Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Transaction Fees, 56883-56886 [2012-22688]
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Federal Register / Vol. 77, No. 179 / Friday, September 14, 2012 / Notices
Detroit Edison Company, Docket No.
50–341, Fermi 2, Monroe County,
Michigan
Date of application for amendment:
December 20, 2011.
Brief description of amendment: The
amendment revised technical
specifications (TS) requirements related
to primary containment isolation
instrumentation. The changes are in
accordance with NRC approved TS Task
Force (TSTF), Improved Standard
Technical Specifications (ISTS) change
TSTF–306, Revision 2.
Date of issuance: August 29, 2012.
Effective date: As of the date of
issuance and shall be implemented
within 60 days.
Amendment No.: 189.
Facility Operating License No. NPF–
43: Amendment revised the Technical
Specifications and License.
Date of initial notice in Federal
Register: April 3, 2012 (77 FR 20073).
The Commission’s related evaluation
of the amendment is contained in a
Safety Evaluation dated August 29,
2012.
No significant hazards consideration
comments received: No.
mstockstill on DSK4VPTVN1PROD with NOTICES
Indiana Michigan Power Company,
Docket No. 50–315, Donald C. Cook
Nuclear Plant, Unit 1, Berrien County,
Michigan
Date of application for amendment:
September 29, 2011, as supplemented
on July 25, 2012.
Brief description of amendment: The
amendment revised Technical
Specification (TS) 4.2.1, adding
Optimized ZIRLOTM clad fuel rods to
the fuel matrix in addition to Zircaloy
or ZIRLOTM clad fuel rods that are
currently in use. The amendment also
added a Westinghouse topical report
regarding Optimized ZIRLOTM as
Reference 8 in TS 5.6.5.b, which lists
the analytical methods used to
determine the core operating limits.
Date of issuance: August 23, 2012.
Effective date: As of the date of
issuance and shall be implemented
within 60 days from the date of
issuance.
Amendment No.: 302.
Facility Operating License No. DPR–
58: Amendment revised the Renewed
Operating License and Technical
Specifications.
Date of initial notice in Federal
Register: November 29, 2011 (76 FR
73731). The licensee’s July 25, 2012,
supplemental letter contained clarifying
information, did not change the scope of
the original license amendment request,
did not change the NRC staff’s initial
proposed finding of no significant
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hazards consideration determination,
and did not expand the scope of the
original Federal Register notice.
The Commission’s related evaluation
of the amendment is contained in a
Safety Evaluation dated August 23,
2012.
No significant hazards consideration
comments received: No.
NextEra Energy Duane Arnold, LLC,
Docket No. 50–331, Duane Arnold
Energy Center, Linn County, Iowa
Date of application for amendments:
September 29, 2011, as supplemented
by letter dated March 12, 2012.
Brief description of amendments: The
amendment modified existing Technical
Specification Surveillance Requirement
(SR) 3.4.3.2, SR 3.5.1.9, and SR
3.6.1.5.1, to provide an alternate means
for testing of the steam safety/relief
valves (SRVs). The change allows for
demonstrating the capability of the
SRVs to perform their function without
requiring the valves to be cycled with
steam pressure while installed in the
plant in accordance with the Inservice
Testing Program.
Date of issuance: August 27, 2012.
Effective date: This license
amendment is effective as of the date of
issuance and shall be implemented
within 30 days from date of issuance.
Amendment No.: 282.
Renewed Facility Operating License
No. DPR–49: Amendment revised the
Renewed Facility Operating License and
Technical Specifications.
Date of initial notice in Federal
Register: June 12, 2012 (77 FR 35075).
The Commission’s related evaluation
of the amendment is contained in a
Safety Evaluation dated August 27,
2012.
No significant hazards consideration
comments received: No.
Northern States Power Company—
Minnesota (NSPM), Docket No. 50–263,
Monticello Nuclear Generating Plant,
Wright County, Minnesota
Date of application for amendment:
May 25, 2012.
Brief description of amendment: The
amendment revised the Monticello
licensing basis, approving the removal
of automatic transfer capability of
essential electrical buses to the 1AR
transformer due to degraded voltage
conditions.
Date of issuance: August 27, 2012.
Effective date: This license
amendment is effective as of the date of
its issuance, and shall be implemented
within 30 days of issuance, except the
revision of the updated safety analysis
report to reflect the revised licensing
basis of the 1AR transformer shall
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56883
follow the schedule set forth in 10 CFR
50.71(e).
