Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees, 3055-3058 [2013-00633]
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Notices
there is a standard clearing charge for
each transaction incurred by the
Exchange along with other
administrative and technical costs 26
that are incurred by the Exchange. The
Exchange believes that the proposed
Routing Fees would enable the
Exchange to recover the respective
remove fee assessed to each market
participant by the away market, plus
clearing and other administrative and
technical fees for the execution of orders
routed to BX and executed on these
away markets.
The Exchange also believes that the
amended Routing Fees are equitable and
not unfairly discriminatory because
these fees would be uniformly applied
to all market participant orders that are
routed to the respective away market to
cover the cost to route the order. The
Exchange applied a similar
methodology in calculating the routing
fees for each market participant by
adding not more than a $0.11 per
contract fee to the away market’s
remove fee to determine the NOM
Routing Fees.27
The Exchange believes that the
technical amendments to the titles of
the Routing Fees are reasonable,
equitable and not unfairly
discriminatory as the amendments add
clarity to the fee categories.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
BX does not believe that the proposed
rule change will impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The Exchange
believes that the rule change would
allow the Exchange to recoup its costs
when routing orders designated as
available for routing by the market
participant. Today, other options
exchanges also assess similar fees to
recoup costs incurred by the Exchange
to route orders to away markets.
Further, a BX Options Participant may
designate an order as not available for
routing to avoid Routing Fees.28 For
these reasons, the Exchange does not
believe that the proposed fees impose a
burden on competition.
srobinson on DSK4SPTVN1PROD with
26 The
Exchange utilizes the NOS a member of the
Exchange and the Exchange’s exclusive order router
to route orders in options listed and open for
trading on the BX to destination markets. See
Securities Exchange Act Release No. 67256 (June
26, 2012) 77 FR 39277 (July 2, 2012) (SR–BX–2012–
030).
27 See NASDAQ Stock Market LLC Rules at
Chapter XV, Section 2(4).
28 See BX Rules at Chapter VI, Section 11(e).
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.29 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:
3055
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 20549–1090, 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–
2013–002, and should be submitted on
or before February 5, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–00662 Filed 1–14–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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–2013–002 on the
subject line.
[Release No. 34–68609; File No. SR–
NASDAQ–2013–001]
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–2013–002. 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
January 9, 2013.
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Routing Fees
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 January 2,
2013, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III, below, which Items
have been prepared by NASDAQ. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ proposes to modify Chapter
XV, Section 2, entitled ‘‘NASDAQ
30 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
29 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Notices
Options Market—Fees and Rebates,’’
which govern pricing for NASDAQ
members using the NASDAQ Options
Market (‘‘NOM’’), NASDAQ’s facility for
executing and routing standardized
equity and index options, to amend
Routing Fees.
The text of the proposed rule change
is provided in Exhibit 5. The text of the
proposed rule change is also available
on the Exchange’s Web site at https://
www.nasdaq.cchwallstreet.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change. The text of
these statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to recoup
costs that the Exchange incurs for
routing and executing certain orders in
equity options to away markets. The
Exchange proposes to amend Routing
Fees for the following away markets:
BATS Exchange, Inc. (‘‘BATS’’), BOX
Exchange
Customer
BATS Penny ....................................................................................................
BATS non-Penny .............................................................................................
BOX .................................................................................................................
BX Options .......................................................................................................
CBOE ...............................................................................................................
CBOE orders greater than 99 contracts in NDX, MNX ETFs, ETNs &
HOLDRs .......................................................................................................
C2 ....................................................................................................................
ISE ...................................................................................................................
ISE Select Symbols .........................................................................................
NYSE Arca Penny Pilot ...................................................................................
NYSE Arca Non Penny Pilot ...........................................................................
NYSE AMEX ....................................................................................................
PHLX (for all options other than PHLX Select Symbols) ................................
PHLX Select Symbols .....................................................................................
srobinson on DSK4SPTVN1PROD with
NASDAQ currently recoups clearing
and transaction charges incurred by the
Exchange as well as certain other costs
incurred by the Exchange when routing
to away markets, such as administrative
and technical costs associated with
operating the order router, membership
fees at away markets, and technical
costs associated with routing.3 For
example, the Exchange incurs costs
related to the Nasdaq Options Services
LLC (‘‘NOS’’), a member of the
Exchange and the Exchange’s exclusive
order router.4 Each time NOS routes an
order to an away market, NOS is
charged a clearing fee 5 and, in the case
of certain exchanges, a transaction fee is
also charged in certain symbols, which
fees are passed through to the Exchange.
