Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees to BX Options, 42050-42052 [2012-17326]
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42050
Federal Register / Vol. 77, No. 137 / Tuesday, July 17, 2012 / Notices
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–Phlx–
2012–94 and should be submitted on or
before August 7, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–17327 Filed 7–16–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67398; File No. SR–Phlx–
2012–88]
at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXfilings, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Routing Fees to BX Options
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
July 11, 2012.
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that, on June 28,
2012, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt
certain Routing Fees to recoup costs
incurred by the Exchange when routing
to NASDAQ OMX BX, Inc. (‘‘BX
Options’’).
While the changes proposed herein
are effective upon filing, the Exchange
has designated these changes to be
operative on July 2, 2012.
The text of the proposed rule change
is available on the Exchange’s Web site
Exchange
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to recoup
costs that the Exchange incurs for
routing and executing certain orders in
equity options to BX Options.
The Exchange’s Pricing Schedule at
Section V currently includes the
following Routing Fees for routing
Customer, Professional, Firm, BrokerDealer and Market Maker 3 orders to
away markets.
Customer
NYSE AMEX ......................................................................................................................................
BATS Penny ......................................................................................................................................
BATS non-Penny ...............................................................................................................................
BOX ...................................................................................................................................................
CBOE .................................................................................................................................................
CBOE orders greater than 99 contracts in RUT, RMN, NDX, MNX, ETFs, ETNs and HOLDRs ....
C2 ......................................................................................................................................................
ISE .....................................................................................................................................................
ISE Select Symbols 13 .......................................................................................................................
NYSE ARCA (Penny Pilot) ................................................................................................................
NYSE ARCA (Standard) ....................................................................................................................
NOM ...................................................................................................................................................
NOM–MNX .........................................................................................................................................
NOM–NDX .........................................................................................................................................
$0.11
0.55
0.86
0.11
0.11
0.29
0.55
0.11
0.31
0.55
0.11
0.54
0.56
0.11
Professional
$0.31
0.55
0.91
0.11
0.31
0.31
0.56
0.29
0.39
0.55
0.11
0.54
0.56
0.81
Firm/
broker-dealer/
specialist/
market maker
$0.55
0.55
0.91
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.81
tkelley on DSK3SPTVN1PROD with NOTICES
13 These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See ISE’s Schedule of Fees for the complete list of symbols that are subject to these fees.
The Exchange is proposing to adopt
the following Routing Fees when
routing to the BX Options:
15 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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16:53 Jul 16, 2012
2 17
CFR 240.19b–4.
the purposes of Routing Fees, a Market
Maker includes Specialists (see Rule 1020) and
3 For
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ROTs (Rule 1014(b)(i) and (ii), which includes
SQTs (see Rule 1014(b)(ii)(A)) and RSQTs (see Rule
1014(b)(ii)(B)).
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Federal Register / Vol. 77, No. 137 / Tuesday, July 17, 2012 / Notices
Exchange
Customer
BX Options Market ............................................................................................................................
tkelley on DSK3SPTVN1PROD with NOTICES
BX Options received approval to
operate a new options market 4 and filed
to adopt various fees and rebates which
would become operative on July 2,
2012. Specifically, BX Options will
assess a Fee to Remove Liquidity of
$0.43 per contract to BX Options Market
Makers and Non-Customers which
includes Professionals, Firms, BrokerDealers and Non-BX Options Marker
Makers.5 Customers would not be
assessed a Fee to Remove Liquidity on
BX Options. The Exchange is seeking to
adopt new Routing Fees to account for
these new fees and other routing costs
incurred by the Exchange when routing
to BX Options as of July 2, 2012.
Nasdaq Options Services LLC
(‘‘NOS’’), a member of the Exchange, is
the Exchange’s exclusive order router.6
NOS serves as the Routing Facility of
BX Options. Each time NOS routes to
away markets NOS is charged a $0.06
clearing fee and, in the case of certain
exchanges, a transaction fee is also
charged in certain symbols, which fees
are passed through to the Exchange. The
Exchange currently recoups clearing
and transaction charges incurred by the
Exchange as well as certain other costs
incurred by the Exchange when routing
to away markets, such as administrative
and technical costs associated with
operating NOS, membership fees at
away markets, and technical costs
associated with routing.7 The Exchange
would therefore assess Customers $0.11
per contract, Firms would be assessed
$0.54 per contract, Market Makers
would be assessed $0.54 per contract
and Professionals would be assessed
$0.54 per contract.8 The Exchange
4 See Securities Exchange Act Release No. 67256
(June 26, 2012) (SR–BX–2012–030).
