[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Notices]
[Pages 81687-81689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32615]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63591; File No. SR-BX-2010-091]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Continue
the Practice Governing the Directed Order Process on BOX
December 21, 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 December 16, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule
[[Page 81688]]
change as described in Items I and II below, which Items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend Chapter VI, Section 5 (Obligations
of Market Makers) of the Rules of the Boston Options Exchange Group,
LLC (``BOX'') to extend the date of effectiveness of the Directed Order
\3\ process (``Pilot Program'') from December 31, 2010, to June 30,
2011 while the Commission considers the Exchange's proposal to amend
the BOX Rules to permit Executing Participants (``EPs'') to only
receive Directed Orders through the BOX Trading Host from Order Flow
Providers (``OFPs'') whom the EP has designated.\4\ The text of the
proposed rule change is available on the Exchange's website at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, on the Commission's
Web site at http://www.sec.gov, at the Exchange, and at the
Commission's Public Reference Room.
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\3\ Capitalized terms not otherwise defined herein shall have
the meanings prescribed within the BOX Rules.
\4\ See Securities Exchange Act Release No. 63539 (December 14,
2010) (SR-BX-2010-079).
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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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
On December 13, 2010, the Exchange filed SR-BX-2010-080, a proposal
to amend the BOX Rules to continue the practice governing the
Exchange's Directed Order process on BOX.\5\ Specifically, pursuant to
SR-BX-2010-080, the BOX Rules state that the BOX Trading Host
identifies to an Executing Participant the identity of the firm
entering the Directed Order on BOX. The amended rule as set forth in
SR-BX-2010-080 was to be effective on a pilot basis until December 31,
2010, while the Commission considered the Exchange's proposal to amend
the BOX Rules to permit EPs to only receive Directed Orders through the
BOX Trading Host from OFPs whom the EP has designated.\6\
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\5\ See Securities Exchange Act Release No. 63540 (December 14,
2010) (SR-BX-2010-080).
\6\ See Securities Exchange Act Release Nos. 63540 (December 14,
2010) (SR-BX-2010-080) and 63539 (December 14, 2010) (SR-BX-2010-
079).
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The purpose of this proposed rule change is to amend Chapter VI,
Section 5(c)(i) of the BOX Rules to extend the date of effectiveness of
the amended Directed Order rule from December 31, 2010, to June 30,
2011. This extension of the pilot period will afford the Commission the
necessary time to consider the Exchange's proposal SR-BX-2010-079
referenced above.\7\ In the event the Commission reaches a decision
with respect to Exchange proposal SR-BX-2010-079 before June 30, 2011,
the proposed Pilot Program governing the Directed Order process on BOX
will cease to be effective at the time of that decision.
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\7\ See Securities Exchange Act Release No. 63539 (December 14,
2010) (SR-BX-2010-079).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\9\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system, and, in general, to protect
investors and the public interest. In particular, the Exchange believes
that the proposed extension of the pilot period will afford the
Commission the necessary time to consider the Exchange's proposal SR-
BX-2010-079 which would amend the BOX Rules to permit EPs to only
receive Directed Orders through the BOX Trading Host from OFPs whom the
EP has designated.\10\ Additionally, the Exchange believes that the
proposed extension will allow the Directed Order Pilot Program to
remain in effect on BOX without interruption.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ See Securities Exchange Act Release No. 63539 (December 14,
2010) (SR-BX-2010-079).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments Regarding the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) \11\ of the Act and Rule 19b-4(f)(6)
thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
may not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange requests that the
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\15\ which would make the rule change effective and
operative upon filing. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because such waiver would continue the pilot for
Directed Orders that has operated under SR-BX-2010-080. A waiver would
therefore continue to permit the Directed Order Pilot Program to remain
in effect on BOX without interruption.\16\
[[Page 81689]]
Accordingly, the Commission designates the proposed rule change
operative upon filing with the Commission.
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\13\ Id.
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ Id.
\16\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such 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.
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-BX-2010-091 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-2010-091. 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 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 website 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 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of the Exchange. All comments received
will be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make publicly available. All submissions
should refer to File Number SR-BX-2010-091 and should be submitted on
or before January 18, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32615 Filed 12-27-10; 8:45 am]
BILLING CODE 8011-01-P