Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options Fees and Rebates, 34136-34138 [2013-13391]
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34136
Federal Register / Vol. 78, No. 109 / Thursday, June 6, 2013 / Notices
develop a pilot trading system and to
begin operation of such system shortly
after submitting an initial report on
Form PILOT to the Commission. During
operation of any such pilot trading
system, the SRO must submit quarterly
reports of the system’s operation to the
Commission, as well as timely
amendments describing any material
changes to the system. After two years
of operating such pilot trading system
under the exemption afforded by Rule
19b–5, the SRO must submit a rule
filing pursuant to Section 19(b)(2) of the
Act (15 U.S.C. 78s(b)(2)) in order to
obtain permanent approval of the pilot
trading system from the Commission.
The collection of information is
designed to allow the Commission to
maintain an accurate record of all new
pilot trading systems operated by SROs
and to determine whether an SRO has
properly availed itself of the exemption
afforded by Rule 19b–5, is operating a
pilot trading system in compliance with
the Act, and is carrying out its statutory
oversight obligations under the Act.
The respondents to the collection of
information are national securities
exchanges and national securities
associations.
While there are 17 national securities
exchanges and national securities
associations that may avail themselves
of the exemption under Rule 19b–5 and
the use of Form PILOT, it is estimated
that approximately three respondents
will file a total of 3 initial reports, 12
quarterly reports, and 6 amendments on
Form PILOT per year, with an estimated
total annual response burden of 126
hours. At an average hourly cost of
$350.07, the estimated aggregate related
cost of compliance with Rule 19b–5 for
all respondents is $44,109 per year (126
burden hours multiplied by $350.07/
hour = $44,109).
Written comments are invited on (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
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writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid OMB
control number.
Please direct your written comments
to: Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way,
Alexandria, Virginia 22312 or send an
email to: PRA_Mailbox@sec.gov.
Dated: May 31, 2013.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–13383 Filed 6–5–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69677; File No. SR–BX–
2013–037]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Amend
Options Fees and Rebates
May 31, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on May 24,
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.
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 rebates and fees relating to
various options and make technical
corrections to this section.
While the changes proposed herein
are effective upon filing, the Exchange
has designated these changes to be
operative on June 3, 2013.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00106
Fmt 4703
Sfmt 4703
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BX proposes to amend Chapter XV,
Section 2(1) to add Bank of America
Corporation (‘‘BAC’’) to the list of
options overlying certain penny pilot
options (the others include IWM, QQQ
and SPY, collectively with BAC, the
‘‘Specified Penny Pilot Options’’).
Additionally, the Exchange proposes to
amend certain fees and rebates for
Customers and BX Options Market
Makers 3 in the Specified Penny Pilot
Options.
The Exchange proposes to increase
the Rebate to Add Liquidity in the
Specified Penny Pilot Options for BX
Options Market Makers from $0.15 to
$0.20 per executed contract. The
Exchange also proposes to decrease the
Fee to Add Liquidity in the Specified
Penny Pilot Options for Customers and
BX Options Market Makers from $0.18
to $0.10 per executed contract. Finally,
the Exchange proposes to decrease the
Rebate to Remove Liquidity in the
Specified Penny Pilot Options for
Customers from $0.12 to $0.00 per
executed contract.
The proposed rule change will reflect
the fees and rebates as follows:
3 A BX Options Market Maker must be registered
as such pursuant to Chapter VII, Section 2 of the
BX Options Rules, and must also remain in good
standing pursuant to Chapter VII, Section 4.
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Federal Register / Vol. 78, No. 109 / Thursday, June 6, 2013 / Notices
FEES AND REBATES
[Per executed contract]
BX Options
market maker
Customer
BAC, IWM, QQQ and SPY:
Rebate to Add Liquidity ............................................................................................
Fee to Add Liquidity .................................................................................................
Rebate to Remove Liquidity .....................................................................................
Fee to Remove Liquidity ..........................................................................................
All Other Penny Pilot Options:
Rebate to Add Liquidity ............................................................................................
Fee to Add Liquidity .................................................................................................
Rebate to Remove Liquidity .....................................................................................
Fee to Remove Liquidity ..........................................................................................
Non-Penny Pilot Options:
Fee to Add Liquidity .................................................................................................
Rebate to Remove Liquidity .....................................................................................
Fee to Remove Liquidity ..........................................................................................
