Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New Order Type Called the Double Play Order, 72423-72425 [2012-29281]
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Federal Register / Vol. 77, No. 234 / Wednesday, December 5, 2012 / Notices
conditions of the order, and agree to
fulfill their responsibilities under the
order. At the time of its investment in
Shares in excess of the limit in section
12(d)(1)(A)(i), an Acquiring Fund will
notify the Fund of the investment. At
such time, the Acquiring Fund will also
transmit to the Fund a list of the names
of each Acquiring Fund Affiliate and
Underwriting Affiliate. The Acquiring
Fund will notify the Fund of any
changes to the list of the names as soon
as reasonably practicable after a change
occurs. The Fund and the Acquiring
Fund will maintain and preserve a copy
of the order, the Acquiring Fund
Agreement, and the list with any
updated information for the duration of
the investment and for a period of not
less than six years thereafter, the first
two years in an easily accessible place.
13. The Acquiring Fund Adviser,
Trustee or Sponsor, as applicable, will
waive fees otherwise payable to it by the
Acquiring Fund in an amount at least
equal to any compensation (including
fees received pursuant to any plan
adopted under rule 12b-1 under the Act)
received from the Fund by the
Acquiring Fund Adviser, Trustee or
Sponsor, or an affiliated person of the
Acquiring Fund Adviser, Trustee or
Sponsor, other than any advisory fees
paid to the Acquiring Fund Adviser,
Trustee, or Sponsor, or its affiliated
person by the Fund, in connection with
the investment by the Acquiring Fund
in the Fund. Any Acquiring Fund
Subadviser will waive fees otherwise
payable to the Acquiring Fund
Subadviser, directly or indirectly, by the
Acquiring Management Company in an
amount at least equal to any
compensation received from a Fund by
the Acquiring Fund Subadviser, or an
affiliated person of the Acquiring Fund
Subadviser, other than any advisory fees
paid to the Acquiring Fund Subadviser
or its affiliated person by the Fund, in
connection with any investment by the
Acquiring Management Company in the
Fund made at the direction of the
Acquiring Fund Subadviser. In the
event that the Acquiring Fund
Subadviser waives fees, the benefit of
the waiver will be passed through to the
Acquiring Management Company.
14. Any sales charges and/or service
fees charged with respect to shares of an
Acquiring Fund will not exceed the
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
15. No Fund will acquire securities of
any other investment company or
company relying on section 3(c)(1) or
3(c)(7) of the Act in excess of the limits
contained in section 12(d)(1)(A) of the
Act, except to the extent permitted by
exemptive relief from the Commission
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permitting the Fund to purchase shares
of other investment companies for shortterm cash management purposes.
16. Before approving any advisory
contract under section 15 of the Act, the
board of directors or trustees of each
Acquiring Management Company,
including a majority of the disinterested
directors or trustees, will find that the
advisory fees charged under such
advisory contract are based on services
provided that will be in addition to,
rather than duplicative of, the services
provided under the advisory contract(s)
of any Fund in which the Acquiring
Management Company may invest.
These findings and their basis will be
recorded fully in the minute books of
the appropriate Acquiring Management
Company.
www.nsx.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2012–29317 Filed 12–4–12; 8:45 am]
1. Purpose
The Exchange is proposing to amend
NSX Rule 11.11(c) entitled ‘‘Order and
Modifiers’’ to provide a new order type,
a Double Play Order. The proposed
Double Play Order is a market or limit
order that instructs the System 3 to route
the order to a specified away Trading
Center(s) 4 as approved by the Exchange
from time to time.5 Such Trading
Centers may include execution venues
known as ‘‘dark pools.’’ The order will
not be exposed to the NSX Book 6 before
being routed to a specified destination
or destinations. An order that is not
executed in full after routing away
would return to the Exchange, receive a
new timestamp, and be processed in the
manner described in NSX Rule
11.14.(a).
