Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees, 43883-43885 [2012-18215]
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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Notices
TKELLEY on DSK3SPTVN1PROD with NOTICES
characteristic, the Commission believes
that the implementation of $1 strike
price intervals for SPBAS options,
within the parameters of CBOE Rule
24.9, is appropriate.17
The Commission notes that the
Exchange proposes to apply its existing
index rules regarding the listing of new
series and additional series to SPBAS
options. Specifically, exercise prices
will be required to be reasonably related
to the value of the underlying index and
generally must be within 30% of the
current index value. The Exchange has
clarified that for purposes of SPBAS
options, ‘‘current index value’’ will be
100 because that is the single value that
will be disseminated for SPBAS options
during the life of an option, as discussed
further below. Given the design of this
product, the Commission believes that
this is appropriate and consistent with
the Act.
The Commission notes that an
intraday value for SPBAS options will
not be disseminated and that, prior to
the open on all trading days other than
the last trading day, CBOE will
disseminate a single value of 100 for
SPBAS options through OPRA, the CTA
and/or the MDI feed. The Commission
notes further that, after the close of
trading on the last trading day, CBOE
will disseminate the exercise settlement
value for the expiring SPBAS contract.
The value of the index may vary from
100 only on the last trading day and
would remain 100 on all other trading
days. Moreover, because the closing
value of the S&P 500 on the last trading
day is a necessary component of the
SBPAS option settlement value
calculation, that value cannot be
calculated until the end of the day on
the last trading day.
The Exchange has also proposed that
SPBAS options be p.m.-settled. As
discussed above, the Exchange asserts
that p.m.-settlement is necessary
because the closing settlement value of
the S&P 500 on the third Friday of the
month (a necessary component of the
SPBAS option settlement value) cannot
be determined until the close of trading.
The Commission believes that the
historic concerns regarding p.m.settlement should not be raised by the
introduction of SPBAS options.18
17 In addition, the Commission notes that CBOE
has represented that it has analyzed its capacity and
believes the Exchange and OPRA have the
necessary systems capacity to handle the additional
traffic associated with the listing and trading of $1
strikes (where the strike price is less than $200) for
SPBAS options.
18 For a detailed discussion of the Commission’s
traditional concerns and policies regarding p.m.settlement, see Securities Exchange Act Release No.
65256 (September 2, 2011), 76 FR 55969 (September
9, 2011) (SR–C2–2011–008) (‘‘SPXPM Filing’’).
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16:42 Jul 25, 2012
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The Exchange has proposed not to
impose position or exercise limits on
SPBAS options on the basis that SPBAS
options should be treated similarly to
SPX and SPXPM options, which are not
subject to position or exercise limits.
The Commission notes that the SPBAS
exercise settlement value is based on the
difference between the opening and
closing values of the S&P 500 Index on
expiration Fridays, and that SPX and
SPXPM are based on the S&P 500 Index
opening and closing values,
respectively. Furthermore, as noted
above, SPBAS options could be used to
gain exposure to or hedge the basis risk
between SPX and SPXPM options. As
such, the Commission believes that
CBOE’s proposal not to apply position
or exercise limits to SPBAS options is
appropriate and consistent with the Act.
CBOE also proposes to margin SPBAS
options as broad-based index options.
The Commission believes that CBOE’s
proposed rules relating to margin
requirements are appropriate. The
Commission also believes that CBOE’s
proposal to allow SPBAS options to be
eligible for trading as FLEX options is
consistent with the Act. The
Commission previously approved rules
relating to the listing and trading of
FLEX options on CBOE, which give
investors and other market participants
the ability to individually tailor, within
specified limits, certain terms of those
options.19
The Commission notes that CBOE has
represented that it has an adequate
surveillance program to monitor trading
of SPBAS options and intends to apply
its existing surveillance program for
index options to support the trading of
these options. Further, CBOE is a
member of the ISG and can obtain
trading activity in information in the
underlying securities (i.e., S&P 500
component securities).
In approving the proposed listing and
trading of SPBAS options, the
Commission has also relied upon
CBOE’s representation that it has the
necessary systems capacity to support
the new options series that will result
from this proposal.
Lastly, the Commission believes that
CBOE’s proposal to update CBOE Rule
24.9.01(d) with the correct crossreference to Interpretation and Policy
.04 to Rule 24.9 is consistent with the
Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,20 that the
19 See Securities Exchange Act Release No. 31910
(February 23, 1993), 58 FR 12056 (March 2, 1993).
