Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Common Ownership, 53490-53492 [2014-21359]
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53490
Federal Register / Vol. 79, No. 174 / Tuesday, September 9, 2014 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’ Neill,
Deputy Secretary.
[FR Doc. 2014–21389 Filed 9–8–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72965; File No. SR–BX–
2014–039]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Common Ownership
September 3, 2014.
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 August
20, 2014, 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.
tkelley on DSK3SPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposed rule
change to harmonize the process by
which it collects information from its
equity members and Options
Participants for aggregating the activity
of affiliated entities for the purposes of
assessing charges or credits.
The Exchange requests that this filing
become operative on December 1, 2014.
The text of the proposed rule change
is set forth below. Proposed new
language is in italics; deleted text is in
brackets.
*
*
*
*
*
Chapter XV Options Pricing
BX Options Market Participants may
be subject to the Charges for
Membership, Services and Equipment
in the Rule 7000 Series as well as the
fees in this Chapter XV. For purposes of
assessing fees and paying rebates, the
following references should serve as
guidance.
The term ‘‘Customer’’ or (‘‘C’’) applies
to any transaction that is identified by
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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a Participant for clearing in the
Customer range at The Options Clearing
Corporation (‘‘OCC’’) which is not for
the account of broker or dealer or for the
account of a ‘‘Professional’’ (as that term
is defined in Chapter I, Section 1(a)(48)).
The term ‘‘BX Options Market Maker’’
or (‘‘M’’) is a Participant that has
registered as a Market Maker on BX
Options pursuant to Chapter VII,
Section 2, and must also remain in good
standing pursuant to Chapter VII,
Section 4. In order to receive Market
Maker pricing in all securities, the
Participant must be registered as a BX
Options Market Maker in at least one
security.
The term ‘‘Non-BX Options Market
Maker’’ or (‘‘O’’) is a registered market
maker on another options exchange that
is not a BX Options Market Maker. A
Non-BX Options Market Maker must
append the proper Non-BX Options
Market Maker designation to orders
routed to BX Options.
The term ‘‘Firm’’ or (‘‘F’’) applies to
any transaction that is identified by a
Participant for clearing in the Firm
range at OCC.
The term ‘‘Professional’’ or (‘‘P’’)
means any person or entity that (i) is not
a broker or dealer in securities, and (ii)
places more than 390 orders in listed
options per day on average during a
calendar month for its own beneficial
account(s) pursuant to Chapter I,
Section 1(a)(48). All Professional orders
shall be appropriately marked by
Participants.
The term ‘‘Broker-Dealer’’ or (‘‘B’’)
applies to any transaction which is not
subject to any of the other transaction
fees applicable within a particular
category.
The term ‘‘Common Ownership’’ shall
mean Participants under 75% common
ownership or control.
(a) For purposes of applying any
options transaction fee or rebate where
the fee assessed, or rebate provided by
BX depends upon the volume of an
Options Participant’s activity, an
Options Participant may request that BX
aggregate its activity with the activity of
its affiliates.
(1) An Options Participant requesting
aggregation of affiliate activity shall be
required to certify to BX the affiliate
status of entities whose activity it seeks
to aggregate prior to receiving approval
for aggregation, and shall be required to
inform BX immediately of any event
that causes an entity to cease to be an
affiliate. BX shall review available
information regarding the entities, and
reserves the right to request additional
information to verify the affiliate status
of an entity. BX shall approve a request
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
unless it determines that the
certification is not accurate.
(2) If two or more Options
Participants become affiliated on or
prior to the sixteenth day of a month,
and submit the required request for
aggregation on or prior to the twentysecond day of the month, an approval
of the request by BX shall be deemed to
be effective as of the first day of that
month. If two or more Options
Participants become affiliated after the
sixteenth day of a month, or submit a
request for aggregation after the twentysecond day of the month, an approval
of the request by BX shall be deemed to
be effective as of the first day of the next
calendar month.
(b) For purposes of applying any
options transaction fee or rebate where
the fee assessed, or rebate provided, by
BX depends upon the volume of an
Options Participant’s activity, references
to an entity (including references to a
‘‘Options Participant’’) shall be deemed
to include the entity and its affiliates
that have been approved for
aggregation.