Amendment No.: 169.
Facility Operating License No. DPR–
22. Amendment revised the Renewed
Facility Operating License.
Date of initial notice in Federal
Register: June 26, 2012 (77 FR 38096).
The Commission’s related evaluation
of the amendment is contained in a
Safety Evaluation dated August 27,
2012.
No significant hazards consideration
comments received: No.
Dated at Rockville, Maryland, this 6th day
of September 2012.
For the Nuclear Regulatory Commission.
Louise Lund,
Deputy Director, Division of Operating
Reactor Licensing, Office of Nuclear Reactor
Regulation.
[FR Doc. 2012–22698 Filed 9–13–12; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67822; File No. SR–BX–
2012–060]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Amend
Transaction Fees
September 10, 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 August
30, 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 rebates and fees relating to
various options and make technical
corrections to this section.
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
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 77, No. 179 / Friday, September 14, 2012 / Notices
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
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 the proposed rule
change is to amend Chapter XV, Section
2(1) to amend rebates and fees for
Customers, BX Options Market Makers 3
and Non-Customers 4 in various
options,5 as well as remove certain
options from the Fees and Rebates
schedule below,6 as follows:
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
FEES AND REBATES
[Per executed contract]
BX Options
market maker
Customer
IWM, QQQ and SPY:
Rebate to Add Liquidity ......................................................................................
Fee to Add Liquidity ...........................................................................................
Rebate to Remove Liquidity ...............................................................................
Fee to Remove Liquidity ....................................................................................
[BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV and USO:
Rebate to Add Liquidity ......................................................................................
Fee to Add Liquidity ...........................................................................................
Rebate to Remove Liquidity ...............................................................................
Fee to Remove Liquidity ....................................................................................
All Other Penny Pilot Options:
Rebate to Add Liquidity ......................................................................................
Fee to Add Liquidity ...........................................................................................
Rebate to Remove Liquidity ...............................................................................
Fee to Remove Liquidity ....................................................................................
2 $0.[15]00
2 $0.15
3 0.1[5]8
3 0.1[5]8
0.12
[0.00] N/A
[0.00] N/A
0.4[3]5
2 0.15
2 0.15
3 0.37
3 0.37
0.32
0.00
0.00
0.43
2 0.[1]00
2 0.10
3 0.40
3 0.40
0.32
[0.00] N/A
[0.00] N/A
0.4[3]5
Non-customer 1
[$0.00] N/A
0.4[3]5
[0.00] N/A
0.4[3]5
0.00
0.43
0.00
0.43]
[0.00] N/A
0.4[3]5
[0.00] N/A
0.4[3]5
1A
Non-Customer includes a Professional, Firm, Broker-Dealer and Non-BX Options Market Maker.
Rebate to Add Liquidity will be paid to a Customer or BX Options Market Maker only when the Customer or BX Options Market Maker is
contra to a Non-Customer or BX Options Market Maker.
3 The Fee to Add Liquidity will be assessed to a Customer or BX Options Market Maker only when the Customer or BX Options Market Maker
is contra to a Customer.
2 The
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The Exchange is proposing to
eliminate the Rebate to Add Liquidity,
in any symbol, to a Customer. The
Exchange is also proposing to increase
the Fee to Add Liquidity in IWM, QQQ
and SPY from $0.15 to $0.18 per
executed contract for Customers and BX
Options Market Makers. For NonCustomers the Fee to Add or to Remove
Liquidity in IWM, QQQ and SPY and
for all other Penny Pilot Options would
increase from $0.43 to $0.45 per
executed contract. Additionally, for BX
Options Market Makers the Fee to
Remove Liquidity in IWM, QQQ and
SPY and for all other Penny Pilot
Options would increase from $0.43 to
$0.45 per executed contract. The
Exchange is also proposing to remove
entirely from the Fees and Rebates
schedule certain other options.7
The Exchange is also proposing to
make technical corrections in Chapter
XV, Section 2 by replacing ‘‘$0.00’’ with
‘‘N/A’’ for several categories. This is not
a change to these fees and rebates, but
a technical amendment since in these
instances ‘‘N/A’’ better reflects that a fee
is not relevant for this category rather
than ‘‘$0.00’’ which simply reflects that
no fee is currently being charged for this
category.
