Federal Register / Vol. 77, No. 9 / Friday, January 13, 2012 / Notices 2103 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 65899 (Dec. 

6, 2011), 76 FR 77287 (Dec. 12, 2011) (‘‘Notice’’) 

and Securities Exchange Act Release No. 65899A 

(Dec. 12, 2011), 76 FR 77865 (Dec. 14, 2011) 

(correcting a non-substantive portion of the Notice). 

4See Letter from Christopher Killian, Managing 

Director, Securities Industry and Financial Markets 

Association, to Elizabeth M. Murphy, Secretary, 

Commission, dated December 19, 2011. 

5 15 U.S.C. 78s(b)(2) (2010), amended by Section 

916 of Pub. L. 111–203, 124 Stat. 1376 (2010). 

6Because the original rule proposal was received 

by the Commission prior to the Dodd-Frank Act 

amendments to Section 19(b)(2) of the Act, the 

operative timing and procedural requirements for 

Commission action are those that applied at the 

time the Commission received the original rule 

proposal. 

7 15 U.S.C. 78s(b)(2) (2010), amended by Section 

916 of Pub. L. 111–203, 124 Stat. 1376 (2010). 

8 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66124; File No. SR–FICC– 

2008–01] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Designation of Longer Period for 

Commission Action on Proposed Rule 

Change To Allow the Mortgage-Backed 

Securities Division To Provide 

Guaranteed Settlement and Central 

Counterparty Services 

January 10, 2012. 

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

Securities Exchange Act of 1934 

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

on March 12, 2008, the Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), and on 

November 21, 2011, amended a 

proposed rule change to allow the 

Mortgage-Backed Securities Division 

(‘‘MBSD’’) to provide guaranteed 

settlement and central counterparty 

services. The proposed rule change was 

published for comment in the Federal 

Register on December 12, 2011.3 The 

Commission received one comment 

letter on the proposal.4

Prior to amendments introduced by 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (‘‘Dodd-Frank 

Act’’), Section 19(b)(2) of the Act 5

provided that, within thirty-five days of 

the publication of notice of the filing of 

a proposed rule change, or within such 

longer period as the Commission may 

designate up to ninety days of such date 

if it finds such longer period to be 

appropriate and publishes its reasons 

for so finding, the Commission shall 

either approve the proposed rule change 

or institute proceedings to determine 

whether the proposed rule change 

should be disapproved.6 The thirty-fifth 

day after publication of notice of this 

filing is Monday, January 16, 2012, a 

national holiday. The last business day 

preceding that date is Friday, January 

13, 2012. 

The proposed rule change would 

modify the rules of FICC’s MBSD to 

allow MBSD to provide guaranteed 

settlement and central counterparty 

(‘‘CCP’’) services to the mortgage-backed 

securities market. As FICC notes in the 

proposed rule change, the conversion of 

the MBSD to a CCP would increase the 

amount of risk to FICC because FICC 

would assume risk currently borne by 

bilateral counterparties in the market. 

The Commission finds it appropriate to 

designate a longer period within which 

to take action on the proposed rule 

change so that it has sufficient time to 

consider the risk management 

implications of the proposed rule 

change in light of, among other things, 

initiatives FICC proposed to develop 

under the proposed rule change and any 

other initiatives FICC may develop 

during the extended period. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,7 the Commission 

designates March 9, 2012, as the date by 

which the Commission should either 

approve or institute proceedings to 

determine whether to disapprove the 

proposed rule change. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–587 Filed 1–12–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66118; File No. SR–CHX– 

2011–33] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Add a 

Rule Regarding the Brokerplex Order 

Entry, Recordation, and Management 

System 

January 9, 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 December 

28, 2011, the Chicago Stock Exchange, 

Inc. (‘‘CHX’’ 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. CHX 

has filed the proposal pursuant to 

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

19b–4(f)(6) thereunder,4 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CHX proposes to add Article 17, Rule 