(c) For purposes of options pricing,
the term ‘‘affiliate’’ of an Options
Participant shall mean any Options
Participant under 75% common
ownership or control of that Options
Participant.
With respect to Chapter XV, Sections
2(1) and (2) the order that is received by
the trading system first in time shall be
considered an order adding liquidity
and an order that trades against that
order shall be considered an order
removing liquidity.
*
*
*
*
*
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
The Exchange is proposing to amend
BX Options Rules at Chapter XV,
entitled ‘‘Options Pricing,’’ to
E:\FR\FM\09SEN1.SGM
09SEN1
tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 174 / Tuesday, September 9, 2014 / Notices
harmonize the process by which the
Exchange will collect information from
Options Participants that desire their
activity to be aggregated for the
purposes of assessing charges or credits
with the process currently required for
equity members on BX. The Exchange
proposes to adopt the process that is
used by equity members today without
changing that process. The Exchange
believes that this filing is noncontroversial because the process, as
proposed, will not change.
Today, equity members may aggregate
affiliate activity based on volume of
activity for purposes of pricing.3 Today,
the Exchange does not offer the ability
to aggregate pricing to its Options
Participants. The Exchange is proposing
to define Common Ownership, in the
same manner it is defined today for
options participants at The NASDAQ
Options Market LLC (‘‘NOM’’) and
NASDAQ OMX PHLX LLC (‘‘Phlx’’).
The term ‘‘Common Ownership’’ means
Participants under 75 percent common
ownership or control. The Exchange
proposes to define Common Ownership
in the instance that BX Options offered
the ability to aggregate pricing. Further,
the Exchange proposes to adopt the
same process that exists today for equity
members with respect to the manner in
which it would collect information to
aggregate pricing.
Today, a BX equity member
requesting aggregation of affiliate
activity is required to certify to BX the
affiliate status of entities whose activity
it seeks to aggregate prior to receiving
approval for aggregation, and also is
required to inform BX immediately of
any event that causes an entity to cease
to be an affiliate. BX reviews available
information regarding the entities, and
reserves the right to request additional
information to verify the affiliate status
of an entity. BX approves a request
unless it determines that the
certification is not accurate. Further, if
two or more members become affiliated
on or prior to the sixteenth day of a
month, and submit the required request
for aggregation on or prior to the twentysecond day of the month, an approval of
the request by BX is deemed to be
effective as of the first day of that
month. If two or more members become
affiliated after the sixteenth day of a
month, or submit a request for
aggregation after the twenty-second day
of the month, an approval of the request
by BX is deemed to be effective as of the
first day of the next calendar month.
The Exchange proposes to amend BX
Options Rules at Chapter XV to adopt
language consistent with the
requirements applied today to BX equity
members and require BX Options
Participants to provide the same type of
information in order to receive
aggregated pricing.
The Exchange believes that
harmonizing the Options Rules of BX to
conform to those of NOM and Phlx with
respect to Common Ownership and also
requiring all BX members, equity and
options, to provide information with
respect to affiliates promotes
consistency and avoids confusion.
The Exchange proposes to apply this
pricing as of December 1, 2014 and
issue an Options Trader Alert to its
members.
merely seeking to harmonize the
manner in which it aggregates pricing
and collects information related to the
aggregation of activity of affiliated
entities for the purposes of assessing
charges or credits for equity members
and Options Participants. The Exchange
intends to apply a uniform process to
request such aggregation for all BX
members and BX Options Participants.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 4 in general, and furthers the
objectives of Section 6(b)(5) of the Act 5
in particular, that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest, in that
the proposal will harmonize its
Common Ownership Rules with those of
NOM and Phlx and also will harmonize
the process by which the Exchange
collects information from equity
members and Options Participants
regarding the aggregation of activity of
affiliated entities for the purpose of
assessing charges or credits.
The Exchange believes that applying
the same 75% standard for Common
Ownership as NOM and Phlx will
provide consistency among these
exchanges with respect to aggregating
volume. In addition, the Exchange
believes that harmonizing the process
by which the Exchange collects
information related to aggregation for
equity members and Options
Participants will provide consistency to
market participants with respect to
meeting the requirements to aggregate
on BX. Also, the Exchange believes that
adopting this method for collecting such
information on aggregated pricing, with
respect to Options Participants, will
ensure proper validation for firms
entitled to the aggregation.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 is
4 15
3 See
BX Rule 7027(a).
