14456 Federal Register / Vol. 77, No. 47 / Friday, March 9, 2012 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires FINRA to give 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, or such shorter time as designated by the 

Commission. The Commission has waived the fiveday prefiling requirement in this case. 

13See Securities Exchange Act Release No. 65695 

(November 4, 2011), 76 FR 70190 (November 10, 

2011) (approving FINRA–2011–051). 

14For 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). 15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3All Other Options refers to non-Penny Pilot 

options. The 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 seventyfive classes to Penny Pilot); and 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 NOM Rules, Chapter VI, 

Section 5. 

19(b)(3)(A) of the Act 11 and Rule 19b– 

4(f)(6) thereunder.12

FINRA has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. The 

Commission believes that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest. The proposed rule change is 

based on FINRA Rules 6183 and 6625, 

which provide FINRA authority to 

exempt certain ATSs from equity trade 

reporting. Those rules were recently 

proposed, noticed for public comment, 

and approved by the Commission.13 The 

conditions and applicability of the 

proposed Rule 6731 are substantively 

identical. Therefore, the Commission 

designates the proposal operative upon 

filing.14

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–FINRA–2012–016 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–FINRA–2012–016. 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 such filing 

also will be available for Web site 

viewing and printing at the principal 

office of FINRA. 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 

publicly available. All submissions 

should refer to File Number SR–FINRA– 

2012–016 and should be submitted on 

or before March 30, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5779 Filed 3–8–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66515; File No. SR– 

NASDAQ–2012–033] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Fees and Rebates in Penny Pilot 

Options and Non-Penny Pilot Options 

March 5, 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 February 

29, 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 

NASDAQ proposes to modify pricing 

for NASDAQ members using the 

NASDAQ Options Market (‘‘NOM’’), 

NASDAQ’s facility for executing and 

routing standardized equity and index 

options. Specifically, NASDAQ 

proposes to amend Section 2 of Chapter 

XV of NOM Rules to increase 

transaction fees for adding and 

removing liquidity in All Other 

Options 3 as well as the Customer 

Rebate to Add Liquidity in Penny Pilot 

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 March 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. 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 47 / Friday, March 9, 2012 / Notices 14457 

4The Exchange is not proposing to amend the 

Customer, Firm, Non-NOM Market Maker or NOM 

Market Maker Fees for Adding Liquidity in All 

Other Options. 

5The Exchange is not proposing to amend the 

Customer Fee for Removing Liquidity in All Other 

Options. 

6For a detailed description of the Investor 

Support Program or ‘‘ISP,’’ see Securities Exchange 

Act Release No. 63270 (November 8, 2010), 75 FR 

69489 (November 12, 2010) (SR–NASDAQ–2010– 

141) (the ‘‘ISP Filing’’). See also Securities 

Exchange Act Release Nos. 63414 (December 2, 

2010), 75 FR 76505 (December 8, 2010) (SR– 

NASDAQ–2010–153); and 63628 (January 3, 2011), 

76 FR 1201 (January 7, 2011) (SR–NASDAQ–2010– 

154). In order to qualify for an ISP credit, a 

Participant would need to transact a certain amount 

of displayed liquidity through an ISP-designated 

port which results in an increase in the overall 

liquidity that the member provides to NASDAQ 

measured as a proportion of the consolidated share 

volume traded by all market participants across all 

trading venues. To this end, a member’s ‘‘Baseline 

Participation Ratio’’ is determined by measuring the 

number of shares in liquidity-providing orders 

entered by the member (through any NASDAQ port) 

and executed on NASDAQ and dividing this 

number by the consolidated (across all trading 

venues) share volume traded in a given month. To 

determine whether a member added liquidity to 

NASDAQ in a given month, NASDAQ would 

perform the same calculation on a monthly basis for 

the then-current month and compare the resulting 

ratio to the Baseline Participation Ratio. 

7 15 U.S.C. 78f. 

8 15 U.S.C. 78f(b)(4). 

9See NYSE Arca’s Fee Schedule. 

10NOM does not have a payment for order flow 

program. 

11Customers are assessed a $0.45 per contract Fee 

for Removing Liquidity in All Other Options. 

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 certain 

transaction fees and rebates in Chapter 

XV, Sec. 2, entitled ‘‘NASDAQ Options 

Market—Fees,’’ in order to attract and 

enhance participation in NOM and raise 

revenues. 

