Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rule 4758(a)(1)(A) To Reflect a Change in Its Routing Functionality To Allow Routable Orders To Simultaneously Execute Against Exchange Available Shares and Route to Other Markets for Execution of the Remainder of the Order, 62285-62287 [2012-25105]
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Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Notices
become effective pursuant to Section
19(b)(3)(A) 7 of the Act and
subparagraph (f)(6) of Rule 19b–4
thereunder.8
A proposed rule change filed under
Rule 19b–4(f)(6) 9 normally does not
become operative prior to 30 days after
the date of the filing. However, Rule
19b–4(f)(6)(iii) 10 permits the
Commission to designate a shorter time
if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that Nasdaq may offer
the ACT Reject Scan service beginning
on October 1, 2012. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest as it will provide members with
the option to obtain greater transparency
with respect to their trade reports, as
well as an enhanced ability to repair
rejected trades.11 In addition, the
Commission notes that the service is
being offered at no charge for the month
of October. Therefore, the Commission
hereby waives the 30-day operative
delay and designates the proposed rule
change to be operative upon filing with
the Commission.
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
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). 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 the filing of the proposed
rule change, or such shorter time as designated by
the Commission. The Exchange has satisfied this
requirement.
9 17 CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii).
11 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
wreier-aviles on DSK5TPTVN1PROD with NOTICES
8 17
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• Send an email to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2012–110 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–2012–110. 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 on official business
days between the hours of 10:00 a.m.
and 3:00 p.m. Copies of such filing also
will be available for inspection and
copying at the principal offices 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–2012–110, and should be
submitted on or before November 2,
2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–25106 Filed 10–11–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67990; File No. SR–BX–
2012–064]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Amend
Exchange Rule 4758(a)(1)(A) To Reflect
a Change in Its Routing Functionality
To Allow Routable Orders To
Simultaneously Execute Against
Exchange Available Shares and Route
to Other Markets for Execution of the
Remainder of the Order
October 5, 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 25, 2012, NASDAQ OMX
BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), a
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 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
BX proposes to amend Rule
4758(a)(1)(A) to reflect a change in its
routing functionality. The Exchange is
proposing to implement the rule change
as soon as practicable, but in no case
later than thirty calendar days from the
filing date of this proposal. The text of
the proposed rule change is available at
https://nasdaqomxbx.cchwallstreet.com,
at BX’s principal office, 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
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.
1 15
12 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00075
Fmt 4703
Sfmt 4703
62285
2 17
E:\FR\FM\12OCN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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62286
Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Notices
wreier-aviles on DSK5TPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BX is proposing to amend Rule
4758(a)(1)(A) to reflect a change in BX’s
order routing functionality, which will
allow routable orders 3 to
simultaneously execute against BX
available shares and route to other
markets for execution of the remainder
of the order. Currently, when a routable
order is entered into the BX system, the
BX book is first checked for available
shares. If such an order is not filled or
filled only partially, then the order is
routed to away markets with the best
bid or best offer pursuant to BX’s
System routing table.4 For example, if a
BX member submitted an order to buy
5,000 shares of a security, and BX had
500 shares displayed with another 500
shares undisplayed, under the current
routing process 1,000 shares would be
executed on BX. Thereafter, BX would
route the remaining 4,000 shares of the
order to other markets for execution.
BX has observed that upon partial
execution of a routable order at BX, as
in the example above, market
participants often react to the order by
cancelling their orders on other markets
and entering new orders at inferior
prices. This occurs because the current
process directs the order to BX before
attempting to access available liquidity
at other markets and thereby allows
market participants to react to the
execution (an effect known as ‘‘market
impact’’ or ‘‘information leakage’’). As a
consequence, the available shares at the
away market are no longer available,
resulting in a lower likelihood of
successfully accessing liquidity on away
markets (i.e., the ‘‘fill rate’’) and an
increased likelihood of ultimately
receiving an execution at an inferior
price. As such, BX is addressing this
problem by changing how the routing
process will operate.
BX is proposing to execute routable
orders against the BX book for available
shares and to simultaneously route any
remaining shares to additional markets.
