8310 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. 

16For 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). 

17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5A Member is any registered broker or dealer that 

has been admitted to membership in the Exchange. 

6See Securities Exchange Act Release No. 66100 

(January 4, 2012), 77 FR 1532 (January 10, 2012) 

(SR–Phlx–2011–185) (notice of filing and 

immediate effectiveness of proposal to modify fees, 

including an increase to the Customer Fee for 

Removing Liquidity from $0.29 per contract to 

$0.31 per contract); Securities Exchange Act Release 

No. 65940 (December 12, 2011), 76 FR 78322 

(December 16, 2011) (SR–Phlx–2011–162) (notice of 

filing and immediate effectiveness of proposal to 

modify fees, including an increase to the Customer 

Act 14 and Rule 19b–4(f)(6) 15

thereunder. 

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because the proposed rule change 

presents no novel issues, and the BX 

members are currently subject to FINRA 

Rule 4360. Therefore, the Commission 

designates the proposal operative upon 

filing.16

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 rule-comments@

sec.gov. Please include File Number SR– 

BX–2012–008 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–2012–008. 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–BX– 

2012–008 and should be submitted on 

or before March 6, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–3333 Filed 2–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66358; File No. SR–BATS– 

2012–006] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

February 8, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

1, 2012, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange has designated the proposed 

rule change as one establishing or 

changing a member due, fee, or other 

charge imposed by the Exchange under 

Section 19(b)(3)(A)(ii) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposed rule change 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes [sic] amend 

the fee schedule applicable to 

Members 5 and non-members of the 

Exchange pursuant to BATS Rules 

15.1(a) and (c). Changes will become 

operative on February 1, 2012. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.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 parts 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 proposes to modify the 

‘‘Options Pricing’’ section of its fee 

schedule to change pricing with respect 

to orders routed to NASDAQ OMX 

PHLX LLC (‘‘PHLX’’). PHLX has 

recently introduced increases to its rates 

to remove liquidity in specified 

symbols 6 identified by the Exchange as 

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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices 8311 

Fee for Removing Liquidity from $0.25 per contract 

to $0.29 per contract). 7As defined on the fee schedule, Make/Take 

pricing refers to executions at the identified 

exchange under which ‘‘Post Liquidity’’ or ‘‘Maker’’ 

rebates (‘‘Make’’) are credited by that exchange and 

‘‘Take Liquidity’’ or ‘‘Taker’’ fees (‘‘Take’’) are 

charged by that exchange. 

8See Options Trader Alert #2012–4, ‘‘PHLX and 

NOM Announce Updated Pricing for Customer 

Orders,’’ January 25, 2012. 

9As defined on the Exchange’s fee schedule, a 

Customer order refers to an order identified by a 

Member for clearing in the Customer range at the 

Options Clearing Corporation (‘‘OCC’’), excluding 

any transaction for a ‘‘Professional’’ as defined in 

Exchange Rule 16.1. 

10The term ‘‘Professional’’ is defined in Exchange 

Rule 16.1 to mean any person or entity that (A) is 

not a broker or dealer in securities, and (B) places 

more than 390 orders in listed options per day on 

average during a calendar month for its own 

beneficial account(s). 

11As defined on the Exchange’s fee schedule, the 

terms ‘‘Firm’’ and ‘‘Market Maker’’ apply to any 

transaction identified by a member for clearing in 

the Firm or Market Maker range, respectively, at the 

OCC. 

12As defined on the fee schedule, Make/Take 

pricing refers to executions at the identified 

exchange under which ‘‘Post Liquidity’’ or ‘‘Maker’’ 

rebates (‘‘Make’’) are credited by that exchange and 

‘‘Take Liquidity’’ or ‘‘Taker’’ fees (‘‘Take’’) are 

charged by that exchange. 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(4). 

15 15 U.S.C. 78s(b)(3)(A)(ii). 

16 17 CFR 240.19b–4(f)(2). 

Make/Take issues (identified as ‘‘Select 

Symbols’’ at PHLX).7 Further, PHLX has 

recently announced an increase to its 

current fee of $0.31 per contract to $0.39 

per contract for customer orders that 

remove liquidity in Make/Take issues.8

The Exchange currently charges certain 

flat rates for routing to other options 

exchanges that have been placed into 

three groups based on the approximate 

cost of routing to such venues. The 

grouping of away options exchanges is 

based on the cost of transaction fees 

assessed by each venue as well as costs 

to the Exchange for routing (i.e., clearing 

fees, infrastructure costs, etc.). The 

Exchange currently assesses fees of 

$0.30 per contract for Customer 9 orders 

and $0.55 per contract for 

Professional,10 Firm or Market Maker 11

orders routed to PHLX in Make/Take 

issues.12 At the current rates, the 

Exchange is not currently covering its 

costs on Customer orders routed to 

PHLX in Make/Take issues, based on 

the existing base rate of $0.31 per 

contract plus additional costs incurred 

by the Exchange. With the proposal by 

PHLX to increase fees for Customer 

orders that remove liquidity to $0.39 per 

share, the Exchange will be even further 

from the cost of routing customer orders 

to PHLX if the Exchange continues to 

charge $0.30 per contract. In order to 

better approximate the cost to the 

Exchange of routing Customer orders to 

PHLX, the Exchange proposes to place 

PHLX in the away options exchange 

grouping along with the Nasdaq Options 

Market (‘‘NOM’’), C2 Options Exchange, 

Incorporated (‘‘C2’’), and NYSE Arca 

Options (‘‘Arca’’) in Make/Take issues. 

