Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees, 24458-24461 [2013-09711]

Download as PDF 24458 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices The Exchange believes the proposed rule change is also consistent with the Section 6(b)(7) 11 requirements that the rules of an exchange provide a fair procedure for the denial of membership to any person seeking membership therein and the prohibition or limitation by an exchange of any person with respect to access to services offered by the exchange. Specifically, with respect to the proposed automatic termination provision when a Permit Holder does not have a required letter of guarantee or authorization for ninety consecutive days, the Exchange believes that that provision establishes a fair procedure because it strikes the appropriate balance between giving a deficient Permit Holder an adequate amount of time to cure the deficiency of not having a required letter of guarantee or authorization and allowing the Exchange to appropriately limit access to its marketplace only to those Permit Holders with a financial guarantee. Furthermore, the automatic termination provision does not prohibit or limit a previously terminated Permit Holder from seeking to gain access again to the Exchange by applying to become a Permit Holder subsequent to the termination if the Permit Holder is able to again acquire the required letter of guarantee and authorization. tkelley on DSK3SPTVN1PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition C2 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. The Exchange does not believes the proposed rule change will pose any burden on intramarket competition because it is applied to all TPHs equally as all will have the same requirements with respect to letters of guarantee. Additionally, the Exchange does not believe the proposed rule change will pose any burden on intermarket competition because the proposed rule change merely allows the Exchange to clarify and codify existing and well-established principles regarding activities permitted by Clearing Participants. Therefore, there would be no further impact on intermarket competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. Impose any significant burden on competition; and C. Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b–4(f)(6) 13 thereunder. 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 will institute proceedings to determine whether the proposed rule change 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–C2–2013–018 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–C2–2013–018. 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 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f)(6). U.S.C. 78f(b)(7). VerDate Mar<15>2010 17:22 Apr 24, 2013 Jkt 229001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Elizabeth M. Murphy, Secretary. [FR Doc. 2013–09766 Filed 4–24–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69392; File No. SR–BX– 2013–030] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees April 18, 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 April 9, 2013, NASDAQ OMX BX, Inc. (‘‘BX’’ 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 comments on the proposed rule change from interested persons. 14 17 12 15 11 15 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–C2– 2013–018 and should be submitted on or before May 16, 2013. PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\25APN1.SGM 25APN1 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Chapter XV, Section 2 entitled ‘‘BX Options Market—Fees and Rebates’’ to amend various fees for routing options to away markets. While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on May 1, 2013. The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxbx.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 and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change tkelley on DSK3SPTVN1PROD with NOTICES 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. Today, the Exchange assesses Non-Customers a flat rate of $0.95 per contract on all NonCustomer orders routed to any away market and the Exchange assesses Customer orders a fixed fee plus the actual transaction fee dependent on the away market. Specifically, the Exchange assesses Customer orders routed to The NASDAQ Options Market LLC (‘‘NOM’’) and NASDAQ OMX PHLX LLC (‘‘PHLX’’) ’’) [sic] a fixed fee of $0.05 per contract in addition to the actual transaction fee assessed by the away market. The Exchange assesses Customer orders routed to all other away markets, except NOM and PHLX, a fixed fee of $0.11 per contract in addition to the actual transaction fee assessed by the away market, unless the away market pays a rebate, then the Routing Fee is $0.00. VerDate Mar<15>2010 17:22 Apr 24, 2013 Jkt 229001 The fixed fees are based on costs that are incurred by the Exchange when