5 See Securities Exchange Act Release No. 67339
(SR–BX–2012–043). This filing will become
operative on July 2, 2012.
6 See Chapter VI, Section 11(e) (Order Routing).
7 In addition to membership fees and transaction
fees, the Exchange also incurs an Options
Regulatory Fee when routing to an away market that
assesses that fee.
8 The Exchange’s proposed Routing Fees for BX
would include the Fees for Removing Liquidity of
$0.43 per contract, a $0.06 clearing cost and another
$0.05 per contract associated with administrative
and technical costs associated with operating NOS,
a total of $0.54 per contract. The Exchange would
only assess a Customer the $0.06 clearing cost and
another $0.05 per contract associated with
administrative and technical costs associated with
operating NOS (a total of $0.11 per contract)
because a Customer is not assessed a Fee for
Removing Liquidity on BX.
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Professional
$0.11
Firm/
broker-dealer/
specialist/
market maker
$0.54
$0.54
proposes to title the new fees ‘‘BX
Options.’’
As with all fees, the Exchange may
adjust these Routing Fees in response to
competitive conditions by filing a new
proposed rule change.
Options Participants may choose to
mark the order as ineligible for routing
to avoid incurring these fees. In
addition, a member may designate an
order as not available for routing to
avoid routing fees.11
2. Statutory Basis
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange believes that its
proposal to amend its Pricing Schedule
is consistent with Section 6(b) of the
Act 9 in general, and furthers the
objectives of Section 6(b)(4) of the Act 10
in particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members.
The Exchange believes that the
proposed BX Options Routing Fees are
reasonable because they seek to recoup
costs that are incurred by the Exchange
when routing Customer, Professional,
Firm, Broker-Dealer, Specialist and
Market Maker orders to BX Options on
behalf of members, respectively. Each
destination market’s transaction charge
varies and there is a standard clearing
charge for each transaction incurred by
the Exchange along with other
administrative and technical costs that
are incurred by the Exchange. The
Exchange believes that the proposed
Routing Fees would enable the
Exchange to recover the remove fees
assessed to market participants by BX
Options, plus clearing and other
administrative and technical fees for the
execution of Customer, Professional,
Firm, Broker-Dealer, Specialist and
Market Maker orders when routed to BX
Options. The Exchange also believes
that the proposed BX Options Routing
Fees are equitable and not unfairly
discriminatory because they would be
uniformly applied to all Customer,
Professional, Firm, Broker-Dealer,
Specialist and Market Maker orders that
are routed to BX Options.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, Phlx Routing Fees seek to
recoup costs for Routing Orders to other
exchanges on behalf of its members.
PO 00000
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
10 15
Frm 00085
Fmt 4703
Sfmt 4703
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.12 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–Phlx–2012–88 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
11 See Rules 1066(h) (Certain Types of Orders
Defined) and 1080(b)(i)(A) (PHLX XL and PHLX XL
II).
12 15 U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 77, No. 137 / Tuesday, July 17, 2012 / Notices
100 F Street NE., Washington, DC
20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
All submissions should refer to File
Number SR–Phlx–2012–88. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–Phlx–
2012–88 and should be submitted on or
before August 7, 2012.
[Release No. 34–67411; File Nos. SR–
NASDAQ–2012–043; SR–NYSEArca–2012–
37]
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–17326 Filed 7–16–12; 8:45 am]
tkelley on DSK3SPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
13 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
16:53 Jul 16, 2012
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Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; NYSE
Arca, Inc.; Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove Proposed Rule
Changes Relating to Market Maker
Incentive Programs for Certain
Exchange-Traded Products
July 11, 2012.
I. Introduction
On March 23, 2012, The NASDAQ
Stock Market LLC (‘‘NASDAQ’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change
(‘‘NASDAQ Proposal’’) to establish the
Market Quality Program (‘‘MQP’’). On
March 29, 2012, NASDAQ submitted
Amendment No. 1 to the proposed rule
change.3 The proposed rule change, as
modified by Amendment No. 1 thereto,
was published for comment in the
Federal Register on April 12, 2012.4
The Commission initially received
fifteen comment letters on the NASDAQ
Proposal.5 On May 18, 2012, pursuant to
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 In Amendment No. 1, NASDAQ made a
technical amendment to Item I of Exhibit 1 to delete
an erroneous reference to the NASDAQ Options
Market and replace it with a reference to NASDAQ.
