Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 15167 

7See, e.g., Securities Exchange Act Release No. 

66322 (February 3, 2012), 77 FR 6831 (February 9, 

2012) (SR–NASDAQ–2012–020) (pricing incentives 

focused on securities listed on exchanges other than 

The NASDAQ Stock Market or NYSE). 

8 15 U.S.C. 78s(b)(3)(A)(ii). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

uncommon,7 and provide means by 

which venues such as Phlx may 

compete more effectively with listing 

venues such as NYSE. 

Finally, Phlx 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. In such an environment, Phlx 

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. Phlx believes 

that the proposed rule change reflects 

this competitive environment because it 

is designed to create pricing incentives 

for trading Tape A Securities through 

PSX. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Phlx 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. 

Because the market for order execution 

is extremely competitive, members may 

readily opt to disfavor Phlx’s execution 

services if they believe that alternatives 

offer them better value. The proposed 

change is designed to enhance 

competition by using pricing incentives 

to encourage trading of Tape A 

Securities through PSX. 

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.8 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 

No. SR–Phlx–2012–25 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 No. 

SR–Phlx–2012–25. 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 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–Phlx–2012– 

25 and should be submitted on or before 

April 4, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6184 Filed 3–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66540; File No. SR– 

NASDAQ–2012–031] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Supplemental Orders 

March 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 February 

27, 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 Exchange. 

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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to introduce 

the ‘‘Supplemental Order’’ for use on 

NASDAQ. The text of the proposed rule 

change is available on the Exchange’s 

Web site at http:// 

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. 


srobinson on DSK4SPTVN1PROD with NOTICES
15168 Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 

3See NYSEArca Rules 7.31(f) and 7.37(c). 

4Orders that are not designated for routing are 

not executable against Supplemental Orders, 

because market participants entering non-routable 

orders either expect to post liquidity on NASDAQ, 

or seek to execute against the NASDAQ displayed 

quote, as through an Immediate or Cancel order 

type. By contrast, the Supplemental Order is 

designed to interact with market participants that 

seek to access liquidity at the NBBO, and that 

employ routable orders to access such liquidity at 

a range of trading venues. 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ proposes to introduce a 

new order type, to be known as the 

‘‘Supplemental Order,’’ for use on 

NASDAQ. The order type and its 

associated execution process are 

virtually identical to the ‘‘Tracking 

Order’’ and ‘‘Tracking Order Process’’ 

that have long been in use at 

NYSEArca.3 The purpose of the order is 

to offer institutional investors and other 

traders that have longer trading horizons 

a means to post stable trading interest 

executable at the national best bid or 

best offer (‘‘NBBO’’). The Exchange 

believes that if the Supplemental Order 

becomes widely used, market 

participants seeking to access liquidity 

will more readily direct their orders to 

NASDAQ, because they will have a 

heightened expectation of the 

availability of liquidity at the NBBO. 

Supplemental Orders are NonDisplayed limit orders that are available 

for execution only between 9:30 a.m. 

and 4 p.m., and that are not eligible for 

participation in the Nasdaq Opening 

Cross, the Nasdaq Halt Cross, the 

Nasdaq Imbalance Cross, or the Nasdaq 

Closing Cross. All Supplemental Orders 

must be entered with size of one or 

more normal units of trading. Upon 

entry in the Nasdaq Market Center 

system, a Supplemental Order will 

always post to the book and thereafter 

become eligible for execution against 

incoming orders in accordance with the 

Nasdaq Market Center’s Supplemental 

Process. 

An incoming order that has been 

designated as eligible for routing may 

interact with Supplemental Orders.4

Such an order will first be matched 

against orders other than Supplemental 

Orders in accordance with Rule 

4757(a)(1)(A) through (C). If any of the 

order remains unexecuted, it will enter 

the Supplemental Process before being 

routed to other venues. In the process, 

the order will be matched against 

Supplemental Order(s) in price/time 

priority. However, executions will be 

permitted to occur only at the NBBO, 

and only if the size of the incoming 

order is less than or equal to the 

aggregate size of Supplemental Order 

interest available at the price of the 

order. A Supplemental Order may not 

trade through a Protected Quotation, 

and will not be permitted to execute if 

the NBBO is locked or crossed. 

Supplemental Orders post to the 

book, rather than interacting with 

resting orders before posting, because 

the market participant entering a 

Supplemental Order is willing to cede 

execution priority in order to provide 

liquidity to those orders that are eligible 

to enter into the Supplement Order 

process (i.e., orders that seek to access 

liquidity at the NBBO). NYSEArca 

Tracking Orders are similarly designed 

to post to the book in all circumstances. 

