[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72484-72486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30191]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65768; File No. SR-NASDAQ-2011-151]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Routing Fees to BATS Exchange, Inc.
November 17, 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 November 8, 2011, The NASDAQ Stock Market LLC (``NASDAQ'' 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 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. In addition the Exchange is also proposing to make minor
amendments to Rule 7053, entitled ``NASDAQ Options Market--Access
Services.''
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on December 1, 2011.
The text of the proposed rule change is set forth below. Proposed
new text is in italics 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.
* * * * *
(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]48
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, ETNs & 0.24 0.55 0.55 0.26
HOLDRs........................................................
C2............................................................. 0.50 0.55 0.55 0.51
ISE............................................................ 0.06 0.55 0.55 0.24
ISE Select Symbols*............................................ 0.18 0.55 0.55 0.34
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
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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.
* * * * *
7053. NASDAQ Options Market--Access Services
[Part A: The following charges are assessed by Nasdaq for
connectivity to the NASDAQ Options Market for NOM 1.0:]
[(a) Financial Information Exchange (FIX) ]
[[Page 72485]]
------------------------------------------------------------------------
[Ports] [Quantity] [Price]
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[FIX Trading Port]........... [First 25 ports] [$500/port/month]
[Additional [$250/port/month]
ports above 25].
[FIX Port for Services Other [First 25 ports] [$500/port/month]
than Trading].
[Additional [$250/port/month]
ports above 25].
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[(b) TradeInfo]
[ Members not subscribing to the Nasdaq Workstation
using TradeInfo will be charged a fee of $95 per user per month.]
[(c) Other Port Fees]
[The following port fees shall apply in connection with the use
of other trading telecommunication protocols:]
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[Quantity] [Price]
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[First 25 ports].............................. [$500 per month for each port pair]
[Additional ports above 25]................... [$250 per month for each port pair]
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[Part B: The following charges are assessed by Nasdaq for
connectivity to the NASDAQ Options Market for NOM 2.0 as of August
26, 2011 through September 30, 2011:]
[(a) TradeInfo]
[ Members not subscribing to the Nasdaq Workstation
using TradeInfo will be charged a fee of $95 per user per month.]
[(b) Port Fees, per port per month, as follows:]
[Order Entry Port Fee]...................................... [$0.00]
[CTI Port Fee].............................................. [$0.00]
[OTTO Port Fee]............................................. [$0.00]
[ITTO Port Fee]............................................. [$0.00]
[Order Entry DROP Port Fee]................................. [$0.00]
[OTTO DROP Port Fee]........................................ [$0.00]
[SQF Port Fee].............................................. [$0.00]
[Part C:] The following charges[*] are assessed by Nasdaq for
connectivity to the NASDAQ Options Market [as of October 3, 2011]:
(a) TradeInfo
Members not subscribing to the Nasdaq Workstation using
TradeInfo will be charged a fee of $95 per user per month.
(b) Port Fees, per port per month, as follows:
Order Entry Port Fee........................................ $500.00
CTI Port Fee................................................ $500.00
OTTO Port Fee............................................... $500.00
ITTO Port Fee............................................... $500.00
Order Entry DROP Port Fee................................... $500.00
OTTO DROP Port Fee.......................................... $500.00
SQF Port Fee................................................ $0.00
[* As of October 3, 2011, the fees in Parts A and B shall no
longer apply. All NOM Participants will be assessed the fees in Part
C.]
* * * * *
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ is proposing to modify Rule 7050 governing fees assessed for
option orders entered into NOM but routed to and executed on away
markets (``Routing Fees''). Specifically, NASDAQ is proposing to amend
the Professional Routing Fee for orders routed to the BATS Exchange,
Inc. (``BATS'').
The Exchange currently assesses the following Routing Fees to route
orders to BATS: a Customer is assessed $0.36 per contract; a Firm is
assessed $0.55 per contract; a Market Maker is assessed $0.55 per
contract; and a Professional is assessed $0.36 per contract. The
Exchange is proposing to amend the Professional Routing Fee to BATS
from $0.36 per contract to $0.48 per contract. The other BATS Routing
Fees for Customers, Firms and Market Makers would remain the same.
BATS recently adopted a definition for a professional and amended
its Fee Schedule to assess a fee of $.42 for professionals that remove
liquidity from BATS Options.\3\ The Exchange is proposing to amend its
Professional Routing Fee to BATS to recoup this fee. In addition,
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. The Exchange is proposing this
amendment in order to recoup clearing and transaction charges incurred
by the Exchange when Professional orders are routed to BATS.\4\
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\3\ See Securities Exchange Act Release No. 65694 (November 4,
2011) (SR-BATS-2011-046).
\4\ The Exchange is proposing to recoup the $.42 per contract
professional taker fee for orders routed to BATS along with the
$0.06 clearing fee which is incurred by the Exchange, as explained
herein.
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In addition, the Exchange proposes to amend Exchange Rule 7053 to
remove outdated text. The Exchange previously filed a rule change to
amend Exchange Rule 7053 in connection with trading system enhancements
that were to take place on October 3, 2011.\5\ The rule change
implemented new Access Services Fees for all NOM Participants as of
October 3, 2011 at which time all NOM Participants were required to
transition to the new trading platform. The effective fees as of
October 3, 2011 are located in Part C of Rule 7053. At this time, the
Exchange proposes to remove Parts A and B as they are no longer
effective and also remove the reference to the words ``Part C'' and
``as of October 3, 2011'' and the note which states ``As of October 3,
2011, the fees in Parts A and B shall no longer apply. All NOM
Participants will be assessed the fees in Part C.'' This language is no
longer necessary with the deletion of
[[Page 72486]]
Parts A and B. The remaining text will reflect the existing fees.
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\5\ See Securities Exchange Act Release No. 65180 (August 22,
2011), 76 FR 53521 (August 26, 2011) (SR-NASDAQ-2011-111).
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2. Statutory Basis
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\6\ in general, and with Section
6(b)(4) of the Act,\7\ 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.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the amendment to the BATS Professional
Routing Fee is reasonable because it seeks to recoup costs that are
incurred by the Exchange when routing Professional orders to BATS on
behalf of its members. Each destination market's transaction charge
varies and there is a standard clearing charge for each transaction
incurred by the Exchange. The Exchange believes that the proposed
Professional Routing Fee would enable the Exchange to recover the
professional taker fee assessed by BATS, plus clearing fees for the
execution of Professional orders. The Exchange also believes that the
proposed Routing Fee is equitable and not unfairly discriminatory
because it would be uniformly applied to all Professionals.
In addition, the Exchange believes that the proposed amendments to
Exchange Rule 7053 are reasonable, equitable and not unfairly
discriminatory because the amendments seek to remove outdated and
unnecessary language from the Rule text. The amendments will clarify
the current Rule for all NOM Participants.
NASDAQ is one of nine options market 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 \8\ and paragraph (f)(2) of Rule 19b-4 \9\
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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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 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 email to [email protected]. Please include
File Number SR-NASDAQ-2011-151 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-2011-151. This
file number should be included on the subject line if email 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 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-NASDAQ-2011-151 and should
be submitted on or before December 14, 2011.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30191 Filed 11-22-11; 8:45 am]
BILLING CODE 8011-01-P