Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify BX's Fee Schedule Governing Order Execution and Routing, 64151-64153 [2012-25653]

Download as PDF mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 77, No. 202 / Thursday, October 18, 2012 / Notices Approximately 150 independent, professional transfer agents must file the independent accountant’s report annually. We estimate that the annual internal time burden for each transfer agent to comply with Rule 17Ad–13 by submitting the report prepared by the independent accountant to the Commission is minimal. The time required for the independent accountant to prepare the accountant’s report varies with each transfer agent depending on the size and nature of the transfer agent’s operations. The Commission estimates that, on average, each report can be completed by the independent accountant in 120 hours, resulting in a total of 18,000 external hours annually (120 hours × 150 reports). The burden was estimated using Commission review of filed Rule 17Ad–13 reports and Commission conversations with transfer agents and accountants. The Commission estimates that, on average, 120 hours are needed to perform the study, prepare the report, and retain the required records on an annual basis. Assuming an average hourly rate of an independent accountant of $60, the average total annual cost of the report is $7,200. The total annual cost for the approximate 150 respondents is approximately $1,080,000. The retention period for the recordkeeping requirement under Rule 17Ad–13 is three years following the date of a report prepared pursuant to the rule. The recordkeeping requirement under Rule 17Ad–13 is mandatory to assist the Commission and other regulatory agencies with monitoring transfer agents and ensuring compliance with the rule. This rule does not involve the collection of confidential information. Written comments are invited on: (a) Whether this proposed collection of information is necessary for the performance of the functions of the agency, including whether the information will have any practical utility; (b) the accuracy of the agency’s estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. The Commission may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be VerDate Mar<15>2010 18:15 Oct 17, 2012 Jkt 229001 subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number. Please direct your written comments to Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, Alexandria, Virginia 22312; or send an email to: PRA Mail Box@sec.gov. Dated: October 12, 2012. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–25602 Filed 10–17–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68051; File No. SR–BX– 2012–067] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify BX’s Fee Schedule Governing Order Execution and Routing October 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 October 1, 2012, NASDAQ OMX BX, Inc. (‘‘BX’’ 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 publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change BX proposes to modify BX’s fee schedule governing order execution and routing. BX will implement the proposed change on October 1, 2012. 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, 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00057 Fmt 4703 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 BX is amending its fee schedule governing order execution and routing. The general purposes of the fee changes are to (i) encourage greater provision of liquidity through BX by expanding BX’s Qualified Liquidity Provider program, and (ii) increase fees for routing orders to the New York Stock Exchange (‘‘NYSE’’) to reflect announced price increases by that exchange.3 All of the changes pertain to securities priced at $1 or more per share. First, BX is expanding its Qualified Liquidity Provider program. Under the program, a qualifying member is eligible to pay a reduced fee for liquidityproviding orders ($0.0015 per share executed versus the usual fee of $0.0018 per share executed) entered through an eligible market participant identifier (‘‘MPID’’). Currently, a Qualified Liquidity Provider must have (i) shares of liquidity provided and (ii) total shares of liquidity accessed and provided in all securities through one or more of its NASDAQ OMX BX Equities System MPIDs that represent more than 0.40% and 0.50%, respectively, of the total consolidated volume reported to all consolidated transaction reporting plans by all exchanges and trade reporting facilities (‘‘Consolidated Volume’’) during the month. If a member satisfies these criteria, it is then eligible to pay the reduced fee for liquidity-providing orders entered through a ‘‘Qualified MPID.’’ A Qualified MPID is an MPID of a Qualified Liquidity Provider through which, for at least 150 securities, it quotes at the national best bid or offer (‘‘NBBO’’) an average of at least 25% of the time during regular market hours (9:30 a.m. through 4:00 p.m.) during the month. Under the proposed change, BX will add an additional means of becoming a Qualified Liquidity Provider. Specifically, a Qualified Liquidity Provider may also be a member with (i) shares of liquidity provided and (ii) total shares of 3 See Sfmt 4703 64151 E:\FR\FM\18OCN1.SGM SR–NYSE–2012–50 (September 26, 2012). 18OCN1 64152 Federal Register / Vol. 77, No. 202 / Thursday, October 18, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES liquidity accessed and provided in all securities through one or more of its NASDAQ OMX BX Equities System MPIDs that represent more than 0.35% and 0.45%, respectively, of Consolidated Volume during the month. For a member qualifying under this method, a Qualified MPID is an MPID through which, for at least 400 securities, the member quotes at the NBBO an average of at least 25% of the time during regular market hours during the month. The change is designed to encourage more members to become active liquidity providers in a wider range of securities, thereby enhancing the number of stock [sic] in which BX is able to provide liquidity at the NBBO and the depth of such liquidity. Second, to reflect recent increases in the fees charged by NYSE with respect to orders routed to it by BX, BX is raising the fee for BSTG, BSCN, and BTFY orders routed to NYSE from $0.0023 per share executed to $0.0025 per share executed; and the fee for BMOP orders routed to NYSE from $0.0025 per share executed to $0.0027 per share executed. 