routing to an away market in addition to the away market’s transaction fee. For example, the Exchange incurs a fee when it utilizes Nasdaq Options Services LLC (‘‘NOS’’), a member of the Exchange and the Exchange’s exclusive order router,3 to route orders in options listed and open for trading to destination markets. Each time NOS routes to away markets NOS incurs a clearing-related cost 4 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 also incurs administrative and technical costs associated with operating NOS, membership fees at away markets, Options Regulatory Fees (‘‘ORFs’’) and technical costs associated with routing options. For Customer orders, the transaction fee assessed by the Exchange is based on the away market’s actual transaction fee or rebate for a particular market participant at the time that the order was entered into the Exchange’s trading system. This transaction fee is calculated on an orderby-order basis for Customer orders, since different away markets charge different amounts. In the event that there is no transaction fee or rebate assessed by the away market, the only fee assessed is the fixed Routing Fee. The Exchange is proposing to amend the Routing Fees to all other options exchanges, except NOM and PHLX, to increase the fixed fee from $0.11 to $0.15 per contract.5 The Exchange currently does not recoup all of its costs to route to away markets other than NOM and PHLX. As mentioned herein, the Exchange incurs costs when routing to away markets including away market transaction fees, ORFs, clearing fees, Section 31 related fees, connectivity and membership fees. The Exchange is not recouping its costs currently with the $0.11 per contract fixed fee and proposes to increase the fixed fee to $0.15 per contract. 2. Statutory Basis BX believes that its proposal to amend its pricing is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(4) of the 3 See BX Rules at Chapter VI, Section 11(e) (Order Routing). 4 The Options Clearing Corporation (‘‘OCC’’) assesses a clearing fee of $0.01 per contract side. See Securities Exchange Act Release No. 68025 (October 10, 2012), 77 FR 63398 (October 16, 2012) (SR–OCC–2012–18). 5 The Exchange is not proposing to amend NonCustomer Routing Fees or Routing Fees for Customer orders routed to NOM or PHLX. 6 15 U.S.C. 78f(b). PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 24459 Act,7 in particular, in that it is an equitable allocation of reasonable fees and other charges among its Participants. The Exchange believes that amending the Customer Routing Fee to other away markets, other than NOM and PHLX, from a fixed fee of $0.11 to $0.15 per contract, in addition to the actual transaction fee, is reasonable because the proposed fixed fee for Customer orders is an approximation of the costs the Exchange will be charged for routing orders to away markets. For example, today, NYSE MKT LLC (‘‘Amex’’) does not assess a Customer transaction fee.8 Today, the Exchange would therefore assess a Customer order that was routed to Amex an $0.11 per contract Routing Fee. The Exchange’s effective per contract expenses to route to Amex which include the ORF, OCC clearing charges, Section 31 related fees, connectivity and membership fees, are not covered by the $0.11 per contract and are slightly higher than the $0.15 per contract. As a general matter, the Exchange believes that the proposed fees will allow it to recoup and cover its costs of providing optional routing services for Customer orders because it better approximates the costs incurred by the Exchange for routing such orders. While, each destination market’s transaction charge varies and there is a cost incurred by the Exchange when routing orders to away markets, including OCC clearing costs, administrative and technical costs associated with operating NOS, membership fees at away markets, ORFs and technical costs associated with routing options, the Exchange believes that the proposed Routing Fees will enable it to recover the costs it incurs to route Customer orders to away markets. Today, the Exchange is paying a higher average cost per contract to route Customer orders to away markets, other than NOM and PHLX. The Exchange believes that the proposed pricing for Customer Routing Fees to all other away markets, except NOM and PHLX, is equitable and not unfairly discriminatory because the Exchange would assess the same fixed fee when routing orders to an away market in addition to the away market transaction fee. The proposal would apply uniformly to all market participants when routing to an away market that pays a rebate. Market participants may submit orders to the Exchange as ineligible for routing or 7 15 U.S.C. 78f(b)(4). Amex’s Fee Schedule. 