Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule for Trading on BOX, 61808-61810 [2012-24956]
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61808
Federal Register / Vol. 77, No. 197 / Thursday, October 11, 2012 / Notices
Adviser), as well as in municipal bonds
not included in the 2018 Index, but
which Investment Adviser believes will
help the 2018 Fund track the 2018
Index. The 2019 Fund may at times
invest up to 20% of its assets in cash
and cash equivalents (including money
market funds affiliated with Investment
Adviser), as well as in municipal bonds
not included in the 2019 Index, but
which the Investment Adviser believes
will help the 2019 Fund track the 2019
Index.
This approval order is based on all of
the Exchange’s representations,
including those set forth above and in
the Notice, and the Exchange’s
description of the Funds.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act 20 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,21 that the
proposed rule change (SR–NYSEArca–
2012–92) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–24957 Filed 10–10–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67984; File No. SR–BOX–
2012–015]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
the Fee Schedule for Trading on BOX
pmangrum on DSK3VPTVN1PROD with NOTICES
October 4, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 notice is hereby
given that on September 25, 2012, BOX
Options Exchange LLC (the ‘‘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 Exchange filed the proposed rule
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 Exchange proposes additional
language in Section I (Exchange Fees) of
its Fee Schedule for trading on its
options facility, BOX Market LLC
(‘‘BOX’’) to specifically reference
Auction Transaction 5 order types, PIP
Orders and Agency Orders. A PIP Order
is a Customer Order (an agency order for
the account of a Public Customer,
Professional Customer, or a brokerdealer) designated for the BOX Price
Improvement Period (‘‘PIP’’). An
Agency Order is a block-size order that
a BOX Order Flow Provider seeks to
facilitate as agent through the BOX
Facilitation Auction or Solicitation
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
5 Auction Transactions are those transactions
executed on BOX through the Price Improvement
Period (‘‘PIP’’), the Solicitation Auction
mechanism, and Facilitation Auction mechanism.
U.S.C. 78f(b)(5).
21 15 U.S.C. 78s(b)(2).
22 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
14:03 Oct 10, 2012
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
BOX Options Exchange LLC (the
‘‘Exchange’’) proposes to add language
to its Fee Schedule for trading on its
options facility, BOX Market LLC
(‘‘BOX’’) to specifically reference certain
order types. The text of the proposed
rule change is available from the
principal office of the Exchange, on the
Exchange’s Internet Web site at https://
boxexchange.com, and at the
Commission’s Public Reference Room.
3 15
20 15
VerDate Mar<15>2010
change pursuant to Section
19(b)(3)(A)(ii) of the Act,3 and Rule
19b–4(f)(2) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
4 17
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Frm 00073
Fmt 4703
Sfmt 4703
Auction mechanism.6 These Auction
Transaction order types were assessed
an Exchange Fee on BOX prior to May
14, 2012, and have continued to be
assessed an Exchange Fee since the
launch of trading on BOX on May 14,
2012. Note that prior to May 14, 2012,
BOX was operated by Boston Options
Exchange Group, LLC as an options
trading facility of NASDAQ OMX BX,
Inc. Upon the commencement of the
Exchange’s operations as a national
securities exchange on May 14, 2012,
the same automated trading system is
now operated by BOX Market LLC as a
facility of the Exchange. As such, the
operation and functionalities of the
system are the same as was in effect
under the rules of the Boston Options
Exchange Group, LLC facility.
Additionally, the Exchange stated in its
proposed rule change to establish fees
for trading on BOX that all of the BOX
fees as of May 14, 2012, were identical
to fees in place prior to that date on the
Boston Options Exchange Group, LLC
options trading facility of NASDAQ
OMX BX, Inc.7 The Exchange Fee for
Auction Transactions for Broker-Dealers
($0.35) and Market Makers (a tiered fee
set forth in Section I.B. of the fee
schedule based on the Market Maker’s
average daily volume on BOX) were in
place on the Boston Options Exchange
Group, LLC facility and the Exchange
fully intended for these Exchange Fees
to be carried over and included on the
BOX Market LLC facility of the
Exchange. Similarly, the Exchange Fees
for customer orders in Auction
Transactions ($0.00 for Public
Customers and Professional Customers)
were inadvertently omitted from the
initial Exchange fee schedule. This
proposal will correct these clerical
errors as of the date of this filing.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,8
in general, and Section 6(b)(5) of the
Act,9 that the rules of an exchange be
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, to
remove impediments to and to perfect
the mechanism for a free and open
market and a national market system,
6 Note that the addition of the definitions of these
order types in proposed footnote 2 cause the
remaining footnotes on the fee schedule to be
renumbered to 3 through 5.
