Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Pricing of Options on Facebook, Inc., Google, Inc. and Groupon, Inc., 57614-57617 [2012-22910]

Download as PDF 57614 Federal Register / Vol. 77, No. 181 / Tuesday, September 18, 2012 / Notices forth in the proposed amendments to NYSE Arca Options Rule 6.96, would be the least disruptive means to correct these errors, except in cases where Arca Securities can assign all such error positions to all affected OTP Holders or OTP Firms of the Exchange. Overall, the proposed amendments are designed to ensure full trade certainty for market participants and to avoid disrupting the clearance and settlement process. The proposed amendments are also designed to provide a consistent methodology for handling error positions in a manner that does not discriminate among OTP Holders or OTP Firms. The proposed amendments are also consistent with Section 6 of the Act insofar as they would require Arca Securities to establish controls to restrict the flow of any confidential information between the third-party broker and Arca Securities/the Exchange associated with the liquidation of error positions. 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 that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. mstockstill on DSK4VPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 18 and Rule 19b– 4(f)(6)19 thereunder. NYSE Arca has requested that the Commission waive the 30-day operative delay.20 The Commission believes that waiver of the operative delay is consistent with the protection of 18 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 20 17 CFR 240.19b–4(f)(6)(iii). 19 17 VerDate Mar<15>2010 18:39 Sep 17, 2012 Jkt 226001 investors and the public interest. Such waiver would allow the Exchange, without delay, to implement the proposed rule change, which is designed to provide a consistent methodology for handling error positions in a manner that does not discriminate among OTP Holders or OTP Firms. The Commission also notes that the proposed rule change is based on, and substantially similar to, NYSE Arca Equities Rule 7.45(d), which the Commission recently approved.21 Accordingly, the Commission designates the proposal operative upon filing.22 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. 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–NYSEArca–2012–100 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–NYSEArca–2012–100. 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 21 See Securities Exchange Act Release No. 66963 (May 10, 2012), 77 FR 28919 (May 16, 2012) (SR– NYSEArca–2012–22). 22 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule change’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 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 a.m. and 3 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– NYSEArca–2012–100 and should be submitted on or before October 9, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–22909 Filed 9–17–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67837; File No. SR– NASDAQ–2012–102] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Pricing of Options on Facebook, Inc., Google, Inc. and Groupon, Inc. September 12, 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 31, 2012, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ 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 NASDAQ. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 23 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\18SEN1.SGM 18SEN1 57615 Federal Register / Vol. 77, No. 181 / Tuesday, September 18, 2012 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The NASDAQ Stock Market LLC proposes to modify pricing for NASDAQ members using the NASDAQ Options Market (‘‘NOM’’), NASDAQ’s facility for executing and routing standardized equity and index options. Specifically, NASDAQ proposes to amend Chapter XV, Section 2 entitled ‘‘NASDAQ Options Market—Fees and Rebates’’ to adopt rebates and fees relating to options on Facebook, Inc. (‘‘FB’’), Google, Inc. (‘‘GOOG’’) and Groupon, Inc. (‘‘GRPN’’). While the changes proposed herein are effective upon filing, the Exchange has designated these changes to be operative on September 4, 2012. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. of the most significant aspects of such statements. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for 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, Customer Rebate to Add Liquidity ....................................................... Fee for Adding Liquidity ....................................................... Fee for Removing Liquidity .................................................. Professional $0.77 N/A 0.79 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change NASDAQ proposes to amend Chapter XV, Section 2 to adopt rebates and fees relating to FB, GOOG and GRPN options.3 The Exchange has previously adopted pricing specific to certain securities as have other options exchanges. The Exchange proposes to assess the following Rebates to Add Liquidity 4, Fees for Adding Liquidity and Fees for Removing Liquidity 5 for transactions in FB, GOOG and GRPN: Non-NOM market maker Firm N/A 0.45 0.85 N/A 0.45 0.85 N/A 0.45 0.85 NOM market maker N/A 0.25 0.79 mstockstill