8 See E:\FR\FM\25APN1.SGM 25APN1 tkelley on DSK3SPTVN1PROD with NOTICES 24460 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices ‘‘DNR’’ to avoid Routing Fees.9 It is important to note that when orders are routed to an away market they are routed based on price first.10 Further, the Exchange believes that it is reasonable to continue to not assess a Customer Routing Fee when routing to all other options exchanges, except NOM and PHLX, if the away market pays a rebate. The Exchange will continue to assess a fixed fee, which fee is being increased with this proposal, plus the actual transaction charge assessed by the away market when routing to all other options exchanges, except NOM and PHLX, unless the away market pays a rebate. The Exchange would continue to not assess a Routing Fee if the away market pays a rebate because the Exchange believes it is reasonable to retain the rebate to offset the Routing Fee. The Exchange believes that market participants will have more certainty as to the Customer Routing Fee that will be assessed by the Exchange by simply not assessing a Routing Fee for Customer orders routed to away markets, other than NOM and PHLX, that pay a rebate. The Exchange believes that it is reasonable, equitable and not unfairly discriminatory to continue to assess Customer orders that are routed to NOM and PHLX a fixed fee of $0.05 per contract and orders that are routed to other away markets, other than NOM and PHLX, a fixed fee of $0.15 per contract because the cost, in terms of actual cash outlays, to the Exchange to route to NOM and PHLX is lower. For example, costs related to routing to PHLX are materially lower as compared to other away markets because NOS is utilized by all three exchanges to route orders.11 NOS and the three NASDAQ OMX options markets have a common data center and staff that are responsible for the day-to-day operations of NOS. Because the three exchanges are in a common data center, Routing Fees are reduced because costly expenses related to, for example, telecommunication lines to obtain connectivity are avoided when routing orders in this instance. The costs related to connectivity to route orders to other NASDAQ OMX exchanges are de minimis. When routing orders to non-NASDAQ OMX exchanges, the Exchange incurs costly connectivity charges related to telecommunication lines and other related costs. The Exchange believes it is reasonable, equitable and not unfairly 9 See BX Rules at Chapter VI, Section 11(e) (Order Routing). 10 Id. 11 See Chapter VI, Section 11 of the NASDAQ and BX Options Rules and PHLX Rule 1080(m)(iii)(A). VerDate Mar<15>2010 17:22 Apr 24, 2013 Jkt 229001 discriminatory to pass along savings realized by leveraging NASDAQ OMX’s infrastructure and scale to market participants when those orders are routed to BX Options. Finally, the Exchange believes that it is reasonable, equitable and not unfairly discriminatory to assess different fees for Customers orders as compared to non-Customer orders because the Exchange has traditionally assessed lower fees to Customers as compared to non-Customers. Customers will continue to receive the lowest fees or no fees when routing orders, as is the case today. Other options exchanges also assess lower Routing Fees for customer orders as compared to non-customer orders.12 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposal creates a burden on intramarket competition because the Exchange is applying the same Routing Fees and credits to all market participants in the same manner dependent on the routing venue, with the exception of Customers. The Exchange will continue to assess separate Customer Routing Fees. Customers will continue to receive the lowest fees or no fees when routing orders, as is the case today. Other options exchanges also assess lower Routing Fees for customer orders as compared to non-customer orders.13 The Exchange’s proposal would allow the Exchange to continue to recoup its costs when routing orders to away markets when such orders are designated as available for routing by the market participant. The Exchange continues to pass along savings realized by leveraging NASDAQ OMX’s infrastructure and scale to market participants when those orders are routed to BX Options and is providing those savings to all market participants. Members and member organizations may choose to mark the order as ineligible for routing to avoid incurring these fees.14 Today, other options exchanges also assess fixed routing fees to recoup costs incurred by the 12 BATS assesses lower customer routing fees as compared to non-customer routing fees per the away market. For example BATS assesses ISE customer routing fees of $0.30 per contract and an ISE non-customer routing fee of $0.57 per contract. See BATS BZX Exchange Fee Schedule. 13 Id. 14 See supra note 9. