[Federal Register Volume 77, Number 198 (Friday, October 12, 2012)]
[Notices]
[Pages 62293-62295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25084]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67997; File No. SR-NASDAQ-2012-112]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Inbound Routing From an Affiliated Exchange
October 5, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\
[[Page 62294]]
notice is hereby given that, on September 28, 2012, The NASDAQ Stock
Market LLC (the ``NASDAQ'' or ``Exchange'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II 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 continue to accept inbound orders routed
by Nasdaq Execution Services LLC (``NES'') from both the NASDAQ OMX PSX
facility (``PSX'') of NASDAQ OMX PHLX LLC (``PHLX'') as well as from
the NASDAQ OMX BX Equities Market of NASDAQ OMX BX, Inc. (``BX''), as
described further below, for an additional six month period. The text
of the proposed rule change is available at http://nasdaq.cchwallstreet.com, at the Exchange'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 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
Currently, NES is the approved outbound routing facility of BX and
PSX, providing outbound routing to other market centers.\3\ The
Exchange, BX and PSX have previously adopted rules to permit NASDAQ to
receive inbound routes of certain orders by NES in its capacity as an
order routing facility of BX and PSX.\4\ The Exchange specifically has
adopted a rule to prevent potential informational advantages resulting
from the affiliation between NASDAQ and NES, as related to NES's
authority to route certain orders from BX and PSX to NASDAQ.\5\ NES's
authority to route these orders to NASDAQ is subject to a pilot period
ending October 6, 2012.\6\ The Exchange hereby seeks to extend the
previously approved pilot period (with the attendant obligations and
conditions) for an additional six months, through March 30, 2013.
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\3\ BX Rule 4758(b) and PHLX Rule 3315(b).
\4\ See Securities Exchange Act Release Nos. 65554 (October 13,
2011), 76 FR 65311 (October 20, 2011) (SR-NASDAQ-2011-142); 65470
(October 3, 2011), 76 FR 62489 (October 7, 2011) (SR-BX-2011-048);
and 65469 (October 3, 2011), 76 FR 62486 (October 7, 2011) (SR-Phlx-
2011-108).
\5\ See NASDAQ Rule 2160(c).
\6\ See Securities Exchange Act Release No. 65554 (October 13,
2011), 76 FR 65311 (October 20, 2011) (SR-NASDAQ-2011-142).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\7\ in general, and with
Sections 6(b)(5) of the Act,\8\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Specifically,
the proposed rule change will allow NASDAQ to continue to receive
inbound routes of equities orders from NES, acting in its capacity as a
facility of PHLX or BX, in a manner consistent with prior approvals and
established protections. The Exchange believes that extending the
previously approved pilot period for six months is a sufficient length
of time to permit both the Exchange and the Commission to assess the
impact of the Exchange's authority to permit it to receive inbound
routes of certain orders via NES (including the attendant obligations
and conditions).
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(5).
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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
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
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
Because the foregoing 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 from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and 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. The
Exchange has satisfied this requirement.
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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest because such waiver would allow the pilot period to be
extended without undue delay through March 30, 2013.\11\ Accordingly,
the Commission hereby grants the Exchange's request and designates the
proposal operative upon filing.\12\
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\11\ See SR-NASDAQ-2012-112, Item 7.
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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:
[[Page 62295]]
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-NASDAQ-2012-112 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-2012-112. 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
a.m. and 3 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-NASDAQ-2012-112 and should
be submitted on or before November 2, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25084 Filed 10-11-12; 8:45 am]
BILLING CODE 8011-01-P