If a Supplemental Order is not 

executed in full, the remaining portion 

of the order shall continue to repost in 

the Supplemental Process until the 

order is fully executed, the order is 

cancelled by the member that entered 

the order, or the size of the order is 

reduced to less than one normal unit of 

trading (in which case the remaining 

order will be cancelled by the System). 

Supplemental Orders may be entered at 

any time between 7 a.m. and 4 p.m., but 

are available for potential execution 

only between 9:30 a.m. and 4 p.m. Any 

Supplemental Orders still on the book 

after 4 p.m. will be cancelled. 

In addition to adding descriptions of 

the Supplemental Order and its 

associated execution process to Rules 

4751 and 4757, NASDAQ is also 

proposing to make conforming changes 

to Rule 4755, and to correct several 

minor typographical errors in Rule 

4757. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general, and with Section 6(b)(5) of the 

Act,6 in particular, in that the proposal 

is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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. Specifically, NASDAQ 

believes that the proposed rule change 

will promote the interests of retail and 

institutional investors and other 

investors with longer term trading 

horizons by (i) offering liquidity 

providers a means to use NASDAQ to 

post larger limit orders that are only 

executable at the NBBO and that do not 

disclose their trading interest to other 

market participants in advance of 

execution, and (ii) offering market 

participants seeking to access liquidity 

a greater expectation of market depth at 

the NBBO than may currently be the 

case. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ 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. 

The proposed change will allow 

NASDAQ to offer functionality that is 

similar to functionality already offered 

by NYSEArca, and will therefore 

promote competition between 

exchanges. 

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 proposed rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) of the Act 7 and paragraph 

(f)(6) of Rule 19b–4 thereunder,8 in that 

the proposed rule change: (i) Does not 

significantly affect the protection of 

investors or the public interest; (ii) does 

not impose any significant burden on 

competition; and (iii) does 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; provided the selfregulatory organization has given 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. NASDAQ provided the 

Commission with such written notice 

on February 8, 2012. NASDAQ proposes 

to implement the proposed rule change 

on a date that is on, or shortly after, the 

30th day following the date of the filing. 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 15169 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3All co-location services are provided by 

NASDAQ Technology Services LLC. 

4See Exchange Rule 7034(b), Connectivity to 

Nasdaq. 

NASDAQ believes that the proposed 

rule change does not significantly affect 

the protection of investors or the public 

interest, and does not impose any 

significant burden on competition 

because (i) the proposal seeks to 

enhance market quality by providing a 

means to encourage market participants 

to offer greater liquidity at the NBBO, 

and (ii) the proposal enhances 

NASDAQ’s ability to compete with 

comparable functionality that is already 

being offered by NYSEArca. 

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–2012–031 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–2012–031. 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 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–NASDAQ– 

2012–031 and should be submitted on 

or before April 4, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6183 Filed 3–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66542; File No. SR–BX– 

2012–012] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Connectivity Options and Fees 

March 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 March 2, 

2012, The NASDAQ OMX BX, Inc. 

(‘‘BX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify 

Exchange connectivity options and fees. 

The text of the proposed rule change is 

available at http:// 

nasdaqomxbx.cchwallstreet.com/, at the 

Exchange’s principal office, 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 Exchange proposes to modify 

Rule 7034(b) regarding connectivity to 

The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’).3 Specifically, the 

Exchange proposes to (i) establish a 

connectivity fee for a 40Gb enhanced 

bandwidth option; and (ii) provide a 

waiver of installation fees for upgrades. 

Enhanced Bandwidth Option 

The Exchange currently offers various 

bandwidth options for connectivity to 

the Exchange, including a 10Gb fiber 

connection, a 1Gb copper connection, 

and a 100 MB connection.4 In keeping 

with changes in technology, the 

Exchange now proposes to provide an 

enhanced bandwidth option to enable 

its clients a more efficient connection to 

the Exchange. The Exchange proposes a 

40G [sic] fiber connection with a onetime installation fee of $1,500, and a 

per-month connectivity fee of $15,000. 

The growth in the size of consolidated 

and proprietary data feeds has resulted 

in demand for higher bandwidth. As the 

number of feeds available and the size 

of the feeds increases, the bandwidth 

required for market data feeds steadily 

rises. The Exchange’s proposal provides 

the co-located client the option to select 

the bandwidth that is appropriate for 

the firm’s current needs and enables it 

to add or change services as its needs 

change. 

Waiver of Installation Fees 

The Exchange also proposes to 

provide a waiver of the installation fees 


srobinson on DSK4SPTVN1PROD with NOTICES