on DSK4VPTVN1PROD with NOTICES The Exchange is proposing to increase the Customer Rebate to Add Liquidity for FB, GOOG and GRPN. Today, Customers receive the Non-Penny Pilot Option Rebate to Add Liquidity. The FB, GOOG and GRPN Customer Rebate to Add Liquidity would increase from $0.20 per contract (Non-Penny Pilot Options Rebate to Add Liquidity) to $0.77 per contract (FB, GOOG and GRPN Rebate to Add Liquidity). No other market participant would be entitled to a Rebate to Add Liquidity in FB, GOOG and GRPN, as is the case today.6 The Exchange is proposing to increase the Professional Fee for Adding Liquidity from $0.30 per contract (NonPenny Pilot Options Fee for Adding Liquidity) to $0.45 per contract Professional Fee for Adding Liquidity in FB, GOOG and GRPN. Firms and NonNOM Market Makers would continue to pay a $0.45 per contract Fee for Adding Liquidity in FB, GOOG and GRPN as they do today for Non-Penny Pilot Options. The Exchange would decrease the NOM Market Maker Fee for Adding Liquidity from $0.30 per contract (NonPenny Pilot Options Fee for Adding Liquidity) to a $0.25 per contract NOM Market Maker Fee for Adding Liquidity in FB, GOOG and GRPN. Customers would continue to incur no Fee for Adding Liquidity in FB, GOOG and GRPN, as is the case today.7 The Exchange is proposing to increase the Fees for Removing Liquidity for FB, GOOG and GRPN. The FB, GOOG and GRPN Fees for Removing Liquidity would increase as follows: A Customer that today pays a Non-Penny Pilot Options Fee for Removing Liquidity of $0.45 per contract would pay a $0.79 per contract Fee for Removing Liquidity in FB, GOOG and GRPN, a Professional, Firm and Non-NOM Market Maker that today pays a $0.50 per contract NonPenny Pilot Fee for Removing Liquidity would pay $0.85 per contract Fee for Removing Liquidity in FB, GOOG and GRPN and a NOM Market Maker that today pays $0.50 per contract NonPenny Pilot Options Fee for Removing Liquidity would pay a $0.79 per contract Fee for Removing Liquidity in FB, GOOG and GRPN.8 The Exchange believes that this pricing will incentivize members to transact FB, GOOG and GRPN on NOM. The Exchange notes that if FB, GOOG and GRPN are included in the Penny Pilot at a later date, the Exchange would file to eliminate the specific fees and rebates for FB, GOOG and/or GRPN in order that FB, GOOG and GRPN would be subject to the Exchange’s Penny Pilot Options 9 pricing. The Exchange is also proposing to make a technical amendment to the pricing in Section 2(1) of Chapter XV to replace any reference to ‘‘$0.00’’ to ‘‘N/ A’’ for clarity. The Exchange believes that using ‘‘N/A’’ reduces confusion when no rebate is being paid or fee is being assessed by the Exchange. 3 FB, GOOG and GRPN are Non-Penny Pilot Options. 4 An order that adds liquidity is one that is entered into NOM and rests on the NOM book. 5 An order that removes liquidity is one that is entered into NOM and that executes against an order resting on the NOM book. 6 Today, only a Customer receives a Rebate to Add Liquidity in Non-Penny Pilot Options. 7 Today, Customers are not assessed a Fee for Adding Liquidity in Non-Penny Pilot Options. 8 With respect to the Opening Cross, all orders would be subject to Chapter XV, Section 2(2). 9 The Penny Pilot was established in March 2008 and in October 2009 was expanded and extended through June 30, 2012. See Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008–026) (notice of filing and immediate effectiveness establishing Penny Pilot); 60874 (October 23, 2009), 74 FR 56682 (November 2, 2009) (SR–NASDAQ–2009–091) (notice of filing and immediate effectiveness expanding and extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) (SR–NASDAQ–2009–097) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); 61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR–NASDAQ– 2010–013) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR–NASDAQ–2010–053) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); 65969 (December 15, 2011), 76 FR 79268 (December 21, 2011) (SR–NASDAQ– 2011–169) (notice of filing and immediate effectiveness extension and replacement of Penny Pilot); and 67325 (June 29, 2012), 77 FR 40127 (July 6, 2012) (SR–NASDAQ–2012–075) (notice of filing and immediate effectiveness extension and replacement of Penny Pilot through December 31, 2012). See also NOM Rules, Chapter VI, Section 5. VerDate Mar<15>2010 18:39 Sep 17, 2012 Jkt 226001 PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 2. Statutory Basis NASDAQ believes that the proposed rule changes are consistent with the E:\FR\FM\18SEN1.SGM 18SEN1 mstockstill on DSK4VPTVN1PROD with NOTICES 57616 Federal Register / Vol. 77, No. 181 / Tuesday, September 18, 2012 / Notices provisions of Section 6 of the Act,10 in general, and with Section 6(b)(4) of the Act,11 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 NASDAQ operates or controls. 