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 Exchange to route orders to away markets.15 The Exchange operates in a highly competitive market, comprised of eleven exchanges, in which market participants can easily and readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. Accordingly, the fees that are assessed by the Exchange must remain competitive with fees charged by other venues and therefore must continue to be reasonable and equitably allocated to those members organizations that opt to direct orders to the Exchange rather than competing venues. 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.16 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–2013–030 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, 15 See CBOE’s Fees Schedule and ISE’s Fee Schedule. 16 15 U.S.C. 78s(b)(3)(A)(ii). E:\FR\FM\25APN1.SGM 25APN1 24461 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2013–030. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BX– 2013–030, and should be submitted on or before May 16, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. Security Blvd., Baltimore, MD 21235, Fax: 410–966–2830, Email address: OR.Reports.Clearance@ssa.gov. [FR Doc. 2013–09711 Filed 4–24–13; 8:45 am] BILLING CODE 8011–01–P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities; Proposed Request The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104–13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions of OMB-approved information collections. SSA is soliciting comments on the accuracy of the agency’s burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers. (OMB), Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202–395–6974, Email address: OIRA_Submission@omb.eop.gov. (SSA), Social Security Administration, DCRDP, Attn: Reports Clearance Director, 107 Altmeyer Building, 6401 Number of respondents Modality of completion The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than June 24, 2013. Individuals can obtain copies of the collection instruments by writing to the above email address. 1. Report to United States Social Security Administration by Person Receiving Benefits for a Child or for an Adult Unable to Handle Funds; Report to United States Social Security Administration—0960–0049. Section 203 (c) of the Social Security Act (Act) requires the Commissioner of SSA to make benefit deductions from the following categories: (1) Entitled individuals who engage in remunerative activity outside of the United States in excess of 45 hours a month and (2) beneficiaries who fail to have in their care the specified entitled child beneficiaries. SSA uses the information Form SSA–7161–OCR–SM and SSA– 7162–OCR–SM provide to: (1) Determine continuing entitlement to Social Security benefits; (2) correct benefit amounts for beneficiaries outside the United States, and (3) monitor the performance of representative payees outside the United States. The respondents are individuals living outside the United States who are receiving benefits on their own (or for someone else) under title II of the Act. Type of Request: Revision of an OMBapproved information collection. Frequency of response Average burden per response (minutes) Estimated total annual burden (hours) 43,000 364,000 1 1 15 5 10,750 30,333 Total .......................................................................................................... tkelley on DSK3SPTVN1PROD with NOTICES SSA–7161–OCR–SM ...................................................................................... SSA–7162–OCR–SM ...................................................................................... 407,000 ........................ ........................ 41,083 2. Cost Reimbursable Research Request—20 CFR 401.165—0960–0754. Qualified researchers need SSA administrative data for a variety of projects. To request SSA’s program data for research, we require the researcher to submit a completed research application, Form SSA–9901 (How to Request SSA Program Data for Research) for SSA’s evaluation. In the application, the requesting researcher provides basic 17 17 project information and describes the way in which the proposed project will further SSA’s mission to promote the economic security of the Nation’s people through its administration of the Old Age, Survivors, and Disability Insurance programs, or the Supplemental Security Income program. SSA reviews the application, and once we approve it, the researcher signs Form SSA–9903 (SSA Agreement Regarding Conditions for Use of SSA Data), which outlines the conditions and safeguards for the research project data exchange. The researcher may only use the data for research and statistical purposes and we require them to complete Form SSA– 9902 (Confidentiality Agreement). SSA recovers all expenses incurred in providing this information as part of this reimbursable service. The respondents are Federal and State CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:22 Apr 24, 2013 Jkt 229001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\25APN1.SGM 25APN1