5 (Brokerplex) to include an explicit 

description of the Exchange’s 

Brokerplex order entry, recordation, and 

management system. The text of this 

proposed rule change is available on the 

Exchange’s Web site at (www.chx.com) 

and in 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 

CHX included statements concerning 

the purpose of and basis for the 

proposed rule changes and discussed 

any comments it received regarding the 

proposal. The text of these statements 

may be examined at the places specified 

in Item IV below. The CHX 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 to add 

new Rule 5 to Article 17 (Institutional 

Brokers) to set forth the terms governing 

the operation of the Brokerplex® 

system. Brokerplex is an Exchangeowned order and trade entry, 

recordation and management system 

developed and operated by the CHX for 

use by Participant Firms registered with 

the Exchange as Institutional Brokers 

under Article 17 (‘‘Institutional 

Brokers’’). The Exchange provides the 

Brokerplex trading system for use by 

Institutional Broker Representatives 

(‘‘IBRs’’), as defined in Rule 1 of this 

Article and the Interpretations and 

Policies thereto, who are affiliated with 

Institutional Brokers. Brokerplex can be 

used by IBRs to receive, transmit and 

hold orders from their clients while 

seeking execution within the CHX 

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2104 Federal Register / Vol. 77, No. 9 / Friday, January 13, 2012 / Notices 

5The Exchange is amending Article 17, Rule 3(b) 

to make explicit that use of Brokerplex satisfies the 

requirement that each Institutional Broker handle 

orders within an integrated system acceptable to the 

Exchange. 

6See infra note 12. 

7Pursuant to Section L.2. of the Exchange’s 

Schedule of Fees and Assessments, trade and order 

data is rebilled to the Participant at cost. 

8Additionally, Institutional Brokers may use the 

services of a layoff vendor, i.e., a broker-dealer or 

routing services provider to transmit orders to other 

trading centers. Those layoff vendors may offer 

additional orders types beyond those in Brokerplex 

and which are not part of this rule filing. 

Brokerplex can be used by the Institutional Broker 

to record the terms of those orders and any resulting 

executions. 

9The existing provisions in our rules regarding 

the Quote@CHX and Reprice@CHX order types are 

being moved from Interpretation and Policy .03 of 

Rule 3 of Article 17 to new Rule 5. Current 

Interpretation and Policy .04 is being renumbered 

as Interpretation and Policy .03, and certain minor 

clarifying changes within are being proposed as 

well. 

10See Article 21, Rule 6 (Submission of Clearing 

Information for Transactions Executed OffExchange). 

11The Institutional Broker would retain the 

responsibility for compliance with all applicable 

rules of FINRA or other self-regulatory organization 

with jurisdiction over that activity. 

Matching System or elsewhere in the 

National Market System.5 Brokerplex 

can be used to record trade executions 

and send transaction reports to a Trade 

Reporting Facility (‘‘TRF’’), as defined 

in FINRA Rules 6300 et seq., as 

amended from time-to-time. Brokerplex 

can also be used by IBRs to initiate 

clearing submissions to a Qualified 

Clearing Agency via the Exchange’s 

reporting systems. Reports of orders, 

executions and clearing submissions 

received, handled or submitted via 

Brokerplex are kept by the system. The 

Brokerplex system has been generally 

described in rule filings made by the 

CHX with the Commission, but the 

Exchange’s rules do not contain a 

comprehensive description of the 

system.6 In order to remove any 

potential ambiguity about the nature of 

the Exchange’s technology offerings, we 

are now proposing to add language to 

our rules which fully describes the basic 

functionality of the Brokerplex system. 

Proposed new Rule 5 provides that 

IBR users of the Brokerplex system are 

responsible for entering all 

transactional, order and other 

information into the system as required 

by CHX rules and in an accurate, timely 

and complete manner. As the operator 

of the Brokerplex system, the CHX 

retains such information on behalf of 

the Institutional Broker users in 

conformity with applicable rules and 

regulations. The Exchange provides 

such information to Institutional 

Brokers in a format designated by the 

Exchange to assist Institutional Brokers 

in processing orders and transactions, 

responding to requests for information 

from customers and regulatory bodies 

and for other legitimate business 

purposes. The Exchange charges the 

Institutional Brokers the fees specified 

in its published Schedule of Fees and 

Assessments for the retrieval of 

information.7

Brokerplex accepts and handles all of 

the order types, conditions and 

instructions accepted by the Matching 

System as specified in Article 20, Rule 

4.8 Orders may be entered into 

Brokerplex manually by an IBR or 

submitted by an Exchange-approved 

electronic connection. In addition to the 

order types accepted by the Matching 

System, Brokerplex permits the entry 

and processing of certain additional 

order types, conditions and instructions 

accepted by other market centers. 