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 or the rebate offered to be inadequate. The Exchange believes that the proposed 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. The Exchange believes that its proposed Customer Rebate to Add Liquidity for FB, GOOG and GRPN is reasonable because the Exchange is continuing to incentivize NOM Participants to transact Customer order flow on NOM. Customer order flow benefits all market participants through the increased liquidity in the market. The Exchange believes that its proposed Customer Rebate to Add Liquidity for FB, GOOG and GRPN is equitable and not unfairly discriminatory because today in the non-Penny Pilot names the Exchange only offers Customers a Rebate to Add Liquidity. The Exchange will continue to only offer Customers a rebate but increase that rebate. The Exchange believes the proposed increased Professional Fee for Adding Liquidity in FB, GOOG and GRPN (from $0.30 to $0.45 per contract) is reasonable because it is within the range of fees assessed today to Firms and NonNOM Market Makers transacting NonPenny Pilot Options on NOM today when those market participants are adding liquidity.12 The Exchange believes that decreasing the NOM Market Maker Fee for Adding Liquidity is reasonable because the Exchange is seeking to incentivize NOM Market Makers to continue to add liquidity on NOM by lowering the transaction fee from $0.30 to $0.25 per contract. The Firm and Non-NOM Market Maker Fees 10 15 U.S.C. 78f. U.S.C. 78f(b)(4). 12 Firms and Non-NOM Market Makers are assessed a Non-Penny Pilot Option Fee for Adding Liquidity of $0.45 per contract. These market participants would continue to be assessed the same fees. 11 15 VerDate Mar<15>2010 18:39 Sep 17, 2012 Jkt 226001 for Adding Liquidity in FB, GOOG and GRPN will remain at $0.45 per contract. The Exchange believes that assessing Professionals a similar Fee for Adding Liquidity in FB, GOOG and GRPN as Firms and Non-NOM Market Makers is equitable and not unfairly discriminatory because the Exchange is assessing all market participants the same fee, except Customers who are not assessed a fee and NOM Market Makers who are assessed a lower fee. As previously mentioned, attracting Customer orders enhances liquidity on the Exchange for the benefit of all market participants. The Exchange believes that assessing NOM Market Makers a lower Fee for Adding Liquidity in FB, GOOG and GRPN is equitable and not unfairly discriminatory because NOM Market Makers have obligations to the market and regulatory requirements,13 which normally do not apply to other market participants. A NOM 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 proposed differentiation as between NOM Market Makers and other market participants recognizes the differing contributions made to the liquidity and trading environment on the Exchange by NOM Market Makers, as well as the differing mix of orders entered. The Exchange believes that the proposed Fees for Removing Liquidity for FB, GOOG and GRPN are reasonable because the Exchange is proposing to increase the fees for all market participants in order to offer Customers an increased Rebate to Add Liquidity in FB, GOOG and GRPN of $0.77 per contract. The Exchange believes that offering Customers a financial incentive will attract additional Customer order flow to the Exchange. Also, the proposed Fees for Removing Liquidity in FB, GOOG and GRPN are similar to the non-Penny Pilot Options fees at BATS Exchange, Inc. (‘‘BATS’’).14 13 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 NOM for all purposes under the Act or rules thereunder. See Chapter VII, Section 5. 14 BATS has a $0.75 per contract fee for Customer orders that remove liquidity from the BATS Options PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 The Exchange believes that the proposed Fees for Removing Liquidity for FB, GOOG and GRPN are equitable and not unfairly discriminatory because all market participants would be assessed the same $0.85 per contract fee except Customers and NOM Market Makers who would be assessed a lower fee of $0.79 per contract. As mentioned previously, attracting Customer orders enhances liquidity on the Exchange for the benefit of all market participants and the increased fees for removing liquidity cover the cost of offering Customers a rebate to add liquidity in FB, GOOG and GRPN. Also, the NonPenny Pilot Customer Fee for Removing Liquidity is lower today for Customers as compared to other market participants ($0.45 per contract vs. $0.50 per contract), the proposed Customer Fee for Removing Liquidity in FB, GOOG and GRPN would be lower for Customers as compared to Professionals, Firms and Non-NOM Market Makers. The Exchange believes that providing NOM Market Makers a lower Fee for Removing Liquidity in FB, GOOG and GRPN as compared to Professionals, Firms and Non-NOM Market Makers is equitable and not unfairly discriminatory because NOM Market Makers have obligations to the market and regulatory requirements, which normally do not apply to other market participants. The proposed differentiation as between Customers and NOM Market Makers and other market participants recognizes the differing contributions made to the liquidity and trading environment on the Exchange by Customers and NOM Market Makers, as well as the differing mix of orders entered. In the current U.S. options market, many of the contracts are quoted in pennies. Under this pricing structure, the minimum penny tick increment equates to a $1.00 economic value difference per contract, given that a single standardized U.S. option contract covers 100 shares of the underlying stock. Where contracts are quoted in $0.05 increments (non-pennies), the value per tick is $5.00 in proceeds to the investor transacting in these contracts. Liquidity rebate and access fee structures on the make-take exchanges, including NOM, for securities quoted in penny increments are commonly in the $0.30 to $0.45 per contract range.15 A book in non-Penny Pilot securities. BATS also has an $0.80 per contract fee for Professionals, Firms and Market Maker orders that remove liquidity from the BATS Options order book in non-Penny Pilot Securities. See BATS BZX Exchange Fee Schedule. 