Agencies

[Federal Register Volume 78, Number 80 (Thursday, April 25, 2013)]
[Notices]
[Pages 24458-24461]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09711]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69392; File No. SR-BX-2013-030]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Routing Fees

April 18, 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 April 9, 2013, NASDAQ OMX BX, Inc. (``BX'' 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 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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[[Page 24459]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Chapter XV, Section 2 entitled ``BX 
Options Market--Fees and Rebates'' to amend various fees for routing 
options to away markets.
    While these amendments are effective upon filing, the Exchange has 
designated the proposed amendments to be operative on May 1, 2013.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://nasdaqomxbx.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 and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 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. Today, the Exchange assesses Non-Customers a flat rate of 
$0.95 per contract on all Non-Customer orders routed to any away market 
and the Exchange assesses Customer orders a fixed fee plus the actual 
transaction fee dependent on the away market. Specifically, the 
Exchange assesses Customer orders routed to The NASDAQ Options Market 
LLC (``NOM'') and NASDAQ OMX PHLX LLC (``PHLX'') '') [sic] a fixed fee 
of $0.05 per contract in addition to the actual transaction fee 
assessed by the away market. The Exchange assesses Customer orders 
routed to all other away markets, except NOM and PHLX, a fixed fee of 
$0.11 per contract in addition to the actual transaction fee assessed 
by the away market, unless the away market pays a rebate, then the 
Routing Fee is $0.00.
    The fixed fees are based on costs that are incurred by the Exchange 
when routing to an away market in addition to the away market's 
transaction fee. For example, the Exchange incurs a fee when it 
utilizes Nasdaq Options Services LLC (``NOS''), a member of the 
Exchange and the Exchange's exclusive order router,\3\ to route orders 
in options listed and open for trading to destination markets. Each 
time NOS routes to away markets NOS incurs a clearing-related cost \4\ 
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 also incurs administrative and technical costs 
associated with operating NOS, membership fees at away markets, Options 
Regulatory Fees (``ORFs'') and technical costs associated with routing 
options. For Customer orders, the transaction fee assessed by the 
Exchange is based on the away market's actual transaction fee or rebate 
for a particular market participant at the time that the order was 
entered into the Exchange's trading system. This transaction fee is 
calculated on an order-by-order basis for Customer orders, since 
different away markets charge different amounts. In the event that 
there is no transaction fee or rebate assessed by the away market, the 
only fee assessed is the fixed Routing Fee.
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    \3\ See BX Rules at Chapter VI, Section 11(e) (Order Routing).
    \4\ The Options Clearing Corporation (``OCC'') assesses a 
clearing fee of $0.01 per contract side. See Securities Exchange Act 
Release No. 68025 (October 10, 2012), 77 FR 63398 (October 16, 2012) 
(SR-OCC-2012-18).
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    The Exchange is proposing to amend the Routing Fees to all other 
options exchanges, except NOM and PHLX, to increase the fixed fee from 
$0.11 to $0.15 per contract.\5\ The Exchange currently does not recoup 
all of its costs to route to away markets other than NOM and PHLX. As 
mentioned herein, the Exchange incurs costs when routing to away 
markets including away market transaction fees, ORFs, clearing fees, 
Section 31 related fees, connectivity and membership fees. The Exchange 
is not recouping its costs currently with the $0.11 per contract fixed 
fee and proposes to increase the fixed fee to $0.15 per contract.
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    \5\ The Exchange is not proposing to amend Non-Customer Routing 
Fees or Routing Fees for Customer orders routed to NOM or PHLX.
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2. Statutory Basis
    BX believes that its proposal to amend its pricing is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\7\ in particular, in that it 
is an equitable allocation of reasonable fees and other charges among 
its Participants.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that amending the Customer Routing Fee to 
other away markets, other than NOM and PHLX, from a fixed fee of $0.11 
to $0.15 per contract, in addition to the actual transaction fee, is 
reasonable because the proposed fixed fee for Customer orders is an 
approximation of the costs the Exchange will be charged for routing 
orders to away markets. For example, today, NYSE MKT LLC (``Amex'') 
does not assess a Customer transaction fee.\8\ Today, the Exchange 
would therefore assess a Customer order that was routed to Amex an 
$0.11 per contract Routing Fee. The Exchange's effective per contract 
expenses to route to Amex which include the ORF, OCC clearing charges, 
Section 31 related fees, connectivity and membership fees, are not 
covered by the $0.11 per contract and are slightly higher than the 
$0.15 per contract. As a general matter, the Exchange believes that the 
proposed fees will allow it to recoup and cover its costs of providing 
optional routing services for Customer orders because it better 
approximates the costs incurred by the Exchange for routing such 
orders. While, each destination market's transaction charge varies and 
there is a cost incurred by the Exchange when routing orders to away 
markets, including OCC clearing costs, administrative and technical 
costs associated with operating NOS, membership fees at away markets, 
ORFs and technical costs associated with routing options, the Exchange 
believes that the proposed Routing Fees will enable it to recover the 
costs it incurs to route Customer orders to away markets. Today, the 
Exchange is paying a higher average cost per contract to route Customer 
orders to away markets, other than NOM and PHLX.
---------------------------------------------------------------------------

    \8\ See Amex's Fee Schedule.
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    The Exchange believes that the proposed pricing for Customer 
Routing Fees to all other away markets, except NOM and PHLX, is 
equitable and not unfairly discriminatory because the Exchange would 
assess the same fixed fee when routing orders to an away market in 
addition to the away market transaction fee. The proposal would apply 
uniformly to all market participants when routing to an away market 
that pays a rebate. Market participants may submit orders to the 
Exchange as ineligible for routing or

[[Page 24460]]

