[Federal Register Volume 78, Number 38 (Tuesday, February 26, 2013)]
[Notices]
[Pages 13105-13107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04350]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68950; File No. SR-BX-2013-014]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
a Pricing Clarification
February 19, 2013.
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 February 7, 2013, 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 add references to certain terms in Chapter
XV, entitled ``Options Pricing.'' The Exchange also proposes to make a
technical amendment to Section 2 entitled ``BX Options Market--Fees and
Rebates.''
The text of the proposed rule change is also 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
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 this filing is to add certain references to Chapter
XV in order to provide greater clarity to the terms used throughout
this Chapter for the purpose of assessing fees and paying rebates.
Specifically, the Exchange proposes to add the terms ``Customer,''
``BX Options Market Maker,'' ``Non-BX Options Market Maker,'' ``Firm,''
``Professional,'' and ``Broker-Dealer'' to Chapter XV to provide
guidance on how the Exchange applies the fees and rebates in Chapter XV
to these categories of market participants. The Exchange proposes to
state that the term ``Customer'' or (``C'') applies to any transaction
that is identified by a Participant for clearing in the Customer range
at The Options Clearing Corporation (``OCC'') which is not for the
account of a broker or dealer or for the account of a ``Professional''
(as that term is defined in Chapter I, Section 1(a)(48)). The Exchange
proposes to state that the term ``BX Options Market Maker'' or (``M'')
is a Participant that has registered as a Market Maker on BX Options
pursuant
[[Page 13106]]
to Chapter VII, Section 2, and must also remain in good standing
pursuant to Chapter VII, Section 4. In order to receive BX Options
Market Maker pricing in all securities, the Participant must be
registered as a BX Options Market Maker in at least one security. The
Exchange proposes to state that the term ``Non-BX Options Market
Maker'' or (``O'') is a registered market maker on another options
exchange that is not a BX Options Market Maker. A Non-BX Options Market
Maker must append the proper Non-BX Options Market Maker designation to
orders routed to BX Options. The Exchange proposes to state that the
term ``Firm'' or (``F'') applies to any transaction that is identified
by a BX Options Participant for clearing in the Firm range at OCC. The
Exchange proposes to state that the term ``Professional'' or (``P'')
means any person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in listed options per
day on average during a calendar month for its own beneficial
account(s) pursuant to Chapter I, Section 1(a)(48). All Professional
orders shall be appropriately marked by BX Options Participants.
Finally, the Exchange proposes to state that the term ``Broker-Dealer''
or (``B'') applies to any transaction which is not subject to any of
the other transaction fees applicable within a particular category. The
order capacity codes, ``C,'' ``M,'' ``O,'' ``F,'' ``P,'' and ``B'' are
codes that have been established by the Exchange related to the order
entry ports using the Financial Information Exchange (``FIX'')
protocol.
The Exchange also proposes to define the terms ``adding liquidity''
and ``removing liquidity'' for purposes of Chapter XV, Section 2(1)
pricing. Specifically, the Exchange proposes to state that ``[w]ith
respect to Chapter XV, Sections 2(1) and (2), the order that is
received by the trading system first in time shall be considered an
order adding liquidity and an order that trades against that order
shall be considered an order removing liquidity.'' The Exchange
believes that specifying which orders are considered adding and which
orders are considered removing liquidity would further clarify BX
Options' pricing. The Exchange also proposes to remove Section 2(3) of
Chapter XV, which is currently reserved, and renumber Section 2(4) as
Section 2(3).
2. Statutory Basis
BX believes that its proposal to amend Chapter XV of the Rules to
add references to various terms is consistent with Section 6(b) of the
Act \3\ in general, and furthers the objectives of Section 6(b)(5) of
the Act \4\ in particular. The Exchange's proposal to clarify its
pricing is intended to provide additional guidance to market
participants with respect to the application of fees and rebates in
Chapter XV, similar to other options exchanges.\5\ Further, the
Exchange also proposes to provide clarification regarding the manner in
which the Exchange applies fee and rebates for adding and removing. The
Exchange believes the addition of these references will provide
additional transparency to Chapter XV of the Exchange's Rules.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4) and (5) [sic].
\5\ See NASDAQ OMX PHLX LLC's Pricing Schedule. See also the
International Securities Exchange, LLC's Fee Schedule.
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The Exchange does not believe that there is confusion among market
participants with respect to the terms described herein, but rather
that the addition of these terms to Chapter XV would serve to provide
transparency and guidance to the benefit of all market participants.
The Exchange believes that the proposal is consistent with Section
6(b)(5) in that it is designed to promote just and equitable principles
of trade, 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, by clarifying what fees and
rebate in Chapter XV apply to certain transactions and market
participants.
The Exchange is not amending the manner in which it applies pricing
to various Participants. The proposed terms merely codify the manner in
which the Exchange assesses fees and pays rebates today. Similarly, the
manner in which fees and rebates for adding and removing liquidity are
applied is not changing but merely codified by the addition of the
terms to Chapter XV.
The Exchange's renumbering of Section 2(4) is merely a technical
amendment to the pricing.
B. Self-Regulatory Organization's Statement on Burden on Competition
BX 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. The Exchange is merely filing this
clarification to specify how certain fees and rebates in Chapter XV are
applied to market participants. The Exchange believes that this
clarification will provide greater transparency to market participants.
The Exchange does not believe that this amendment creates intramarket
competition among Participants as it is applied uniformly to all
Participants. The Exchange believes that clarifying the applicability
of certain fees and rebates for adding and removing liquidity within
the Pricing Schedule provides market participants clear guidance.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
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)(ii) of the Act \6\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(a)(ii).
\7\ 17 CFR 240.19b-4(f)(6).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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. The Exchange has
provided the Commission written notice of its 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
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 13107]]
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-2013-014 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-2013-014. 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 such filing also will be available
for inspection and copying at the principal office 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-2013-014, and should be
submitted on or before March 19, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-04350 Filed 2-25-13; 8:45 am]
BILLING CODE 8011-01-P