[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