``DNR'' to avoid Routing Fees.\9\ It is important to note that when 
orders are routed to an away market they are routed based on price 
first.\10\
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    \9\ See BX Rules at Chapter VI, Section 11(e) (Order Routing).
    \10\ Id.
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    Further, the Exchange believes that it is reasonable to continue to 
not assess a Customer Routing Fee when routing to all other options 
exchanges, except NOM and PHLX, if the away market pays a rebate. The 
Exchange will continue to assess a fixed fee, which fee is being 
increased with this proposal, plus the actual transaction charge 
assessed by the away market when routing to all other options 
exchanges, except NOM and PHLX, unless the away market pays a rebate. 
The Exchange would continue to not assess a Routing Fee if the away 
market pays a rebate because the Exchange believes it is reasonable to 
retain the rebate to offset the Routing Fee. The Exchange believes that 
market participants will have more certainty as to the Customer Routing 
Fee that will be assessed by the Exchange by simply not assessing a 
Routing Fee for Customer orders routed to away markets, other than NOM 
and PHLX, that pay a rebate.
    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to continue to assess Customer orders that are 
routed to NOM and PHLX a fixed fee of $0.05 per contract and orders 
that are routed to other away markets, other than NOM and PHLX, a fixed 
fee of $0.15 per contract because the cost, in terms of actual cash 
outlays, to the Exchange to route to NOM and PHLX is lower. For 
example, costs related to routing to PHLX are materially lower as 
compared to other away markets because NOS is utilized by all three 
exchanges to route orders.\11\ NOS and the three NASDAQ OMX options 
markets have a common data center and staff that are responsible for 
the day-to-day operations of NOS. Because the three exchanges are in a 
common data center, Routing Fees are reduced because costly expenses 
related to, for example, telecommunication lines to obtain connectivity 
are avoided when routing orders in this instance. The costs related to 
connectivity to route orders to other NASDAQ OMX exchanges are de 
minimis. When routing orders to non-NASDAQ OMX exchanges, the Exchange 
incurs costly connectivity charges related to telecommunication lines 
and other related costs. The Exchange believes it is reasonable, 
equitable and not unfairly discriminatory to pass along savings 
realized by leveraging NASDAQ OMX's infrastructure and scale to market 
participants when those orders are routed to BX Options.
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    \11\ See Chapter VI, Section 11 of the NASDAQ and BX Options 
Rules and PHLX Rule 1080(m)(iii)(A).
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    Finally, the Exchange believes that it is reasonable, equitable and 
not unfairly discriminatory to assess different fees for Customers 
orders as compared to non-Customer orders because the Exchange has 
traditionally assessed lower fees to Customers as compared to non-
Customers. Customers will continue to receive the lowest fees or no 
fees when routing orders, as is the case today. Other options exchanges 
also assess lower Routing Fees for customer orders as compared to non-
customer orders.\12\
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    \12\ BATS assesses lower customer routing fees as compared to 
non-customer routing fees per the away market. For example BATS 
assesses ISE customer routing fees of $0.30 per contract and an ISE 
non-customer routing fee of $0.57 per contract. See BATS BZX 
Exchange Fee Schedule.
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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 not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that the proposal creates a burden on intra-market competition because 
the Exchange is applying the same Routing Fees and credits to all 
market participants in the same manner dependent on the routing venue, 
with the exception of Customers. The Exchange will continue to assess 
separate Customer Routing Fees. Customers will continue to receive the 
lowest fees or no fees when routing orders, as is the case today. Other 
options exchanges also assess lower Routing Fees for customer orders as 
compared to non-customer orders.\13\
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    \13\ Id.
---------------------------------------------------------------------------

    The Exchange's proposal would allow the Exchange to continue to 
recoup its costs when routing orders to away markets when such orders 
are designated as available for routing by the market participant. The 
Exchange continues to pass along savings realized by leveraging NASDAQ 
OMX's infrastructure and scale to market participants when those orders 
are routed to BX Options and is providing those savings to all market 
participants. Members and member organizations may choose to mark the 
order as ineligible for routing to avoid incurring these fees.\14\ 
Today, other options exchanges also assess fixed routing fees to recoup 
costs incurred by the Exchange to route orders to away markets.\15\
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    \14\ See supra note 9.
    \15\ See CBOE's Fees Schedule and ISE's Fee Schedule.
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    The Exchange operates in a highly competitive market, comprised of 
eleven exchanges, in which market participants can easily and readily 
direct order flow to competing venues if they deem fee levels at a 
particular venue to be excessive. Accordingly, the fees that are 
assessed by the Exchange must remain competitive with fees charged by 
other venues and therefore must continue to be reasonable and equitably 
allocated to those members organizations that opt to direct orders to 
the Exchange rather than competing venues.

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.\16\ 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.
---------------------------------------------------------------------------

    \16\ 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-2013-030 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary,

[[Page 24461]]

Securities and Exchange Commission, 100 F Street NE., Washington, DC 
20549-1090.

All submissions should refer to File Number SR-BX-2013-030. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BX-2013-030, and should be 
submitted on or before May 16, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-09711 Filed 4-24-13; 8:45 am]
BILLING CODE 8011-01-P
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