[Federal Register Volume 75, Number 212 (Wednesday, November 3, 2010)]
[Notices]
[Pages 67801-67803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27690]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63199; File No. SR-NASDAQ-2010-139]
Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees
October 27, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 67802]]
(``Act''), \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 25, 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 Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
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.
While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative upon
the effectiveness of SR-C2-2010-006.
The text of the proposed rule change is set forth below. Proposed
new text is in italics 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.
* * * * *
(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 Web site.
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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
PHLX (for all options other than $0.06 $0.55 $0.55
PHLX Select Symbols)............
PHLX Select Symbols **........... $0.30 $0.55 $0.55
C2............................... $0.21 $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.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change 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'').
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 proposes to assess new fees for routing contracts to
markets other than the NASDAQ Options Market to Rule 7050. The Exchange
is proposing to assess a $.21 per contract fee for Customer option
orders, a $.55 per contract fee for Firm and Market Maker option orders
that are routed to C2 Options Exchange, Inc. (``C2''). The Exchange is
proposing to caption these proposed fees ``C2.''
The Exchange is proposing these fees in order to recoup clearing
and transaction charges incurred by the Exchange when orders are routed
to C2.\3\ Each destination market's transaction charge varies and there
is a standard clearing charge for each transaction incurred by the
Exchange. The Exchange believes that the routing fees proposed will
enable the Exchange to recover the transaction fees assessed by away
markets, where applicable, plus clearing fees for the execution of
Customer, Firm and Market Maker orders. As with all fees, the Exchange
may adjust these Routing Fees in response to competitive conditions by
filing a new proposed rule change.
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\3\ See C2 Fees Schedule.
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While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative upon
the effectiveness of SR-C2-2010-006.
2. Statutory Basis
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\4\ in
[[Page 67803]]
general, and with Section 6(b)(4) of the Act,\5\ 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.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
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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 C2 on behalf of its members. The Exchange also believes that
the proposed fees are equitable because they will be uniformly applied
to all customers.
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.\6\ 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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\6\ 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NASDAQ-2010-139 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-2010-139. 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-2010-139 and should be submitted on or before
November 24, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27690 Filed 11-2-10; 8:45 am]
BILLING CODE 8011-01-P