[Federal Register Volume 77, Number 155 (Friday, August 10, 2012)]
[Notices]
[Pages 47886-47887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-19607]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67593; File No. SR-BX-2012-058]


 Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
BX's Fee Schedule Governing Order Routing

August 6, 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 July 31, 2012, NASDAQ OMX BX, Inc. (``BX'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') a 
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 the 
Substance of the Proposed Rule Change

    BX proposes to modify BX's fee schedule governing order routing. BX 
will implement the proposed change on August 1, 2012. The text of the 
proposed rule change is available at http://nasdaqomxbx.cchwallstreet.com/, at BX's principal office, 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 self-regulatory organization 
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 those statements may be examined at 
the places specified in Item III [sic] below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts 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 making a minor modification to the schedule governing fees 
for use of its routing services. Effective August 1, 2012, the NASDAQ 
OMX PSX (``PSX'') facility of NASDAQ OMX PHLX LLC (``Phlx'') is 
increasing the fees that it charges for accessing liquidity.\3\ 
Accordingly, BX is making conforming changes to the fees that it 
charges for routing orders to PSX. Under the modified fee schedule, BX 
will charge $0.0030 per share executed for orders that use the BSTG or 
BSCN routing strategies \4\ (the same fee charged for routing to all 
venues other than the New York Stock Exchange (``NYSE'')), $0.0035 per 
share executed for orders that use the BMOP routing strategy (the same 
fee charged for routing to all venues other than NYSE), and will pass

[[Page 47887]]

through fees charged by PSX for orders that use the BTFY or BCRT 
routing strategies.
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    \3\ See SR-Phlx-2012-102 (July 31, 2012). In making this change, 
Phlx undid a pricing change made for July 2012 and reverted to the 
pricing in effect prior to July 2, 2012. See Securities Exchange Act 
Release No. 67387 (July 10, 2012), 77 FR 41838 (July 16, 2012) (SR-
Phlx-2012-87). Similarly, BX adjusted its routing fees in July 2012 
to reflect the change made by Phlx and is now reverting to the fees 
formerly in effect. See Securities Exchange Act Release No. 67386 
(July 10, 2012), 77 FR 41840 (July 16, 2012) (SR-BX-2012-044).
    \4\ The functionality of BX's various routing strategies is 
explained in BX Rule 4758.
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2. Statutory Basis
    BX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\5\ in general, and with Sections 
6(b)(4) and (5) of the Act,\6\ 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, and is not designed to permit 
unfair discrimination between customers, issuers, brokers or dealers. 
All similarly situated members are subject to the same fee structure, 
and access to BX is offered on fair and non-discriminatory terms. The 
change is reasonable because the proposed fee for routing orders to PSX 
reflects the increase in the fee that will be charged by PSX to BX with 
respect to such orders.\7\ The change is consistent with an equitable 
allocation of fees because it will bring the economic attributes of 
routing orders to PSX in line with the cost of executing orders there. 
Finally, the change is not unfairly discriminatory because it solely 
applies to members that opt to route orders to PSX.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4) and (5).
    \7\ Depending on the listing venue of the security, BX will be 
charged either $0.0019 or $0.0027 per share executed. BX believes 
that it is appropriate to charge a markup with respect to routed 
orders to reflect the costs of offering routing services and the 
value of such services. Although the amount of the markup varies 
depending on the listing venue of the security and the routing 
strategy employed, BX believes that it is not inappropriate to 
establish uniform fees for particular routing strategies, with a 
goal of reflecting the complexity of the routing strategies and 
allowing BX to recoup the fees charged by the venues to which BX 
routes and a share of the fixed costs of operating these services, 
and earning a return.
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    Finally, BX notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. In such an 
environment, BX must continually adjust its fees to remain competitive 
with other exchanges and with alternative trading systems that have 
been exempted from compliance with the statutory standards applicable 
to exchanges. BX believes that the proposed rule change reflects this 
competitive environment because it is designed to ensure that the 
charges for use of the BX routing facility to route to PSX reflect an 
increase in the cost of such routing.

B. Self-Regulatory Organization's Statement on Burden on Competition

    BX 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. Because the market 
for order execution is extremely competitive, members may readily opt 
to disfavor BX's routing services if they believe that alternatives 
offer them better value. The proposed change is designed to ensure that 
the charges for use of the BX routing facility to route to PSX reflect 
an increase in the cost of such routing, thereby ensuring that it does 
not incur a loss when routing to PSX.

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.\8\ 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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    \8\ 15 U.S.C. 78s(b)(3)(a)(ii). [sic]
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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-2012-058 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-2012-058. 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 on 
official business days between the hours of 10 a.m. and 3 p.m. Copies 
of such filing also will be available for inspection and copying at the 
principal offices 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-2012-058, and should be submitted on or before August 
31, 2012.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19607 Filed 8-9-12; 8:45 am]
BILLING CODE 8011-01-P