15 NOM is proposing to only pay a Customer a Rebate to Add Liquidity in FB, GOOG and GRPN. E:\FR\FM\18SEN1.SGM 18SEN1 Federal Register / Vol. 77, No. 181 / Tuesday, September 18, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES $0.30 per contract rebate in a penny quoted security is a rebate equivalent to 30% of the value of the minimum tick. A $0.45 per contract fee in a penny quoted security is a charge equivalent to 45% of the value of that minimum tick. In other words, in penny quoted securities, where the price is improved by one tick with an access fee of $0.45 per contract, an investor paying to access that quote is still $0.55 better off than trading at the wider spread, even without the access fee ($1.00 of price improvement ¥ $0.45 access fee = $0.55 better economics). This computation is equally true for securities quoted in wider increments. Rebates and access fees near the $0.85 per contract level equate to only 17% of the value of the minimum tick in Non-Penny Pilot Options, less than the experience today in Penny Pilot Options. For example, a retail investor transacting a single contract in a non-penny quoted security quoted a single tick tighter than the rest of the market, and paying an access fee of $0.79 per contract, is receiving an economic benefit of $4.21 ($0.05 improved tick = $5.00 in proceeds ¥ $0.79 access fee = $4.21). The Exchange believes that encouraging NOM Market Makers to quote more aggressively by reducing transaction fees 16 and incentivizing Customer orders to post on NOM will narrow the spread in FB, GOOG and GRPN to the benefit of investors and all market participants by improving the overall economics of the resulting transactions that occur on the Exchange, even if the access fee paid in connection with such transactions is higher. Accordingly, the Exchange believes that the proposed fees and rebates for FB, GOOG and GRPN are reasonable, equitable and not unfairly discriminatory. Further, the Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to adopt specific pricing for FB, GOOG and GRPN because pricing by symbol is a common practice on many U.S. options exchanges as a means to incentivize order flow to be sent to an exchange for execution in the most actively traded Other market participants would not be entitled to a rebate. 16 The Exchange notes that the proposed $0.25 per contract NOM Market Maker Fee for Adding in FB, GOOG and GRPN is significantly less than transaction fees plus payment for order flow fees assessed by other options exchanges. For example, on NASDAQ OMX PHLX LLC (‘‘Phlx’’), the combined payment for order flow fee plus the transaction fee is $0.92 per contract. See Phlx’s Pricing Schedule. Unlike Penny Pilot Options, the Exchange believes this significant reduction in fees for adding liquidity will have the same effect as a rebate in non-Penny Pilot Options in terms of a narrower spread. VerDate Mar<15>2010 18:39 Sep 17, 2012 Jkt 226001 57617 options classes. The Exchange notes that FB, GOOG and GRPN are some of the most actively traded options in the U.S.17 Finally, the Exchange believes the proposed technical amendments to Section 2(1) of Chapter XV to replace any reference to ‘‘$0.00’’ to ‘‘N/A’’ is reasonable, equitable and not unfairly discriminatory because the Exchange is identifying when no fees are assessed and no rebates paid with an ‘‘N/A’’ to avoid any confusion. change is consistent with the Act. Comments may be submitted by any of the following methods: B. Self-Regulatory Organization’s Statement on Burden on Competition NASDAQ does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. To the contrary, NASDAQ 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. Paper Comments 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.18 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 17 From August 1, 2012 through August 21, 2012, FB was the 5th most actively traded equity option class, GOOG was the 28th most actively traded equity option class and GRPN was the 51st most actively traded equity option class. 18 15 U.S.C. 78s(b)(3)(A)(ii). PO 00000 Frm 00062 Fmt 4703 Sfmt 9990 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–NASDAQ–2012–102 on the subject line. • 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–NASDAQ–2012–102. 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 a.m. and 3 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– NASDAQ–2012–102 and should be submitted on or before October 9, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–22910 Filed 9–17–12; 8:45 am] BILLING CODE 8011–01–P 19 17 E:\FR\FM\18SEN1.SGM CFR 200.30–3(a)(12). 18SEN1