The Exchange believes that the
proposed amended fees and rebates for
the Specified Penny Pilot Options, as
well as including BAC to the list of
Specified Penny Pilot Options, is
competitive and will encourage BX
members to transact business on the
Exchange. Despite the reduction of the
Customer Rebate to Remove Liquidity to
$0.00, the Exchange believes that the
increased Rebate to Add Liquidity for
BX Options Market Makers coupled
with the reduction of Fees to Add
Liquidity for both Customers and BX
Options Market Makers will enable the
Exchange to remain competitive with
other options exchanges by improving
liquidity and that market participants
will continue to send order flow to the
Exchange.
mstockstill on DSK4VPTVN1PROD with NOTICES
2. Statutory Basis
BX believes that the proposed rule
changes are consistent with the
provisions of Section 6 of the Act,4 in
general, and with Section 6(b)(4) of the
Act,5 in particular, in that they provide
for the equitable allocation of reasonable
dues, fees and other charges among
members and issuers and other persons
using any facility or system which BX
operates or controls.
The Exchange believes that its
proposal to include BAC in the list of
Specified Penny Pilot Options and
subject to the fees and rebates
applicable thereto, is reasonable given
the fact that certain symbols such as the
Specified Penny Pilot Options are
highly liquid as compared to other
penny pilot options and pricing by
symbol is not novel as other options
exchanges differentiate pricing by
4 15
5 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
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17:35 Jun 05, 2013
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2 $0.00
Fmt 4703
Sfmt 4703
N/A
0.45
2 0.00
2 0.10
3 0.40
3 0.40
0.32
N/A
N/A
0.45
4 0.25/0.85
4 0.50/0.85
0.70
N/A
N/A
0.88
6 See NASDAQ OMX PHLX LLC’s Pricing
Schedule, which has different pricing for its Select
Symbols and different pricing for other Multiply
Listed Options. See also the NASDAQ Options
Market LLC at Chapter XV, Section 2(1), which
distinguishes pricing for NDX and MNX. See also
the International Securities Exchange LLC’s Fee
Schedule, which distinguishes pricing for Special
Non-Select Penny Pilot Symbols. See also the
Chicago Board Options Exchange, Incorporated’s
Fees Schedule, which distinguishes index products.
Frm 00107
3 0.10
0.00
N/A
security today.6 The Exchange believes
that its proposal to assess different fees
and rebates for BAC (as is the case for
the other Specified Penny Pilot Options)
as compared to all other penny pilot
options is equitable and not unfairly
discriminatory as described hereafter.
The Exchange believes that for
Specified Penny Pilot Options the
proposed increase of the Rebate to Add
Liquidity for BX Options Market Makers
from $0.15 to $0.20 per executed
contract (available only when they are
contra to a Non-Customer or BX Options
Marker Maker) along with the reduction
in the Fee to Add Liquidity for both
Customers and BX Options Market
Makers from $0.18 to $0.10 per executed
contract (available only when the
Customer or BX Options Market Maker
is contra to a Customer) is reasonable
because these fee and rebate changes
will help to attract order flow from BX
Options Market Makers and Customers
to the Exchange to the benefit of all
market participants through increased
liquidity.
The Exchange believes that increasing
Specified Penny Pilot Options Rebate to
Add Liquidity for BX Options Market
Makers from $0.15 to $0.20 per executed
contract and offering the rebate only to
BX Options Market Makers is equitable
and not unfairly discriminatory because
BX Options Market Makers have
obligations to the market and regulatory
PO 00000
2 $0.20
3 0.10
Noncustomer 1
N/A
0.45
N/A
0.45
N/A
0.45
N/A
0.45
0.88
N/A
0.88
requirements,7 which normally do not
apply to other market participants. By
continuing to incentivize BX Options
Market Makers to add liquidity, by
offering an increased rebate, will result
in tighter markets and increased order
interaction.
Specifically, with respect to the Fee to
Add Liquidity, the Exchange believes
that assessing Customers and BX
Options Market Makers a lower Fee to
Add Liquidity, when they are not contra
to a Customer, as compared to NonCustomers is reasonable because the
Exchange seeks to incentivize these
critical market participants to add
liquidity. Increased liquidity benefits all
market participants. The Exchange also
believes that the lower Fees to Add
Liquidity for Customers and BX Options
Market Makers as compared to NonCustomers are equitable and not
unfairly discriminatory because
Customer order flow benefits all market
participants by improving liquidity, the
quality of order interaction and
executions at the Exchange. Also, BX
Options Market Makers have obligations
to the market and regulatory
requirements,8 which normally do not
apply to other market participants. A BX
Options Market Maker has the
obligation to make continuous markets,
engage in course of dealings reasonably
calculated to contribute to the
7 Pursuant to Chapter VII (Market Participants),
Section 5 (Obligations of Market Makers), in
registering as a Market Maker, an Options
Participant commits himself to various obligations.