4 Securities Exchange Act Release No. 66765
(April 6, 2012), 77 FR 22042 (‘‘NASDAQ Notice’’).
5 See Letter from Frank Choi, dated April 13, 2012
(‘‘Choi Letter’’); Letter from Christopher J. Csicsko,
dated April 14, 2012 (‘‘Csicsko Letter’’); Letter from
Jeremiah O’Connor III, dated April 14, 2012
(‘‘O’Connor Letter’’); Letter from Dezso J. Szalay,
dated April 15, 2012 (‘‘Szalay Letter’’); Letter from
Kathryn Keita, dated April 18, 2012; Letter (‘‘Keita
Letter’’); Letter from Anonymous, dated April 18,
2012 (‘‘Anonymous Letter’’); Letter from Mark
Connell, dated April 19, 2012 (‘‘Connell Letter’’);
Letter from Timothy Quast, Managing Director,
Modern Networks IR LLC, dated April 26, 2012 (‘‘IR
Letter’’); Letter from Daniel G. Weaver, Ph.D.,
Professor of Finance, Rutgers Business School,
dated April 26, 2012 (‘‘Weaver Letter’’); Letter from
Amber Anand, Associate Professor of Finance,
Syracuse University, dated April 29, 2012 (‘‘Anand
Letter’’); Letter from Albert J. Menkveld, Associate
Professor of Finance, VU University Amsterdam,
dated May 2, 2012 (‘‘Menkveld Letter’’); Letter from
James J. Angel, Associate Professor of Finance,
Georgetown University, dated May 2, 2012 (‘‘Angel
Letter’’); Letter from Ari Burstein, Senior Counsel,
Investment Company Institute, dated May 3, 2012
(‘‘NASDAQ ICI Letter’’); Letter from Gus Sauter,
Managing Director and Chief Investment Officer,
Vanguard, dated May 3, 2012 (‘‘NASDAQ Vanguard
Letter’’); and Letter from Leonard J. Amoruso,
General Counsel, Knight Capital Group, Inc., dated
May 4, 2012 (‘‘Knight Letter’’).
PO 00000
1 15
2 17
Frm 00086
Fmt 4703
Sfmt 4703
Section 19(b)(2) of the Act,6 the
Commission designated a longer period
within which to either approve the
NASDAQ Proposal, disapprove the
NASDAQ Proposal, or institute
proceedings to determine whether to
disapprove the NASDAQ Proposal.7 The
Commission received three additional
comment letters on the NASDAQ
Proposal.8 On July 6, 2012, the
Commission received NASDAQ’s
response to the comment letters.9
On April 27, 2012, NYSE Arca, Inc.
(‘‘NYSE Arca’’ and together with
NASDAQ, the ‘‘Exchanges’’) filed with
the Commission, pursuant to Section
19(b)(1) of the Act 10 and Rule 19b–4
thereunder,11 a proposed rule change
(‘‘NYSE Arca Proposal,’’ and together
with the NASDAQ Proposal, the ‘‘SRO
Proposals’’) to create and implement, on
a pilot basis, a Lead Market Maker
(‘‘LMM’’) Issuer Incentive Program
(‘‘Fixed Incentive Program,’’ and
together with the MQP, the ‘‘Programs’’)
for issuers of certain exchange-traded
products listed on NYSE Arca. The
NYSE Arca Proposal was published for
comment in the Federal Register on
May 17, 2012.12 The Commission
received two comment letters on the
NYSE Arca Proposal.13 On June 20,
2012, pursuant to Section 19(b)(2) of the
Act,14 the Commission designated a
longer period within which to either
approve the NYSE Arca Proposal,
disapprove the NYSE Arca Proposal, or
institute proceedings to determine
whether to disapprove the NYSE Arca
6 15
U.S.C. 78s(b)(2).