The Exchange will route the Double
Play Order through NSX Securities, Inc.,
an affiliate and facility of the Exchange
(‘‘Outbound Router’’).7 The Outbound
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68317; File No. SR–NSX–
2012–22]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Adopt a
New Order Type Called the Double
Play Order
November 29, 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 November
14, 2012, National Stock Exchange, Inc.
(‘‘NSX’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit 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 is proposing to amend
NSX Rule 11.11(c), entitled ‘‘Order and
Modifiers’’ to provide a new order type,
a Double Play Order. The text of the
proposed rule change is available on the
Exchange’s Web site at https://
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00105
Fmt 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
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 parts of such
statements.
3 Under Exchange Rule 1.5, the term ‘‘System’’ is
defined as ‘‘the electronic communications and
trading facility * * * through which orders of [ETP
Holders] are consolidated for ranking and
execution.’’
4 NSX Rule 2.11. A Trading Center is defined as
‘‘other securities exchanges, facilities of securities
exchanges, automated trading systems, electronic
communication networks or other brokers or
dealers.’’
5 The Exchange will not directly route orders to
the Chicago Stock Exchange, Inc. until approved as
an inbound routing facility of the Chicago Board
Options Exchange, Inc.
6 Under Exchange Rule 1.5, the term ‘‘NSX Book’’
is defined as ‘‘the System’s electronic file of
orders.’’
7 The Outbound Router is regulated as a facility
of the Exchange (as defined in Section 3(a)(2) of the
Securities Exchange Act of 1934, as amended
(‘‘Exchange Act’’ or ‘‘Act’’)), 15 U.S.C. 78c(a)(2),
Continued
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Federal Register / Vol. 77, No. 234 / Wednesday, December 5, 2012 / Notices
Router will be subject to the
requirements set forth in NSX Rule 2.11.
Accordingly, the Exchange believes that
routing of Double Play Orders is
consistent with the previously approved
functions of the Outbound Router, and
the Exchange does not believe these
functions are expanded through the
addition of this order type.
The Exchange notes that both the
BATS Exchange, Inc.8 (‘‘BATS’’) and
The Nasdaq Stock Market LLC
(‘‘Nasdaq’’) 9 have similar order types.
Both BATS and Nasdaq members are
given the option of entering an order
that instructs the exchange to route the
order to a specified away trading center
or centers. There is no material
difference between the BATS Modified
Destination Specific Order and the
NSX’s Double Play Order. Both orders
are similar in that: (1) Orders that are
not executed in full are returned to the
exchange; and (2) each receives new
timestamps upon return to the exchange
and a new time price priority as
appropriate.10
2. Statutory Basis
mstockstill on DSK4VPTVN1PROD with
The Exchange believes the proposed
rule change is consistent with Section 6
of the Exchange Act,11 and the rules and
regulations thereunder and, in
particular, the requirements of Section
6(b) of the Exchange Act.12 Specifically,
the Exchange believes the Double Play
Order furthers the objective of Section
6(b)(5) of the Exchange Act because it
will enable ETP Holders to access pools
of liquidity that may offer a faster
response time and a lower fee which
promotes just and equitable principles
of trade and perfects the mechanism of
a free and open market and a national
market system. Further, the Double Play
Order is designed to allow ETP Holders
to obtain response times that are
generally consistent with those of other
market centers that offer order handling
and routing options that are designed to
facilitate access to two or more markets
with comparable access fees. In so
doing, the proposed rule filing promotes
the protection of investors and the
protection of the public interest.
subject to Section 6 of the Exchange Act. 15 U.S.C.
78f.
8 See BATS Rule 11.9(c)(13). See also Exchange
Act Release No. 58546 (September 15, 2008) 73 FR
54440 (September 19, 2008) (SR–BATS–2008–003).
9 See Nasdaq Rule 4751(f)(9). See also Exchange
Act Release No. 55405 (March 6, 2007) 72 FR 11069
(March 12, 2007) (SR–Nasdaq–2007–020).
10 Unlike the BATS Modified Destination Specific
Order and NSX’s proposed Double Play Order, the
Nasdaq Directed Orders that are not executed in full
are returned to the customer and not Nasdaq.
