[Federal Register Volume 77, Number 9 (Friday, January 13, 2012)]
[Notices]
[Pages 2106-2108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-529]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66121; File No. SR-NASDAQ-2012-001]


 Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Routing Fees

January 9, 2012.
    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 3, 2012, 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 NASDAQ. 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 NASDAQ Stock Market LLC 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.
* * * * *
    (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
----------------------------------------------------------------------------------------------------------------
BATS.............................................       $0.[36]50           $0.55           $0.55      $0.[48]50
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            0.24            0.55            0.55       0.26
 ETFs, ETNs & 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                 0.06            0.55            0.55       0.26
 Symbols)........................................
PHLX Select Symbols**............................            0.30            0.55            0.55       0.46
----------------------------------------------------------------------------------------------------------------
* 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.


[[Page 2107]]

* * * * *
    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 proposes 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 
its Customer and Professional Routing Fees 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 $0.48 per contract. The 
Exchange proposes to amend the Customer and Professional Routing Fees 
to BATS to $0.50 per contract. The other BATS Routing Fees for Firms 
and Market Makers would remain the same. Recently, BATS announced that 
it would amend its customer and professional fees to remove liquidity 
to $0.44 per contract on January 3, 2012.\3\ The Exchange is proposing 
to amend its Customer and Professional Routing Fees to BATS to $0.50 
per contract to recoup this fee.
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    \3\ See BATS (BZX) Exchange Fee Schedule. See also BATS Options 
Exchange Pricing Update Effective January 3, 2012 (dated December 
15, 2011).
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    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 Customer and Professional orders 
are routed to BATS. The Exchange proposes to recoup the $0.44 per 
contract customer and professional taker fee for option orders that are 
routed to BATS along with the $0.06 clearing fee which is incurred by 
the Exchange, as explained herein.
    As with all fees, the Exchange may adjust these Routing Fees in 
response to competitive conditions by filing a new proposed rule 
change.
2. Statutory Basis
    NASDAQ believes that the proposed rule changes are 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 NASDAQ operates or controls.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that this fee is reasonable because it seeks 
to recoup costs that are incurred by the Exchange when routing Customer 
and 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 Routing Fee would enable the 
Exchange to recover the customer and professional taker fees assessed 
by BATS, plus clearing fees for the execution of Customer and 
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 Customers and Professionals.

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.\6\ 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. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2012-001 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-2012-001. 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

[[Page 2108]]

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-2012-001 and should 
be submitted on or before February 3, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-529 Filed 1-12-12; 8:45 am]
BILLING CODE 8011-01-P