2. Statutory Basis BX believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,4 in general, and with Sections 6(b)(4) and (5) of the Act,5 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which BX operates or controls, and is not designed to permit unfair discrimination between customers, issuers, brokers or dealers. All similarly situated members are subject to the same fee structure, and access to BX is offered on fair and nondiscriminatory terms. BX believes that the proposed expansion of the Qualified Liquidity Provider program is reasonable because it will enable fee reductions for members that opt to provide and add liquidity and maintain quotes at the NBBO to the extent required by either of the two tiers established under the program. The proposed change is consistent with an equitable allocation of fees because it uses pricing incentives in order encourage [sic] usage of the market and the quoting of a range of securities at the NBBO for a significant portion of the trading day, activities that benefit both the exchange and its other market participants. Finally, the proposed change is not unfairly discriminatory because the offered 4 15 5 15 U.S.C. 78f. U.S.C. 78f(b)(4) and (5). VerDate Mar<15>2010 18:15 Oct 17, 2012 pricing reduction does not result in an excessive deviation from the otherwise prevailing charge to access liquidity, and because the change has the potential to benefit other market participants by enhancing market quality. The change to routing fees is reasonable because the proposed fees for routing orders to NYSE reflect the increase in the fee that will be charged by NYSE to BX with respect to such orders. The change is consistent with an equitable allocation of fees because it will bring the economic attributes of routing orders to NYSE in line with the cost of executing orders there. Finally, the change is not unfairly discriminatory because it solely applies to members that opt to route orders to NYSE. Finally, BX notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, BX must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. BX believes that the proposed rule change reflects this competitive environment because it is designed to use pricing incentives to attract liquidity at the NBBO to BX, and to ensure that the charges for use of the BX routing facility to route to NYSE reflect an increase in the cost of such routing. B. Self-Regulatory Organization’s Statement on Burden on Competition BX 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. Because the market for order execution is extremely competitive, members may readily opt to disfavor BX’s execution and routing services if they believe that alternatives offer them better value. The proposed change is designed to enhance competition by using pricing incentives to encourage greater use of BX’s trading services. The proposed change is also designed to ensure that the charges for use of the BX routing facility to route to NYSE reflect an increase in the cost of such routing, thereby ensuring that BX does not incur a loss when routing to NYSE. 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)(ii) of the Act.6 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–BX–2012–067 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–2012–067. 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 6 15 Jkt 229001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 E:\FR\FM\18OCN1.SGM U.S.C. 78s(b)(3)(a)(ii). 18OCN1 Federal Register / Vol. 77, No. 202 / Thursday, October 18, 2012 / Notices 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–BX– 2012–067, and should be submitted on or before November 8, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–25653 Filed 10–17–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68043; File No. SR– NYSEArca–2012–108] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Listing and Trading of Shares of the NYSE Arca U.S. Equity Synthetic Reverse Convertible Index Fund Under NYSE Arca Equities Rule 5.2(j)(3) October 12, 2012. mstockstill on DSK4VPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on September 27, 2012, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) 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. On October 2, 2012, the Exchange submitted Amendment No. 1 to the proposed rule change.3 The Commission 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In Amendment No. 1, the Exchange amended the filing to specify that a list of components of the Index (as defined below), with percentage weightings, will be available on the Exchange’s Web site, and that the Exchange may halt trading in the Shares (as defined below) if the Index value, or the 1 15 VerDate Mar<15>2010 18:15 Oct 17, 2012 Jkt 229001 is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares of the following issue under Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3) (‘‘Investment Company Units’’): NYSE Arca U.S. Equity Synthetic Reverse Convertible Index Fund. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.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 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 The Exchange proposes to list and trade shares (‘‘Shares’’) of the NYSE Arca U.S. Equity Synthetic Reverse Convertible Index Fund (‘‘Fund’’) under Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3), which governs the listing and trading of Investment Company Units.4 The Shares will be issued by the ALPS ETF Trust (‘‘Trust’’). ALPS Advisors, Inc. will be the Fund’s investment adviser (‘‘Adviser’’), and Rich Investment Solutions, LLC, will be the Fund’s investment sub-adviser (‘‘Sub-Adviser’’).5 The Bank of New value of the components of the Index, is not available or not disseminated as required. 4 NYSE Arca Equities Rule 5.2(j)(3)(A) provides that an Investment Company Unit is a security that represents an interest in a registered investment company that holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities (or holds securities in another registered investment company that holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities). 5 An investment adviser to an open-end fund is required to be registered under the Investment PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 64153 York Mellon (‘‘BNY’’) will serve as custodian, Fund accounting agent, and transfer agent for the Fund. ALPS Distributors, Inc. will be the Fund’s distributor (‘‘Distributor’’).6 The Adviser is affiliated with a broker-dealer and will implement and maintain procedures designed to prevent the use and dissemination of material, non-public information regarding the Fund’s portfolio. The SubAdviser is not affiliated with a brokerdealer. In the event (a) the Sub-Adviser becomes newly affiliated with a brokerdealer, or (b) any new adviser or subadviser becomes affiliated with a brokerdealer, it will implement a fire wall and maintain procedures designed to prevent the use and dissemination of material, non-public information regarding the Fund’s portfolio. NYSE Arca will be the ‘‘Index Provider’’ for the Fund. NYSE Arca is not affiliated with the Trust, the Adviser, the Sub-Adviser, or the Distributor. NYSE Arca is affiliated with a broker-dealer and will implement a fire wall and maintain procedures designed to prevent the use and dissemination of material, non-public information regarding the Index. Advisers Act of 1940 (‘‘Advisers Act’’). As a result, the Adviser and Sub-Adviser and their related personnel are subject to the provisions of Rule 204A–1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non-public information by an investment adviser must be consistent with Rule 204A–1 under the Advisers Act. In addition, Rule 206(4)–7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above. 6 The Trust is registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’). On June 22, 2012, the Trust filed with the Commission an amendment to its registration statement on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act relating to the Fund (File Nos. 333–148826 and 811–22175) (‘‘Registration Statement’’). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 812–13430 (May 1, 2008) (‘‘Exemptive Order’’). E:\FR\FM\18OCN1.SGM 18OCN1