7 See Securities Exchange Act Release No. 66979
(May 14, 2012) 77 FR 29740 (May 18, 2012) (Notice
of Immediate Effectiveness of Proposed Rule
Change To Adopt the Fee Schedule For Trading on
BOX).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4).
E:\FR\FM\11OCN1.SGM
11OCN1
pmangrum on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 197 / Thursday, October 11, 2012 / Notices
and, in general, to protect investors and
the public interest.
The Exchange believes the exchange
fees for agency orders in Auction
Transactions are reasonable. The
proposed fee structure is intended to
attract order flow to BOX, and the PIP
in particular, by offering market
participants incentives to submit their
agency orders to BOX.
Additionally, the Exchange believes it
is equitable and not unfairly
discriminatory for BOX Market Makers
to have the opportunity to benefit from
a potentially discounted fee less than
that charged to broker-dealers. Market
Makers have obligations that other
Participants do not. In particular, they
must maintain active two-sided markets
in the classes in which they are
appointed, and must meet certain
minimum quoting requirements. As
such, the Exchange believes it is
appropriate that Market Makers be
charged potentially lower transaction
fees on BOX when they provide greater
volumes of liquidity to the market.
Further, the Exchange believes that
the proposed tiered and potentially
discounted fees for Market Makers that
on a daily basis, trade an average daily
volume (as calculated at the end of the
month) of 10,000 contracts or more on
BOX represents a fair and equitable
allocation of reasonable dues, fees, and
other charges as it is aimed at
incentivizing these participants to
provide a greater volume of liquidity to
the market. The Exchange believes that
giving incentives for this activity results
in increased volume on BOX. Such
increased volume increases potential
revenue to BOX, and would allow BOX
and the Exchange to spread its
administrative and infrastructure costs
over a greater number of transactions,
leading to lower costs per transaction.
The Exchange also believes it is
equitable and not unfairly
discriminatory that Public and
Professional Customers not be charged
fees for their agency orders in Auction
Transactions as compared to brokerdealers on BOX. The securities markets
generally, and BOX in particular, have
historically aimed to improve markets
for investors and develop various
features within the market structure for
customer benefit. As such, the Exchange
believes the exchange fees for Public
and Professional Customer Auction
Transactions are appropriate and not
unfairly discriminatory. The Exchange
believes comparably lower customer
transaction fees are reasonable. The
Exchange believes it promotes the best
interests of investors to have lower
transaction costs for Public and
Professional Customer orders in Auction
VerDate Mar<15>2010
14:03 Oct 10, 2012
Jkt 229001
Transactions, and that the low fees
attract participants to submit order flow
to the BOX Auction Transactions. The
Exchange believes the fees charged to
broker-dealers, and market makers are
reasonable because they are designed to
be comparable to the fees that such
accounts would be charged at
competing venues.10
Moreover, the Exchange believes the
exchange fees for broker-dealer
customer orders in Auction
Transactions are reasonable. As stated
above, BOX operates within a highly
competitive business. The fees charged
to broker-dealers are designed to be
comparable to the fees that such
accounts would be charged at
competing venues. As stated, the
Exchange believes it is equitable and not
unfairly discriminatory to charge
broker-dealer proprietary accounts
comparably higher fees than BOX
Market Makers and customers. As
discussed, Market Makers have
obligations that other Participants do
not. In particular, they must maintain
active two-sided markets in the classes
in which they are appointed, and must
meet certain minimum quoting
requirements. As such, the Exchange
believes it is appropriate that Market
Makers be charged lower fees on BOX.
The Exchange also believes it is
equitable and not unfairly
discriminatory that customers,
including Professionals, be charged
lower exchange fees for their customer
orders in Auction Transactions than
broker-dealers. The securities markets
generally, and BOX in particular, have
historically aimed to improve markets
for investors and develop various
features within the market structure for
customer benefit. As such, the Exchange
believes the proposed fees for brokerdealers, as compared to customers, is
appropriate and not unfairly
discriminatory.
The Exchange believes that the BOX
Exchange Fees for customer orders in
Auction Transactions will keep BOX
competitive with other exchanges as
well as apply in such a manner so as to
be equitable among BOX Participants.