Finally, Brokerplex accepts and 

processes certain specified orders types, 

conditions and instructions, 

specifically—Quote@CHX and 

Reprice@CHX.9

Quote@CHX. The Quote@CHX order type 

allows the Institutional Broker to submit an 

order to be priced within Brokerplex at a 

defined limit price which is one minimum 

price increment (normally 1 cent for most 

securities) from the relevant side of the 

NBBO. For buy orders, the relevant side of 

the NBBO is the offer; for sell orders it is the 

bid. An IBR handling a customer limit order 

must enter the limit price into Brokerplex as 

part of submitting a Quote@CHX order. In 

pricing the Quote@CHX, Brokerplex will 

reject any entries if the systematicallygenerated price would be outside the 

customer’s specified limit price. The 

Quote@CHX order may not be transmitted to 

destinations other than the CHX Matching 

System. The Matching System itself will not 

be eligible to receive this order type; rather, 

it will receive a standard limit order at a 

price generated by Brokerplex. 

Reprice@CHX. The Reprice@CHX order 

type allows a Brokerplex user to cancel an 

existing limit order residing in the Matching 

System and replace it with an order 

generated in the same manner as a 

Quote@CHX order type. An IBR handling a 

customer limit order must enter the limit 

price into Brokerplex as part of submitting a 

Reprice@CHX order. In pricing the 

Reprice@CHX orders, Brokerplex will reject 

any entries if the systematically-generated 

price would be outside the customer’s 

specified limit price. The Reprice@CHX 

order type may not be transmitted to 

destinations other than the CHX Matching 

System. The Matching System itself will not 

be eligible to receive this order type; rather, 

it will receive a standard limit order at a 

price generated by Brokerplex. 

As permitted by CHX rules, an IBR 

may make post-trade entries in 

Brokerplex to transfer positions from 

one Clearing Participant to one or more 

other Clearing Participants or from its 

own account to the account of a 

Clearing Participant.10

Brokerplex also provides for the 

transmission of orders to the Exchange’s 

Matching System, another trading center 

which is connected to Brokerplex, or a 

systems provider which can perform 

routing services. As directed by the 

user, Brokerplex will either send orders 

that are eligible for submission to the 

Matching System under Article 20, Rule 

4 first to the Matching System to 

execute or display and then, if they 

cannot be executed or displayed in the 

Matching System, to another destination 

according to the Institutional Broker’s 

instructions, or to another trading center 

designated by the user. Orders which 

are not eligible for submission to the 

Matching System will be directly sent to 

another destination in accordance with 

the IBR’s instructions. 

Any order entered into Brokerplex 

and sent through Brokerplex to another 

exchange or trading center via the 

provisions of this rule and which results 

in an execution shall be binding on the 

Participant on whose behalf such order 

was entered, including any access, 

transaction or other fee imposed by that 

trading center. The Institutional Broker 

will be responsible for ensuring that it 

has a relationship with its chosen 

destinations to permit the requested 

access. The Exchange shall not have 

responsibility for the handling of the 

order by the other destination, but will 

report any execution or cancellation of 

the order reported by the other 

destination to Brokerplex, and will 

notify the other venue of any 

cancellations or changes to the order 

submitted by the IBR into Brokerplex. 

An IBR may use Brokerplex to record 

the execution of a trade in the Over-theCounter (‘‘OTC’’) marketplace using 

Brokerplex.11 As directed by the IBR, 

Brokerplex will transmit an execution 

report to a Trade Reporting Facility 

designated by the Institutional Broker, 

either directly or through a service 

provider designated by the Institutional 

Broker. 