Agencies

[Federal Register Volume 77, Number 202 (Thursday, October 18, 2012)]
[Notices]
[Pages 64151-64153]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25653]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68051; File No. SR-BX-2012-067]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
BX's Fee Schedule Governing Order Execution and Routing

October 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 October 1, 2012, NASDAQ OMX BX, Inc. (``BX'' 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 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 the 
Substance of the Proposed Rule Change

    BX proposes to modify BX's fee schedule governing order execution 
and routing. BX will implement the proposed change on October 1, 2012. 
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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    BX is amending its fee schedule governing order execution and 
routing. The general purposes of the fee changes are to (i) encourage 
greater provision of liquidity through BX by expanding BX's Qualified 
Liquidity Provider program, and (ii) increase fees for routing orders 
to the New York Stock Exchange (``NYSE'') to reflect announced price 
increases by that exchange.\3\ All of the changes pertain to securities 
priced at $1 or more per share.
---------------------------------------------------------------------------

    \3\ See SR-NYSE-2012-50 (September 26, 2012).
---------------------------------------------------------------------------

    First, BX is expanding its Qualified Liquidity Provider program. 
Under the program, a qualifying member is eligible to pay a reduced fee 
for liquidity-providing orders ($0.0015 per share executed versus the 
usual fee of $0.0018 per share executed) entered through an eligible 
market participant identifier (``MPID''). Currently, a Qualified 
Liquidity Provider must have (i) shares of liquidity provided and (ii) 
total shares of liquidity accessed and provided in all securities 
through one or more of its NASDAQ OMX BX Equities System MPIDs that 
represent more than 0.40% and 0.50%, respectively, of the total 
consolidated volume reported to all consolidated transaction reporting 
plans by all exchanges and trade reporting facilities (``Consolidated 
Volume'') during the month. If a member satisfies these criteria, it is 
then eligible to pay the reduced fee for liquidity-providing orders 
entered through a ``Qualified MPID.'' A Qualified MPID is an MPID of a 
Qualified Liquidity Provider through which, for at least 150 
securities, it quotes at the national best bid or offer (``NBBO'') an 
average of at least 25% of the time during regular market hours (9:30 
a.m. through 4:00 p.m.) during the month. Under the proposed change, BX 
will add an additional means of becoming a Qualified Liquidity 
Provider. Specifically, a Qualified Liquidity Provider may also be a 
member with (i) shares of liquidity provided and (ii) total shares of