The Exchange believes that the
proposed amended fees and rebates are
competitive and will encourage BX
members to transact business on the
Exchange. Despite the reduction of the
Customer rebate to $0.00, the Exchange
believes that the fees remain
competitive with other options
exchanges and that market participants
will continue to send order flow to the
Exchange.
3 A BX Options Market Makers must be registered
as such pursuant to Chapter VII, Section 2 of the
BX Options Rules, and must also remain in good
standing pursuant to Chapter VII, Section 4.
4 A Non-Customer includes a Professional, Firm,
Broker-Dealer and Non-BX Options Market Maker.
5 The Exchange is proposing to amend fees and
rebates for options overlying iShares Russell 2000
(‘‘IWM’’), PowerShares QQQ Trust (‘‘QQQ’’)®;
Standard and Poor’s Depositary Receipts/SPDRs
(‘‘SPY’’); and all other Penny Pilot Options.
6 The Exchange is proposing to eliminate fees and
rebates for Bank of America Corporation (‘‘BAC’’),
Citigroup, Inc. (‘‘C’’), Cisco Systems, Inc. (‘‘CSCO’’),
Ford Motor Company Common Stock (‘‘F’’), Intel
Corp (‘‘INTC’’), Microsoft Corporation (‘‘MSFT’’), JP
Morgan Chase & Co. (‘‘JPM’’), SPDR Gold Shares
(‘‘GLD’’), iShares Silver Trust (‘‘SLV’’) and United
States Oil Fund LP Units (‘‘USO’’) (‘‘Deleted
Symbols’’).
7 Id. As a result, the pricing for the Deleted
Symbols currently in place will be eliminated and
revert to the current fees and rebates for all other
Penny Pilot Options. The Rebate to Add Liquidity
will decrease for Customers and BX Options Market
Makers from $0.15 to $0.00 and from $0.15 to $0.10
per contract, respectively. A Non-Customer will
continue not to be paid a Rebate for Adding
Liquidity. The Rebate to Remove Liquidity will
remain unchanged, a Customer will continue to be
paid a $0.32 per contract rebate and BX Options
Market Makers and Non-Customers will not be
entitled to a Rebate to Remove Liquidity. The Fee
to Remove Liquidity will remain unchanged for
Customers as they will not be assessed this fee as
is the case today. The Fee for Removing Liquidity
will increase for BX Options Market Makers and
Non-Customers from $0.43 to $0.45 per contract
because the Exchange is proposing to increase this
fee.
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Federal Register / Vol. 77, No. 179 / Friday, September 14, 2012 / Notices
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.
The Exchange believes that its
proposal to assess different fees and
rebates for IWM, QQQ and SPY as
compared to all other Penny Pilot
Options is reasonable given the fact that
certain symbols such as IWM, QQQ and
SPY are highly liquid Penny Pilot
Options as compared to other Penny
Pilot Options. Additionally, other
options exchanges differentiate pricing
by security today.10
The Exchange believes that its
proposal to assess different fees and
rebates for IWM, QQQ and SPY as
compared to all other Penny Pilot
Options is equitable and not unfairly
discriminatory as described hereafter.
With respect to the proposed
elimination of the Rebate to Add
Liquidity 11 for IWM, QQQ, SPY and all
other Penny Pilot Options, the Exchange
believes it is critical to incentivize BX
Options Market Makers because they
have obligations to the market and
regulatory requirements,12 which
normally do not apply to other market
participants. A BX Options Market
Maker has the obligation to make
continuous markets, engage in a course
of dealings reasonably calculated to
8 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
10 See NASDAQ OMX PHLX LLC’s (‘‘Phlx’’)
Pricing Schedule, which has different pricing for its
Select Symbols and different pricing for other
Multiply Listed Options. See also the NASDAQ
Options Market LLC (‘‘NOM’’) at Chapter XV,
Section 2(1), which distinguishes pricing for NDX
and MNX. See also the International Securities
Exchange LLC’s Fee Schedule, which distinguishes
pricing for Special Non-Select Penny Pilot Symbols.
See also the Chicago Board Options Exchange,
Incorporated’s Fees Schedule, which distinguishes
index products.
11 The Exchange proposes to eliminate for
Customers the Rebate to Add Liquidity for IWM,
QQQ, and SPY of $0.15 per contract and of $0.10
per contract for other Penny Pilot Options.
12 Pursuant to Chapter VII (Market Participants),
Section 5 (Obligations of Market Makers), in
registering as a Market Maker, an Options
Participant commits himself to various obligations.