Specifically, under the proposed change
a routable order would attempt to
execute against the available shares at
BX and, to the extent the order would
not be filled by such available shares,
3 For purposes of this filing, a ‘‘routable order’’ is
an order entered into the BX System, which is not
of an Order Type precluded from routing to other
markets.
4 The ‘‘System routing table’’ is the proprietary
process for determining the specific trading venues
to which the System routes orders and the order in
which it routes them. See Rule 4758(a)(1)(A).
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13:59 Oct 11, 2012
Jkt 229001
BX would simultaneously route the
remainder of the order to other venues,
according to BX’s System routing table,
in a manner consistent with Regulation
NMS (i.e., satisfying all displayed
protected quotes). For example, using
the scenario above, if a member enters
a routable order to buy 5,000 shares of
a security and BX is displaying 500
shares of that security, with 500
undisplayed, BX would execute against
the 500 displayed shares and 500
undisplayed shares, while
simultaneously routing the remaining
4,000 shares to other venues for
execution. In the event that the amount
of shares on other markets is insufficient
to completely fill the order, or the order
fails to completely execute, BX would
then post the remaining shares on the
BX book or cancel the remaining shares
per the routed order’s instructions. BX
believes that this simultaneous
execution against BX available shares
and routing to other venues’ shares will
avoid the deleterious effect of market
impact discussed above and result in
overall faster and better executions of its
members’ routable orders.
BX notes that it is not changing the
execution and routing sequence of all
routable orders. The BTFY, BMOP, and
BCRT orders are designed to execute
serially as part of their strategies, which
is generally to reduce the blended fees
associated with transacting on multiple
markets. As such, simultaneous routing
of such orders would not result in a
better execution in terms of the goals of
these routable order types.
The proposed change is based on the
recently-approved change to the
analogous NASDAQ Stock Market LLC
(‘‘NASDAQ’’) rule.5 Although the
Exchange does not have all of the order
types that NASDAQ has, it is making
the identical changes applicable to the
analogous routable order types shared in
common with NASDAQ. The Exchange
will implement the proposed change as
soon as practicable and in no event later
than 30 calendar days from the filing
date of this proposal.
2. Statutory Basis
The statutory basis for the proposed
rule change is Section 6(b)(5) of the
Act,6 which requires the rules of an
exchange to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
5 See Securities Exchange Act Release No. 67639
(August 10, 2012), 77 FR 49034 (August 15, 2012)
(SR–NASDAQ–2012–071).
6 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
public interest. The Exchange believes
that the proposed rule meets these
requirements in that it promotes
efficiency in the market, and increases
the speed of execution and likelihood
that a routable order will be filled at the
best price possible. In this regard, the
Exchange notes that simultaneous
execution minimizes the market impact
a routable order has on other markets
under the current multi-step execution
and routing process, thus improving fill
rates. Accordingly, the proposed rule
change will serve to improve execution
quality for investors sending their
routable orders to the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor 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)
of the Act 7 and Rule 19b–4(f)(6) 8
thereunder because the proposal does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) by its
terms, become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate.9
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 10 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay period. The Commission believes
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
9 In addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to give the Commission written notice of
the Exchange’s intent to file the proposed rule
change, along with a brief description and text of
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.
10 17 CFR 240.19b–4(f)(6)(iii).
8 17
E:\FR\FM\12OCN1.SGM
12OCN1
Federal Register / Vol. 77, No. 198 / Friday, October 12, 2012 / Notices
that waiver of the 30-day operative
delay period is consistent with the
protection of investors and the public
interest. Specifically, the Commission
believes that the proposal should
increase the likelihood that a routable
order would receive a more complete
fill and should improve the Exchange’s
ability to process such orders. For these
reasons, the Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Therefore, the Commission designates
the proposed rule change to be operative
upon filing with the Commission.11
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.12
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:
wreier-aviles on DSK5TPTVN1PROD with NOTICES
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–2012–064 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–2012–064. 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
11 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
12 15 U.S.C. 78s(b)(3)(C).
