[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]


-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \3\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http://nasdaqomxbx.cchwallstreet.com.
---------------------------------------------------------------------------

* * * * *
    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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11359 Filed 5-14-09; 8:45 am]
BILLING CODE 8010-01-P