20 15 U.S.C. 78s(b)(2).
PO 00000
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43883
proposed rule change (SR–CBOE–2012–
042) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–18243 Filed 7–25–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67474; File No. SR–BX–
2012–051]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Routing Fees
July 20, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 10,
2012, NASDAQ OMX BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘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 amend
Chapter XV, Section 2 entitled ‘‘BX
Options Market—Fees and Rebates’’ to
amend a Customer fee for routing
options to The NASDAQ Options
Market (‘‘NOM’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/
micro.aspx?id=BXRulefilings, 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
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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43884
Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Notices
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
Exchange
incur a cost of $0.56 per contract to
route a Customer order to NOM, the
Exchange has determined to assess a fee
of $0.55 per contract for routing
Customer orders to NOM.
TKELLEY on DSK3SPTVN1PROD with NOTICES
The Exchange inadvertently noted
that the NOM Customer routing fee is
$0.11 per contract. NOM assesses a
Customer Fee to Remove Liquidity in
Penny Pilot Options of $0.45 per
contract.4 The routing fees are proposed
to recoup costs that the Exchange incurs
for routing and executing certain orders
on away markets.
BX 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 the order router, membership
fees at away markets, and technical
costs associated with routing.5 For
example, BX incurs costs related to the
Nasdaq Options Services LLC (‘‘NOS’’),
a member of the Exchange and the
Exchange’s exclusive order router.6
Each time NOS routes an order to an
away market, 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 proposes to recoup a portion
of the above costs along with the NOM
Customer routing fee of $0.45 per
contract when routing Customer orders
to NOM. The Exchange is proposing a
NOM Customer routing fee of $0.55 per
contract.7 While the Exchange would
BX believes that the proposed rule
changes are consistent with the
provisions of Section 6 of the Act,8 in
general, and with Section 6(b)(4) of the
Act,9 in particular, in that they provide
for the equitable allocation of reasonable
dues, fees and other charges among
members and issuers and other persons
using any facility or system which BX
operates or controls.
The amended NOM Customer routing
fee is reasonable because it seeks to
recoup costs that are incurred by the
Exchange when routing Customer orders
to NOM on behalf of members. 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 10
that are incurred by the Exchange. The
Exchange believes that the proposed
NOM Customer routing fee would
enable the Exchange to recover the
remove fee assessed to each market
participant by NOM, plus clearing and
other administrative and technical fees
3 See Securities Exchange Act Release No. 67339
(July 3, 2012), 77 FR 405688 (July 10, 2012) (SR–
BX–2012–043).
4 See NOM Rules at Chapter XV, Section 2(4).
5 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.
6 See BX Rules at Chapter VI, Section 11(e) (Order
Routing).
7 The Exchange calculates its routing fees by
totaling its costs which include the remove fee at
the away market ($0.45 per contract), a $0.06 per
contract clearing fee and another $0.05 per contract
fee associated with administrative and technical
costs associated with operating NOS. This would
total $0.56 per contract to route a Customer order
to NOM.
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(4).
18:06 Jul 25, 2012
Jkt 226001
Firm/market
maker/brokerdealer
Customer
BATS (Penny Pilot) ..........................................................................................................
BOX .................................................................................................................................
CBOE ...............................................................................................................................
CBOE orders greater than 99 contracts in ETFs, ETNs and HOLDRS) ........................
C2 ....................................................................................................................................
ISE (Standard) .................................................................................................................
ISE (Select Symbols) * .....................................................................................................
NOM .................................................................................................................................
NYSE Arca (Penny Pilot) .................................................................................................
NYSE Amex .....................................................................................................................
PHLX (for all options than PHLX Select Symbols) .........................................................
PHLX Select Symbols ** ..................................................................................................
VerDate Mar<15>2010
1. Purpose
The Exchange recently filed a
proposal to adopt fees for routing
contracts to markets other the BX
Options market.3 Specifically, the
Exchange adopted the following routing
fees in Chapter XV, Section 2(4):
2. Statutory Basis
PO 00000
Frm 00080
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$0.55
0.11
0.11
0.29
0.55
0.11
0.31
0.11
0.55
0.11
0.11
0.50
Professional
$0.55
0.55
0.55
N/A
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
$0.55
0.11
0.31
0.31
0.55
0.29
0.39
0.55
0.55
0.31
0.36
0.55
for the execution of orders routed to BX
and executed on NOM.