VerDate Mar<15>2010
13:59 Oct 11, 2012
Jkt 229001
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BX–
2012–064 and should be submitted on
or before November 2, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–25105 Filed 10–11–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67991; File No. SR–Phlx–
2012–116]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Exchange Rule 3315(a)(1)(A) To Reflect
a Change in Its Routing Functionality
To Allow Routable Orders to
Simultaneously Execute Against
Exchange Available Shares and Route
to Other Markets for Execution of the
Remainder of the Order
October 5, 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 25, 2012, NASDAQ OMX
PHLX LLC (‘‘PHLX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
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
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
62287
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
PHLX proposes to amend Rule
3315(a)(1)(A) to reflect a change in its
routing functionality. The Exchange is
proposing to implement the rule change
as soon as practicable, but in no case
later than thirty calendar days from the
filing date of this proposal. The text of
the proposed rule change is available at
https://
nasdaqomxphlx.cchwallstreet.com, at
PHLX’s principal office, 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
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
PHLX is proposing to amend Rule
3315(a)(1)(A) to reflect a change in
PHLX’s order routing functionality,
which will allow routable orders 3 to
simultaneously execute against PHLX
available shares and route to other
markets for execution of the remainder
of the order. Currently, when a routable
order is entered into the PHLX system,
the PHLX book is first checked for
available shares. If such an order is not
filled or filled only partially, then the
order is routed to away markets with the
best bid or best offer pursuant to PHLX’s
System routing table.4 For example, if a
PHLX member submitted an order to
buy 5,000 shares of a security, and
PHLX had 500 shares displayed with
another 500 shares undisplayed, under
the current routing process 1,000 shares
3 For purposes of this filing, a ‘‘routable order’’ is
an order entered into the PHLX System, which is
not of an Order Type precluded from routing to
other markets.
4 The ‘‘System routing table’’ is the proprietary
process for determining the specific trading venues
to which the System routes orders and the order in
which it routes them. See Rule 3315(a)(1)(A).
E:\FR\FM\12OCN1.SGM
12OCN1
]]>Agencies
[Federal Register Volume 77, Number 198 (Friday, October 12, 2012)]
[Notices]
[Pages 62285-62287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25105]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67990; File No. SR-BX-2012-064]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Exchange Rule 4758(a)(1)(A) To Reflect a Change in Its Routing
Functionality To Allow Routable Orders To Simultaneously Execute
Against Exchange Available Shares and Route to Other Markets for
Execution of the Remainder of the Order
October 5, 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 25, 2012, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''), a
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 comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
BX proposes to amend Rule 4758(a)(1)(A) to reflect a change in its
routing functionality. The Exchange is proposing to implement the rule
change as soon as practicable, but in no case later than thirty
calendar days from the filing date of this proposal. The text of the
proposed rule change is available at https://nasdaqomxbx.cchwallstreet.com, at BX's principal office, 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 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.
[[Page 62286]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
BX is proposing to amend Rule 4758(a)(1)(A) to reflect a change in
BX's order routing functionality, which will allow routable orders \3\
to simultaneously execute against BX available shares and route to
other markets for execution of the remainder of the order. Currently,
when a routable order is entered into the BX system, the BX book is
first checked for available shares. If such an order is not filled or
filled only partially, then the order is routed to away markets with
the best bid or best offer pursuant to BX's System routing table.\4\
For example, if a BX member submitted an order to buy 5,000 shares of a
security, and BX had 500 shares displayed with another 500 shares
undisplayed, under the current routing process 1,000 shares would be
executed on BX. Thereafter, BX would route the remaining 4,000 shares
of the order to other markets for execution.
---------------------------------------------------------------------------
\3\ For purposes of this filing, a ``routable order'' is an
order entered into the BX System, which is not of an Order Type
precluded from routing to other markets.
\4\ The ``System routing table'' is the proprietary process for
determining the specific trading venues to which the System routes
orders and the order in which it routes them. See Rule
4758(a)(1)(A).