The Exchange proposes to recoup a
3 In addition to membership fees and transaction
fees, the Exchange also incurs an Options
Regulatory Fee (‘‘ORF’’) when it routes to an away
market that assesses an ORF.
4 See Exchange Rules at Chapter VI, Section 11(e)
(Order Routing).
5 The Options Clearing Corporation (‘‘OCC’’)
assesses $0.01 per contract side.
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Professional
$0.55
0.91
0.55
0.54
0.55
$0.55
0.91
0.55
0.54
0.55
$0.55
0.91
0.11
0.54
0.31
0.29
0.55
0.11
0.35
0.55
0.11
0.11
0.11
0.50
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.31
0.55
0.29
0.39
0.55
0.11
0.31
0.31
0.51
BATS BZX Exchange Fee Schedule.
Exchange computed the BATS Non-Penny
Pilot Routing Fees by adding an $0.11 per contract
fixed fee to the away market’s transaction fee. The
Exchange proposes to cap the Firm, Market Maker
7 The
Firm
$0.55
0.86
0.11
0.11
0.11
portion of the above costs along with the
away market’s routing fee when routing
to an away market. The Exchange is
proposing to amend various away
market fees to account for amendments
to fees to remove liquidity at those
markets. The Exchange currently
assesses an $0.11 per contract fixed
routing fee in addition to the away
market’s transaction fee.
BATS assesses the following fees for
removing liquidity from the BATS
Options order book in all other
securities, or Non-Penny Pilot
Securities, as follows: $0.84 per contract
for a Professional, Firm or Market Maker
order and $0.75 per contract for a
Customer order.6 The Exchange is
proposing to amend the BATS NonPenny Pilot Routing Fees by increasing
the Firm, Market Maker and
Professional Routing Fees from $0.91 to
$0.94 per contract.7 The Exchange
6 See
Options Exchange LLC (‘‘BOX’’),
NASDAQ OMX BX, Inc. (‘‘BX
Options’’), the Chicago Board Exchange
Incorporated (‘‘CBOE’’), the
International Securities Exchange LLC
(‘‘ISE’’), NYSE ARCA, Inc. (‘‘NYSE
Arca’’) and NASDAQ OMX PHLX LLC
(‘‘Phlx’’). These away markets amended
their transaction fees and the Exchange
desires to amend its Routing Fees to
reflect the amended transaction cost for
routing to these away markets. In
addition, the Exchange proposes to
adopt Routing Fees when routing orders
to Miami International Securities
Exchange, LLC (‘‘MIAX’’).
Today, the Exchange’s Rules at
Chapter XV, Section 2(4) include the
following fees for routing Customer,
Firm, Market Maker and Professional
orders:
proposes to make a technical
amendment for consistency to the
‘‘BATS non-Penny’’ category to rename
it ‘‘BATS Non-Penny Pilot.’’ The
Exchange also proposes to rename the
‘‘BATS Penny’’ Routing Fees as the
‘‘BATS Penny Pilot’’ Routing Fees for
consistency in the Routing Fees.
BOX amended its Professional fees to
assess a Professional non-auction
transaction fee of $0.20 per contact.8
The Exchange is proposing to increase
the BOX Professional Routing Fee from
$0.11 to $0.31 per contract.9
BX Options recently adopted NonPenny Pilot Pricing.10 The Exchange is
and Professional BATS Non-Penny Pilot Routing
Fees at $0.94 per contract similar to NYSE Arca and
BX Options Routing Fees. The Exchange is not
proposing to amend the Customer Routing Fee in
BATS Non-Penny Pilot Options.
8 See BOX Options Exchange Fee Schedule.
9 The Exchange computed the BOX Professional
Routing Fee by adding an $0.11 per contract fixed
fee to the away market’s transaction fee.