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18:08 Sep 08, 2014
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53491
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00086
Fmt 4703
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.
Because the foregoing proposed rule
change does not significantly affect the
protection of investors or the public
interest; does not impose any significant
burden on competition; and by its terms
does not 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) 6 of the
Act and Rule 19b–4(f)(6)(iii)
thereunder.7
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–2014–039 on the
subject line.
6 15
7 17
Sfmt 4703
E:\FR\FM\09SEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
09SEN1
53492
Federal Register / Vol. 79, No. 174 / Tuesday, September 9, 2014 / Notices
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BX–2014–039. 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–
2014–039 and should be submitted on
or before September 30, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Kevin M. O’ Neill,
Deputy Secretary.
[FR Doc. 2014–21359 Filed 9–8–14; 8:45 am]
tkelley on DSK3SPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72963; File No. SR–
NYSEArca–2014–99]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Operation
of the NYSE Arca ETP Incentive
Program, Currently Scheduled To
Expire on September 3, 2014, for an
Additional Year
September 3, 2014.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
28, 2014, NYSE Arca, Inc. (‘‘Exchange’’
or ‘‘NYSE Arca’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
operation of the NYSE Arca ETP
Incentive Program, currently scheduled
to expire on September 3, 2014, for an
additional year. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
8 17
CFR 200.30–3(a)(12).
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to extend the
operation of the NYSE Arca ETP
Incentive Program (‘‘Incentive
Program’’),4 a one-year pilot program for
issuers of certain exchange-traded
products (‘‘ETPs’’) listed on the
Exchange, for an additional year. The
Incentive Program is currently
scheduled to expire on September 3,
2014. As proposed, the pilot program
would be set to end on September 4,
2015.
NYSE Arca established the Incentive
Program to enhance the market quality
for ETPs by incentivizing Market
Makers 5 to take Lead Market Maker
(‘‘LMM’’) assignments in certain lower
volume ETPs by offering an alternative
fee structure for such LMMs. The
Incentive Program is designed to
improve the quality of market for lowervolume ETPs, thereby incentivizing
them to list on the Exchange. Moreover,
the Exchange believes that the Incentive
Program, which is entirely voluntary,
encourages competition among markets
for issuers’ listings and among Market
Makers for LMM assignments.
This filing seeks to extend the current
operation of the Incentive Program for
an additional year to allow the
Commission, the Exchange, LMMs, and
issuers to further assess the impact of
the Incentive Program before making it
available to other securities and
implementing the program on a
permanent basis.6 During the initial
one-year pilot period, because no ETP
issuers signed up for the Incentive
Program, the Exchange does not have
any data to assess the impact of the
Incentive Program on ETP market
quality or whether any provisions of the
Incentive Program should be modified.7
4 See Rule 8.800 and Securities Exchange Act
Release No. 34–69706 (June 6, 2013), 78 FR 35340
(June 12, 2013) (SR–NYSEArca–2013–34) (order
establishing the Incentive Program).
5 A Market Maker is an Equity Trading Permit
Holder (‘‘ETP Holder’’) that acts as a Market Maker
pursuant to NYSE Arca Equities Rule 7. See NYSE
Arca Equities Rule 1.1(v). An ETP Holder is a sole
proprietorship, partnership, corporation, limited
liability company, or other organization in good
standing that has been issued an Equity Trading
Permit. See NYSE Arca Equities Rule 1.1(n).
6 The Exchange notes that any proposed further
continuance of the Incentive Program or proposal
to make the Inventive Program permanent would
require a rule filing with the Commission pursuant
to Section 19(b) of the Act and Rule 19b–4
thereunder.