Agencies

[Federal Register Volume 77, Number 181 (Tuesday, September 18, 2012)]
[Notices]
[Pages 57614-57617]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22910]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67837; File No. SR-NASDAQ-2012-102]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Pricing of Options on Facebook, Inc., Google, Inc. and 
Groupon, Inc.

September 12, 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 31, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' 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 NASDAQ. 
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.

---------------------------------------------------------------------------

[[Page 57615]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NASDAQ Stock Market LLC proposes to modify pricing for NASDAQ 
members using the NASDAQ Options Market (``NOM''), NASDAQ's facility 
for executing and routing standardized equity and index options. 
Specifically, NASDAQ proposes to amend Chapter XV, Section 2 entitled 
``NASDAQ Options Market--Fees and Rebates'' to adopt rebates and fees 
relating to options on Facebook, Inc. (``FB''), Google, Inc. (``GOOG'') 
and Groupon, Inc. (``GRPN'').
    While the changes proposed herein are effective upon filing, the 
Exchange has designated these changes to be operative on September 4, 
2012.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://www.nasdaq.cchwallstreet.com, 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. 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
    NASDAQ proposes to amend Chapter XV, Section 2 to adopt rebates and 
fees relating to FB, GOOG and GRPN options.\3\ The Exchange has 
previously adopted pricing specific to certain securities as have other 
options exchanges. The Exchange proposes to assess the following 
Rebates to Add Liquidity \4\, Fees for Adding Liquidity and Fees for 
Removing Liquidity \5\ for transactions in FB, GOOG and GRPN:
---------------------------------------------------------------------------

    \3\ FB, GOOG and GRPN are Non-Penny Pilot Options.
    \4\ An order that adds liquidity is one that is entered into NOM 
and rests on the NOM book.
    \5\ An order that removes liquidity is one that is entered into 
NOM and that executes against an order resting on the NOM book.

----------------------------------------------------------------------------------------------------------------
                                                                                  Non-NOM market    NOM market
                                     Customer      Professional        Firm            maker           maker
----------------------------------------------------------------------------------------------------------------
Rebate to Add Liquidity.........           $0.77             N/A             N/A             N/A             N/A
Fee for Adding Liquidity........             N/A            0.45            0.45            0.45            0.25
Fee for Removing Liquidity......            0.79            0.85            0.85            0.85            0.79
----------------------------------------------------------------------------------------------------------------

    The Exchange is proposing to increase the Customer Rebate to Add 
Liquidity for FB, GOOG and GRPN. Today, Customers receive the Non-Penny 
Pilot Option Rebate to Add Liquidity. The FB, GOOG and GRPN Customer 
Rebate to Add Liquidity would increase from $0.20 per contract (Non-
Penny Pilot Options Rebate to Add Liquidity) to $0.77 per contract (FB, 
GOOG and GRPN Rebate to Add Liquidity). No other market participant 
would be entitled to a Rebate to Add Liquidity in FB, GOOG and GRPN, as 
is the case today.\6\
---------------------------------------------------------------------------

    \6\ Today, only a Customer receives a Rebate to Add Liquidity in 
Non-Penny Pilot Options.
---------------------------------------------------------------------------

    The Exchange is proposing to increase the Professional Fee for 
Adding Liquidity from $0.30 per contract (Non-Penny Pilot Options Fee 
for Adding Liquidity) to $0.45 per contract Professional Fee for Adding 
Liquidity in FB, GOOG and GRPN. Firms and Non-NOM Market Makers would 
continue to pay a $0.45 per contract Fee for Adding Liquidity in FB, 
GOOG and GRPN as they do today for Non-Penny Pilot Options. The 
Exchange would decrease the NOM Market Maker Fee for Adding Liquidity 
from $0.30 per contract (Non-Penny Pilot Options Fee for Adding 
Liquidity) to a $0.25 per contract NOM Market Maker Fee for Adding 
Liquidity in FB, GOOG and GRPN. Customers would continue to incur no 
Fee for Adding Liquidity in FB, GOOG and GRPN, as is the case today.\7\
---------------------------------------------------------------------------