Transactions of a Market Maker in its market
making capacity must constitute a course of
dealings reasonably calculated to contribute to the
maintenance of a fair and orderly market, and
Market Makers should not make bids or offers or
enter into transactions that are inconsistent with
such course of dealings. Further, all Market Makers
are designated as specialists on BX for all purposes
under the Act or rules thereunder. See Chapter VII,
Section 5.
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9 15
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contribute to the maintenance of a fair
and orderly market, and not make bids
or offers or enter into transactions that
are inconsistent with a course of
dealings. The Exchange is proposing to
eliminate the Customer Rebate to Add
Liquidity because the Exchange believes
that Customers do not require a similar
incentive as do BX Options Market
Makers because they post liquidity on
the Exchange for reasons other than the
opportunity to receive rebates and
additionally, Customers, unlike BX
Options Market Makers, are not assessed
a Fee to Remove Liquidity.13 BX
Options Market Makers would continue
to receive the opportunity to earn a
$0.10 per contract (all other Penny Pilot
Options) or $0.15 per contract (IWM,
QQQ, and SPY) Rebate to Add Liquidity
only when they are contra to a NonCustomer or BX Options Market Maker.
The proposed differentiation as between
Customers and BX Options Market
Makers and other market participants
recognizes the differing contributions
made to the liquidity and trading
environment on the Exchange by BX
Options Market Makers, as well as the
differing mix of orders entered. This is
not to say that Customer order flow is
not important, to the contrary, the
Exchange believes that the pursuit of
such order flow by BX Options Market
Makers and other market participants
because of the valuable liquidity
Customer order flow brings to the
marketplace is the very reason that at
this time, the Exchange desires to
incentivize and reward BX Options
Market Makers to make continuous
markets and pursue Customer Order
which can be freely removed at no
expense. Also, it is important to note
that BX Options Market Makers are
unaware at the time the order is entered
whether they would be entitled to a
$0.10 or $0.15 per contract Rebate to
Add Liquidity, depending on the
security, because they are unaware of
the identity of the contra-party, which
would determine whether they receive a
rebate. Because of anonymity of the
contra-parties, BX Options Market
Makers aggressively pursue order flow
which benefits all market participants.
The Exchange’s proposal to increase
the Fee to Add Liquidity for IWM, QQQ,
SPY for all market participants and for
Non-Customers in all other Penny Pilot
Options, as well as to increase the Fee
to Remove Liquidity for IWM, QQQ,
SPY and all other Penny Pilot Options
for BX Options Market Makers and for
Non-Customers is reasonable because
the increased fees would allow the
13 Today, Customers are not assessed a Fee to
Remove Liquidity unlike other market participants.
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56885
Exchange to continue to reward
Customers for removing liquidity, and
BX Options Market Makers for
providing liquidity with rebates. The
advantage of increased Customer order
flow benefits all market participants. In
addition, the proposed amended Fees to
Add or to Remove Liquidity are no
greater than the rates assessed by other
exchanges for similar fees.14 Attracting
Customer, BX Options Market Maker,
and Non-Customer order flow to the
Exchange benefits all market
participants. BX Options Market Makers
have burdens that do not apply to other
market participants. The Exchange is
also uniformly assessing all NonCustomer market participants
(Professionals, Firms, Broker-Dealers,
Non-BX Options Market Makers and BX
Options Market Makers) the same $0.45
per executed contract Fee to Add or to
Remove Liquidity on every transaction.
The Exchange’s proposal to increase
the Fee to Add Liquidity for IWM, QQQ,
SPY for all market participants and for
Non-Customers of all other Penny Pilot
Options is equitable and not unfairly
discriminatory because the Exchange is
increasing all market participant Fees to
Add Liquidity. Specifically, while
Customers and BX Options Market
Makers are being increased by $0.03 per
executed contract, Non-Customers are
being increased by $0.02 per executed
contract because they are assessed
higher fees. The Exchange is assessing
higher fees to all participants and not a
select group of market participants. The
Exchange’s proposal to increase the Fee
to Remove Liquidity for BX Options
Market Makers and Non-Customers for
IWM, QQQ, SPY and for all other Penny
Pilot Options is equitable and not
unfairly discriminatory because the
Exchange is uniformly assessing all
market participants, except
Customers,15 a $0.45 per executed
contract Fee to Remove Liquidity.
