[Federal Register Volume 74, Number 97 (Thursday, May 21, 2009)]
[Notices]
[Pages 23915-23916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11810]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59919; File No. SR-BX-2009-025]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing of Proposed Rule Change To Retroactively Amend the Fee Schedule
To Clarify and Correct References to the Volume Discount Given to
Market Makers
May 14, 2009.
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 May 8, 2009, 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 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 purpose of the proposed rule change is to amend the Fee
Schedule of the Boston Options Exchange Group, LLC (``BOX'') on a
retroactive basis to clarify and correct references relating to the
volume discount (``Volume Discount'') given to Market Makers. The text
of the proposed rule change is available from the principal office of
the Exchange, at the Commission's Public Reference Room 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
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend on a retroactive basis Section 3
(Market Maker Trading Fees) of the BOX Fee Schedule.\3\ BOX applies a
Volume Discount to the fees charged to BOX Market Makers who engage in
particularly active trading volume on BOX. The proposed changes will
clarify and correct the Fee Schedule to reflect that trading volume in
options classes included within the Liquidity Make or Take Pricing
Structure (``Make or Take''), as set forth in Section 7 of the BOX Fee
Schedule, is excluded when determining a Market Maker's Volume
Discount.\4\ The text explicitly stating this was inadvertently removed
from the BOX Fee Schedule in a prior filing, SR-BSE-2007-52.\5\
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\3\ The BOX Fee Schedule can be found on the BOX Web site at
http://www.bostonoptions.com.
\4\ Make or Take volume is excluded when determining a Market
Maker's monthly trading volume for purposes of the Volume Discount
and is not eligible to have a Volume Discount applied to it.
\5\ See Securities Exchange Act Release No. 56948 (December 12,
2007), 72 FR 72426 (December 20, 2007) (SR-BSE-2007-52).
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The Exchange requests that the current proposed changes be made
effective retroactive to November 30, 2007, which is the date of filing
and effectiveness of SR-BSE-2007-52. The Exchange believes that the
proposed changes will eliminate any gap in the treatment of Make or
Take volume when calculating the Volume Discount and is consistent with
previous Commission action on similar matters pertaining to the
allocation of exchange member fees and dues.\6\ Additionally, the
Exchange
[[Page 23916]]
believes that the inadvertent elimination of the language in question
from the BOX Fee Schedule did not alter BOX Market Makers'
understanding that Make or Take volume was excluded from the
calculation of the Volume Discount.\7\
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\6\ See Securities Exchange Act Release No. 55549 (March 28,
2007), 72 FR 16837 (April 5, 2007) (SR-CHX-2007-02) (Order Granting
Accelerated Approval of a Proposed Rule Change To Amend the CHX Fee
Schedule on a Retroactive Basis To Clarify the Application of a
Credit Against Specialist Fixed Fees). The approval order stated
that the rule change clarified the application of a specialist fixed
fee credit that the exchange was offering as an incentive for
specialists and would reconcile the discrepancy between the manner
in which the exchange intended to apply the credit and the
description of the credit in a prior proposal. The order also stated
that approval would clarify ambiguity about the application of the
specialist fixed fee credit. The Commission believed that
accelerated approval would provide clarity without delay. See also
Securities Exchange Act Release No. 57347 (February 19, 2008), 73 FR
10080 (February 25, 2008) (SR-NASDAQ-2007-100) (Order Approving
Proposed Rule Change to Nasdaq Rule 7033 To Modify the Fees Charged
for the Mutual Fund Quotation Service and To Correct Certain Errors
in the Rule Manual). The Commission approved a Nasdaq proposal
seeking retroactive approval for the implementation of previously
approved Mutual Fund Quotation Service (``MFQS'') fees which Nasdaq
failed to transfer from the NASD rule to the corresponding Nasdaq
rule when Nasdaq commenced operations as a national securities
exchange, more than one and one half year earlier, on August 1,
2006. The Commission stated that such approval was appropriate as it
corrected an omission in Nasdaq's rules. See also Securities
Exchange Act Release No. 56240 (August 13, 2007), 72 FR 46527
(August 20, 2007) (SR-ISE-2007-49) (Order Approving Proposed Rule
Change Relating to Fee Changes on a Retroactive Basis). The
Commission stated that application of the amendments to ISE's
Schedule of Fees on a retroactive basis, to a point in time
approximately six months prior, were appropriate and aligned revenue
collected from members with license costs charged to ISE.
\7\ See BOX Information Circular entitled ``Amended BOX Fee
Schedule--Expansion of ``Make or Take'' and Elimination of Minimum
Activity Charger (MAC)'' that was distributed to Participants on
November 28, 2007 which stated that the establishment of the Make or
Take Credit set forth in the then proposed rule filing SR-BSE-2007-
52 would not impact Volume Discounts. Specifically, the BOX
Information Circular stated: ``Current discounts based upon average
daily volumes (ADV) of over 25,000 and 50,000 contracts will be
maintained.''
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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,\8\ in general, and Section
6(b)(4) of the Act,\9\ in particular, in that it is designed to provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities. The proposed changes will result in clarification of the
fees charged for trading activity on BOX. The Exchange believes that
retroactive approval of the proposed rule change will clarify the BOX
Fee Schedule and eliminate any concern of inequitable allocation of
fees as between the Market Makers and other Options Participants during
the retroactive period.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
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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
result in any burden on competition that is 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. By order approve such proposed rule change, or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
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-2009-025 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-2009-025. 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 inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. 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-BX-
2009-025 and should be submitted on or before June 11, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11810 Filed 5-20-09; 8:45 am]
BILLING CODE 8010-01-P