[Federal Register Volume 77, Number 108 (Tuesday, June 5, 2012)]
[Notices]
[Pages 33257-33258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13511]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67074; File No. SR-BX-2012-037]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
a Waiver of Fees for BX Options Participants

May 30, 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 May 18, 2012, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``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 waive certain application, membership and 
data fees for BX members seeking to participate solely in the new BX 
Options Market.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=BXRulefilings, 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
    The purpose of the proposed rule change is to waive the following 
BX fees to promote participation in the new BX Options Market: (1) 
Membership Fee; (2) Trading Rights Fee; (3) Application Fee; (4) 
testing fee; and (5) Annual Administrative Fee.
    The Exchange recently filed for approval to operate a new options 
market.\3\ The new market, called NASDAQ OMX BX Options, or BX Options, 
will be all-electronic with no physical trading floor. BX proposed to 
adopt a series of rules based on the existing rules of NOM.\4\
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    \3\ See SR-BX-2012-30.
    \4\ See SR-BX-2012-30. BX will operate an electronic trading 
system developed to trade options that will provide for the 
electronic display and execution of orders in price/time priority 
without regard to the status of the entities that are entering 
orders.
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    Persons desiring to join the new BX Options Market need to apply to 
become members of BX pursuant to BX Rules. BX Members are subject to 
various charges for membership, services and equipment as noted in the 
7000 Rules. The Exchange desires to waive certain of those fees to 
attract market participants to the new BX Options Market. BX seeks to 
implement the fee waivers immediately so that Applicants seeking to 
participate in the new BX Options market may begin submitting 
applications to the Exchange prior to the market's commencement of 
operations.
    Currently, BX members are assessed a $3,000 Membership Fee \5\ per 
year and a $500 per month trading rights fee.\6\ The Exchange also 
assesses an Application Fee of $2,000.\7\ Among other fees, the 
Exchange also currently assesses subscribers to the Exchange a fee for 
conducting tests of their Exchange access protocols connection or 
market data feeds through the Exchange's Testing Facility a fee of $300 
per port, per month.\8\ The Exchange assesses an Annual Administrative 
Fee to market data distributors that receive any proprietary Exchange 
data feed product. The amount of this fee is the higher of the delayed 
distributor fee of $500 or the real-time distributor fee of $1,000 
(which may include the delayed fee). This fee is assessed annually.
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    \5\ The Membership Fee is imposed on all persons that are 
Exchange members as of a date determined by the Exchange in December 
of each year. This fee is not refundable in the event that a person 
ceases to be an Exchange member following the date on which the fee 
is assessed. See Rule 7001. This Membership Fee is collected by the 
Financial Industry Regulatory Authority (FINRA) on behalf of the 
Exchange and would be refunded by the Exchange annually, if the fee 
is assessed to a BX Options Participant who qualified for the 
waiver.
    \6\ The Trading Rights Fee is assessed on all persons that are 
Exchange members as of a date determined by the Exchange in each 
month. This fee is not refundable in the event that a person ceases 
to be an Exchange member following the date on which the fee is 
assessed. See Rule 7001.
    \7\ The Application Fee for membership in the Exchange is non-
refundable.
    \8\ These fees do not apply to testing occasioned by new or 
enhanced services or software, modifications to services or software 
initiated by the Exchange in response to a contingency or testing by 
a new subscriber under certain circumstances. See Rule 7030.
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    The Exchange proposes to waive the Membership Fee, Trading Rights 
Fee, Application Fee, and Annual Administrative Fee for Applicants 
desiring to apply to become BX Options Market Participants, who will 
not transact business on the BX Equities Market.\9\ The proposed fee 
waivers for the Membership Fee, Trading Rights Fee and Annual 
Administrative Fee would apply also to an existing BX member if that 
member applies to transact business on the BX Options Market only and 
will no longer be conducting an equities business on BX. In this 
example, the Application Fee would not be waived because it was already 
assessed at the time the member became a BX member.

[[Page 33258]]

The waiver would also apply to a BX member who determines at a later 
date to transact business on the BX Options Market only; the 
Application Fee would not be waived in this case because it was already 
paid at the time the member became a BX member. The aforementioned 
waivers would not apply to Applicants seeking approval to participate 
solely in the BX Equities Market, or to an applicant seeking to 
participate in both the BX Equities and the BX Options Markets. In the 
event that an Applicant applies to be a BX Options Participant and 
obtains the waiver but later determines to commence an equities 
business, the BX Options Participant would be assessed the Membership 
Fee, Trading Rights Fee; testing fees; and Annual Administrative Fee 
going forward.\10\
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    \9\ New BX Options Market members would be assigned an account 
by the Membership Department.
    \10\ These members would not be assessed an Application Fee, 
which was previously waived at the time they became Exchange 
members.
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    The Exchange also proposes to waive BX Options testing fees as such 
fees are described in Rule 7030(d). The Exchange also proposes to make 
minor technical amendments to Rule 7001 to remove outdated text that 
dates back to the commencement of the BX Equities Market.
2. Statutory Basis
    The Exchange believes that its proposal to amend its fees is 
consistent with Section 6(b) of the Act \11\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \12\ in particular, in 
that it is an equitable allocation of reasonable fees and other charges 
among Exchange members and other persons using its facilities.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4).
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    The Exchange makes all services and products subject to its fees 
available on a non-discriminatory basis to similarly situated 
recipients. The proposed waivers of the Membership Fee, Trading Rights 
Fee, Application Fee, testing fee and Annual Administrative Fee are 
reasonable because the Exchange is seeking to attract market 
participants to the new BX Options Market.
    The Exchange believes that the proposed waivers of the Membership 
Fee, Trading Rights Fee, Application Fee and Annual Administrative Fee 
are equitable and not unfairly discriminatory because the waivers will 
uniformly apply to BX Options Participants that transact business 
solely on the BX Options Market. The testing fee will also be uniformly 
waived for all testing related to the BX Options market.
    The proposed technical amendments are reasonable, equitable and not 
unfairly discriminatory because the amendments remove outdated text.

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.\13\ 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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    \13\ 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-BX-2012-037 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-2012-037. 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 
10:00 a.m. and 3:00 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-2012-037 and should be 
submitted on or before June 26, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-13511 Filed 6-4-12; 8:45 am]
BILLING CODE 8011-01-P