10 See SR–BX–2012–074 (not yet published). BX
Options Non-Penny Pilot Fees to Remove Liquidity
are as follows: Customer is not assessed a fee, a BX
Options Market Maker and Non-Customer are
assessed an $0.88 per contract fee. A Non-Customer
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Notices
srobinson on DSK4SPTVN1PROD with
proposing to amend the title of the
current BX Options Routing Fees from
‘‘BX Options’’ to ‘‘BX Options Penny
Pilot’’ and create a new category of
Routing Fees entitled ‘‘BX Options NonPenny Pilot.’’ The Exchange is
proposing to adopt the following BX
Options Non-Penny Pilot Routing Fees:
$0.11 per contract for a Customer and
$0.94 per contract for a Firm, Market
Maker and Professional.11
CBOE amended its fees in Select
Symbols to assess a Professional
transaction fee of $0.30 per contract.12
The Exchange is proposing to increase
the CBOE Professional Routing Fee from
$0.31 to $0.41 per contract.13 In
addition, the Exchange is proposing to
amend the Professional Routing Fee for
CBOE orders greater than 99 contracts in
ETFs, ETNs and HOLDRs of $0.31 per
contract to ‘‘N/A.’’ The Exchange noted
a $0.31 per contract fee, which is the
same fee for the Professional CBOE
Routing Fee, at the time that the
Exchange created the CBOE orders
greater than 99 contracts Routing Fee
category. This was an error because the
Routing Fees for CBOE orders greater
than 99 contracts only apply to
Customer orders and not Professional
orders. The Exchange has never
assessed the Professional Routing Fee
for CBOE orders greater than 99
contracts on a Professional because it
was only able to route Customer orders
over 99 contracts to CBOE in this
category. The Exchange proposes to
amend the fee rate to display ‘‘N/A’’
because a Professional would not
qualify for this category. Additionally,
the Exchange proposes to update the
title of the Routing Fee to ‘‘CBOE orders
greater than 99 contracts in ETFs and
ETNs’’ to remove the HOLDRs product,
which is no longer listed on CBOE.
The Exchange is proposing to rename
the ‘‘ISE’’ Routing Fees as the ‘‘ISE
(Standard)’’ Routing Fees to further
distinguish this fee from the ISE Select
Symbols Routing Fees. ISE amended its
Professional Customer Non-Select
Symbols or ‘‘Standard’’ fee to $0.20 per
contract.14 The Exchange is proposing
includes a Professional, Firm, Broker-Dealer and
Non-BX Options Market Maker.
11 The Exchange computed the BX Options
Customer Non-Penny Pilot Routing Fee by assessing
only the $0.11 per contract fixed fee. The Exchange
computed the Firm, Market Maker and Professional
Routing Fees by adding $0.11 per contract to the
away market’s transaction fee. The Exchange
determined to cap the Firm, Market Maker and
Professional Routing Fees at $0.94 per contract
similar to BATS and NYSE Arca Routing Fees.
12 See CBOE’s Fees Schedule.
13 The Exchange computed the CBOE Professional
Routing Fee by adding an $0.11 per contract fixed
fee to the away market’s transaction fee.
14 See ISE’s Fee Schedule.
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to increase the newly named ISE
(Standard) Professional Routing Fee
from $0.29 to $0.31 per contract.15
Additionally, ISE amended its
Professional Customer taker fee in
Select Symbols to $0.33 per contract.16
The Exchange is proposing to increase
the ISE (Select Symbols) Professional
Routing Fee from $0.39 to $0.44 per
contract.17
NYSE Arca assesses the following
take liquidity fees: $0.79 per contact for
a Customer and $0.85 per contract for a
Firm and Broker-Dealer.18 The
Exchange is proposing to amend the
NYSE Arca Non-Penny Pilot Routing
Fees as follows: the Customer and
Professional Routing Fees will increase
from $0.11 to $0.90 per contract, and the
Firm and Market Maker Routing Fees
will increase from $0.55 to $0.94 per
contract.19
Phlx recently amended its fees in
Select Symbols to assess no Customer
Fee to Remove Liquidity and to decrease
the Professional Fee for Removing
Liquidity in Select Symbols from $0.45
to $0.44 per contract.20 The Exchange is
proposing to decrease the Phlx Select
Symbols Customer Routing Fee from
$0.50 to $0.11 per contract and increase
the Professional Routing Fee from $0.51
to $0.55 per contract.21
MIAX recently filed to adopt
transaction fees, which included the
following fees applicable to all classes
of options: $0.00 for a Priority
15 The Exchange computed the ISE (Standard)
Professional Routing Fee by adding an $0.11 per
contract fixed fee to the away market’s transaction
fee.
16 See ISE’s Fee Schedule.
17 The Exchange computed the ISE (Select
Symbols) Professional Routing Fee by adding an
$0.11 per contract fixed fee to the away market’s
transaction fee.
18 See NYSE ARCA General Options and Trading
Permit (OTP) Fees.