The Exchange believes the BOX
Exchange Fees are fair, reasonable, and
competitive with fees in place on other
exchanges. Further, the Exchange
believes that this competitive
marketplace impacts the fees proposed
for BOX.
10 See e.g., Taker Fees or Fees for Removing
Liquidity on the ISE Fee Schedule and NASDAQ
Options Pricing as of September 2012.
PO 00000
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61809
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
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 Exchange Act 11
and Rule 19b–4(f)(2) thereunder,12
because it establishes or changes a due,
fee, or other charge applicable only to a
member.
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 Exchange 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–BOX–2012–015 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–BOX–2012–015. 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
11 15
12 17
E:\FR\FM\11OCN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
11OCN1
61810
Federal Register / Vol. 77, No. 197 / Thursday, October 11, 2012 / Notices
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–BOX–
2012–015 and should be submitted on
or before November 1, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–24956 Filed 10–10–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67979; File No. SR–
NASDAQ–2012–108]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend Fee
Pilot Program for NASDAQ Last Sale
pmangrum on DSK3VPTVN1PROD with NOTICES
October 4, 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
September 24, 2012, The NASDAQ
Stock Market LLC (‘‘NASDAQ’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I, II, and III below,
which Items have been prepared by the
Exchange. The Commission is
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
14:03 Oct 10, 2012
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
NASDAQ is proposing to extend for
three months the fee pilot pursuant to
which NASDAQ distributes the
NASDAQ Last Sale (‘‘NLS’’) market data
products. NLS allows data distributors
to have access to real-time market data
for a capped fee, enabling those
distributors to provide free access to the
data to millions of individual investors
via the internet and television.
Specifically, NASDAQ offers the
‘‘NASDAQ Last Sale for NASDAQ’’ and
‘‘NASDAQ Last Sale for NYSE/Amex’’
data feeds containing last sale activity in
U.S. equities within the NASDAQ
Market Center and reported to the
FINRA/NASDAQ Trade Reporting
Facility (‘‘FINRA/NASDAQ TRF’’),
which is jointly operated by NASDAQ
and the Financial Industry Regulatory
Authority (‘‘FINRA’’). The purpose of
this proposal is to extend the existing
pilot program for three months, from
October 1, 2012 to December 31, 2012.
This pilot program supports the
aspiration of Regulation NMS to
increase the availability of proprietary
data by allowing market forces to
determine the amount of proprietary
market data information that is made
available to the public and at what
price. During the pilot period, the
program has vastly increased the
availability of NASDAQ proprietary
market data to individual investors.
Based upon data from NLS distributors,
NASDAQ believes that since its launch
in July 2008, the NLS data has been
viewed by over 50,000,000 investors on
Web sites operated by Google,
Interactive Data, and Dow Jones, among
others.
The text of the proposed rule change
is below. Proposed new language is
italicized; proposed deletions are in
brackets.
*
*
*
*
*
7039. NASDAQ Last Sale Data Feeds
(a) For a three month pilot period
commencing on [July] October 1, 2012,
NASDAQ shall offer two proprietary data
feeds containing real-time last sale
information for trades executed on NASDAQ
or reported to the NASDAQ/FINRA Trade
Reporting Facility.
(1)–(2) No change.
(b)–(c) No change.
*
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*
*
Frm 00075
*
Fmt 4703
*
Sfmt 4703
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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Prior to the launch of NLS, public
investors that wished to view market
data to monitor their portfolios
generally had two choices: (1) Pay for
real-time market data or (2) use free data
that is 15 to 20 minutes delayed. To
increase consumer choice, NASDAQ
proposed a pilot to offer access to realtime market data to data distributors for
a capped fee, enabling those distributors
to disseminate the data at no cost to
millions of internet users and television
viewers. NASDAQ now proposes a
three-month extension of that pilot
program, subject to the same fee
structure as is applicable today.
NLS consists of two separate ‘‘Level
1’’ products containing last sale activity
within the NASDAQ market and
reported to the jointly-operated FINRA/
NASDAQ TRF. First, the ‘‘NASDAQ
Last Sale for NASDAQ’’ data product is
a real-time data feed that provides realtime last sale information including
execution price, volume, and time for
executions occurring within the
NASDAQ system as well as those
reported to the FINRA/NASDAQ TRF.