The Exchange believes that its
proposal to eliminate the fees and
rebates currently in place for Deleted
Symbols and instead include these
symbols in all other Penny Pilot Options
and assess those fees and pay those
rebates is reasonable because the
Exchange does not believes [sic] it is
necessary to incentivize BX Options
Participants with higher rebates and
lower fees as compare [sic] to other
Non-Penny [sic] Pilot Options. The
Exchange believes that the fee [sic] and
14 See BATS Exchange, Inc.’s Fee Schedule. See
also NOM Chapter XV, Section 2 (the Penny Pilot
Fees to Remove Liquidity are $0.45 per contract for
all market participants).
15 Customers are not assessed a Fee to Remove
Liquidity today in either Penny Pilot or all other
Penny Pilot Options.
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mstockstill on DSK4VPTVN1PROD with NOTICES
rebates in place for all other Penny Pilot
Options will continue to incentivize
NOM Participants to transact business
on the Exchange because despite the
increase to the fees and the rebate
reduction, the pricing for these NonPenny [sic] Pilot Options remains
competitive. The Exchange also believes
that it is equitable and not unfairly
discriminatory to assess the Deleted
Symbols the fees and rebates currently
assessed and paid all other Penny Pilot
Options because the fees and rebates
would be the same as those assessed
and paid for all other Non-Penny [sic]
Pilot Options today. The Exchange
would assess and pay fees and rebates
for the Deleted Symbols, which are NonPenny [sic] Pilot symbols, the same
pricing as is assessed and paid for all
other Non-Penny [sic] Pilot symbols
options.
The Exchange’s proposal to make
technical corrections in Chapter XV,
Section 2, by replacing ‘‘$0.00’’ with
‘‘N/A’’ for several categories is
reasonable, equitable and not unfairly
discriminatory because this is not a
change to these fees and rebates, but a
clarification that in these instances ‘‘N/
A’’ better reflects that a fee is not
relevant for this category rather than
using ‘‘$0.00’’ which simply reflects that
no fee is currently being charged for this
category.
The Exchange operates in a highly
competitive market comprised of ten
U.S. options exchanges in which
sophisticated and knowledgeable
market participants can and do send
order flow to competing exchanges if
they deem fee levels at a particular
exchange to be excessive. The Exchange
believes that the proposed amended fee
and rebate scheme is competitive and
similar to other fees and rebates in place
on other exchanges. The Exchange
believes that this competitive
marketplace materially impacts the fees
and rebates present on the Exchange
today and substantially influences the
proposal set forth above.
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. To the contrary, BX
has designed its fees and rebates to
compete effectively for the execution
and routing of options contracts and to
reduce the overall cost to investors of
options trading. The Exchange believes
that the proposed fee/rebate pricing
structure would attract liquidity to and
benefit order interaction at the Exchange
to the benefit of all market participants.
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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.16 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–BX–2012–060 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–2012–060. 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–
2012–060 and should be submitted on
or before October 5, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–22688 Filed 9–13–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67816; File No. SR–NSX–
2012–14]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Clarify
the Purpose of, and Statutory Basis
for, the September 4, 2012 Changes to
the NSX Fee and Rebate Schedule
September 10, 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
September 4, 2012, National Stock
Exchange, Inc. filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change, as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comment on the proposed rule change
from interested persons.
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
16 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
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]]>Agencies
[Federal Register Volume 77, Number 179 (Friday, September 14, 2012)]
[Notices]
[Pages 56883-56886]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22688]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67822; File No. SR-BX-2012-060]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Transaction Fees
September 10, 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 August 30, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 rebates and fees relating
to various options and make technical corrections to this section.
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
[[Page 56884]]
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 the proposed rule change is to amend Chapter XV,
Section 2(1) to amend rebates and fees for Customers, BX Options Market
Makers \3\ and Non-Customers \4\ in various options,\5\ as well as
remove certain options from the Fees and Rebates schedule below,\6\ as
follows:
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\3\ A BX Options Market Makers must be registered as such
pursuant to Chapter VII, Section 2 of the BX Options Rules, and must
also remain in good standing pursuant to Chapter VII, Section 4.
\4\ A Non-Customer includes a Professional, Firm, Broker-Dealer
and Non-BX Options Market Maker.
\5\ The Exchange is proposing to amend fees and rebates for
options overlying iShares Russell 2000 (``IWM''), PowerShares QQQ
Trust (``QQQ'')[supreg]; Standard and Poor's Depositary Receipts/
SPDRs (``SPY''); and all other Penny Pilot Options.