19 The Exchange computed the NYSE Arca NonPenny Pilot Customer and Routing Fees by adding
an $0.11 per contract fixed fee to the away market’s
transaction fee. Because NYSE Arca does not have
a Professional category, Professional orders would
be routed as Customer to NYSE Arca. In light of
this, the Professional Routing Fee was computed
the same as the Customer Routing Fee. With respect
to the Firm and Market Maker Routing Fees, the
Exchange added an $0.11 per contract fixed fee to
the away market’s transaction fee and determined
to cap the Routing Fees at $0.94 per contract similar
to BATS and BX Options.
20 See SR–Phlx–2013–01 (not yet published). Phlx
lists its Select Symbols in Section I of its Pricing
Schedule.
21 The Exchange is proposing to assess a
Customer the $0.11 per contract fixed fee as there
is no transaction fee when routing a Customer order
to Phlx in Select Symbols. The Exchange is also
proposing to add the $0.11 per contract fixed fee to
the away market’s transaction fee to compute the
Professional Routing Fee in Select Symbols. The
Exchange proposes to cap the fee at $0.55 per
contract similar to the Firm and Market Maker
Routing Fee in PHLX Select Symbols.
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3057
Customer, $0.45 for a Non-MIAX Market
Maker, $0.45 for a Broker-Dealer and
$0.25 per contract for a Public Customer
other than a Priority Customer.22 The
Exchange is proposing to adopt MIAX
Routing Fees as follows: $0.11 per
contract for a Customer, $0.36 per
contract for a Professional and $0.55 per
contract for a Firm and Market Maker.23
The Exchange is not proposing to
otherwise amend other Routing Fees not
specifically mentioned. As with all fees,
the Exchange may adjust these Routing
Fees in response to competitive
conditions by filing a new proposed rule
change.
2. Statutory Basis
NASDAQ believes that its proposal to
amend its rules is consistent with
Section 6(b) of the Act 24 in general, and
furthers the objectives of Section 6(b)(4)
of the Act 25 in particular, in that it is
an equitable allocation of reasonable
fees and other charges among Exchange
members.
The Exchange’s amendments to the
BATS, BOX, BX Options, CBOE, ISE,
NYSE Arca and Phlx Routing fees as
well as the adoption of MIAX Routing
Fees are reasonable because these fees
are designed to recoup costs that are
incurred by the Exchange when routing
certain orders to these away markets on
behalf of members. Each destination
market’s transaction charge varies and
there is a standard clearing charge for
each transaction incurred by the
Exchange along with other
administrative and technical costs 26
that are incurred by the Exchange. The
Exchange believes that the proposed
Routing Fees would enable the
Exchange to recover the respective
remove fee assessed to each market
participant by the away market, plus
clearing and other administrative and
technical fees for the execution of orders
routed to NOM and executed on these
away markets.
The Exchange also believes that the
amended Routing Fees are equitable and
not unfairly discriminatory because
these fees would be uniformly applied
to all market participant orders that are
routed to the respective away market to
cover the cost to route the order. The
22 See
MIAX’s Fee Schedule.
Exchange computed the MIAX Routing
Fees by adding an $0.11 per contract fixed fee to
the away market’s transaction fee. With respect to
the Firm and Market Maker Routing Fees, the
Exchange determined to cap the fees at $0.55 per
contract similar to other Routing Fees.
24 15 U.S.C. 78f(b).
25 15 U.S.C. 78f(b)(4).
26 The Exchange utilizes the NOS a member of the
Exchange and the Exchange’s exclusive order router
to route orders in options listed and open for
trading on NOM to destination markets.
23 The
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Federal Register / Vol. 78, No. 10 / Tuesday, January 15, 2013 / Notices
Exchange applied a similar
methodology in calculating the routing
fees for each market participant by
adding not more than a $0.11 per
contract fee to the away market’s
remove fee to determine the BX Options
Routing Fees.27
The Exchange believes that the
technical amendments to the titles of
the Routing Fees are reasonable,
equitable and not unfairly
discriminatory as the amendments add
clarity to the fee categories.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act. The Exchange
believes that the rule change would
allow the Exchange to recoup its costs
when routing orders designated as
available for routing by the market
participant. Today, other options
exchanges also assess similar fees to
recoup costs incurred by the Exchange
to route orders to away markets.
Further, a NOM Participant may
designate an order as not available for
routing to avoid Routing Fees.28 For
these reasons, the Exchange does not
believe that that the proposed fees
impose a burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
srobinson on DSK4SPTVN1PROD with
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.29 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.