Exchange Act Release No. 67022 (May
18, 2012), 77 FR 31050 (May 24, 2012). The
Commission determined that it was appropriate to
designate a longer period within which to take
action on the NASDAQ Proposal so that it has
sufficient time to consider the NASDAQ Proposal,
the comments received, and any response to the
comments submitted by NASDAQ. Accordingly, the
Commission designated July 11, 2012 as the date by
which it should either approve, disapprove, or
institute proceedings to determine whether to
disapprove the NASDAQ Proposal.
8 See Letter from Gary L. Gastineau, Managing
Member, ETF Consultants LLC, dated June 11, 2012
(‘‘ETF Consultants Letter’’); Letter from Rey
Ramsey, President & CEO, TechNet, dated June 20,
2012 (‘‘TechNet Letter’’); and Letter from Stuart J.
Kaswell, Executive Vice President & Managing
Director, General Counsel, Managed Funds
Association, dated July 3, 2012 (‘‘MFA Letter’’).
9 See Letter from Joan C. Conley, Senior Vice
President & Corporate Secretary, NASDAQ, dated
July 6, 2012 (‘‘NASDAQ Response Letter’’).
10 15 U.S.C. 78s(b)(1).
11 17 CFR 240.19b–4.
12 Securities Exchange Act Release No. 66966
(May 11, 2012), 77 FR 29419 (‘‘NYSE Arca Notice’’).
13 See Letter from Gus Sauter, Managing Director
and Chief Investment Officer, Vanguard, dated June
7, 2012 (‘‘NYSE Arca Vanguard Letter’’); and Letter
from Ari Burstein, Senior Counsel, Investment
Company Institute, dated June 7, 2012 (‘‘NYSE Arca
ICI Letter’’).
14 15 U.S.C. 78s(b)(2).
7 Securities
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]]>Agencies
[Federal Register Volume 77, Number 137 (Tuesday, July 17, 2012)]
[Notices]
[Pages 42050-42052]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17326]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67398; File No. SR-Phlx-2012-88]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees to BX Options
July 11, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that, on June 28, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt certain Routing Fees to recoup costs
incurred by the Exchange when routing to NASDAQ OMX BX, Inc. (``BX
Options'').
While the changes proposed herein are effective upon filing, the
Exchange has designated these changes to be operative on July 2, 2012.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXfilings, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to recoup costs that the Exchange
incurs for routing and executing certain orders in equity options to BX
Options.
The Exchange's Pricing Schedule at Section V currently includes the
following Routing Fees for routing Customer, Professional, Firm,
Broker-Dealer and Market Maker \3\ orders to away markets.
---------------------------------------------------------------------------
\3\ For the purposes of Routing Fees, a Market Maker includes
Specialists (see Rule 1020) and ROTs (Rule 1014(b)(i) and (ii),
which includes SQTs (see Rule 1014(b)(ii)(A)) and RSQTs (see Rule
1014(b)(ii)(B)).
------------------------------------------------------------------------
Firm/ broker-
dealer/
Exchange Customer Professional specialist/
market maker
------------------------------------------------------------------------
NYSE AMEX................... $0.11 $0.31 $0.55
BATS Penny.................. 0.55 0.55 0.55
BATS non-Penny.............. 0.86 0.91 0.91
BOX......................... 0.11 0.11 0.55
CBOE........................ 0.11 0.31 0.55
CBOE orders greater than 99 0.29 0.31 0.55
contracts in RUT, RMN, NDX,
MNX, ETFs, ETNs and HOLDRs.
C2.......................... 0.55 0.56 0.55
ISE......................... 0.11 0.29 0.55
ISE Select Symbols \13\..... 0.31 0.39 0.55
NYSE ARCA (Penny Pilot)..... 0.55 0.55 0.55
NYSE ARCA (Standard)........ 0.11 0.11 0.55
NOM......................... 0.54 0.54 0.55
NOM-MNX..................... 0.56 0.56 0.55
NOM-NDX..................... 0.11 0.81 0.81
------------------------------------------------------------------------
\13\ These fees are applicable to orders routed to ISE that are subject
to Rebates and Fees for Adding and Removing Liquidity in Select
Symbols. See ISE's Schedule of Fees for the complete list of symbols
that are subject to these fees.