\6\ The Exchange is proposing to eliminate fees and rebates for
Bank of America Corporation (``BAC''), Citigroup, Inc. (``C''),
Cisco Systems, Inc. (``CSCO''), Ford Motor Company Common Stock
(``F''), Intel Corp (``INTC''), Microsoft Corporation (``MSFT''), JP
Morgan Chase & Co. (``JPM''), SPDR Gold Shares (``GLD''), iShares
Silver Trust (``SLV'') and United States Oil Fund LP Units (``USO'')
(``Deleted Symbols'').
Fees and Rebates
[Per executed contract]
----------------------------------------------------------------------------------------------------------------
BX Options
Customer market maker Non-customer \1\
----------------------------------------------------------------------------------------------------------------
IWM, QQQ and SPY:
Rebate to Add Liquidity............................ \2\ $0.[15]00 \2\ $0.15 [$0.00] N/A
Fee to Add Liquidity............................... \3\ 0.1[5]8 \3\ 0.1[5]8 0.4[3]5
Rebate to Remove Liquidity......................... 0.12 [0.00] N/A [0.00] N/A
Fee to Remove Liquidity............................ [0.00] N/A 0.4[3]5 0.4[3]5
[BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV and USO:
Rebate to Add Liquidity............................ \2\ 0.15 \2\ 0.15 0.00
Fee to Add Liquidity............................... \3\ 0.37 \3\ 0.37 0.43
Rebate to Remove Liquidity......................... 0.32 0.00 0.00
Fee to Remove Liquidity............................ 0.00 0.43 0.43]
All Other Penny Pilot Options:
Rebate to Add Liquidity............................ \2\ 0.[1]00 \2\ 0.10 [0.00] N/A
Fee to Add Liquidity............................... \3\ 0.40 \3\ 0.40 0.4[3]5
Rebate to Remove Liquidity......................... 0.32 [0.00] N/A [0.00] N/A
Fee to Remove Liquidity............................ [0.00] N/A 0.4[3]5 0.4[3]5
----------------------------------------------------------------------------------------------------------------
\1\ A Non-Customer includes a Professional, Firm, Broker-Dealer and Non-BX Options Market Maker.
\2\ The Rebate to Add Liquidity will be paid to a Customer or BX Options Market Maker only when the Customer or
BX Options Market Maker is contra to a Non-Customer or BX Options Market Maker.
\3\ The Fee to Add Liquidity will be assessed to a Customer or BX Options Market Maker only when the Customer or
BX Options Market Maker is contra to a Customer.
The Exchange is proposing to eliminate the Rebate to Add Liquidity,
in any symbol, to a Customer. The Exchange is also proposing to
increase the Fee to Add Liquidity in IWM, QQQ and SPY from $0.15 to
$0.18 per executed contract for Customers and BX Options Market Makers.
For Non-Customers the Fee to Add or to Remove Liquidity in IWM, QQQ and
SPY and for all other Penny Pilot Options would increase from $0.43 to
$0.45 per executed contract. Additionally, for BX Options Market Makers
the Fee to Remove Liquidity in IWM, QQQ and SPY and for all other Penny
Pilot Options would increase from $0.43 to $0.45 per executed contract.
The Exchange is also proposing to remove entirely from the Fees and
Rebates schedule certain other options.\7\
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\7\ Id. As a result, the pricing for the Deleted Symbols
currently in place will be eliminated and revert to the current fees
and rebates for all other Penny Pilot Options. The Rebate to Add
Liquidity will decrease for Customers and BX Options Market Makers
from $0.15 to $0.00 and from $0.15 to $0.10 per contract,
respectively. A Non-Customer will continue not to be paid a Rebate
for Adding Liquidity. The Rebate to Remove Liquidity will remain
unchanged, a Customer will continue to be paid a $0.32 per contract
rebate and BX Options Market Makers and Non-Customers will not be
entitled to a Rebate to Remove Liquidity. The Fee to Remove
Liquidity will remain unchanged for Customers as they will not be
assessed this fee as is the case today. The Fee for Removing
Liquidity will increase for BX Options Market Makers and Non-
Customers from $0.43 to $0.45 per contract because the Exchange is
proposing to increase this fee.
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The Exchange is also proposing to make technical corrections in
Chapter XV, Section 2 by replacing ``$0.00'' with ``N/A'' for several
categories. This is not a change to these fees and rebates, but a
technical amendment since in these instances ``N/A'' better reflects
that a fee is not relevant for this category rather than ``$0.00''
which simply reflects that no fee is currently being charged for this
category.