Second, the ‘‘NASDAQ Last Sale for
NYSE/Amex’’ data product provides
real-time last sale information including
execution price, volume, and time for
NYSE- and NYSE Amex-securities
executions occurring within the
NASDAQ system as well as those
reported to the FINRA/NASDAQ TRF.
By contrast, the securities information
processors (‘‘SIPs’’) that provide ‘‘core’’
data consolidate last sale information
from all exchanges and trade reporting
facilities (‘‘TRFs’’). Thus, NLS replicates
a subset of the information provided by
the SIPs.
NASDAQ established two different
pricing models, one for clients that are
able to maintain username/password
E:\FR\FM\11OCN1.SGM
11OCN1
Agencies
[Federal Register Volume 77, Number 197 (Thursday, October 11, 2012)]
[Notices]
[Pages 61808-61810]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24956]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67984; File No. SR-BOX-2012-015]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Fee Schedule for Trading on BOX
October 4, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on September 25, 2012, BOX Options Exchange
LLC (the ``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 Exchange filed the proposed rule change pursuant to
Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
BOX Options Exchange LLC (the ``Exchange'') proposes to add
language to its Fee Schedule for trading on its options facility, BOX
Market LLC (``BOX'') to specifically reference certain order types. The
text of the proposed rule change is available from the principal office
of the Exchange, on the Exchange's Internet Web site at https://boxexchange.com, 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 Exchange proposes additional language in Section I (Exchange
Fees) of its Fee Schedule for trading on its options facility, BOX
Market LLC (``BOX'') to specifically reference Auction Transaction \5\
order types, PIP Orders and Agency Orders. A PIP Order is a Customer
Order (an agency order for the account of a Public Customer,
Professional Customer, or a broker-dealer) designated for the BOX Price
Improvement Period (``PIP''). An Agency Order is a block-size order
that a BOX Order Flow Provider seeks to facilitate as agent through the
BOX Facilitation Auction or Solicitation Auction mechanism.\6\ These
Auction Transaction order types were assessed an Exchange Fee on BOX
prior to May 14, 2012, and have continued to be assessed an Exchange
Fee since the launch of trading on BOX on May 14, 2012. Note that prior
to May 14, 2012, BOX was operated by Boston Options Exchange Group, LLC
as an options trading facility of NASDAQ OMX BX, Inc. Upon the
commencement of the Exchange's operations as a national securities
exchange on May 14, 2012, the same automated trading system is now
operated by BOX Market LLC as a facility of the Exchange. As such, the
operation and functionalities of the system are the same as was in
effect under the rules of the Boston Options Exchange Group, LLC
facility. Additionally, the Exchange stated in its proposed rule change
to establish fees for trading on BOX that all of the BOX fees as of May
14, 2012, were identical to fees in place prior to that date on the
Boston Options Exchange Group, LLC options trading facility of NASDAQ
OMX BX, Inc.\7\ The Exchange Fee for Auction Transactions for Broker-
Dealers ($0.35) and Market Makers (a tiered fee set forth in Section
I.B. of the fee schedule based on the Market Maker's average daily
volume on BOX) were in place on the Boston Options Exchange Group, LLC
facility and the Exchange fully intended for these Exchange Fees to be
carried over and included on the BOX Market LLC facility of the
Exchange. Similarly, the Exchange Fees for customer orders in Auction
Transactions ($0.00 for Public Customers and Professional Customers)
were inadvertently omitted from the initial Exchange fee schedule. This
proposal will correct these clerical errors as of the date of this
filing.
---------------------------------------------------------------------------
\5\ Auction Transactions are those transactions executed on BOX
through the Price Improvement Period (``PIP''), the Solicitation
Auction mechanism, and Facilitation Auction mechanism.
\6\ Note that the addition of the definitions of these order
types in proposed footnote 2 cause the remaining footnotes on the
fee schedule to be renumbered to 3 through 5.
\7\ See Securities Exchange Act Release No. 66979 (May 14, 2012)
77 FR 29740 (May 18, 2012) (Notice of Immediate Effectiveness of
Proposed Rule Change To Adopt the Fee Schedule For Trading on BOX).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\8\ in general, and Section
6(b)(5) of the Act,\9\ that the rules of an exchange be designed to
promote just and equitable principles of trade, to prevent fraudulent
and manipulative acts, to remove impediments to and to perfect the
mechanism for a free and open market and a national market system,
[[Page 61809]]
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes the exchange fees for agency orders in
Auction Transactions are reasonable. The proposed fee structure is
intended to attract order flow to BOX, and the PIP in particular, by
offering market participants incentives to submit their agency orders
to BOX.