27 See
BX Rules at Chapter XV, Section 2(4).
NOM Rules at Chapter VI, Section 11.
29 15 U.S.C. 78s(b)(3)(A)(ii).
28 See
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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:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2013–001 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–2013–001. 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 20549–1090, 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–
NASDAQ–2013–001, and should be
submitted on or before February 5, 2013.
Frm 00120
Fmt 4703
[FR Doc. 2013–00633 Filed 1–14–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
PO 00000
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
Kevin M. O’Neill,
Deputy Secretary.
Sfmt 4703
[Release No. 34–68612; File No. SR–NSX–
2012–27]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Amend
its Fee and Rebate Schedule
January 9, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 notice is hereby
given that on December 27, 2012,
National Stock Exchange, Inc. (‘‘NSX®’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change, as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comment 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
to amend its Fee and Rebate Schedule
(the ‘‘Fee Schedule’’) issued pursuant to
Exchange Rule 16.1(a) to modify the
Order Delivery Notification Fee charged
for each Order Delivery Notification 3
transmitted by the Exchange to an
Equity Trading Permit (‘‘ETP’’)4 Holder
using the Exchange’s Order Delivery
mode (‘‘Order Delivery Mode’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at www.nsx.com, at the Exchange’s
principal office, and at the
Commission’s public reference room.
30 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 An ‘‘Order Delivery Notification’’ refers to a
message sent by the Exchange to the Order Delivery
participant communicating the details of the full or
partial quantity of an inbound contra-side order that
potentially may be matched within the System for
execution against an Order Delivery Order.
4 Exchange Rule 1.5 defines the term ‘‘ETP’’ as an
Equity Trading Permit issued by the Exchange for
effecting approved securities transactions on the
Exchange’s Trading Facilities.
1 15
E:\FR\FM\15JAN1.SGM
15JAN1
]]>Agencies
[Federal Register Volume 78, Number 10 (Tuesday, January 15, 2013)]
[Notices]
[Pages 3055-3058]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00633]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68609; File No. SR-NASDAQ-2013-001]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Routing Fees
January 9, 2013.
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 January 2, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by NASDAQ.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ proposes to modify Chapter XV, Section 2, entitled ``NASDAQ
[[Page 3056]]
Options Market--Fees and Rebates,'' which govern pricing for NASDAQ
members using the NASDAQ Options Market (``NOM''), NASDAQ's facility
for executing and routing standardized equity and index options, to
amend Routing Fees.
The text of the proposed rule change is provided in Exhibit 5. The
text of the proposed rule change is also available on the Exchange's
Web site at https://www.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to recoup costs that the Exchange
incurs for routing and executing certain orders in equity options to
away markets. The Exchange proposes to amend Routing Fees for the
following away markets: BATS Exchange, Inc. (``BATS''), BOX Options
Exchange LLC (``BOX''), NASDAQ OMX BX, Inc. (``BX Options''), the
Chicago Board Exchange Incorporated (``CBOE''), the International
Securities Exchange LLC (``ISE''), NYSE ARCA, Inc. (``NYSE Arca'') and
NASDAQ OMX PHLX LLC (``Phlx''). These away markets amended their
transaction fees and the Exchange desires to amend its Routing Fees to
reflect the amended transaction cost for routing to these away markets.
In addition, the Exchange proposes to adopt Routing Fees when routing
orders to Miami International Securities Exchange, LLC (``MIAX'').
Today, the Exchange's Rules at Chapter XV, Section 2(4) include the
following fees for routing Customer, Firm, Market Maker and
Professional orders:
----------------------------------------------------------------------------------------------------------------
Exchange Customer Firm MM Professional
----------------------------------------------------------------------------------------------------------------
BATS Penny...................................... $0.55 $0.55 $0.55 $0.55
BATS non-Penny.................................. 0.86 0.91 0.91 0.91
BOX............................................. 0.11 0.55 0.55 0.11
BX Options...................................... 0.11 0.54 0.54 0.54
CBOE............................................ 0.11 0.55 0.55 0.31
CBOE orders greater than 99 contracts in NDX, 0.29 0.55 0.55 0.31
MNX ETFs, ETNs & HOLDRs........................