The Exchange believes that the proposed amended fees and rebates
are competitive and will encourage BX members to transact business on
the Exchange. Despite the reduction of the Customer rebate to $0.00,
the Exchange believes that the fees remain competitive with other
options exchanges and that market participants will continue to send
order flow to the Exchange.
[[Page 56885]]
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.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that its proposal to assess different fees
and rebates for IWM, QQQ and SPY as compared to all other Penny Pilot
Options is reasonable given the fact that certain symbols such as IWM,
QQQ and SPY are highly liquid Penny Pilot Options as compared to other
Penny Pilot Options. Additionally, other options exchanges
differentiate pricing by security today.\10\
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\10\ See NASDAQ OMX PHLX LLC's (``Phlx'') Pricing Schedule,
which has different pricing for its Select Symbols and different
pricing for other Multiply Listed Options. See also the NASDAQ
Options Market LLC (``NOM'') at Chapter XV, Section 2(1), which
distinguishes pricing for NDX and MNX. See also the International
Securities Exchange LLC's Fee Schedule, which distinguishes pricing
for Special Non-Select Penny Pilot Symbols. See also the Chicago
Board Options Exchange, Incorporated's Fees Schedule, which
distinguishes index products.
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The Exchange believes that its proposal to assess different fees
and rebates for IWM, QQQ and SPY as compared to all other Penny Pilot
Options is equitable and not unfairly discriminatory as described
hereafter. With respect to the proposed elimination of the Rebate to
Add Liquidity \11\ for IWM, QQQ, SPY and all other Penny Pilot Options,
the Exchange believes it is critical to incentivize BX Options Market
Makers because they have obligations to the market and regulatory
requirements,\12\ which normally do not apply to other market
participants. A BX Options Market Maker has the obligation to make
continuous markets, engage in a course of dealings reasonably
calculated to contribute to the maintenance of a fair and orderly
market, and not make bids or offers or enter into transactions that are
inconsistent with a course of dealings. The Exchange is proposing to
eliminate the Customer Rebate to Add Liquidity because the Exchange
believes that Customers do not require a similar incentive as do BX
Options Market Makers because they post liquidity on the Exchange for
reasons other than the opportunity to receive rebates and additionally,
Customers, unlike BX Options Market Makers, are not assessed a Fee to
Remove Liquidity.\13\ BX Options Market Makers would continue to
receive the opportunity to earn a $0.10 per contract (all other Penny
Pilot Options) or $0.15 per contract (IWM, QQQ, and SPY) Rebate to Add
Liquidity only when they are contra to a Non-Customer or BX Options
Market Maker. The proposed differentiation as between Customers and BX
Options Market Makers and other market participants recognizes the
differing contributions made to the liquidity and trading environment
on the Exchange by BX Options Market Makers, as well as the differing
mix of orders entered. This is not to say that Customer order flow is
not important, to the contrary, the Exchange believes that the pursuit
of such order flow by BX Options Market Makers and other market
participants because of the valuable liquidity Customer order flow
brings to the marketplace is the very reason that at this time, the
Exchange desires to incentivize and reward BX Options Market Makers to
make continuous markets and pursue Customer Order which can be freely
removed at no expense. Also, it is important to note that BX Options
Market Makers are unaware at the time the order is entered whether they
would be entitled to a $0.10 or $0.15 per contract Rebate to Add
Liquidity, depending on the security, because they are unaware of the
identity of the contra-party, which would determine whether they
receive a rebate. Because of anonymity of the contra-parties, BX
Options Market Makers aggressively pursue order flow which benefits all
market participants.
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\11\ The Exchange proposes to eliminate for Customers the Rebate
to Add Liquidity for IWM, QQQ, and SPY of $0.15 per contract and of
$0.10 per contract for other Penny Pilot Options.
\12\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a Market Maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on BX for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
\13\ Today, Customers are not assessed a Fee to Remove Liquidity
unlike other market participants.
