[Federal Register Volume 75, Number 149 (Wednesday, August 4, 2010)]
[Notices]
[Pages 47057-47059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19111]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62590; File No. SR-NASDAQ-2010-090]
Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto Relating to Fees for Routing to Away
Markets
July 29, 2010.
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 July 20, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Exchange submitted Amendment Nos. 1 and 2 to the proposed
rule change on July 28, 2010.\3\ The Commission is publishing this
notice to solicit comments on the proposed rule change, as amended,
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment Nos. 1 and 2 make technical corrections to the
rule text.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify Rule 7050 governing pricing for
NASDAQ members using the NASDAQ Options Market (``NOM''), NASDAQ's
facility for executing and routing standardized equity and index
options.
The text of the proposed rule change is set forth below. Proposed
new text is underlined and deleted text is in [brackets].
7050. NASDAQ Options Market
The following charges shall apply to the use of the order execution
and routing services of the NASDAQ Options Market for all securities.
(1)-(3) No Change.
(4) Fees for routing contracts to markets other than the NASDAQ
Options Market shall be assessed as provided below. The current fees
and a historical record of applicable fees shall be posted on the
NasdaqTrader.com website.
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Exchange Customer Firm MM
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BATS............................. $0.36 $0.55 $0.55
BOX.............................. 0.06 0.55 0.55
CBOE............................. 0.06 0.55 0.55
ISE.............................. 0.06 0.55 0.55
ISE Select Symbols * of 100 or 0.26 0.55 0.55
more contracts..................
NYSE Arca Penny Pilot............ 0.50 0.55 0.55
NYSE Arca Non Penny Pilot........ 0.06 0.55 0.55
NYSE AMEX........................ 0.06 0.55 0.55
[[Page 47058]]
PHLX (for all options other than 0.06 0.55 0.55
PHLX Select Symbols)............
PHLX Select Symbols **........... 0.30 0.55 0.55
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* These fees are applicable to orders routed to ISE that are subject to
Rebates and Fees for Adding and Removing Liquidity in Select Symbols.
See ISE's Schedule of Fees for the complete list of symbols that are
subject to these fees.
** These fees are applicable to orders routed to PHLX that are subject
to Rebates and Fees for Adding and Removing Liquidity in Select
Symbols. See PHLX's Fee Schedule for the complete list of symbols that
are subject to these fees.
* * * * *
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqomx.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
NASDAQ is proposing to modify Rule 7050 governing the fees assessed
for options orders entered into NOM but routed to and executed on away
markets (``routing fees''). The Exchange proposes to assess the
following fees for orders routed to the International Securities
Exchange LLC (``ISE'') in Select Symbols for orders of 100 or more
contracts: $.26 per contract for customers and $0.55 per contract for
Firms \4\ and Market Makers.\5\ All other orders that are routed to
ISE, including orders that are less than 100 contracts, will be
assessed the rates labeled ``ISE''.\6\
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\4\ Firm is an order that clears as ``Firm'' with the Options
Clearing Corporation (``OCC''). This fee of $0.55 is a fixed routing
fee for routing orders for the account(s) of Firms.
\5\ This fee of $0.55 is a fixed routing fee for routing orders
for the account(s) of Market Makers. The Exchange notes that some
other options exchanges include Market Maker transaction and
clearing fees as ``broker-dealer'' fees.
\6\ The current rates to route an order to ISE are $.06 for
customers and $0.55 for Firms and Market Makers. This would not
include ISE Select Symbols, which have different fees and are the
subject of this filing.
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NASDAQ Options Services LLC (``NOS''), a member of the Exchange, is
the Exchange's exclusive order router. Each time NOS routes to away
markets NOS is charged a $0.06 clearing fee and, in the case of certain
exchanges, a transaction fee is also charged in certain symbols, which
are passed through to the Exchange. The Exchange is proposing to amend
Rule 7050 to title these fees ``ISE Select Symbols of 100 or more
contracts.''
The Exchange is proposing this amendment in order to recoup
clearing and transaction charges incurred by the Exchange when orders
are routed to ISE in the ISE Select Symbols and the order is for 100 or
more contracts. Each destination market's transaction charge varies and
there is a standard clearing charge for each transaction incurred by
the Exchange. The Exchange proposes this fee change to account for an
increase in cost for routing to ISE relative to the fees in the ISE
Select Symbols.\7\
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\7\ ISE assesses a taker fee of $0.20 for priority customers for
orders for 100 or more contracts in its rebates and fees for adding
and removing liquidity in select symbols. See Securities Exchange
Act Release No. 61869 (April 7, 2010), 75 FR 19449 (April 14, 2010)
(SR-ISE-2010-25).
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2. Statutory Basis
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\8\ in general, and with Section
6(b)(4) of the Act,\9\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which NASDAQ operates or controls. The Exchange believes that this fee
is reasonable because it seeks to recoup costs that are incurred by the
Exchange when routing customer orders to ISE in the select symbols of
100 or more contracts on behalf of its members. The Exchange also
believes that the proposed fee change for customer orders routed to ISE
in the select symbols is equitable because it will be uniformly applied
to all customers with orders of 100 or more contracts.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
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NASDAQ is one of eight options market in the national market system
for standardized options. Joining NASDAQ and electing to trade options
is entirely voluntary. Under these circumstances, NASDAQ's fees must be
competitive and low in order for NASDAQ to attract order flow, execute
orders, and grow as a market. NASDAQ thus believes that its fees are
fair and reasonable and consistent with the Exchange Act.
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.
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\ and paragraph (f)(2) of Rule 19b-4 \11\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission may summarily abrogate 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.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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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, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File
[[Page 47059]]
Number SR-NASDAQ-2010-090 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2010-090. This
file number should be included on the subject line if e-mail 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 (http://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. 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-NASDAQ-2010-090 and should be submitted on or before
August 25, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19111 Filed 8-3-10; 8:45 am]
BILLING CODE 8010-01-P