Specifically, the Exchange proposes to 

amend All Other Options (non-Penny 

Options) rebates and fees. The Exchange 

proposes to increase the Professional 

Fee for Adding Liquidity in All Other 

Options from $0.20 to $0.30 per 

contract.4 The Exchange also proposes 

to increase the Professional, Firm, NonNOM Market Maker and NOM Market 

Maker Fees for Removing Liquidity in 

All Other Options from $0.45 to $0.50 

per contract.5 The Exchange believes 

that increasing the Professional Fee for 

Adding Liquidity in All Other Options 

and the Professional, Firm, Non-NOM 

Market Maker and NOM Market Maker 

Fees for Removing Liquidity in All 

Other Options will help raise revenues. 

The Exchange is also proposing to 

amend the monthly volume tiers of the 

Customer Rebate to Add Liquidity in 

Penny Options to further incentivize 

NOM Participants to route Customer 

orders to the Exchange. Currently, there 

are five tiers of the Customer Rebate to 

Add Liquidity in Penny Options. Each 

tier requires the NOM participant to 

meet certain criteria in order to qualify 

for the rebate. Specifically, the 

Exchange is proposing to amend Tier 5, 

which states that if a ‘‘Participant adds 

(1) Customer liquidity of 25,000 or more 

contracts per day in a month, and (2) the 

Participant has certified for the Investor 

Support Program set forth in Rule 

7014; 6 and (3) the Participant executed 

at least one order on NASDAQ’s equity 

market,’’ the Participant will be paid a 

rebate of $0.40 per contract. The 

Exchange is proposing to increase this 

Customer rebate to $0.41 per contract. 

The Exchange believes that further 

incentivizing NOM Participants to send 

additional Customer orders to the 

Exchange will benefit all market 

participants by adding liquidity to the 

market in Penny Options. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule changes are consistent with the 

provisions of Section 6 of the Act,7 in 

general, and with Section 6(b)(4) of the 

Act,8 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 

NASDAQ operates or controls. 

The Exchange believes that its 

proposal to increase the Professional 

Fee for Adding Liquidity in All Other 

Options to $0.30 per contract is 

reasonable, equitable and not unfairly 

discriminatory, because, as compared to 

Firms and Non-NOM Market Makers, a 

Professional would continue to be 

assessed a lower Fee for Adding 

Liquidity. In addition, the new fee is the 

same fee assessed today for a NOM 

Market Maker for adding liquidity. The 

Exchange believes that Professionals 

engage in trading activity similar to that 

conducted by market makers. For 

example, Professionals join bids and 

offers on the Exchange and thus 

compete for incoming order flow; 

Professionals do so in direct 

competition with the Exchange’s market 

makers. Also, Professionals have access 

to more information than a Customer 

and therefore should continue to be 

assessed a higher rate than a Customer. 

The Exchange believes that its 

proposal to increase the Professional 

Fee for Removing Liquidity in All Other 

Options to $0.50 per contract is 

reasonable, equitable and not unfairly 

discriminatory because Professionals 

would be assessed a fee that is less 

favorable than a Customer but 

equivalent to market markers because it 

has been established that Professionals 

have access to more information than a 

Customer. 

In addition, the Exchange believes 

that its proposal to increase the Firm 

and Non-NOM Market Maker Fees for 

Removing Liquidity in All Other 

Options to $0.50 per contract is 

reasonable because the Firm and NonNOM Market Maker fees are within the 

range of fees assessed by other 

exchanges. NYSE Arca, Inc. (‘‘NYSE 

Arca’’) assesses Firms and BrokerDealers a $0.50 per contract fee for 

electronic orders.9

The Exchange also believes that its 

proposal to increase the Professional, 

Firm, Non-NOM Market Maker and 

NOM Market Maker Fees for Removing 

Liquidity in All Other Options to $0.50 

per contract is reasonable because the 

proposed Fees for Removing Liquidity 

are less than the average fees paid by 

market makers on other exchanges when 

factoring in payment for order flow.10 In 

addition, the Exchange believes that its 

proposal to increase the Professional, 

Firm, Non-NOM Market Maker and 

NOM Market Maker Fees for Removing 

Liquidity in All Other Options to $0.50 

per contract is equitable and not 

unfairly discriminatory because the 

Exchange is proposing to uniformly 

increase the fees applicable to all market 

participants except Customers.11 A 

lower Customer Fee for Removing 

Liquidity benefits all market 

participants by incentivizing NOM 

Participants to transact a greater number 

of Customer orders, which results in 

increased liquidity. 