[[Page 64152]]

liquidity accessed and provided in all securities through one or more 
of its NASDAQ OMX BX Equities System MPIDs that represent more than 
0.35% and 0.45%, respectively, of Consolidated Volume during the month. 
For a member qualifying under this method, a Qualified MPID is an MPID 
through which, for at least 400 securities, the member quotes at the 
NBBO an average of at least 25% of the time during regular market hours 
during the month. The change is designed to encourage more members to 
become active liquidity providers in a wider range of securities, 
thereby enhancing the number of stock [sic] in which BX is able to 
provide liquidity at the NBBO and the depth of such liquidity.
    Second, to reflect recent increases in the fees charged by NYSE 
with respect to orders routed to it by BX, BX is raising the fee for 
BSTG, BSCN, and BTFY orders routed to NYSE from $0.0023 per share 
executed to $0.0025 per share executed; and the fee for BMOP orders 
routed to NYSE from $0.0025 per share executed to $0.0027 per share 
executed.
2. Statutory Basis
    BX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\4\ in general, and with Sections 
6(b)(4) and (5) of the Act,\5\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility or 
system which BX operates or controls, and is not designed to permit 
unfair discrimination between customers, issuers, brokers or dealers. 
All similarly situated members are subject to the same fee structure, 
and access to BX is offered on fair and non-discriminatory terms.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    BX believes that the proposed expansion of the Qualified Liquidity 
Provider program is reasonable because it will enable fee reductions 
for members that opt to provide and add liquidity and maintain quotes 
at the NBBO to the extent required by either of the two tiers 
established under the program. The proposed change is consistent with 
an equitable allocation of fees because it uses pricing incentives in 
order encourage [sic] usage of the market and the quoting of a range of 
securities at the NBBO for a significant portion of the trading day, 
activities that benefit both the exchange and its other market 
participants. Finally, the proposed change is not unfairly 
discriminatory because the offered pricing reduction does not result in 
an excessive deviation from the otherwise prevailing charge to access 
liquidity, and because the change has the potential to benefit other 
market participants by enhancing market quality.
    The change to routing fees is reasonable because the proposed fees 
for routing orders to NYSE reflect the increase in the fee that will be 
charged by NYSE to BX with respect to such orders. The change is 
consistent with an equitable allocation of fees because it will bring 
the economic attributes of routing orders to NYSE in line with the cost 
of executing orders there. Finally, the change is not unfairly 
discriminatory because it solely applies to members that opt to route 
orders to NYSE.
    Finally, BX notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. In such an 
environment, BX must continually adjust its fees to remain competitive 
with other exchanges and with alternative trading systems that have 
been exempted from compliance with the statutory standards applicable 
to exchanges. BX believes that the proposed rule change reflects this 
competitive environment because it is designed to use pricing 
incentives to attract liquidity at the NBBO to BX, and to ensure that 
the charges for use of the BX routing facility to route to NYSE reflect 
an increase in the cost of such routing.

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

    BX 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. Because the market 
for order execution is extremely competitive, members may readily opt 
to disfavor BX's execution and routing services if they believe that 
alternatives offer them better value. The proposed change is designed 
to enhance competition by using pricing incentives to encourage greater 
use of BX's trading services. The proposed change is also designed to 
ensure that the charges for use of the BX routing facility to route to 
NYSE reflect an increase in the cost of such routing, thereby ensuring 
that BX does not incur a loss when routing to NYSE.

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)(ii) of the Act.\6\ 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.
---------------------------------------------------------------------------

    \6\ 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-BX-2012-067 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-2012-067. 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

[[Page 64153]]

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-BX-2012-067, and should be submitted on or before 
November 8, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25653 Filed 10-17-12; 8:45 am]
BILLING CODE 8011-01-P
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