The Exchange also believes that the
amended NOM Customer routing fee is
equitable and not unfairly
discriminatory because it would be
uniformly applied to all market
participant Customer orders that are
routed to NOM to cover the cost to route
the order. The Exchange applied a
similar methodology in calculating the
routing fees for each market participant
by adding not more than a $0.11 per
contract fee to the away market’s
remove fee to determine BX routing
fees.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
BX 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. In addition, a BX
Participant may designate an order as
not available for routing to avoid routing
fees.11
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.
10 The Exchange utilizes the Nasdaq Options
Services LLC (‘‘NOS’’), a member of the Exchange
and the Exchange’s exclusive order router to route
orders in options listed and open for trading on the
BX to destination markets. See Securities Exchange
Act Release No. 67256 (June 26, 2012) (SR–BX–
2012–030).
11 See BX Rules at Chapter VI, Section 11(e).
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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Notices
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:
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–BX–
2012–051 and should be submitted on
or before August 16, 2012.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to amend FINRA
Rule 6730(e) to expressly exclude from
the Trade Reporting and Compliance
Engine (‘‘TRACE’’) trade reporting
requirements transfers of TRACE–
Eligible Securities for the sole purpose
of creating or redeeming instruments
such as exchange-traded funds
(‘‘ETFs’’).
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA, and at the
Commission’s Public Reference Room.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
[FR Doc. 2012–18215 Filed 7–25–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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–BX–2012–051 on the
subject line.
TKELLEY on DSK3SPTVN1PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BX–2012–051. 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
12 15
[Release No. 34–67427; File No. SR–FINRA–
2012–034]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend TRACE
Reporting Rules Relating to Transfers
of TRACE–Eligible Securities To
Create or Redeem Instruments Such as
ETFs
July 12, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’)1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 11,
2012, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change, as described in Items I, II, and
III below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comment on the proposed rule
change from interested persons.
U.S.C. 78s(b)(3)(A)(ii).
VerDate Mar<15>2010
16:42 Jul 25, 2012
Jkt 226001
43885
PO 00000
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
1 15
Frm 00081
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Under the Rule 6700 Series (the
TRACE rules), members are required to
report transactions in debt securities
that are TRACE–Eligible Securities as
defined in Rule 6710(a) to FINRA unless
they fall within an express exception
listed in Rule 6730(e). Certain
transactions and transfers are not
reported to FINRA (e.g., trades executed
and reported through an exchange and
transfers made pursuant to an asset
purchase agreement that has been
approved by a bankruptcy court).
Members must have policies and
procedures and internal controls in
place to determine whether a
transaction qualifies for an exception
under the TRACE rules.
FINRA proposes to amend Rule
6730(e) to provide that transfers of
TRACE–Eligible Securities for the sole
purpose of creating or redeeming an
instrument that evidences ownership or
otherwise tracks the underlying
securities transferred, such as an ETF,
shall be excluded expressly from the
TRACE reporting requirements. The
proposed amendment to Rule 6730(e) is
similar to an exclusion for such
E:\FR\FM\26JYN1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 144 (Thursday, July 26, 2012)]
[Notices]
[Pages 43883-43885]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18215]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67474; File No. SR-BX-2012-051]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees
July 20, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 10, 2012, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``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 amend Chapter XV, Section 2 entitled ``BX
Options Market--Fees and Rebates'' to amend a Customer fee for routing
options to The NASDAQ Options Market (``NOM'').
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=BXRulefilings, 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
[[Page 43884]]
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 Exchange recently filed a proposal to adopt fees for routing
contracts to markets other the BX Options market.\3\ Specifically, the
Exchange adopted the following routing fees in Chapter XV, Section
2(4):
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 67339 (July 3,
2012), 77 FR 405688 (July 10, 2012) (SR-BX-2012-043).
----------------------------------------------------------------------------------------------------------------
Firm/market
Exchange Customer maker/broker- Professional
dealer
----------------------------------------------------------------------------------------------------------------
BATS (Penny Pilot)........................................ $0.55 $0.55 $0.55
BOX....................................................... 0.11 0.55 0.11
CBOE...................................................... 0.11 0.55 0.31
CBOE orders greater than 99 contracts in ETFs, ETNs and 0.29 N/A 0.31
HOLDRS)..................................................