Transactions of a Market Maker in its market
making capacity must constitute a course of
dealings reasonably calculated to contribute to the
maintenance of a fair and orderly market, and
Market Makers should not make bids or offers or
enter into transactions that are inconsistent with
such course of dealings. Further, all Market Makers
are designated as specialists on BX for all purposes
under the Act or rules thereunder. See Chapter VII,
Section 5.
8 Id.
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Federal Register / Vol. 78, No. 109 / Thursday, June 6, 2013 / Notices
maintenance of a fair and orderly
market, and not make bids or offers or
enter into transactions that are
inconsistent with course of dealings.
The proposed differentiation as between
Customers and BX Options Market
Makers and Non-Customers recognizes
the differing contributions made to the
liquidity and trading environment on
the Exchange by Customers and BX
Options Market Makers, as well as the
differing mix of orders entered.
The Exchange believes that for the
Specified Penny Pilot Options the
proposed reduction of the Customer
Rebate to Remove Liquidity from $0.12
to $0.00 is reasonable because Customer
orders will receive benefits in the form
of increased liquidity and the $0.00 rate
is the same rate that is assessed at other
options exchanges.9 The Exchange
believes that for the Specified Penny
Pilot Options the proposed reduction of
the Customer Rebate to Remove
Liquidity from $0.12 to $0.00 is
equitable and not unfairly
discriminatory because Customers
would still be assessed the lowest rates
with respect to Non-Customers on BX
Options.
The Exchange operates in a highly
competitive market comprised of eleven
U.S. options exchanges in which
sophisticated and knowledgeable
market participants can and do send
order flow to competing exchanges if
they deem fee levels at a particular
exchange to be excessive. The Exchange
believes that the proposed fee and
rebate scheme discussed herein is
competitive and similar to other fees
and rebates in place on other exchanges.
The Exchange believes that this
competitive marketplace materially
impacts the fees and rebates present on
the Exchange today and substantially
influences the proposal set forth above.
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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. To the contrary, BX
has designed its fees and rebates to
compete effectively for the execution
and routing of options contracts. The
Exchange believes that the proposed
amended fee/rebate pricing structure for
the Specified Penny Pilot Options,
including the addition of BAC to this
list, would attract liquidity to and
benefit order interaction at the Exchange
to the benefit of all market participants.
9 See also the NYSE AMEX’s Fees Schedule,
which distinguishes index products.
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Additionally, since the fees and
rebates are comparable to those present
at other options venues, the Exchange
believes the proposals discussed herein
do not pose a burden on competition
amongst Exchange participants.
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.10 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–2013–037 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BX–2013–037. 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/
10 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
Frm 00108
Fmt 4703
Sfmt 4703
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BX–
2013–037 and should be submitted on
or before June 27, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–13391 Filed 6–5–13; 8:45 am]
BILLING CODE 8011–01–P
STATE JUSTICE INSTITUTE
SJI Board of Directors Meeting, Notice
AGENCY:
ACTION:
State Justice Institute.
Notice of Meeting.
The SJI Board of Directors
will be meeting on Monday, June 24,
2013 at 1:00 p.m. The meeting will be
held at the Supreme Court of
Connecticut in Hartford, Connecticut.
The purpose of this meeting is to
consider grant applications for the 3rd
quarter of FY 2013, and other business.
All portions of this meeting are open to
the public.
SUMMARY:
Supreme Court of
Connecticut, 231 Capitol Ave.
Attorney’s Conference Room, Main
Level.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Jonathan Mattiello, Executive Director,
State Justice Institute, 11951 Freedom
11 17
E:\FR\FM\06JNN1.SGM
CFR 200.30–3(a)(12).
06JNN1
]]>Agencies
[Federal Register Volume 78, Number 109 (Thursday, June 6, 2013)]
[Notices]
[Pages 34136-34138]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13391]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69677; File No. SR-BX-2013-037]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Options Fees and Rebates
May 31, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on May 24, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Chapter XV, Section 2 entitled ``BX
Options Market--Fees and Rebates'' to amend rebates and fees relating
to various options and make technical corrections to this section.