C2.............................................. 0.55 0.55 0.55 0.55
ISE............................................. 0.11 0.55 0.55 0.29
ISE Select Symbols.............................. 0.35 0.55 0.55 0.39
NYSE Arca Penny Pilot........................... 0.55 0.55 0.55 0.55
NYSE Arca Non Penny Pilot....................... 0.11 0.55 0.55 0.11
NYSE AMEX....................................... 0.11 0.55 0.55 0.31
PHLX (for all options other than PHLX Select 0.11 0.55 0.55 0.31
Symbols).......................................
PHLX Select Symbols............................. 0.50 0.55 0.55 0.51
----------------------------------------------------------------------------------------------------------------
NASDAQ currently recoups clearing and transaction charges incurred
by the Exchange as well as certain other costs incurred by the Exchange
when routing to away markets, such as administrative and technical
costs associated with operating the order router, membership fees at
away markets, and technical costs associated with routing.\3\ For
example, the Exchange incurs costs related to the Nasdaq Options
Services LLC (``NOS''), a member of the Exchange and the Exchange's
exclusive order router.\4\ Each time NOS routes an order to an away
market, NOS is charged a clearing fee \5\ and, in the case of certain
exchanges, a transaction fee is also charged in certain symbols, which
fees are passed through to the Exchange. The Exchange proposes to
recoup a portion of the above costs along with the away market's
routing fee when routing to an away market. The Exchange is proposing
to amend various away market fees to account for amendments to fees to
remove liquidity at those markets. The Exchange currently assesses an
$0.11 per contract fixed routing fee in addition to the away market's
transaction fee.
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\3\ In addition to membership fees and transaction fees, the
Exchange also incurs an Options Regulatory Fee (``ORF'') when it
routes to an away market that assesses an ORF.
\4\ See Exchange Rules at Chapter VI, Section 11(e) (Order
Routing).
\5\ The Options Clearing Corporation (``OCC'') assesses $0.01
per contract side.
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BATS assesses the following fees for removing liquidity from the
BATS Options order book in all other securities, or Non-Penny Pilot
Securities, as follows: $0.84 per contract for a Professional, Firm or
Market Maker order and $0.75 per contract for a Customer order.\6\ The
Exchange is proposing to amend the BATS Non-Penny Pilot Routing Fees by
increasing the Firm, Market Maker and Professional Routing Fees from
$0.91 to $0.94 per contract.\7\ The Exchange proposes to make a
technical amendment for consistency to the ``BATS non-Penny'' category
to rename it ``BATS Non-Penny Pilot.'' The Exchange also proposes to
rename the ``BATS Penny'' Routing Fees as the ``BATS Penny Pilot''
Routing Fees for consistency in the Routing Fees.
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\6\ See BATS BZX Exchange Fee Schedule.
\7\ The Exchange computed the BATS Non-Penny Pilot Routing Fees
by adding an $0.11 per contract fixed fee to the away market's
transaction fee. The Exchange proposes to cap the Firm, Market Maker
and Professional BATS Non-Penny Pilot Routing Fees at $0.94 per
contract similar to NYSE Arca and BX Options Routing Fees. The
Exchange is not proposing to amend the Customer Routing Fee in BATS
Non-Penny Pilot Options.
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BOX amended its Professional fees to assess a Professional non-
auction transaction fee of $0.20 per contact.\8\ The Exchange is
proposing to increase the BOX Professional Routing Fee from $0.11 to
$0.31 per contract.\9\
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\8\ See BOX Options Exchange Fee Schedule.
\9\ The Exchange computed the BOX Professional Routing Fee by
adding an $0.11 per contract fixed fee to the away market's
transaction fee.
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BX Options recently adopted Non-Penny Pilot Pricing.\10\ The
Exchange is
[[Page 3057]]
proposing to amend the title of the current BX Options Routing Fees
from ``BX Options'' to ``BX Options Penny Pilot'' and create a new
category of Routing Fees entitled ``BX Options Non-Penny Pilot.'' The
Exchange is proposing to adopt the following BX Options Non-Penny Pilot
Routing Fees: $0.11 per contract for a Customer and $0.94 per contract
for a Firm, Market Maker and Professional.\11\
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\10\ See SR-BX-2012-074 (not yet published). BX Options Non-
Penny Pilot Fees to Remove Liquidity are as follows: Customer is not
assessed a fee, a BX Options Market Maker and Non-Customer are
assessed an $0.88 per contract fee. A Non-Customer includes a
Professional, Firm, Broker-Dealer and Non-BX Options Market Maker.
