[Federal Register Volume 75, Number 37 (Thursday, February 25, 2010)]
[Notices]
[Pages 8763-8765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3774]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61536; File No. SR-BX-2010-014]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Order Routing on the Boston Options Exchange Facility
February 18, 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 February 8, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been prepared by the self-regulatory organization. The Exchange
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ OMX BX, Inc. (the ``Exchange'') proposes to amend Chapter
XII, Section 5 (Order Routing to Away Exchanges) of the Rules of the
Boston Options Exchange Group, LLC (``BOX'') to make the Order Routing
Pilot Permanent. The text of the proposed rule change is available from
the principal office of the Exchange, on the Commission's Web site at
http://www.sec.gov and also on the Exchange's Internet Web site at
http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.
II. Self-Regulatory Organization's Statement of the Purpose of, and the
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
[[Page 8764]]
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 purpose of the proposed rule change is to remove Supplementary
Material .03 to Chapter XII, Section 5, to make the rules governing the
outbound order routing process permanent. On October 16, 2009 the
Commission approved \5\ the Exchange's proposal to amend Chapter XII of
the BOX Rules to provide for the use by BOX of certain non-affiliated
third party routing broker/dealers (``Routing Broker(s)'') to route
options orders to one or more Away Exchange(s) when such Away
Exchange(s) display the Best Bid or Best Offer in accordance with the
Options Order Protection and Locked/Crossed Market Plan
(``Decentralized Plan'').\6\
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\5\ See Securities Exchange Act Release No. 60832 (October 16,
2009), 74 FR 54607 (October 22, 2009) (SR-BX-2009-066)(Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule
Change Relating to Chapter XII of the BOX Rules) (``Approval
Order''). See also Chapter XII, Section 5 of the BOX Rules. Chapter
XII, Section 5 is consistent with rules approved for other national
securities exchanges. See e.g. Approval Order at 54609, note 24.
Terms not otherwise defined herein shall have the meaning proscribed
in the BOX Rules.
\6\ See Securities Exchange Act Release No. 60405 (July 30,
2009), 74 FR 39362 (August 6, 2009) (File No. 4-546) (Order
Approving the National Market System Plan Relating to Options Order
Protection and Locked/Crossed Market Plan).
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The Exchange requested that the proposal be approved on a pilot
basis for three (3) months starting from the date of the approval of
submission of filing. The Commission approved the Exchange's proposal
on an accelerated basis \7\ for a pilot period to expire on January 15,
2010.\8\ On January 15, 2010, the effective date of the Order Routing
Pilot was extended until March 15, 2010.\9\ The Exchange believes
permanent approval is appropriate. There have been no comments, or
complaints pertaining to the Order Routing Pilot. The routing process
is operating as intended. Moreover, as previously noted, Chapter XII,
Section 5 is consistent with rules approved for other national
securities exchanges.\10\
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\7\ The Exchange requested accelerated approval to allow BOX to
establish and implement mechanisms to remain fully compliant with
the Decentralized Plan and BOX Rules and to no longer rely upon a
Commission-granted exemption from Rule 608(c) of Regulations NMS.
The pilot period also allowed interested parties an opportunity to
comment on the proposal before it was permanently approved.
\8\ See Supra note 5.
\9\ See Securities Exchange Act Release No. 61399 (January 22,
2010), 75 FR 4603 (January 28, 2010) (SR-BX-2010-007) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Order Routing Pilot on the Boston Options Exchange Facility).
\10\ See Supra note 5.
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2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\11\ in general, and Section
6(b)(5) of the Act,\12\ in particular, in that it is designed to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism for 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 permanent approval of the
Order Routing Pilot will result in an ongoing benefit to investors by
affording BOX Options Participants the choice, on a voluntary basis, to
have their orders routed to one or more Away Exchange(s) when such Away
Exchange(s) display the Best Bid or Best Offer, in accordance with the
Decentralized Plan.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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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 on 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
This proposed rule change is filed pursuant to paragraph (A) of
section 19(b)(3) of the Exchange Act \13\ and Rule 19b-4(f)(6)
thereunder.\14\ This 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 after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange believes that this
proposed rule change, which is essential for competitive purposes and
to promote a free and open market for the benefit of investors, does
not raise any new, unique or substantive issues from those raised in
the Exchanges initial proposal to implement the Order Routing Pilot or
the recent extension tothe Pilot,\15\ and the rules are consistent with
those of other exchanges.\16\ The Exchange believes permanent approval
is appropriate. There have been no comments, or complaints pertaining
to the Order Routing Pilot. The routing process is operating as
intended.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, as required under Rule
19b-4(f)(6)(iii), the Exchange has submitted to the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and the text of the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
\15\ See Supra note 5 and note 9.
\16\ See Supra note 5.
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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.
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-2010-014 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-2010-014. 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
[[Page 8765]]
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 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
available publicly. All submissions should refer to File Number SR-BX-
2010-014 and should be submitted on or before March 18, 2010.
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. 2010-3774 Filed 2-24-10; 8:45 am]
BILLING CODE 8011-01-P