The Exchange believes that the 

increased Customer rebate for market 

participants that add Customer liquidity 

of 25,000 or more contracts per day in 

a month, certify for the ISP and execute 

at least one order on NASDAQ’s equity 

market is reasonable, because it will 

continue to incentivize NOM 


srobinson on DSK4SPTVN1PROD with NOTICES
14458 Federal Register / Vol. 77, No. 47 / Friday, March 9, 2012 / Notices 

12The Commission has expressed its concern that 

a significant percentage of the orders of individual 

investors are executed in the over-the-counter 

(‘‘OTC’’) market, that is, not on exchange markets; 

and that a significant percentage of the orders of 

institutional investors are executed in dark pools. 

See Securities Exchange Act Release No. 61358 

(January 14, 2010), 75 FR 3594 (January 21, 2010) 

(Concept Release on Equity Market Structure, 

‘‘Concept Release’’). In the Concept Release, the 

Commission has recognized the strong policy 

preference under the Act in favor of price 

transparency and displayed markets. The 

Commission published the Concept Release to 

invite public comment on a wide range of market 

structure issues, including high frequency trading 

and un-displayed, or ‘‘dark,’’ liquidity. See also 

Mary L. Schapiro, Strengthening Our Equity Market 

Structure (Speech at the Economic Club of New 

York, Sept. 7, 2010) (‘‘Schapiro Speech,’’ available 

on the Commission Web site) (comments of 

Commission Chairman on what she viewed as a 

troubling trend of reduced participation in the 

equity markets by individual investors, and that 

nearly 30 percent of volume in U.S.-listed equities 

is executed in venues that do not display their 

liquidity or make it generally available to the 

public). 13 15 U.S.C. 78s(b)(3)(A)(ii). 14 17 CFR 200.30–3(a)(12). 

Participants to transact additional 

Customer orders and encourage 

participants in the Exchange’s equity 

markets to also participate in the 

Exchange’s options market. 

The Exchange believes that the 

increased Customer rebate for market 

participants that add Customer liquidity 

of 25,000 or more contracts per day in 

a month, certify for the ISP and execute 

at least one order on NASDAQ’s equity 

market is equitable and not unfairly 

discriminatory, because the increased 

rebate is intended to encourage 

increased activity in both NOM and in 

the ISP of the NASDAQ equity market. 

The goal of the ISP is to incentivize 

members 12 to provide liquidity from 

individual equity investors to the 

NASDAQ Market Center. The increased 

rebate would encourage firms that 

certify pursuant to Rule 7014 to increase 

the amount of Customer order liquidity 

to NOM. The addition of such liquidity, 

either through the ISP or through 

increased Customer order flow, would 

benefit all Exchange members that 

participate in those markets. 

The Exchange operates in a highly 

competitive market comprised of nine 

U.S. options exchanges in which 

sophisticated and knowledgeable 

market participants can and do send 

order flow to competing exchanges if 

they deem fee levels at a particular 

exchange to be excessive or rebate 

opportunities to be inadequate. The 

Exchange believes that the proposed fee 

and rebate scheme are competitive and 

similar to other fees, rebates and tier 

opportunities in place on other 

exchanges. The Exchange believes that 

this competitive marketplace materially 

impacts the fees and rebates present on 

the Exchange today and substantially 

influences the proposal set forth above. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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. 

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)(ii) of the Act.13 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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

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–NASDAQ–2012–033 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–2012–033. 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–2012–033 and should be 

submitted on or before March 30, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5736 Filed 3–8–12; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #13024] 

Connecticut Disaster #CT–00027; 

Declaration of Economic Injury 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Economic Injury Disaster Loan (EIDL) 

declaration for the State of Connecticut, 

dated 02/29/2012. 

Incident: Major Winter Storm. 

Incident Period: 10/29/2011. 

Effective Date: 02/29/2012. 

EIDL Loan Application Deadline Date: 

11/29/2012. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 


srobinson on DSK4SPTVN1PROD with NOTICES