    \7\ Today, Customers are not assessed a Fee for Adding Liquidity 
in Non-Penny Pilot Options.
---------------------------------------------------------------------------

    The Exchange is proposing to increase the Fees for Removing 
Liquidity for FB, GOOG and GRPN. The FB, GOOG and GRPN Fees for 
Removing Liquidity would increase as follows: A Customer that today 
pays a Non-Penny Pilot Options Fee for Removing Liquidity of $0.45 per 
contract would pay a $0.79 per contract Fee for Removing Liquidity in 
FB, GOOG and GRPN, a Professional, Firm and Non-NOM Market Maker that 
today pays a $0.50 per contract Non-Penny Pilot Fee for Removing 
Liquidity would pay $0.85 per contract Fee for Removing Liquidity in 
FB, GOOG and GRPN and a NOM Market Maker that today pays $0.50 per 
contract Non-Penny Pilot Options Fee for Removing Liquidity would pay a 
$0.79 per contract Fee for Removing Liquidity in FB, GOOG and GRPN.\8\
---------------------------------------------------------------------------

    \8\ With respect to the Opening Cross, all orders would be 
subject to Chapter XV, Section 2(2).
---------------------------------------------------------------------------

    The Exchange believes that this pricing will incentivize members to 
transact FB, GOOG and GRPN on NOM. The Exchange notes that if FB, GOOG 
and GRPN are included in the Penny Pilot at a later date, the Exchange 
would file to eliminate the specific fees and rebates for FB, GOOG and/
or GRPN in order that FB, GOOG and GRPN would be subject to the 
Exchange's Penny Pilot Options \9\ pricing.
---------------------------------------------------------------------------

    \9\ The Penny Pilot was established in March 2008 and in October 
2009 was expanded and extended through June 30, 2012. See Securities 
Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 
4, 2008) (SR-NASDAQ-2008-026) (notice of filing and immediate 
effectiveness establishing Penny Pilot); 60874 (October 23, 2009), 
74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091) (notice of 
filing and immediate effectiveness expanding and extending Penny 
Pilot); 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) 
(SR-NASDAQ-2009-097) (notice of filing and immediate effectiveness 
adding seventy-five classes to Penny Pilot); 61455 (February 1, 
2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-2010-013) (notice of 
filing and immediate effectiveness adding seventy-five classes to 
Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR-
NASDAQ-2010-053) (notice of filing and immediate effectiveness 
adding seventy-five classes to Penny Pilot); 65969 (December 15, 
2011), 76 FR 79268 (December 21, 2011) (SR-NASDAQ-2011-169) (notice 
of filing and immediate effectiveness extension and replacement of 
Penny Pilot); and 67325 (June 29, 2012), 77 FR 40127 (July 6, 2012) 
(SR-NASDAQ-2012-075) (notice of filing and immediate effectiveness 
extension and replacement of Penny Pilot through December 31, 2012). 
See also NOM Rules, Chapter VI, Section 5.
---------------------------------------------------------------------------

    The Exchange is also proposing to make a technical amendment to the 
pricing in Section 2(1) of Chapter XV to replace any reference to 
``$0.00'' to ``N/A'' for clarity. The Exchange believes that using ``N/
A'' reduces confusion when no rebate is being paid or fee is being 
assessed by the Exchange.
2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with 
the

[[Page 57616]]

provisions of Section 6 of the Act,\10\ in general, and with Section 
6(b)(4) of the Act,\11\ 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 NASDAQ operates or controls.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    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 or the 
rebate offered to be inadequate. The Exchange believes that the 
proposed 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.
    The Exchange believes that its proposed Customer Rebate to Add 
Liquidity for FB, GOOG and GRPN is reasonable because the Exchange is 
continuing to incentivize NOM Participants to transact Customer order 
flow on NOM. Customer order flow benefits all market participants 
through the increased liquidity in the market. The Exchange believes 
that its proposed Customer Rebate to Add Liquidity for FB, GOOG and 
GRPN is equitable and not unfairly discriminatory because today in the 
non-Penny Pilot names the Exchange only offers Customers a Rebate to 
Add Liquidity. The Exchange will continue to only offer Customers a 
rebate but increase that rebate.
    The Exchange believes the proposed increased Professional Fee for 
Adding Liquidity in FB, GOOG and GRPN (from $0.30 to $0.45 per 
contract) is reasonable because it is within the range of fees assessed 
today to Firms and Non-NOM Market Makers transacting Non-Penny Pilot 
Options on NOM today when those market participants are adding 
liquidity.\12\ The Exchange believes that decreasing the NOM Market 
Maker Fee for Adding Liquidity is reasonable because the Exchange is 
seeking to incentivize NOM Market Makers to continue to add liquidity 
on NOM by lowering the transaction fee from $0.30 to $0.25 per 
contract. The Firm and Non-NOM Market Maker Fees for Adding Liquidity 
in FB, GOOG and GRPN will remain at $0.45 per contract.
---------------------------------------------------------------------------