11 15 U.S.C. 78f.
12 15 U.S.C. 78f(b).
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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 impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments on the proposed
rule change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 13 and Rule
19b–4(f)(6) thereunder.14 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing.16 However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requested that the
Commission waive the 30-day operative
delay, as specified in Rule 19b–
4(f)(6)(iii),17 which would make the rule
change effective and operative upon
filing.
The Exchange represented that the
proposed rule is similar to and based on
rules of other exchanges and that the
waiver of the 30-day operative delay
would allow the Exchange to
immediately compete with other
13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii). 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.
17 17 CFR 240.19b–4(f)(6)(iii).
14 17
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
exchanges that offer a similar order
type. The Exchange believes that the
proposed rule change is consistent with
the protection of investors and the
public interest because it would give
ETP Holders enhanced order execution
opportunities for market participants by
allowing such participants to access, at
a potentially reduced fee, pools of
liquidity in addition to orders resting on
the Exchange. The Commission believes
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver would allow the
Exchange to offer an order type
immediately to market participants that
is similar to an order type that has been
offered by other exchanges. In addition,
as the proposed rule change is similar
to order types offered by other national
securities exchanges, the Commission
does not believe that the proposed rule
change raises any novel regulatory
issues. Therefore, the Commission
designates the proposed rule change as
operative upon filing with the
Commission.18
At any time within sixty (60) days of
the filing of such proposed rule change,
the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NSX–2012–22 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–NSX–2012–22. This file
number should be included on the
18 For purposes only of waiving the 30-day
operative delay, 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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Federal Register / Vol. 77, No. 234 / Wednesday, December 5, 2012 / Notices
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NSX–
2012–22 and should be submitted on or
before December 26, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68322; File No. SR–
NYSEARCA–2012–129]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Permit ETP Holders to
Designate Orders as Retail Orders By
Using a Tag in the Order Entry
Message
mstockstill on DSK4VPTVN1PROD with
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
November 16, 2012, NYSE Arca, Inc.
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to permit ETP
Holders to designate orders as Retail
Orders for the purpose of qualifying for
the Retail Order Tier by means of a tag
in the order entry message. 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
[FR Doc. 2012–29281 Filed 12–4–12; 8:45 am]
November 29, 2012.
(the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1. Purpose
The Exchange is proposing to permit
ETP Holders to designate orders as
Retail Orders for the purpose of
qualifying for the Retail Order Tier by
means of a tag in the order entry
message. The Exchange proposes to
implement the change effective
December 1, 2012.
On August 1, 2012, the Exchange
introduced the ‘‘Retail Order Tier,’’ a
new tier and corresponding credit in the
Fee Schedule for ETP Holders,
including Market Makers, that execute
an average daily volume (‘‘ADV’’) of
Retail Orders during the particular
month that is 0.40% or more of the U.S.
Consolidated ADV.4 For purposes of the
Retail Order Tier and credit, a ‘‘Retail
72425
Order’’ is an agency order that originates
from a natural person and is submitted
to the Exchange by an ETP Holder,
provided that no change is made to the
terms of the order with respect to price
or side of market and the order does not
originate from a trading algorithm or
any other computerized methodology.
As part of qualifying for the Retail
Order Tier, an ETP Holder is required to
designate certain of its order entry ports
at the Exchange as ‘‘Retail Order Ports’’
and attest, in a form and/or manner
prescribed by the Exchange, that all
orders submitted to the Exchange via
such Retail Order Ports are Retail
Orders.
The Exchange proposes to provide an
additional method for ETP Holders to
designate orders as Retail Orders.
Specifically, the Exchange proposes to
allow ETP Holders to designate orders
as Retail Orders by using a tag in the
order entry message. ETP Holders
would still be able to use Retail Order
Ports to designate orders as Retail
Orders.