---------------------------------------------------------------------------
BX has observed that upon partial execution of a routable order at
BX, as in the example above, market participants often react to the
order by cancelling their orders on other markets and entering new
orders at inferior prices. This occurs because the current process
directs the order to BX before attempting to access available liquidity
at other markets and thereby allows market participants to react to the
execution (an effect known as ``market impact'' or ``information
leakage''). As a consequence, the available shares at the away market
are no longer available, resulting in a lower likelihood of
successfully accessing liquidity on away markets (i.e., the ``fill
rate'') and an increased likelihood of ultimately receiving an
execution at an inferior price. As such, BX is addressing this problem
by changing how the routing process will operate.
BX is proposing to execute routable orders against the BX book for
available shares and to simultaneously route any remaining shares to
additional markets. Specifically, under the proposed change a routable
order would attempt to execute against the available shares at BX and,
to the extent the order would not be filled by such available shares,
BX would simultaneously route the remainder of the order to other
venues, according to BX's System routing table, in a manner consistent
with Regulation NMS (i.e., satisfying all displayed protected quotes).
For example, using the scenario above, if a member enters a routable
order to buy 5,000 shares of a security and BX is displaying 500 shares
of that security, with 500 undisplayed, BX would execute against the
500 displayed shares and 500 undisplayed shares, while simultaneously
routing the remaining 4,000 shares to other venues for execution. In
the event that the amount of shares on other markets is insufficient to
completely fill the order, or the order fails to completely execute, BX
would then post the remaining shares on the BX book or cancel the
remaining shares per the routed order's instructions. BX believes that
this simultaneous execution against BX available shares and routing to
other venues' shares will avoid the deleterious effect of market impact
discussed above and result in overall faster and better executions of
its members' routable orders.
BX notes that it is not changing the execution and routing sequence
of all routable orders. The BTFY, BMOP, and BCRT orders are designed to
execute serially as part of their strategies, which is generally to
reduce the blended fees associated with transacting on multiple
markets. As such, simultaneous routing of such orders would not result
in a better execution in terms of the goals of these routable order
types.
The proposed change is based on the recently-approved change to the
analogous NASDAQ Stock Market LLC (``NASDAQ'') rule.\5\ Although the
Exchange does not have all of the order types that NASDAQ has, it is
making the identical changes applicable to the analogous routable order
types shared in common with NASDAQ. The Exchange will implement the
proposed change as soon as practicable and in no event later than 30
calendar days from the filing date of this proposal.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 67639 (August 10,
2012), 77 FR 49034 (August 15, 2012) (SR-NASDAQ-2012-071).
---------------------------------------------------------------------------
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\6\ which requires the rules of an exchange to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system
and, in general, to protect investors and the public interest. The
Exchange believes that the proposed rule meets these requirements in
that it promotes efficiency in the market, and increases the speed of
execution and likelihood that a routable order will be filled at the
best price possible. In this regard, the Exchange notes that
simultaneous execution minimizes the market impact a routable order has
on other markets under the current multi-step execution and routing
process, thus improving fill rates. Accordingly, the proposed rule
change will serve to improve execution quality for investors sending
their routable orders to the Exchange.
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\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor 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) of the Act \7\ and Rule 19b-4(f)(6) \8\ thereunder because
the proposal does not: (i) Significantly affect the protection of
investors or the public interest; (ii) impose any significant burden on
competition; and (iii) by its terms, become operative for 30 days from
the date on which it was filed, or such shorter time as the Commission
may designate.\9\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's intent to file
the proposed rule change, along with a brief description and text of
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.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay period. The Commission
believes
[[Page 62287]]
that waiver of the 30-day operative delay period is consistent with the
protection of investors and the public interest. Specifically, the
Commission believes that the proposal should increase the likelihood
that a routable order would receive a more complete fill and should
improve the Exchange's ability to process such orders. For these
reasons, the Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. Therefore, the Commission designates the proposed rule change
to be operative upon filing with the Commission.\11\
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\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 Act.\12\
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\12\ 15 U.S.C. 78s(b)(3)(C).
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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-2012-064 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-2012-064. 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 such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BX-2012-064 and should be
submitted on or before November 2, 2012.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25105 Filed 10-11-12; 8:45 am]
BILLING CODE 8011-01-P