\11\ The Exchange computed the BX Options Customer Non-Penny
Pilot Routing Fee by assessing only the $0.11 per contract fixed
fee. The Exchange computed the Firm, Market Maker and Professional
Routing Fees by adding $0.11 per contract to the away market's
transaction fee. The Exchange determined to cap the Firm, Market
Maker and Professional Routing Fees at $0.94 per contract similar to
BATS and NYSE Arca Routing Fees.
---------------------------------------------------------------------------
CBOE amended its fees in Select Symbols to assess a Professional
transaction fee of $0.30 per contract.\12\ The Exchange is proposing to
increase the CBOE Professional Routing Fee from $0.31 to $0.41 per
contract.\13\ In addition, the Exchange is proposing to amend the
Professional Routing Fee for CBOE orders greater than 99 contracts in
ETFs, ETNs and HOLDRs of $0.31 per contract to ``N/A.'' The Exchange
noted a $0.31 per contract fee, which is the same fee for the
Professional CBOE Routing Fee, at the time that the Exchange created
the CBOE orders greater than 99 contracts Routing Fee category. This
was an error because the Routing Fees for CBOE orders greater than 99
contracts only apply to Customer orders and not Professional orders.
The Exchange has never assessed the Professional Routing Fee for CBOE
orders greater than 99 contracts on a Professional because it was only
able to route Customer orders over 99 contracts to CBOE in this
category. The Exchange proposes to amend the fee rate to display ``N/
A'' because a Professional would not qualify for this category.
Additionally, the Exchange proposes to update the title of the Routing
Fee to ``CBOE orders greater than 99 contracts in ETFs and ETNs'' to
remove the HOLDRs product, which is no longer listed on CBOE.
---------------------------------------------------------------------------
\12\ See CBOE's Fees Schedule.
\13\ The Exchange computed the CBOE Professional Routing Fee by
adding an $0.11 per contract fixed fee to the away market's
transaction fee.
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The Exchange is proposing to rename the ``ISE'' Routing Fees as the
``ISE (Standard)'' Routing Fees to further distinguish this fee from
the ISE Select Symbols Routing Fees. ISE amended its Professional
Customer Non-Select Symbols or ``Standard'' fee to $0.20 per
contract.\14\ The Exchange is proposing to increase the newly named ISE
(Standard) Professional Routing Fee from $0.29 to $0.31 per
contract.\15\ Additionally, ISE amended its Professional Customer taker
fee in Select Symbols to $0.33 per contract.\16\ The Exchange is
proposing to increase the ISE (Select Symbols) Professional Routing Fee
from $0.39 to $0.44 per contract.\17\
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\14\ See ISE's Fee Schedule.
\15\ The Exchange computed the ISE (Standard) Professional
Routing Fee by adding an $0.11 per contract fixed fee to the away
market's transaction fee.
\16\ See ISE's Fee Schedule.
\17\ The Exchange computed the ISE (Select Symbols) Professional
Routing Fee by adding an $0.11 per contract fixed fee to the away
market's transaction fee.
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NYSE Arca assesses the following take liquidity fees: $0.79 per
contact for a Customer and $0.85 per contract for a Firm and Broker-
Dealer.\18\ The Exchange is proposing to amend the NYSE Arca Non-Penny
Pilot Routing Fees as follows: the Customer and Professional Routing
Fees will increase from $0.11 to $0.90 per contract, and the Firm and
Market Maker Routing Fees will increase from $0.55 to $0.94 per
contract.\19\
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\18\ See NYSE ARCA General Options and Trading Permit (OTP)
Fees.
\19\ The Exchange computed the NYSE Arca Non-Penny Pilot
Customer and Routing Fees by adding an $0.11 per contract fixed fee
to the away market's transaction fee. Because NYSE Arca does not
have a Professional category, Professional orders would be routed as
Customer to NYSE Arca. In light of this, the Professional Routing
Fee was computed the same as the Customer Routing Fee. With respect
to the Firm and Market Maker Routing Fees, the Exchange added an
$0.11 per contract fixed fee to the away market's transaction fee
and determined to cap the Routing Fees at $0.94 per contract similar
to BATS and BX Options.
---------------------------------------------------------------------------
Phlx recently amended its fees in Select Symbols to assess no
Customer Fee to Remove Liquidity and to decrease the Professional Fee
for Removing Liquidity in Select Symbols from $0.45 to $0.44 per
contract.\20\ The Exchange is proposing to decrease the Phlx Select
Symbols Customer Routing Fee from $0.50 to $0.11 per contract and
increase the Professional Routing Fee from $0.51 to $0.55 per
contract.\21\
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\20\ See SR-Phlx-2013-01 (not yet published). Phlx lists its
Select Symbols in Section I of its Pricing Schedule.