As currently required with the use of
Retail Order Ports to designate orders as
Retail Orders, an ETP Holder
designating orders as Retail Orders by
using a tag in the order entry message
will be required to have written policies
and procedures reasonably designed to
assure that it will only designate orders
as Retail Orders if all requirements of a
Retail Order are met. The written
policies and procedures must require
the ETP Holder to (i) exercise due
diligence before entering a Retail Order
to assure that entry as a Retail Order is
in compliance with the requirements
specified by the Exchange, and (ii)
monitor whether orders entered as
Retail Orders meet the applicable
requirements. If the ETP Holder
represents Retail Orders from another
broker-dealer customer, the ETP
Holder’s supervisory procedures must
be reasonably designed to assure that
the orders it receives from such brokerdealer customer that it designates as
Retail Orders meet the definition of a
Retail Order. The ETP Holder must (i)
obtain an annual written representation,
in a form acceptable to the Exchange,
from each broker-dealer customer that
sends it orders to be designated as Retail
Orders that entry of such orders as
Retail Orders will be in compliance
with the requirements specified by the
Exchange, and (ii) monitor whether its
broker-dealer customer’s Retail Order
flow continues to meet the applicable
requirements.5
19 17
1 15
VerDate Mar<15>2010
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4 Exchange Act Release No. 34–67540 (July 30,
2012), 77 FR 46539 (August 3, 2012) (SR–
NYSEArca–2012–77).
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5 The Financial Industry Regulatory Authority,
Inc. (‘‘FINRA’’), on behalf of the Exchange, will
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05DEN1
]]>Agencies
[Federal Register Volume 77, Number 234 (Wednesday, December 5, 2012)]
[Notices]
[Pages 72423-72425]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29281]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68317; File No. SR-NSX-2012-22]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Adopt a New Order Type Called the Double Play Order
November 29, 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 November 14, 2012, National Stock Exchange, Inc. (``NSX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit 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
The Exchange is proposing to amend NSX Rule 11.11(c), entitled
``Order and Modifiers'' to provide a new order type, a Double Play
Order. The text of the proposed rule change is available on the
Exchange's Web site at https://www.nsx.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change 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 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 is proposing to amend NSX Rule 11.11(c) entitled
``Order and Modifiers'' to provide a new order type, a Double Play
Order. The proposed Double Play Order is a market or limit order that
instructs the System \3\ to route the order to a specified away Trading
Center(s) \4\ as approved by the Exchange from time to time.\5\ Such
Trading Centers may include execution venues known as ``dark pools.''
The order will not be exposed to the NSX Book \6\ before being routed
to a specified destination or destinations. An order that is not
executed in full after routing away would return to the Exchange,
receive a new timestamp, and be processed in the manner described in
NSX Rule 11.14.(a).
---------------------------------------------------------------------------
\3\ Under Exchange Rule 1.5, the term ``System'' is defined as
``the electronic communications and trading facility * * * through
which orders of [ETP Holders] are consolidated for ranking and
execution.''
\4\ NSX Rule 2.11. A Trading Center is defined as ``other
securities exchanges, facilities of securities exchanges, automated
trading systems, electronic communication networks or other brokers
or dealers.''
\5\ The Exchange will not directly route orders to the Chicago
Stock Exchange, Inc. until approved as an inbound routing facility
of the Chicago Board Options Exchange, Inc.
\6\ Under Exchange Rule 1.5, the term ``NSX Book'' is defined as
``the System's electronic file of orders.''
---------------------------------------------------------------------------
The Exchange will route the Double Play Order through NSX
Securities, Inc., an affiliate and facility of the Exchange (``Outbound
Router'').\7\ The Outbound
[[Page 72424]]
Router will be subject to the requirements set forth in NSX Rule 2.11.
Accordingly, the Exchange believes that routing of Double Play Orders
is consistent with the previously approved functions of the Outbound
Router, and the Exchange does not believe these functions are expanded
through the addition of this order type.
---------------------------------------------------------------------------
\7\ The Outbound Router is regulated as a facility of the
Exchange (as defined in Section 3(a)(2) of the Securities Exchange
Act of 1934, as amended (``Exchange Act'' or ``Act'')), 15 U.S.C.