Accordingly, the Exchange proposes to 

charge a fee of $0.50 per contract for 

Customer orders and to continue to 

charge $0.55 per contract for 

Professional, Firm, or Market Maker 

orders routed to and executed at PHLX. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6 of the Act.13

Specifically, the Exchange believes that 

the proposed rule change is consistent 

with Section 6(b)(4) of the Act,14 in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among members and other 

persons using any facility or system 

which the Exchange operates or 

controls. The Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive. The 

Exchange also notes that with respect to 

the change proposed in this filing, 

although routing options are available to 

all Users, Users are not required to use 

the Exchange’s routing services, but 

instead, the Exchange’s routing services 

are completely optional. Members can 

manage their own routing to different 

options exchanges or can utilize a 

myriad of other routing solutions that 

are available to market participants. 

The Exchange believes that its 

proposal to modify routing fees to PHLX 

is reasonable because the modified fee 

is a better approximation of the cost to 

the Exchange for routing Customer 

orders to PHLX. The Exchange believes 

that its flat fee structure for orders 

routed to various venues is a fair and 

equitable approach to pricing, as it 

provides certainty with respect to 

execution fees at groups of away options 

exchanges. Under its flat fee structure, 

the Exchange has previously operated at 

a slight loss for Customer orders routed 

to and executed at PHLX. The Exchange 

believes that the proposed change will 

allow it to recoup and better cover its 

costs of providing routing services going 

forward. The Exchange also believes 

that the proposed fees for orders routed 

to and executed at PHLX are fair and 

equitable and not unreasonably 

discriminatory in that they apply 

equally to all Exchange Users. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A)(ii) of 

the Act 15 and Rule 19b–4(f)(2) 

thereunder,16 the Exchange has 

designated this proposal as establishing 

or changing a due, fee, or other charge 

applicable to the Exchange’s Members 

and non-members, which renders the 

proposed rule change effective upon 

filing. 

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 rulecomments@sec.gov. Please include File 

Number SR–BATS–2012–006 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–BATS–2012–006. 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 

mstockstill on DSK4VPTVN1PROD with NOTICES

8312 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices 

17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Penny Pilot was established in March 2008 

and in October 2009 was expanded and extended 

through June 30, 2012. See Securities Exchange Act 

Release Nos. 57579 (March 28, 2008), 73 FR 18587 

(April 4, 2008) (SR–NASDAQ–2008–026) (notice of 

filing and immediate effectiveness establishing 

Penny Pilot); 60874 (October 23, 2009), 74 FR 56682 

(November 2, 2009) (SR–NASDAQ–2009–091) 

(notice of filing and immediate effectiveness 

expanding and extending Penny Pilot); 60965 

(November 9, 2009), 74 FR 59292 (November 17, 

2009) (SR–NASDAQ–2009–097) (notice of filing 

and immediate effectiveness adding seventy-five 

classes to Penny Pilot); 61455 (February 1, 2010), 

75 FR 6239 (February 8, 2010) (SR–NASDAQ– 

2010–013) (notice of filing and immediate 

effectiveness adding seventy-five classes to Penny 

Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10, 

2010) (SR–NASDAQ–2010–053) (notice of filing 

and immediate effectiveness adding seventy-five 

classes to Penny Pilot); 65969 (December 15, 2011, 

76 FR 79268 (December 21, 2011) (SR–NASDAQ– 

2011–169) (notice of filing and immediate 

effectiveness extension and replacement of Penny 

Pilot). See also Exchange Rule Chapter VI, Section 

5. 

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 

will also 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–BATS– 

2012–006 and should be submitted on 

or before March 6, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–3332 Filed 2–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66360; File No. SR– 

NASDAQ–2012–022] 

Self-Regulatory Organizations; 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Options Fees 

February 8, 2012. 

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 January 

31, 2012, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by NASDAQ. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The NASDAQ Stock Market LLC 

proposes to modify Chapter XV, entitled 

‘‘Option Fees,’’ at Sec. 2 governing 

pricing for NASDAQ members using the 

NASDAQ Options Market (‘‘NOM’’), 

NASDAQ’s facility for executing and 

routing standardized equity and index 

options. Specifically, NOM proposes to 

amend the applicability of the Customer 

Rebate to Add Liquidity and Fee for 

Removing Liquidity for the Penny Pilot 3

Options (‘‘Penny Options’’). 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

on February 1, 2012. 

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. 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 proposes to modify Chapter 

XV, entitled ‘‘Option Fees,’’ at Sec. 2 

governing the rebates and fees assessed 

for option orders entered into NOM. 

Specifically, the Exchange is proposing 

to modify the four tier structure for 

paying Customer Rebates to Add 

Liquidity in Penny Pilot Options. The 

Exchange proposes to increase the tiers 

to five tiers and further incentivize 

NOM Participants to route Customer 

orders to the Exchange by paying an 

additional rebate for certain orders after 

the NOM Participant has met a volume 

criteria. The Exchange believes that 

incentivizing NOM Participants to send 

additional Customer orders to the 

Exchange will benefit all market 

participants by adding liquidity to the 

market. 

Specifically, the Exchange currently 

pays a Customer Rebate to Add 

Liquidity in Penny Pilot Options based 

on the following tier structure: 

Monthly volume Rebate to add 

liquidity 

Tier 1 ................. Participant adds Customer liquidity of up to 49,999 contracts per day in a month ........................................ $0.26 

Tier 2 ................. Participant adds Customer liquidity of 50,000 or more contracts per day in a month .................................... 0.42 

Tier 3 a ............... Participant adds (1) Customer liquidity of 100,000 or more contracts per day in a month, and (2) NOM 

Market Maker liquidity of 40,000 or more contracts per day in a month.

0.43 

mstockstill on DSK4VPTVN1PROD with NOTICES