[Federal Register Volume 76, Number 103 (Friday, May 27, 2011)]
[Notices]
[Pages 30984-30986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13148]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64534; File No. SR-NASDAQ-2011-069]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Routing Fees
May 23, 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 May 19, 2011, The NASDAQ Stock Market LLC (``NASDAQ'' 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 [sic] 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.
While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
June 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.
* * * * *
[[Page 30985]]
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
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, 0.24 0.55 0.55 0.26
MNX ETFs, ETNs & HOLDRs........................
C2.............................................. 0.31 0.55 0.55 0.46
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
[C2]............................................ [$0.21] [$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.
* * * * *
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 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
Customer Routing Fees for orders routed to the C2 Options Exchange,
Inc. (``C2'').
The Exchange currently assesses the following Routing Fees to route
orders to C2: A Customer is assessed $0.21 per contract; a Firm is
assessed $0.55 per contract; a Market Maker is assessed $0.55 per
contract; and a Professional is assessed $0.46 per contract. The
Exchange is proposing to amend the Customer Routing Fee to C2 from
$0.21 per contract to $0.31 per contract. The other C2 Routing Fees for
Firms, Market Makers and Professionals would remain the same.
C2 recently amended its Fees Schedule to increase its public
customer taker fee from $.15 to $.25. The Exchange is proposing to
amend its Customer Routing Fee to C2 to account for this increase.\3\
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 orders are routed to C2.\4\
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\3\ See Securities Exchange Act Release No. 64390 (May 4, 2011),
76 FR 27117 (May 10, 2011) (SR-C2-2011-011).
\4\ The Exchange is proposing to recoup the $.25 per contract
public customer transaction fee for orders routed to C2 along with
the $0.06 clearing fee which is incurred by the Exchange, as
explained above. See C2 Fees Schedule.
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In addition, the Exchange proposes to amend the Routing Fees in
Rule 7050 to reorder the Routing Fees, specifically to move C2 after
CBOE for ease of reference. While fee changes pursuant to this proposal
are effective upon filing, the Exchange has designated these changes to
be operative on June 1, 2011.
2. Statutory Basis
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\5\ in general, and with Section
6(b)(4) 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 NASDAQ operates or controls.
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\5\ 15 U.S.C. 78f.
\6\ 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
orders to C2 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
public customer transaction fee assessed by C2, plus clearing fees for
the execution of Customer orders. The Exchange also believes that the
proposed Routing Fee is equitable because it would be uniformly applied
to all Customers.
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
[[Page 30986]]
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 \7\ and paragraph (f)(2) of Rule 19b-4\8\
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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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 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 e-mail to [email protected]. Please include
File Number SR-NASDAQ-2011-069 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-2011-069. This
file number should be included on the subject line if e-mail 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 such 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 No. SR-NASDAQ-
2011-069 and should be submitted on or before June 17, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-13148 Filed 5-26-11; 8:45 am]
BILLING CODE 8011-01-P