[Federal Register Volume 76, Number 12 (Wednesday, January 19, 2011)]
[Notices]
[Pages 3188-3189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-950]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63705; File No. SR-NASDAQ-2011-006]
Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees for the NASDAQ Options Market
January 12, 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 January 6, 2011, 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.
The text of the proposed rule change is set forth below. Proposed
new text is italicized 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 Web site.
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Exchange Customer Firm MM Professional
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BATS..................................................... $0.36 $0.55 $0.55 $0.36
BOX...................................................... 0.06 0.55 0.55 0.06
CBOE..................................................... 0.06 0.55 0.55 0.26
CBOE orders greater than 99 contracts in NDX, MNX ETFs, 0.24 0.55 0.55 0.26
ETNs & HOLDRs...........................................
ISE...................................................... 0.06 0.55 0.55 0.24
ISE Select Symbols* [of 100 or more contracts]........... 0.[26]18 0.55 0.55 0.3[1]4
NYSE Arca Penny Pilot.................................... 0.50 0.55 0.55 0.50
NYSE Arca Non Penny Pilot................................ 0.06 0.55 0.55 0.06
NYSE AMEX................................................ 0.06 0.55 0.55 0.26
PHLX (for all options other than PHLX Select Symbols).... 0.06 0.55 0.55 0.26
PHLX Select Symbols\**\.................................. 0.30 0.55 0.55 0.46
C2....................................................... 0.21 0.55 0.55 0.46
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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''). Specifically, the Exchange is proposing to
amend its current Routing Fees that are currently assessed on orders
routed to the International Securities Exchange LLC (``ISE'') in Select
Symbols \3\ for orders of 100 or more contracts. ISE recently amended
its fees and the amendments proposed herein reflect the proposed ISE
amendments.\4\
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\3\ Select Symbols refer to the symbols which are subject to
ISE's Rebates and Fees for Adding and Removing Liquidity in Select
Symbols in ISE's Schedule of Fees.
\4\ See SR-ISE-2010-120.
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The Exchange proposes to assess Customers a fee of $0.18 per
contract and Professionals a fee of $0.34 per contract for orders
routed to ISE in Select Symbols. The Routing Fees currently assessed on
Firms and Market Makers will remain unchanged. Currently, the Exchange
assesses the following fees to route to ISE in Select Symbols of 100 or
more contracts: $.26 per contract for Customers, $0.55 per contract for
Firms \5\ and Market Makers \6\ and $0.31 per contract for
Professionals.
[[Page 3189]]
All other orders that are routed to ISE, including orders that are less
than 100 contracts, are assessed the rates labeled ``ISE''.
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\5\ 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.
\6\ 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.
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The Exchange also proposes to amend the title of the Routing Fees
in ISE Select Symbols to state ``ISE Select Symbols'' rather than ``ISE
Select Symbols of 100 or more contracts'' to reflect the recent
amendments to ISE's fees which eliminate the fee differential between
priority customers with 100 or more contracts and priority customers
with less than 100 contracts.\7\ All other orders that are routed to
ISE, which are not in the Select Symbols, would be assessed the rates
labeled ``ISE''.
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\7\ See SR-ISE-2010-120.
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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. Each destination market's
transaction charge varies for each transaction incurred by the
Exchange. 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.
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 these
fees are reasonable because the Exchange is seeking to recoup costs
that it incurs when routing orders to ISE in Select Symbols on behalf
of its members. The Exchange believes that the proposed fee amendments
are equitable because these amendments mirror recent proposed
amendments to ISE's Schedule of Fees and are being uniformly applied to
the Exchange's members.
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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 nine options markets 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 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.
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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 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-2011-006 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-2011-006. 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, 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
available publicly. All submissions should refer to File No. SR-NASDAQ-
2011-006 and should be submitted on or before February 9, 2011.
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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-950 Filed 1-18-11; 8:45 am]
BILLING CODE 8011-01-P