While the changes proposed herein are effective upon filing, the
Exchange has designated these changes to be operative on June 3, 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
BX proposes to amend Chapter XV, Section 2(1) to add Bank of
America Corporation (``BAC'') to the list of options overlying certain
penny pilot options (the others include IWM, QQQ and SPY, collectively
with BAC, the ``Specified Penny Pilot Options''). Additionally, the
Exchange proposes to amend certain fees and rebates for Customers and
BX Options Market Makers \3\ in the Specified Penny Pilot Options.
---------------------------------------------------------------------------
\3\ A BX Options Market Maker must be registered as such
pursuant to Chapter VII, Section 2 of the BX Options Rules, and must
also remain in good standing pursuant to Chapter VII, Section 4.
---------------------------------------------------------------------------
The Exchange proposes to increase the Rebate to Add Liquidity in
the Specified Penny Pilot Options for BX Options Market Makers from
$0.15 to $0.20 per executed contract. The Exchange also proposes to
decrease the Fee to Add Liquidity in the Specified Penny Pilot Options
for Customers and BX Options Market Makers from $0.18 to $0.10 per
executed contract. Finally, the Exchange proposes to decrease the
Rebate to Remove Liquidity in the Specified Penny Pilot Options for
Customers from $0.12 to $0.00 per executed contract.
The proposed rule change will reflect the fees and rebates as
follows:
[[Page 34137]]
Fees and Rebates
[Per executed contract]
----------------------------------------------------------------------------------------------------------------
BX Options Non- customer
Customer market maker \1\
----------------------------------------------------------------------------------------------------------------
BAC, IWM, QQQ and SPY:
Rebate to Add Liquidity............................... \2\ $0.00 \2\ $0.20 N/A
Fee to Add Liquidity.................................. \3\ 0.10 \3\ 0.10 0.45
Rebate to Remove Liquidity............................ 0.00 N/A N/A
Fee to Remove Liquidity............................... N/A 0.45 0.45
All Other Penny Pilot Options:
Rebate to Add Liquidity............................... \2\ 0.00 \2\ 0.10 N/A
Fee to Add Liquidity.................................. \3\ 0.40 \3\ 0.40 0.45
Rebate to Remove Liquidity............................ 0.32 N/A N/A
Fee to Remove Liquidity............................... N/A 0.45 0.45
Non-Penny Pilot Options:
Fee to Add Liquidity.................................. \4\ 0.25/0.85 \4\ 0.50/0.85 0.88
Rebate to Remove Liquidity............................ 0.70 N/A N/A
Fee to Remove Liquidity............................... N/A 0.88 0.88
----------------------------------------------------------------------------------------------------------------
The Exchange believes that the proposed amended fees and rebates
for the Specified Penny Pilot Options, as well as including BAC to the
list of Specified Penny Pilot Options, is competitive and will
encourage BX members to transact business on the Exchange. Despite the
reduction of the Customer Rebate to Remove Liquidity to $0.00, the
Exchange believes that the increased Rebate to Add Liquidity for BX
Options Market Makers coupled with the reduction of Fees to Add
Liquidity for both Customers and BX Options Market Makers will enable
the Exchange to remain competitive with other options exchanges by
improving liquidity and that market participants will continue to send
order flow to the Exchange.
2. Statutory Basis
BX believes that the proposed rule changes are consistent with the
provisions of Section 6 of the Act,\4\ in general, and with Section
6(b)(4) of the Act,\5\ in particular, in that they provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which BX operates or controls.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that its proposal to include BAC in the list
of Specified Penny Pilot Options and subject to the fees and rebates
applicable thereto, is reasonable given the fact that certain symbols
such as the Specified Penny Pilot Options are highly liquid as compared
to other penny pilot options and pricing by symbol is not novel as
other options exchanges differentiate pricing by security today.\6\ The
Exchange believes that its proposal to assess different fees and
rebates for BAC (as is the case for the other Specified Penny Pilot
Options) as compared to all other penny pilot options is equitable and
not unfairly discriminatory as described hereafter.
---------------------------------------------------------------------------
\6\ See NASDAQ OMX PHLX LLC's Pricing Schedule, which has
different pricing for its Select Symbols and different pricing for
other Multiply Listed Options. See also the NASDAQ Options Market
LLC at Chapter XV, Section 2(1), which distinguishes pricing for NDX
and MNX. See also the International Securities Exchange LLC's Fee
Schedule, which distinguishes pricing for Special Non-Select Penny
Pilot Symbols. See also the Chicago Board Options Exchange,
Incorporated's Fees Schedule, which distinguishes index products.
