[Federal Register Volume 74, Number 93 (Friday, May 15, 2009)]
[Notices]
[Pages 23000-23002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11359]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59894; File No. SR-BX-2009-023]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Temporarily Implement a Cap on Certain Fees for Members
May 8, 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 1, 2009, NASDAQ OMX BX, Inc. (``BX'' or ``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 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
BX proposes to adopt a temporary cap on fees charged for OUCH ports
to the Equities Market. The text of the proposed rule change is below.
Proposed new language is in italics.\3\
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\3\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at http://nasdaqomxbx.cchwallstreet.com.
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* * * * *
7015. Access Services.
The following charges are assessed by the Exchange for ports to
establish connectivity to the NASDAQ OMX BX Equities Market, as well as
ports to
[[Page 23001]]
receive data from the NASDAQ OMX BX Equities Market:
$400 per month for each port pair, other than Multicast
ITCH[supreg] data feed pairs, for which the fee is $1000 per month.
Additional OUCH port pairs beyond 15 are at no cost for the months of
May and June 2009.
Internet Ports: An additional $200 per month for each
Internet port that requires additional bandwidth.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, BX 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. BX 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
BX is proposing to modify its pricing for OUCH ports, which provide
connectivity to the NASDAQ OMX BX Equities Market. Specifically, BX
will eliminate fees for a member firm's OUCH ports in excess of 15 for
the months of May and June 2009. Member firms have complained that,
because BX does not have an anti-internalization capability, they must
purchase additional OUCH ports that they would otherwise not need to
purchase solely to avoid unwanted execution against their customer
orders. Internalization occurs when a member firm's customer order is
posted on the market and executed all or in part by the same member
firm. Member firms must avoid internalization of certain customer
orders to avoid violating rules and regulations of the Employee
Retirement Income Security Act that preclude and/or limit managing
broker-dealers of such customer accounts from trading as principal with
orders generated for those accounts. Currently, some member firms are
only able to avoid internalization by purchasing additional OUCH ports
through which they place all order flow that must not be internalized.
Such additional ports have discrete MPID numbers, which allow these
member firms to identify the orders and avoid internalization.
BX is developing an anti-internalization function for its market
designed to prevent member firms from executing a trade as a
counterparty to their customer orders, which it anticipates will be
operational by the end of June. The temporary cap on OUCH port fees
proposed herein is designed to provide relief to member firms affected
by BX's lack of an anti-internalization function until it can be
implemented, at which time such firms can reduce the number of ports
currently subscribed to solely due to the lack of such a function. BX
will seek to remove the cap language from the rule upon its expiration
or alternatively will seek to extend the cap until such time the anti-
internalization function can be implemented.
2. Statutory Basis
BX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\4\ in general, and with Section
6(b)(4) of the Act,\5\ 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 BX operates or controls. The proposed fee change applies
uniformly to all BX members. BX has determined that temporarily
instituting a cap on fees for OUCH ports in excess of 15 will provide
relief to member firms required to purchase additional ports solely due
to BX's lack of an anti-internalization function.
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\4\ 15 U.S.C. 78f.
\5\ 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, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor 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 \6\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\7\ 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.
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\6\ 15 U.S.C. 78s(b)(3)(a)(ii).
\7\ 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-BX-2009-023 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-2009-023. 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 business days between the hours
of 10 a.m. and 3 p.m., located at 100 F Street, NE., Washington, DC
20549. 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
[[Page 23002]]
Number SR-BX-2009-023 and should be submitted on or before June 5,
2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11359 Filed 5-14-09; 8:45 am]
BILLING CODE 8010-01-P