\21\ The Exchange is proposing to assess a Customer the $0.11
per contract fixed fee as there is no transaction fee when routing a
Customer order to Phlx in Select Symbols. The Exchange is also
proposing to add the $0.11 per contract fixed fee to the away
market's transaction fee to compute the Professional Routing Fee in
Select Symbols. The Exchange proposes to cap the fee at $0.55 per
contract similar to the Firm and Market Maker Routing Fee in PHLX
Select Symbols.
---------------------------------------------------------------------------
MIAX recently filed to adopt transaction fees, which included the
following fees applicable to all classes of options: $0.00 for a
Priority Customer, $0.45 for a Non-MIAX Market Maker, $0.45 for a
Broker-Dealer and $0.25 per contract for a Public Customer other than a
Priority Customer.\22\ The Exchange is proposing to adopt MIAX Routing
Fees as follows: $0.11 per contract for a Customer, $0.36 per contract
for a Professional and $0.55 per contract for a Firm and Market
Maker.\23\
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\22\ See MIAX's Fee Schedule.
\23\ The Exchange computed the MIAX Routing Fees by adding an
$0.11 per contract fixed fee to the away market's transaction fee.
With respect to the Firm and Market Maker Routing Fees, the Exchange
determined to cap the fees at $0.55 per contract similar to other
Routing Fees.
---------------------------------------------------------------------------
The Exchange is not proposing to otherwise amend other Routing Fees
not specifically mentioned. As with all fees, the Exchange may adjust
these Routing Fees in response to competitive conditions by filing a
new proposed rule change.
2. Statutory Basis
NASDAQ believes that its proposal to amend its rules is consistent
with Section 6(b) of the Act \24\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \25\ in particular, in that it
is an equitable allocation of reasonable fees and other charges among
Exchange members.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78f(b).
\25\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange's amendments to the BATS, BOX, BX Options, CBOE, ISE,
NYSE Arca and Phlx Routing fees as well as the adoption of MIAX Routing
Fees are reasonable because these fees are designed to recoup costs
that are incurred by the Exchange when routing certain orders to these
away markets on behalf of members. Each destination market's
transaction charge varies and there is a standard clearing charge for
each transaction incurred by the Exchange along with other
administrative and technical costs \26\ that are incurred by the
Exchange. The Exchange believes that the proposed Routing Fees would
enable the Exchange to recover the respective remove fee assessed to
each market participant by the away market, plus clearing and other
administrative and technical fees for the execution of orders routed to
NOM and executed on these away markets.
---------------------------------------------------------------------------
\26\ The Exchange utilizes the NOS a member of the Exchange and
the Exchange's exclusive order router to route orders in options
listed and open for trading on NOM to destination markets.
---------------------------------------------------------------------------
The Exchange also believes that the amended Routing Fees are
equitable and not unfairly discriminatory because these fees would be
uniformly applied to all market participant orders that are routed to
the respective away market to cover the cost to route the order. The
[[Page 3058]]
Exchange applied a similar methodology in calculating the routing fees
for each market participant by adding not more than a $0.11 per
contract fee to the away market's remove fee to determine the BX
Options Routing Fees.\27\
---------------------------------------------------------------------------
\27\ See BX Rules at Chapter XV, Section 2(4).
---------------------------------------------------------------------------
The Exchange believes that the technical amendments to the titles
of the Routing Fees are reasonable, equitable and not unfairly
discriminatory as the amendments add clarity to the fee categories.
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange believes that the rule change
would allow the Exchange to recoup its costs when routing orders
designated as available for routing by the market participant. Today,
other options exchanges also assess similar fees to recoup costs
incurred by the Exchange to route orders to away markets. Further, a
NOM Participant may designate an order as not available for routing to
avoid Routing Fees.\28\ For these reasons, the Exchange does not
believe that that the proposed fees impose a burden on competition.
---------------------------------------------------------------------------
\28\ See NOM Rules at Chapter VI, Section 11.
---------------------------------------------------------------------------
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\29\ 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.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2013-001 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-2013-001. 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 20549-1090, 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-
NASDAQ-2013-001, and should be submitted on or before February 5, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00633 Filed 1-14-13; 8:45 am]
BILLING CODE 8011-01-P