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The Exchange's proposal to increase the Fee to Add Liquidity for
IWM, QQQ, SPY for all market participants and for Non-Customers in all
other Penny Pilot Options, as well as to increase the Fee to Remove
Liquidity for IWM, QQQ, SPY and all other Penny Pilot Options for BX
Options Market Makers and for Non-Customers is reasonable because the
increased fees would allow the Exchange to continue to reward Customers
for removing liquidity, and BX Options Market Makers for providing
liquidity with rebates. The advantage of increased Customer order flow
benefits all market participants. In addition, the proposed amended
Fees to Add or to Remove Liquidity are no greater than the rates
assessed by other exchanges for similar fees.\14\ Attracting Customer,
BX Options Market Maker, and Non-Customer order flow to the Exchange
benefits all market participants. BX Options Market Makers have burdens
that do not apply to other market participants. The Exchange is also
uniformly assessing all Non-Customer market participants
(Professionals, Firms, Broker-Dealers, Non-BX Options Market Makers and
BX Options Market Makers) the same $0.45 per executed contract Fee to
Add or to Remove Liquidity on every transaction.
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\14\ See BATS Exchange, Inc.'s Fee Schedule. See also NOM
Chapter XV, Section 2 (the Penny Pilot Fees to Remove Liquidity are
$0.45 per contract for all market participants).
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The Exchange's proposal to increase the Fee to Add Liquidity for
IWM, QQQ, SPY for all market participants and for Non-Customers of all
other Penny Pilot Options is equitable and not unfairly discriminatory
because the Exchange is increasing all market participant Fees to Add
Liquidity. Specifically, while Customers and BX Options Market Makers
are being increased by $0.03 per executed contract, Non-Customers are
being increased by $0.02 per executed contract because they are
assessed higher fees. The Exchange is assessing higher fees to all
participants and not a select group of market participants. The
Exchange's proposal to increase the Fee to Remove Liquidity for BX
Options Market Makers and Non-Customers for IWM, QQQ, SPY and for all
other Penny Pilot Options is equitable and not unfairly discriminatory
because the Exchange is uniformly assessing all market participants,
except Customers,\15\ a $0.45 per executed contract Fee to Remove
Liquidity.
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\15\ Customers are not assessed a Fee to Remove Liquidity today
in either Penny Pilot or all other Penny Pilot Options.
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The Exchange believes that its proposal to eliminate the fees and
rebates currently in place for Deleted Symbols and instead include
these symbols in all other Penny Pilot Options and assess those fees
and pay those rebates is reasonable because the Exchange does not
believes [sic] it is necessary to incentivize BX Options Participants
with higher rebates and lower fees as compare [sic] to other Non-Penny
[sic] Pilot Options. The Exchange believes that the fee [sic] and
[[Page 56886]]
rebates in place for all other Penny Pilot Options will continue to
incentivize NOM Participants to transact business on the Exchange
because despite the increase to the fees and the rebate reduction, the
pricing for these Non-Penny [sic] Pilot Options remains competitive.
The Exchange also believes that it is equitable and not unfairly
discriminatory to assess the Deleted Symbols the fees and rebates
currently assessed and paid all other Penny Pilot Options because the
fees and rebates would be the same as those assessed and paid for all
other Non-Penny [sic] Pilot Options today. The Exchange would assess
and pay fees and rebates for the Deleted Symbols, which are Non-Penny
[sic] Pilot symbols, the same pricing as is assessed and paid for all
other Non-Penny [sic] Pilot symbols options.
The Exchange's proposal to make technical corrections in Chapter
XV, Section 2, by replacing ``$0.00'' with ``N/A'' for several
categories is reasonable, equitable and not unfairly discriminatory
because this is not a change to these fees and rebates, but a
clarification that in these instances ``N/A'' better reflects that a
fee is not relevant for this category rather than using ``$0.00'' which
simply reflects that no fee is currently being charged for this
category.
The Exchange operates in a highly competitive market comprised of
ten U.S. options exchanges in which sophisticated and knowledgeable
market participants can and do send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive. The
Exchange believes that the proposed amended fee and rebate scheme is
competitive and similar to other fees and rebates in place on other
exchanges. The Exchange believes that this competitive marketplace
materially impacts the fees and rebates present on the Exchange today
and substantially influences the proposal set forth above.
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. To the contrary, BX has designed its fees and
rebates to compete effectively for the execution and routing of options
contracts and to reduce the overall cost to investors of options
trading. The Exchange believes that the proposed fee/rebate pricing
structure would attract liquidity to and benefit order interaction at
the Exchange to the benefit of all market participants.
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.\16\ 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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\16\ 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-2012-060 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-2012-060. 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-2012-060 and should be
submitted on or before October 5, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22688 Filed 9-13-12; 8:45 am]
BILLING CODE 8011-01-P