    \12\ Firms and Non-NOM Market Makers are assessed a Non-Penny 
Pilot Option Fee for Adding Liquidity of $0.45 per contract. These 
market participants would continue to be assessed the same fees.
---------------------------------------------------------------------------

    The Exchange believes that assessing Professionals a similar Fee 
for Adding Liquidity in FB, GOOG and GRPN as Firms and Non-NOM Market 
Makers is equitable and not unfairly discriminatory because the 
Exchange is assessing all market participants the same fee, except 
Customers who are not assessed a fee and NOM Market Makers who are 
assessed a lower fee. As previously mentioned, attracting Customer 
orders enhances liquidity on the Exchange for the benefit of all market 
participants. The Exchange believes that assessing NOM Market Makers a 
lower Fee for Adding Liquidity in FB, GOOG and GRPN is equitable and 
not unfairly discriminatory because NOM Market Makers have obligations 
to the market and regulatory requirements,\13\ which normally do not 
apply to other market participants. A NOM 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 proposed 
differentiation as between NOM Market Makers and other market 
participants recognizes the differing contributions made to the 
liquidity and trading environment on the Exchange by NOM Market Makers, 
as well as the differing mix of orders entered.
---------------------------------------------------------------------------

    \13\ 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 NOM for all purposes under 
the Act or rules thereunder. See Chapter VII, Section 5.
---------------------------------------------------------------------------

    The Exchange believes that the proposed Fees for Removing Liquidity 
for FB, GOOG and GRPN are reasonable because the Exchange is proposing 
to increase the fees for all market participants in order to offer 
Customers an increased Rebate to Add Liquidity in FB, GOOG and GRPN of 
$0.77 per contract. The Exchange believes that offering Customers a 
financial incentive will attract additional Customer order flow to the 
Exchange. Also, the proposed Fees for Removing Liquidity in FB, GOOG 
and GRPN are similar to the non-Penny Pilot Options fees at BATS 
Exchange, Inc. (``BATS'').\14\
---------------------------------------------------------------------------

    \14\ BATS has a $0.75 per contract fee for Customer orders that 
remove liquidity from the BATS Options book in non-Penny Pilot 
securities. BATS also has an $0.80 per contract fee for 
Professionals, Firms and Market Maker orders that remove liquidity 
from the BATS Options order book in non-Penny Pilot Securities. See 
BATS BZX Exchange Fee Schedule.
---------------------------------------------------------------------------

    The Exchange believes that the proposed Fees for Removing Liquidity 
for FB, GOOG and GRPN are equitable and not unfairly discriminatory 
because all market participants would be assessed the same $0.85 per 
contract fee except Customers and NOM Market Makers who would be 
assessed a lower fee of $0.79 per contract. As mentioned previously, 
attracting Customer orders enhances liquidity on the Exchange for the 
benefit of all market participants and the increased fees for removing 
liquidity cover the cost of offering Customers a rebate to add 
liquidity in FB, GOOG and GRPN. Also, the Non-Penny Pilot Customer Fee 
for Removing Liquidity is lower today for Customers as compared to 
other market participants ($0.45 per contract vs. $0.50 per contract), 
the proposed Customer Fee for Removing Liquidity in FB, GOOG and GRPN 
would be lower for Customers as compared to Professionals, Firms and 
Non-NOM Market Makers. The Exchange believes that providing NOM Market 
Makers a lower Fee for Removing Liquidity in FB, GOOG and GRPN as 
compared to Professionals, Firms and Non-NOM Market Makers is equitable 
and not unfairly discriminatory because NOM Market Makers have 
obligations to the market and regulatory requirements, which normally 
do not apply to other market participants. The proposed differentiation 
as between Customers and NOM Market Makers and other market 
participants recognizes the differing contributions made to the 
liquidity and trading environment on the Exchange by Customers and NOM 
Market Makers, as well as the differing mix of orders entered.
    In the current U.S. options market, many of the contracts are 
quoted in pennies. Under this pricing structure, the minimum penny tick 
increment equates to a $1.00 economic value difference per contract, 
given that a single standardized U.S. option contract covers 100 shares 
of the underlying stock. Where contracts are quoted in $0.05 increments 
(non-pennies), the value per tick is $5.00 in proceeds to the investor 
transacting in these contracts. Liquidity rebate and access fee 
structures on the make-take exchanges, including NOM, for securities 
quoted in penny increments are commonly in the $0.30 to $0.45 per 
contract range.\15\ A