C2........................................................ 0.55 0.55 0.55
ISE (Standard)............................................ 0.11 0.55 0.29
ISE (Select Symbols) *.................................... 0.31 0.55 0.39
NOM....................................................... 0.11 0.55 0.55
NYSE Arca (Penny Pilot)................................... 0.55 0.55 0.55
NYSE Amex................................................. 0.11 0.55 0.31
PHLX (for all options than PHLX Select Symbols)........... 0.11 0.55 0.36
PHLX Select Symbols **.................................... 0.50 0.55 0.55
----------------------------------------------------------------------------------------------------------------
The Exchange inadvertently noted that the NOM Customer routing fee
is $0.11 per contract. NOM assesses a Customer Fee to Remove Liquidity
in Penny Pilot Options of $0.45 per contract.\4\ The routing fees are
proposed to recoup costs that the Exchange incurs for routing and
executing certain orders on away markets.
---------------------------------------------------------------------------
\4\ See NOM Rules at Chapter XV, Section 2(4).
---------------------------------------------------------------------------
BX 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 the order router, membership fees at
away markets, and technical costs associated with routing.\5\ For
example, BX incurs costs related to the Nasdaq Options Services LLC
(``NOS''), a member of the Exchange and the Exchange's exclusive order
router.\6\ Each time NOS routes an order to an away market, 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 proposes to recoup a
portion of the above costs along with the NOM Customer routing fee of
$0.45 per contract when routing Customer orders to NOM. The Exchange is
proposing a NOM Customer routing fee of $0.55 per contract.\7\ While
the Exchange would incur a cost of $0.56 per contract to route a
Customer order to NOM, the Exchange has determined to assess a fee of
$0.55 per contract for routing Customer orders to NOM.
---------------------------------------------------------------------------
\5\ 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.
\6\ See BX Rules at Chapter VI, Section 11(e) (Order Routing).
\7\ The Exchange calculates its routing fees by totaling its
costs which include the remove fee at the away market ($0.45 per
contract), a $0.06 per contract clearing fee and another $0.05 per
contract fee associated with administrative and technical costs
associated with operating NOS. This would total $0.56 per contract
to route a Customer order to NOM.
---------------------------------------------------------------------------
2. Statutory Basis
BX believes that the proposed rule changes are consistent with the
provisions of Section 6 of the Act,\8\ in general, and with Section
6(b)(4) of the Act,\9\ in particular, in that they provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which BX operates or controls.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The amended NOM Customer routing fee is reasonable because it seeks
to recoup costs that are incurred by the Exchange when routing Customer
orders to NOM on behalf of members. 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 \10\ that are incurred by the
Exchange. The Exchange believes that the proposed NOM Customer routing
fee would enable the Exchange to recover the remove fee assessed to
each market participant by NOM, plus clearing and other administrative
and technical fees for the execution of orders routed to BX and
executed on NOM.
---------------------------------------------------------------------------
\10\ The Exchange utilizes the Nasdaq Options Services LLC
(``NOS''), a member of the Exchange and the Exchange's exclusive
order router to route orders in options listed and open for trading
on the BX to destination markets. See Securities Exchange Act
Release No. 67256 (June 26, 2012) (SR-BX-2012-030).
---------------------------------------------------------------------------
The Exchange also believes that the amended NOM Customer routing
fee is equitable and not unfairly discriminatory because it would be
uniformly applied to all market participant Customer orders that are
routed to NOM to cover the cost to route the order. The Exchange
applied a similar methodology in calculating the routing fees for each
market participant by adding not more than a $0.11 per contract fee to
the away market's remove fee to determine BX routing fees.
B. Self-Regulatory Organization's Statement on Burden on Competition
BX 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. In addition, a BX Participant may designate an
order as not available for routing to avoid routing fees.\11\
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\11\ See BX Rules at Chapter VI, Section 11(e).
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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.
[[Page 43885]]
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-BX-2012-051 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2012-051. 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-BX-2012-051 and should be
submitted on or before August 16, 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. 2012-18215 Filed 7-25-12; 8:45 am]
BILLING CODE 8011-01-P
