[Federal Register Volume 78, Number 91 (Friday, May 10, 2013)]
[Notices]
[Pages 27464-27466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11173]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69522; File No. SR-BX-2013-034]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Its
Schedule of Fees and Rebates for Execution of Orders for Securities
Priced at $1 or More Under Rule 7018
May 6, 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 April 30, 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 changes to its schedule of fees and rebates
for execution of orders for securities priced at $1 or more under Rule
7018. While these amendments are effective upon filing, the Exchange
has designated the proposed amendments to be operative on May 1, 2013.
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
[[Page 27465]]
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
The Exchange is proposing minor adjustments to the fees that it
charges members for executed orders that provide liquidity through the
NASDAQ OMX BX Equities System.\3\ Currently, BX charges $0.0018 per
share executed for displayed orders that provide liquidity unless a
more favorable rate applies.\4\ Effective May 1, 2013, BX proposes to
increase this fee to $0.0020 per share executed. BX will, however,
continue to charge the $0.0018 per share executed fee for a displayed
order that provides liquidity if entered through a BX MPID through
which the member provides an average daily volume of 4 million or more
shares of liquidity during the month.
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\3\ Like the EDGA Exchange and the BATS-Y Exchange, BX charges
for execution of orders that provide liquidity and provides a credit
for execution of orders that access liquidity.
\4\ Specifically, the applicable charge is $0.0015 per share
executed for a member entering an order through a market participant
identifier (``MPID'') that is eligible for the Exchange's Qualified
Liquidity Provider program. A member seeking to qualify an MPID for
the program must achieve certain requirements pertaining to volume
and time at the national best bid/best offer (``NBBO''), as
specified in Rule 7018. BX also charges $0.0015 per share executed
for midpoint pegged orders that provide liquidity, but charges
$0.0025 per share executed for other non-displayed orders that
provide liquidity.
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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 6(b)(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.
The change to introduce a volume requirement with respect to the
current $0.0018 per share executed rate for displayed orders that
provide liquidity, and the increase in the applicable rate for
displayed orders that do not meet the volume requirement, is reasonable
because the applicable increase is only $0.0002 per share executed, and
the volume requirement associated with maintaining the existing fee is
a modest 4 million shares per day, or 0.067% of total consolidated
volume on a trading day with total consolidated volume of 6 billion
shares. Moreover, the Exchange continues to offer an even more
favorable charge to members using midpoint pegged orders, which may be
used by all members, regardless of volume. The change is consistent
with an equitable allocation of fees because it is consistent with the
established practice at a number of national securities exchanges of
providing more favorable fee economics to members that contribute to
market quality and the Exchange's market share by achieving certain
volume requirements. In this instance, the Exchange's practice of
paying a credit to members accessing liquidity gives liquidity
providers a greater assurance of speedy execution. A member that
provides a comparatively large volume of liquidity is demonstrating its
commitment to the viability of BX's market model by posting orders at
prices that attract members seeking liquidity. Accordingly, BX believes
that it is equitable for the fees charged to such a member to be more
favorable than the fees charged to members providing lower volumes of
liquidity. The Exchange further believes that the change is not
unfairly discriminatory because the associated volume requirements are
not very high and because the Exchange provides an alternative means of
paying a lower fee for orders that provide liquidity.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4) and (5).
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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. 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, or rebate opportunities available at
other venues to be more favorable. 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.
Because competitors are free to modify their own fees in response, and
because market participants may readily adjust their order routing
practices, BX believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited. In
this instance, although the proposed change imposes a volume condition
on the availability of a fee of $0.0018 per share executed for
displayed orders that provide liquidity and raises the fee for members
not meeting the volume condition, the volume condition is not markedly
high and the fee increase is only $0.0002. Moreover, if the changes are
unattractive to market participants, it is likely that BX will lose
market share as a result. Accordingly, BX does not believe that the
proposed changes will impair the ability of members or competing order
execution venues to maintain their competitive standing in the
financial markets.
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) of the Act \7\ and paragraph (f) of Rule 19b-4
thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(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:
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-2013-034 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission,
[[Page 27466]]
100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2013-034. 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 offices of BX.
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-2013-034,
and should be submitted on or before May 31, 2013.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11173 Filed 5-9-13; 8:45 am]
BILLING CODE 8011-01-P