---------------------------------------------------------------------------
The Exchange believes that for Specified Penny Pilot Options the
proposed increase of the Rebate to Add Liquidity for BX Options Market
Makers from $0.15 to $0.20 per executed contract (available only when
they are contra to a Non-Customer or BX Options Marker Maker) along
with the reduction in the Fee to Add Liquidity for both Customers and
BX Options Market Makers from $0.18 to $0.10 per executed contract
(available only when the Customer or BX Options Market Maker is contra
to a Customer) is reasonable because these fee and rebate changes will
help to attract order flow from BX Options Market Makers and Customers
to the Exchange to the benefit of all market participants through
increased liquidity.
The Exchange believes that increasing Specified Penny Pilot Options
Rebate to Add Liquidity for BX Options Market Makers from $0.15 to
$0.20 per executed contract and offering the rebate only to BX Options
Market Makers is equitable and not unfairly discriminatory because BX
Options Market Makers have obligations to the market and regulatory
requirements,\7\ which normally do not apply to other market
participants. By continuing to incentivize BX Options Market Makers to
add liquidity, by offering an increased rebate, will result in tighter
markets and increased order interaction.
---------------------------------------------------------------------------
\7\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a Market Maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on BX for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
---------------------------------------------------------------------------
Specifically, with respect to the Fee to Add Liquidity, the
Exchange believes that assessing Customers and BX Options Market Makers
a lower Fee to Add Liquidity, when they are not contra to a Customer,
as compared to Non-Customers is reasonable because the Exchange seeks
to incentivize these critical market participants to add liquidity.
Increased liquidity benefits all market participants. The Exchange also
believes that the lower Fees to Add Liquidity for Customers and BX
Options Market Makers as compared to Non-Customers are equitable and
not unfairly discriminatory because Customer order flow benefits all
market participants by improving liquidity, the quality of order
interaction and executions at the Exchange. Also, BX Options Market
Makers have obligations to the market and regulatory requirements,\8\
which normally do not apply to other market participants. A BX Options
Market Maker has the obligation to make continuous markets, engage in
course of dealings reasonably calculated to contribute to the
[[Page 34138]]
maintenance of a fair and orderly market, and not make bids or offers
or enter into transactions that are inconsistent with course of
dealings. The proposed differentiation as between Customers and BX
Options Market Makers and Non-Customers recognizes the differing
contributions made to the liquidity and trading environment on the
Exchange by Customers and BX Options Market Makers, as well as the
differing mix of orders entered.
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\8\ Id.
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The Exchange believes that for the Specified Penny Pilot Options
the proposed reduction of the Customer Rebate to Remove Liquidity from
$0.12 to $0.00 is reasonable because Customer orders will receive
benefits in the form of increased liquidity and the $0.00 rate is the
same rate that is assessed at other options exchanges.\9\ The Exchange
believes that for the Specified Penny Pilot Options the proposed
reduction of the Customer Rebate to Remove Liquidity from $0.12 to
$0.00 is equitable and not unfairly discriminatory because Customers
would still be assessed the lowest rates with respect to Non-Customers
on BX Options.
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\9\ See also the NYSE AMEX's Fees Schedule, which distinguishes
index products.
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The Exchange operates in a highly competitive market comprised of
eleven U.S. options exchanges in which sophisticated and knowledgeable
market participants can and do send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive. The
Exchange believes that the proposed fee and rebate scheme discussed
herein is competitive and similar to other fees and rebates in place on
other exchanges. The Exchange believes that this competitive
marketplace materially impacts the fees and rebates present on the
Exchange today and substantially influences the proposal set forth
above.
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. To the contrary, BX has designed its fees and
rebates to compete effectively for the execution and routing of options
contracts. The Exchange believes that the proposed amended fee/rebate
pricing structure for the Specified Penny Pilot Options, including the
addition of BAC to this list, would attract liquidity to and benefit
order interaction at the Exchange to the benefit of all market
participants.
Additionally, since the fees and rebates are comparable to those
present at other options venues, the Exchange believes the proposals
discussed herein do not pose a burden on competition amongst Exchange
participants.
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.\10\ 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.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-BX-2013-037 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2013-037. 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 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-BX-2013-037 and should be
submitted on or before June 27, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13391 Filed 6-5-13; 8:45 am]
BILLING CODE 8011-01-P