The Exchange makes clearing 

submissions for trades entered and/or 

recorded in Brokerplex as directed by an 

IBR to a Qualified Clearing Agency 

pursuant to the provisions of Article 21, 

Rules 1 (Trade Recording with a 

Qualified Clearing Agency) and 6 

(Submission of Clearing Information for 

Transactions Executed Off-Exchange), 

for CHX and non-CHX trade executions, 

respectively. These submissions can be 

made for trades executed by either an 

Institutional Broker or a third-party 

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Federal Register / Vol. 77, No. 9 / Friday, January 13, 2012 / Notices 2105 

12See Exchange Act Release No. 53772 (May 8, 

2006), 71 FR 27758 (May 12, 2006) (SR–CHX–2004– 

38). This proposal amended the Exchanges rules 

regarding the required reporting of orders and 

executions by CHX Participants. Footnote 6 

contains a basic description of the Brokerplex 

systems used at that time by CHX floor brokers to 

‘‘manage their orders, route orders to the 

Exchange’s co-specialists for execution and report 

executed trades.’’; Exchange Act Release No. 60620 

(Sept. 3, 2009), 74 FR 46814 (Sept. 11, 2009) (SR– 

CHX–2009–10). This proposal added the 

‘‘Quote@CHX’’ and ‘‘Reprice@CHX’’ order types as 

orders which could be entered into the Brokerplex 

system by Institutional Brokers in handling and 

seeking execution of their customer’s orders. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

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

16 17 CFR 240.19b–4(f)(6). 

broker dealer which in turn instructs an 

Institutional Broker to make the 

submission to clearing, including any 

substitution of Clearing Participants and 

allocation of the trade. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act in general, and 

furthers the objectives of Section 6(b)(1) 

of the Act in particular, in that it allows 

the Exchange to be organized and have 

the capacity to be able to carry out the 

purposes of the Act and to comply, and 

(subject to any rule or order of the 

Commission pursuant to section 17(d) 

or 19(g)(2) of the Act) to enforce 

compliance by its members and persons 

associated with such members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the exchange. The Brokerplex system 

has been generally described in rule 

filings made by the CHX with the 

Commission, but the Exchange’s rules 

do not contain a comprehensive 

description of the system.12 In order to 

remove any potential ambiguity about 

the nature of the Exchange’s technology 

offerings, we are now proposing to add 

language to our rules which fully 

describes the basic functionality of the 

Brokerplex system. 

In addition, the Exchange believes 

that the proposed rule change is 

consistent with Section 6(b) of the Act 

in general,13 and furthers the objectives 

of Section 6(b)(5) in particular,14 in that 

it is designed to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transaction in securities, to remove 

impediments and perfect the 

mechanisms of a free and open market, 

and, in general, to protect investors and 

the public interest by setting forth the 

rules and principles governing the use 

of Brokerplex by Institutional Brokers. 

Brokerplex is the principal system used 

by the Exchange’s Institutional Brokers 

to handle orders placed by their 

customers. Brokerplex has been 

designed specifically for use by IBRs 

and it represents a customized solution 

for those firms. The adoption of rules 

governing the use of Brokerplex will 

help facilitate the ability of Institutional 

Brokers and their IBRs to meet their 

customers’ needs. The proposed 

changes to Article 17, Rule 3 conform 

those rules to the proposed new Rule 5 

of Article 17 by transferring certain 

order types currently described in Rule 

3 and consolidating them with others 

more fully set out in new Rule 5. The 

additional language in Rule 3(b) clarifies 

that use of the Brokerplex system 

satisfies the requirement that 

Institutional Brokers utilize an 

acceptable, integrated order 

management system. Proposed Rule 5(a) 

provides a basic description of the 

Brokerplex system and the uses of that 

system. Proposed Rule 5(b) specifies the 

record retention requirements regarding 

the use of Brokerplex, which provides 

certainty to Participants on that issue. 

Proposed Rule 5(c) sets forth the order 

types accepted and processed by 

Brokerplex, including those order types 

accepted by the Exchange’s Matching 

System pursuant to Article 20, Rule 4, 

as well as additional order types which 

can be sent to other trading centers for 

execution. The specification of these 

order types helps Institutional Brokers 

and Participants who may wish to have 

their orders handled by Institutional 

Brokers understand the conditions and 

obligations associated with each 

particular order type which can by 

employed by Institutional Brokers and 

IBRs using Brokerplex. Proposed Rule 

5(d) describes the trade allocation 

process within Brokerplex which allows 

IBRs to make post-trade substitution of 

Clearing Participants pursuant to the 

provisions of CHX rules. The facilitation 

of trade allocation should assist 

Institutional Brokers in the handling of 

customer orders, in particular the 

execution and post-trade processing of 

the equities component of complex 

derivatives transactions. Proposed Rule 

5(e) permits Institutional Brokers to 

send orders to other trading centers and 

destinations. By facilitating the 

transmission of such orders when they 

cannot be executed or displayed on the 

Exchange, the proposed rule assists 

customers seeking execution of their 

orders in a prompt and fair manner. 