The Exchange is proposing to adopt the following Routing Fees when
routing to the BX Options:
[[Page 42051]]
------------------------------------------------------------------------
Firm/ broker-
dealer/
Exchange Customer Professional specialist/
market maker
------------------------------------------------------------------------
BX Options Market........... $0.11 $0.54 $0.54
------------------------------------------------------------------------
BX Options received approval to operate a new options market \4\
and filed to adopt various fees and rebates which would become
operative on July 2, 2012. Specifically, BX Options will assess a Fee
to Remove Liquidity of $0.43 per contract to BX Options Market Makers
and Non-Customers which includes Professionals, Firms, Broker-Dealers
and Non-BX Options Marker Makers.\5\ Customers would not be assessed a
Fee to Remove Liquidity on BX Options. The Exchange is seeking to adopt
new Routing Fees to account for these new fees and other routing costs
incurred by the Exchange when routing to BX Options as of July 2, 2012.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 67256 (June 26,
2012) (SR-BX-2012-030).
\5\ See Securities Exchange Act Release No. 67339 (SR-BX-2012-
043). This filing will become operative on July 2, 2012.
---------------------------------------------------------------------------
Nasdaq Options Services LLC (``NOS''), a member of the Exchange, is
the Exchange's exclusive order router.\6\ NOS serves as the Routing
Facility of BX Options. Each time NOS routes to away markets NOS is
charged a $0.06 clearing fee and, in the case of certain exchanges, a
transaction fee is also charged in certain symbols, which fees are
passed through to the Exchange. The Exchange currently recoups clearing
and transaction charges incurred by the Exchange as well as certain
other costs incurred by the Exchange when routing to away markets, such
as administrative and technical costs associated with operating NOS,
membership fees at away markets, and technical costs associated with
routing.\7\ The Exchange would therefore assess Customers $0.11 per
contract, Firms would be assessed $0.54 per contract, Market Makers
would be assessed $0.54 per contract and Professionals would be
assessed $0.54 per contract.\8\ The Exchange proposes to title the new
fees ``BX Options.''
---------------------------------------------------------------------------
\6\ See Chapter VI, Section 11(e) (Order Routing).
\7\ In addition to membership fees and transaction fees, the
Exchange also incurs an Options Regulatory Fee when routing to an
away market that assesses that fee.
\8\ The Exchange's proposed Routing Fees for BX would include
the Fees for Removing Liquidity of $0.43 per contract, a $0.06
clearing cost and another $0.05 per contract associated with
administrative and technical costs associated with operating NOS, a
total of $0.54 per contract. The Exchange would only assess a
Customer the $0.06 clearing cost and another $0.05 per contract
associated with administrative and technical costs associated with
operating NOS (a total of $0.11 per contract) because a Customer is
not assessed a Fee for Removing Liquidity on BX.
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As with all fees, the Exchange may adjust these Routing Fees in
response to competitive conditions by filing a new proposed rule
change.
2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \9\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \10\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed BX Options Routing Fees are
reasonable because they seek to recoup costs that are incurred by the
Exchange when routing Customer, Professional, Firm, Broker-Dealer,
Specialist and Market Maker orders to BX Options on behalf of members,
respectively. Each destination market's transaction charge varies and
there is a standard clearing charge for each transaction incurred by
the Exchange along with other administrative and technical costs that
are incurred by the Exchange. The Exchange believes that the proposed
Routing Fees would enable the Exchange to recover the remove fees
assessed to market participants by BX Options, plus clearing and other
administrative and technical fees for the execution of Customer,
Professional, Firm, Broker-Dealer, Specialist and Market Maker orders
when routed to BX Options. The Exchange also believes that the proposed
BX Options Routing Fees are equitable and not unfairly discriminatory
because they would be uniformly applied to all Customer, Professional,
Firm, Broker-Dealer, Specialist and Market Maker orders that are routed
to BX Options.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, Phlx Routing
Fees seek to recoup costs for Routing Orders to other exchanges on
behalf of its members. Options Participants may choose to mark the
order as ineligible for routing to avoid incurring these fees. In
addition, a member may designate an order as not available for routing
to avoid routing fees.\11\
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\11\ See Rules 1066(h) (Certain Types of Orders Defined) and
1080(b)(i)(A) (PHLX XL and PHLX XL II).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\12\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2012-88 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission,
[[Page 42052]]
100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2012-88. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2012-88 and should be
submitted on or before August 7, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-17326 Filed 7-16-12; 8:45 am]
BILLING CODE 8011-01-P