78c(a)(2), subject to Section 6 of the Exchange Act. 15 U.S.C. 78f.
---------------------------------------------------------------------------
The Exchange notes that both the BATS Exchange, Inc.\8\ (``BATS'')
and The Nasdaq Stock Market LLC (``Nasdaq'') \9\ have similar order
types. Both BATS and Nasdaq members are given the option of entering an
order that instructs the exchange to route the order to a specified
away trading center or centers. There is no material difference between
the BATS Modified Destination Specific Order and the NSX's Double Play
Order. Both orders are similar in that: (1) Orders that are not
executed in full are returned to the exchange; and (2) each receives
new timestamps upon return to the exchange and a new time price
priority as appropriate.\10\
---------------------------------------------------------------------------
\8\ See BATS Rule 11.9(c)(13). See also Exchange Act Release No.
58546 (September 15, 2008) 73 FR 54440 (September 19, 2008) (SR-
BATS-2008-003).
\9\ See Nasdaq Rule 4751(f)(9). See also Exchange Act Release
No. 55405 (March 6, 2007) 72 FR 11069 (March 12, 2007) (SR-Nasdaq-
2007-020).
\10\ Unlike the BATS Modified Destination Specific Order and
NSX's proposed Double Play Order, the Nasdaq Directed Orders that
are not executed in full are returned to the customer and not
Nasdaq.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6 of the Exchange Act,\11\ and the rules and regulations
thereunder and, in particular, the requirements of Section 6(b) of the
Exchange Act.\12\ Specifically, the Exchange believes the Double Play
Order furthers the objective of Section 6(b)(5) of the Exchange Act
because it will enable ETP Holders to access pools of liquidity that
may offer a faster response time and a lower fee which promotes just
and equitable principles of trade and perfects the mechanism of a free
and open market and a national market system. Further, the Double Play
Order is designed to allow ETP Holders to obtain response times that
are generally consistent with those of other market centers that offer
order handling and routing options that are designed to facilitate
access to two or more markets with comparable access fees. In so doing,
the proposed rule filing promotes the protection of investors and the
protection of the public interest.
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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b).
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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
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\15\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing.\16\ However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requested that the Commission waive
the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii),\17\
which would make the rule change effective and operative upon filing.
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\16\ 17 CFR 240.19b-4(f)(6)(iii). 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.
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange represented that the proposed rule is similar to and
based on rules of other exchanges and that the waiver of the 30-day
operative delay would allow the Exchange to immediately compete with
other exchanges that offer a similar order type. The Exchange believes
that the proposed rule change is consistent with the protection of
investors and the public interest because it would give ETP Holders
enhanced order execution opportunities for market participants by
allowing such participants to access, at a potentially reduced fee,
pools of liquidity in addition to orders resting on the Exchange. The
Commission believes waiving the 30-day operative delay is consistent
with the protection of investors and the public interest because such
waiver would allow the Exchange to offer an order type immediately to
market participants that is similar to an order type that has been
offered by other exchanges. In addition, as the proposed rule change is
similar to order types offered by other national securities exchanges,
the Commission does not believe that the proposed rule change raises
any novel regulatory issues. Therefore, the Commission designates the
proposed rule change as operative upon filing with the Commission.\18\
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\18\ For purposes only of waiving the 30-day operative delay,
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 sixty (60) days of the filing of such proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NSX-2012-22 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-NSX-2012-22. This file
number should be included on the
[[Page 72425]]
subject line if email is used. To help the Commission process and
review your comments more efficiently, please use only one method. The
Commission will post all comments on the Commission's Internet Web site
(https://www.sec.gov/rules/sro.shtml). Copies of the submission, all
subsequent amendments, all written statements with respect to the
proposed rule change that are filed with the Commission, and all
written communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NSX-2012-22 and should be submitted on or before
December 26, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-29281 Filed 12-4-12; 8:45 am]
BILLING CODE 8011-01-P