Proposed Rule 5(f) permits Institutional 

Brokers to use Brokerplex to execute 

trades in the OTC marketplace, 

provided that all FINRA requirements 

are satisfied. Allowing Institutional 

Brokers to use Brokerplex to execute 

trades in the OTC marketplace should 

give them additional flexibility and 

options in handling their customer’s 

orders. Brokerplex can also be used to 

submit trade reports for OTC 

transactions. Finally, the proposal 

provides that transactions reflected in 

Brokerplex be submitted to a Qualified 

Clearing Agency pursuant to Exchange 

rules, which should help ensure the 

reliable and prompt clearance and 

settlement of such transactions. 

B. Self-Regulatory Organization’s 

Statement of Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that its provision of 

an order management system for certain 

of its Participants acts as a competitive 

force, since there are a number of other 

private systems providers for order 

routing and execution systems. 

Additionally, use of an Exchangeprovided system is a benefit for smaller 

firms, since they may lack the resources 

to develop or lease a system specifically 

tailored for their needs as CHXregistered Institutional Brokers. 

C. Self-Regulatory Organization’s 

Statement on Comments Regarding 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 

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

Act 15 and Rule 19b–4(f)(6) 

thereunder,16 CHX has designated this 

proposal as one that effects a change 

that (A) Does not significantly affect the 

protection of investors or the public 

interest; (B) does not impose any 

significant burden on competition; and 

(C) will 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. CHX 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. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

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2106 Federal Register / Vol. 77, No. 9 / Friday, January 13, 2012 / Notices 

17 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 

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 Exchange 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–CHX–2011–33 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–CHX–2011–33. 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–CHX– 

2011–33 and should be submitted on or 

before February 3, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–533 Filed 1–12–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66121; File No. SR– 

NASDAQ–2012–001] 

Self-Regulatory Organizations; 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Routing Fees 

January 9, 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 3, 

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 the 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 Rule 7050, 

governing pricing for NASDAQ 

members using the NASDAQ Options 

Market (‘‘NOM’’), NASDAQ’s facility for 

executing and routing standardized 

equity and index options. 

The text of the proposed rule change 

is set forth below. Proposed new text is 

italicized and deleted text is in brackets. 

* * * * * 

7050. NASDAQ Options Market 

The following charges shall apply to 

the use of the order execution and 

routing services of the NASDAQ 

Options Market for all securities. 

* * * * * 

(4) Fees for routing contracts to 

markets other than the NASDAQ 

Options Market shall be assessed as 

provided below. The current fees and a 

historical record of applicable fees shall 

be posted on the NasdaqTrader.com 

Web site. 

Exchange Customer Firm MM Professional 

BATS ................................................................................................................ $0.[36]50 $0.55 $0.55 $0 .[48]50 

BOX ................................................................................................................. 0.06 0.55 0.55 0 .06 

CBOE ............................................................................................................... 0.06 0.55 0.55 0 .26 

CBOE orders greater than 99 contracts in NDX, MNX ETFs, ETNs & 

HOLDRs ....................................................................................................... 0.24 0.55 0.55 0 .26 

C2 .................................................................................................................... 0.50 0.55 0.55 0 .51 

ISE ................................................................................................................... 0.06 0.55 0.55 0 .24 

ISE Select Symbols* ........................................................................................ 0.18 0.55 0.55 0 .34 

NYSE Arca Penny Pilot ................................................................................... 0.50 0.55 0.55 0 .50 

NYSE Arca Non Penny Pilot ........................................................................... 0.06 0.55 0.55 0 .06 

NYSE AMEX .................................................................................................... 0.06 0.55 0.55 0 .26 

PHLX (for all options other than PHLX Select Symbols) ................................ 0.06 0.55 0.55 0 .26 

PHLX Select Symbols** ................................................................................... 0.30 0.55 0.55 0 .46 

* These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See ISE’s Schedule of Fees for the complete list of symbols that are subject to these fees. 

** These fees are applicable to orders routed to PHLX that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See PHLX’s Fee Schedule for the complete list of symbols that are subject to these fees. 

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