7 See Securities Exchange Act Release No. 34–
69706 (June 6, 2013), 78 FR 35340 (June 12, 2013)
(SR–NYSEArca–2013–34) (order approving Rule
8.800 and specifying the requirement for the
E:\FR\FM\09SEN1.SGM
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Agencies
[Federal Register Volume 79, Number 174 (Tuesday, September 9, 2014)]
[Notices]
[Pages 53490-53492]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-21359]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72965; File No. SR-BX-2014-039]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Common Ownership
September 3, 2014.
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 August 20, 2014, 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 is filing a proposed rule change to harmonize the
process by which it collects information from its equity members and
Options Participants for aggregating the activity of affiliated
entities for the purposes of assessing charges or credits.
The Exchange requests that this filing become operative on December
1, 2014.
The text of the proposed rule change is set forth below. Proposed
new language is in italics; deleted text is in brackets.
* * * * *
Chapter XV Options Pricing
BX Options Market Participants may be subject to the Charges for
Membership, Services and Equipment in the Rule 7000 Series as well as
the fees in this Chapter XV. For purposes of assessing fees and paying
rebates, the following references should serve as guidance.
The term ``Customer'' or (``C'') applies to any transaction that is
identified by a Participant for clearing in the Customer range at The
Options Clearing Corporation (``OCC'') which is not for the account of
broker or dealer or for the account of a ``Professional'' (as that term
is defined in Chapter I, Section 1(a)(48)).
The term ``BX Options Market Maker'' or (``M'') is a Participant
that has registered as a Market Maker on BX Options pursuant to Chapter
VII, Section 2, and must also remain in good standing pursuant to
Chapter VII, Section 4. In order to receive Market Maker pricing in all
securities, the Participant must be registered as a BX Options Market
Maker in at least one security.
The term ``Non-BX Options Market Maker'' or (``O'') is a registered
market maker on another options exchange that is not a BX Options
Market Maker. A Non-BX Options Market Maker must append the proper Non-
BX Options Market Maker designation to orders routed to BX Options.
The term ``Firm'' or (``F'') applies to any transaction that is
identified by a Participant for clearing in the Firm range at OCC.
The term ``Professional'' or (``P'') means any person or entity
that (i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a calendar
month for its own beneficial account(s) pursuant to Chapter I, Section
1(a)(48). All Professional orders shall be appropriately marked by
Participants.
The term ``Broker-Dealer'' or (``B'') applies to any transaction
which is not subject to any of the other transaction fees applicable
within a particular category.
The term ``Common Ownership'' shall mean Participants under 75%
common ownership or control.
(a) For purposes of applying any options transaction fee or rebate
where the fee assessed, or rebate provided by BX depends upon the
volume of an Options Participant's activity, an Options Participant may
request that BX aggregate its activity with the activity of its
affiliates.
(1) An Options Participant requesting aggregation of affiliate
activity shall be required to certify to BX the affiliate status of
entities whose activity it seeks to aggregate prior to receiving
approval for aggregation, and shall be required to inform BX
immediately of any event that causes an entity to cease to be an
affiliate. BX shall review available information regarding the
entities, and reserves the right to request additional information to
verify the affiliate status of an entity. BX shall approve a request
unless it determines that the certification is not accurate.
(2) If two or more Options Participants become affiliated on or
prior to the sixteenth day of a month, and submit the required request
for aggregation on or prior to the twenty-second day of the month, an
approval of the request by BX shall be deemed to be effective as of the
first day of that month. If two or more Options Participants become
affiliated after the sixteenth day of a month, or submit a request for
aggregation after the twenty-second day of the month, an approval of
the request by BX shall be deemed to be effective as of the first day
of the next calendar month.
(b) For purposes of applying any options transaction fee or rebate
where the fee assessed, or rebate provided, by BX depends upon the
volume of an Options Participant's activity, references to an entity
(including references to a ``Options Participant'') shall be deemed to
include the entity and its affiliates that have been approved for
aggregation.
(c) For purposes of options pricing, the term ``affiliate'' of an
Options Participant shall mean any Options Participant under 75% common
ownership or control of that Options Participant.
With respect to Chapter XV, Sections 2(1) and (2) the order that is
received by the trading system first in time shall be considered an
order adding liquidity and an order that trades against that order
shall be considered an order removing liquidity.