[[Page 57617]]

$0.30 per contract rebate in a penny quoted security is a rebate 
equivalent to 30% of the value of the minimum tick. A $0.45 per 
contract fee in a penny quoted security is a charge equivalent to 45% 
of the value of that minimum tick. In other words, in penny quoted 
securities, where the price is improved by one tick with an access fee 
of $0.45 per contract, an investor paying to access that quote is still 
$0.55 better off than trading at the wider spread, even without the 
access fee ($1.00 of price improvement - $0.45 access fee = $0.55 
better economics). This computation is equally true for securities 
quoted in wider increments. Rebates and access fees near the $0.85 per 
contract level equate to only 17% of the value of the minimum tick in 
Non-Penny Pilot Options, less than the experience today in Penny Pilot 
Options. For example, a retail investor transacting a single contract 
in a non-penny quoted security quoted a single tick tighter than the 
rest of the market, and paying an access fee of $0.79 per contract, is 
receiving an economic benefit of $4.21 ($0.05 improved tick = $5.00 in 
proceeds - $0.79 access fee = $4.21). The Exchange believes that 
encouraging NOM Market Makers to quote more aggressively by reducing 
transaction fees \16\ and incentivizing Customer orders to post on NOM 
will narrow the spread in FB, GOOG and GRPN to the benefit of investors 
and all market participants by improving the overall economics of the 
resulting transactions that occur on the Exchange, even if the access 
fee paid in connection with such transactions is higher. Accordingly, 
the Exchange believes that the proposed fees and rebates for FB, GOOG 
and GRPN are reasonable, equitable and not unfairly discriminatory.
---------------------------------------------------------------------------

    \15\ NOM is proposing to only pay a Customer a Rebate to Add 
Liquidity in FB, GOOG and GRPN. Other market participants would not 
be entitled to a rebate.
    \16\ The Exchange notes that the proposed $0.25 per contract NOM 
Market Maker Fee for Adding in FB, GOOG and GRPN is significantly 
less than transaction fees plus payment for order flow fees assessed 
by other options exchanges. For example, on NASDAQ OMX PHLX LLC 
(``Phlx''), the combined payment for order flow fee plus the 
transaction fee is $0.92 per contract. See Phlx's Pricing Schedule. 
Unlike Penny Pilot Options, the Exchange believes this significant 
reduction in fees for adding liquidity will have the same effect as 
a rebate in non-Penny Pilot Options in terms of a narrower spread.
---------------------------------------------------------------------------

    Further, the Exchange believes that it is reasonable, equitable, 
and not unfairly discriminatory to adopt specific pricing for FB, GOOG 
and GRPN because pricing by symbol is a common practice on many U.S. 
options exchanges as a means to incentivize order flow to be sent to an 
exchange for execution in the most actively traded options classes. The 
Exchange notes that FB, GOOG and GRPN are some of the most actively 
traded options in the U.S.\17\ Finally, the Exchange believes the 
proposed technical amendments to Section 2(1) of Chapter XV to replace 
any reference to ``$0.00'' to ``N/A'' is reasonable, equitable and not 
unfairly discriminatory because the Exchange is identifying when no 
fees are assessed and no rebates paid with an ``N/A'' to avoid any 
confusion.
---------------------------------------------------------------------------

    \17\ From August 1, 2012 through August 21, 2012, FB was the 5th 
most actively traded equity option class, GOOG was the 28th most 
actively traded equity option class and GRPN was the 51st most 
actively traded equity option class.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. To the contrary, 
NASDAQ 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.\18\ 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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-NASDAQ-2012-102 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-NASDAQ-2012-102. 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 
a.m. and 3 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-NASDAQ-2012-102 and should 
be submitted on or before October 9, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22910 Filed 9-17-12; 8:45 am]
BILLING CODE 8011-01-P
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