[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Notices]
[Pages 8321-8322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3330]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66356; File No. SR-BX-2012-007]
Self-Regulatory Organizations; NASDAQ OMX BX; Notice of Filing
and Immediate Effectiveness of a Proposal To Permit Customer Cross
Orders on BOX
February 8, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on January 26, 2012, NASDAQ OMX BX (the ``Exchange'') filed with
the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been substantially prepared by the Exchange. The Exchange
has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\
which renders the proposal effective upon filing with the Commission.
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.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend Chapter V, Section 14(c) (Doing
Business on BOX-Order Entry) and Supplementary Material .01 to Chapter
V, Section 17 (Customer Orders), of the Rules of the Boston Options
Exchange Group, LLC (``BOX'') to permit Customer Cross Orders.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.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 the
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
Chapter V, Section 14(c) of the BOX Rules designates the order
types that may be submitted to the Trading Host. The purpose of this
proposal is to amend the definition of Order Entry to include Customer
Cross Orders. In particular, the Exchange proposes to add the
definition of a Customer Cross Order as new Section 14(c)(vii),
specifying that a Customer Cross Order is comprised of a non-
Professional, Public Customer Order to buy and a non-Professional,
Public Customer Order to sell at the same price and for the same
quantity. The Exchange also proposes to specify that Customer Cross
Orders be automatically executed upon entry provided that the execution
is between the best bid and offer on BOX (``BBO'') and will not trade-
through the national best bid or offer (``NBBO'').
The proposed rule also specifies that Customer Cross Orders entered
at a price that is outside the BBO or the NBBO will be automatically
canceled, and that Customer Cross Orders may only be entered in the
regular trading increments applicable to the options class under
Chapter V, Section 6 of the BOX Rules.
Finally, the proposal specifies that Supplementary Material .01 to
Chapter V, Section 17 of the BOX Rules, which prohibits an Options
Participant from being a party to any arrangement designed to
circumvent the requirements applicable to executing agency orders as
principal, applies to the entry and execution of Customer Cross Orders.
In this respect, the Exchange proposes to amend Supplementary Material
.01 to Chapter V, Section 17 to specifically reference affiliates of
Options Participants, which is consistent with how BOX has interpreted
the provision.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of Section 6(b) of the Act,\4\ in general, and
Section 6(b)(5) of the Act,\5\ in particular. Specifically, the
Exchange believes that the proposed rule change is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to facilitate transactions in
securities, to remove impediments to and perfect the mechanism for a
free and open market and a national market system and, in general, to
protect investors and the public interest. In particular, the Exchange
believes that the proposed rule change provides for the efficient entry
and execution of Customer Cross Orders while also protecting orders at
the best prices on the BOX Book.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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The Exchange notes that a similar filing proposed by the
International Securities Exchange, LLC (``ISE'') became effective July
7, 2009.\6\ The Exchange would like to similarly offer BOX Options
Participants the opportunities associated with Customer
[[Page 8322]]
Cross Orders. BOX believes that this proposed rule change, which is
essential for competitive purposes and to promote a free and open
market for the benefit of investors, does not raise any new, unique or
substantive issues from those raised in the effective ISE filing.
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\6\ See Securities Exchange Act Release No. 60253 (July 7, 2009)
74 FR 34063 (July 14, 2009) (SR-ISE-2009-34) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Regarding Customer
Cross Orders).
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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
This proposed rule change is filed pursuant to paragraph (A) of
section 19(b)(3) of the Exchange Act \7\ and Rule 19b-4(f)(6)
thereunder.\8\ This proposed rule change does not significantly affect
the protection of investors or the public interest, does not impose any
significant burden on competition, and, by its terms, does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest.\9\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ As required under Rule 19b-4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file
the proposed rule change along with a brief description and the text
of the proposed rule change, at least five business days prior to
the date of filing of the proposed rule change, or such shorter time
as designated by the Commission.
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A similar filing proposed by the International Securities Exchange,
LLC (``ISE'') became effective July 7, 2009.\10\ The Exchange would
like to similarly offer BOX Options Participants the opportunities
associated with Customer Cross Orders. BOX believes that this proposed
rule change, which is essential for competitive purposes and to promote
a free and open market for the benefit of investors, does not raise any
new, unique or substantive issues from those raised in the effective
ISE filing.
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\10\ See Securities Exchange Act Release No. 60253 (July 7,
2009) 74 FR 34063 (July 14, 2009) (SR-ISE-2009-34) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Regarding
Customer Cross Orders).
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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.
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-2012-007 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-2012-007. 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 10:00 a.m. and 3:00 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-2012-007, and should be submitted on
or before March 6, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3330 Filed 2-13-12; 8:45 am]
BILLING CODE 8011-01-P