* * * * *
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
The Exchange is proposing to amend BX Options Rules at Chapter XV,
entitled ``Options Pricing,'' to
[[Page 53491]]
harmonize the process by which the Exchange will collect information
from Options Participants that desire their activity to be aggregated
for the purposes of assessing charges or credits with the process
currently required for equity members on BX. The Exchange proposes to
adopt the process that is used by equity members today without changing
that process. The Exchange believes that this filing is non-
controversial because the process, as proposed, will not change.
Today, equity members may aggregate affiliate activity based on
volume of activity for purposes of pricing.\3\ Today, the Exchange does
not offer the ability to aggregate pricing to its Options Participants.
The Exchange is proposing to define Common Ownership, in the same
manner it is defined today for options participants at The NASDAQ
Options Market LLC (``NOM'') and NASDAQ OMX PHLX LLC (``Phlx''). The
term ``Common Ownership'' means Participants under 75 percent common
ownership or control. The Exchange proposes to define Common Ownership
in the instance that BX Options offered the ability to aggregate
pricing. Further, the Exchange proposes to adopt the same process that
exists today for equity members with respect to the manner in which it
would collect information to aggregate pricing.
---------------------------------------------------------------------------
\3\ See BX Rule 7027(a).
---------------------------------------------------------------------------
Today, a BX equity member requesting aggregation of affiliate
activity is required to certify to BX the affiliate status of entities
whose activity it seeks to aggregate prior to receiving approval for
aggregation, and also is required to inform BX immediately of any event
that causes an entity to cease to be an affiliate. BX reviews available
information regarding the entities, and reserves the right to request
additional information to verify the affiliate status of an entity. BX
approves a request unless it determines that the certification is not
accurate. Further, if two or more members become affiliated on or prior
to the sixteenth day of a month, and submit the required request for
aggregation on or prior to the twenty-second day of the month, an
approval of the request by BX is deemed to be effective as of the first
day of that month. If two or more members become affiliated after the
sixteenth day of a month, or submit a request for aggregation after the
twenty-second day of the month, an approval of the request by BX is
deemed to be effective as of the first day of the next calendar month.
The Exchange proposes to amend BX Options Rules at Chapter XV to
adopt language consistent with the requirements applied today to BX
equity members and require BX Options Participants to provide the same
type of information in order to receive aggregated pricing.
The Exchange believes that harmonizing the Options Rules of BX to
conform to those of NOM and Phlx with respect to Common Ownership and
also requiring all BX members, equity and options, to provide
information with respect to affiliates promotes consistency and avoids
confusion.
The Exchange proposes to apply this pricing as of December 1, 2014
and issue an Options Trader Alert to its members.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \4\ in general, and furthers the objectives of Section
6(b)(5) of the Act \5\ in particular, that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest,
in that the proposal will harmonize its Common Ownership Rules with
those of NOM and Phlx and also will harmonize the process by which the
Exchange collects information from equity members and Options
Participants regarding the aggregation of activity of affiliated
entities for the purpose of assessing charges or credits.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that applying the same 75% standard for
Common Ownership as NOM and Phlx will provide consistency among these
exchanges with respect to aggregating volume. In addition, the Exchange
believes that harmonizing the process by which the Exchange collects
information related to aggregation for equity members and Options
Participants will provide consistency to market participants with
respect to meeting the requirements to aggregate on BX. Also, the
Exchange believes that adopting this method for collecting such
information on aggregated pricing, with respect to Options
Participants, will ensure proper validation for firms entitled to the
aggregation.
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 is merely seeking to harmonize
the manner in which it aggregates pricing and collects information
related to the aggregation of activity of affiliated entities for the
purposes of assessing charges or credits for equity members and Options
Participants. The Exchange intends to apply a uniform process to
request such aggregation for all BX members and BX Options
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
Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest; does not
impose any significant burden on competition; and by its terms does not
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) \6\ of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6)(iii).
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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 rule-comments@sec.gov. Please include
File Number SR-BX-2014-039 on the subject line.
[[Page 53492]]
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2014-039. 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-2014-039 and should be
submitted on or before September 30, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O' Neill,
Deputy Secretary.
[FR Doc. 2014-21359 Filed 9-8-14; 8:45 am]
BILLING CODE 8011-01-P