Additionally, the Exchange believes it is equitable and not
unfairly discriminatory for BOX Market Makers to have the opportunity
to benefit from a potentially discounted fee less than that charged to
broker-dealers. Market Makers have obligations that other Participants
do not. In particular, they must maintain active two-sided markets in
the classes in which they are appointed, and must meet certain minimum
quoting requirements. As such, the Exchange believes it is appropriate
that Market Makers be charged potentially lower transaction fees on BOX
when they provide greater volumes of liquidity to the market.
Further, the Exchange believes that the proposed tiered and
potentially discounted fees for Market Makers that on a daily basis,
trade an average daily volume (as calculated at the end of the month)
of 10,000 contracts or more on BOX represents a fair and equitable
allocation of reasonable dues, fees, and other charges as it is aimed
at incentivizing these participants to provide a greater volume of
liquidity to the market. The Exchange believes that giving incentives
for this activity results in increased volume on BOX. Such increased
volume increases potential revenue to BOX, and would allow BOX and the
Exchange to spread its administrative and infrastructure costs over a
greater number of transactions, leading to lower costs per transaction.
The Exchange also believes it is equitable and not unfairly
discriminatory that Public and Professional Customers not be charged
fees for their agency orders in Auction Transactions as compared to
broker-dealers on BOX. The securities markets generally, and BOX in
particular, have historically aimed to improve markets for investors
and develop various features within the market structure for customer
benefit. As such, the Exchange believes the exchange fees for Public
and Professional Customer Auction Transactions are appropriate and not
unfairly discriminatory. The Exchange believes comparably lower
customer transaction fees are reasonable. The Exchange believes it
promotes the best interests of investors to have lower transaction
costs for Public and Professional Customer orders in Auction
Transactions, and that the low fees attract participants to submit
order flow to the BOX Auction Transactions. The Exchange believes the
fees charged to broker-dealers, and market makers are reasonable
because they are designed to be comparable to the fees that such
accounts would be charged at competing venues.\10\
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\10\ See e.g., Taker Fees or Fees for Removing Liquidity on the
ISE Fee Schedule and NASDAQ Options Pricing as of September 2012.
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Moreover, the Exchange believes the exchange fees for broker-dealer
customer orders in Auction Transactions are reasonable. As stated
above, BOX operates within a highly competitive business. The fees
charged to broker-dealers are designed to be comparable to the fees
that such accounts would be charged at competing venues. As stated, the
Exchange believes it is equitable and not unfairly discriminatory to
charge broker-dealer proprietary accounts comparably higher fees than
BOX Market Makers and customers. As discussed, Market Makers have
obligations that other Participants do not. In particular, they must
maintain active two-sided markets in the classes in which they are
appointed, and must meet certain minimum quoting requirements. As such,
the Exchange believes it is appropriate that Market Makers be charged
lower fees on BOX. The Exchange also believes it is equitable and not
unfairly discriminatory that customers, including Professionals, be
charged lower exchange fees for their customer orders in Auction
Transactions than broker-dealers. The securities markets generally, and
BOX in particular, have historically aimed to improve markets for
investors and develop various features within the market structure for
customer benefit. As such, the Exchange believes the proposed fees for
broker-dealers, as compared to customers, is appropriate and not
unfairly discriminatory.
The Exchange believes that the BOX Exchange Fees for customer
orders in Auction Transactions will keep BOX competitive with other
exchanges as well as apply in such a manner so as to be equitable among
BOX Participants. The Exchange believes the BOX Exchange Fees are fair,
reasonable, and competitive with fees in place on other exchanges.
Further, the Exchange believes that this competitive marketplace
impacts the fees proposed for BOX.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
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 Exchange Act \11\ and Rule 19b-4(f)(2)
thereunder,\12\ because it establishes or changes a due, fee, or other
charge applicable only to a member.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
\12\ 17 CFR 240.19b-4(f)(2).
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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 Exchange 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 rule-comments@sec.gov. Please include
File Number SR-BOX-2012-015 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-BOX-2012-015. 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
[[Page 61810]]
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-BOX-2012-015 and should be submitted on or before
November 1, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24956 Filed 10-10-12; 8:45 am]
BILLING CODE 8011-01-P