[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20426-20428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8582]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64198; File No. SR-BX-2011-020]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX BX, Inc. To Amend
the Fee Schedule of the Boston Options Exchange Facility
April 6, 2011.
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 March 31, 2011, NASDAQ OMX BX, Inc. (the ``Exchange'') 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 self-regulatory organization. The Exchange filed
the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the
Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to
[[Page 20427]]
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Fee Schedule of the Boston
Options Exchange Group, LLC (``BOX''). While changes to the BOX Fee
Schedule pursuant to this proposal will be effective upon filing, the
changes will become operative on April 1, 2011. The text of the
proposed rule change is available from the principal office of the
Exchange, at the Commission's Public Reference Room, on the Exchange's
Internet Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, and on the Commission's Web site at http://www.sec.gov.
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
Fees and Credits in Section 7
Currently, Section 7 of the BOX Fee Schedule specifies a $0.25
credit and fee for transactions in the BOX Price Improvement Period
(``PIP''). These credits and fees apply equally to all account types,
whether Public Customer, Broker Dealer or Market Maker, and across
options classes, both those within the Penny Pilot program and non-
Penny classes, and are in addition to any applicable trading fees, as
described in Sections 1 through 3 of the BOX Fee Schedule. The Exchange
proposes to increase the existing credits and fees within Section 7 for
transactions in the PIP, from $0.25 to $0.30. This increase in credits
and fees for PIP transactions is designed to provide all BOX market
participants an additional incentive to submit their orders to the PIP
and the opportunity to benefit from its potential price improvement.
BOX believes that the change to PIP transaction fees and credits
are competitive, fair and reasonable, and non-discriminatory in that
they apply to all account types and options classes.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\5\ in general, and Section
6(b)(4) of the Act,\6\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees, and other charges among
its members and other persons using its facilities. The Exchange
believes the proposal is an equitable allocation of reasonable fees and
other charges among BOX Options Participants. The Exchange also
believes that there is an equitable allocation of reasonable credits
among BOX Options Participants.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that it is equitable to provide a credit to
any Participant that removes liquidity through the PIP on behalf of its
customer. The Exchange believes this credit will attract additional
order flow to BOX, and to the PIP in particular, to the benefit of all
market participants. The Exchange believes that it is an equitable
allocation of the fees and credits for PIP transactions because such
fees and credits apply uniformly to all categories of participants in
PIP transactions, across all account types and options classes. All
market participants that trade within the PIP, and all PIP transactions
would be subject to the fees and credits in Section 7 of the BOX Fee
Schedule.
Further, the Exchange believes the proposed fees and credits
related to PIP transactions to be reasonable. BOX operates within a
highly competitive market in which market participants can readily
direct order flow to any of eight other competing venues if they deem
fee levels at a particular venue to be excessive. The changes to BOX
credits and fees proposed by this filing are intended to attract order
flow to BOX by offering incentives to all market participants to submit
their orders to the PIP for potential price improvement. BOX notes that
this proposed rule change will increase both the fees and credit for
PIP transactions. The result is that BOX will collect a $.30 fee from
Participants that add liquidity in the PIP and credit another
Participant $.30 for removing liquidity. Stated otherwise, the fees
collected will not necessarily result in additional revenue to BOX, but
will simply allow BOX to provide the credit incentive to Participants
to attract additional order flow to the PIP. BOX believes it is
appropriate to provide incentives to market participants to use PIP,
resulting in potential benefit to customers through potential price
improvement, and to all market participants from greater liquidity.
In particular, the proposed change will allow the fees charged on
BOX to remain competitive with other exchanges as well as apply such
fees in a manner which is equitable among all BOX Participants. The
Exchange believes that the PIP transaction fees and credits it assesses
are fair and reasonable and must be competitive with fees and credits
in place on other exchanges. Further, the Exchange believes that this
competitive marketplace impacts the fees and credits present on BOX
today and influences the proposal set forth above.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \7\ and Rule 19b-4(f)(2) thereunder,\8\
because it establishes or changes a due, fee, or other charge
applicable only to a member.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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.
[[Page 20428]]
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-2011-020 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-2011-020. 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, 100 F Street, NW.,
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 available publicly. All
submissions should refer to File Number SR-BX-2011-020 and should be
submitted on or before May 3, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8582 Filed 4-11-11; 8:45 am]
BILLING CODE 8011-01-P