Federal Register / Vol. 80, No. 16 / Monday, January 26, 2015 / Notices 4023 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3BAC is the symbol for Bank of America 

Corporation, IWM is the symbol for iShares Russell 

200 ETF, QQQ is the symbol for PowerShares QQQ 

Trust Series 1 ETF, SPY is the symbol for SPDR S&P 

500 ETF, and VXX is the symbol for iPath S&P 500 

VIX Short Term Futures ETN. 

4See Securities Exchange Act Release No. 72883 

(August 20, 2014), 79 FR 50971 (August 26, 2014) 

(SR–BX–2014–035) (order approving introduction 

of LMMs on BX) (the ‘‘LMM approval order’’). 

5LMM obligations and prohibitions are further 

described in Chapter VII, Section 14. 

6See BX Chapter VII, Section 2. 

7See BX Chapter VII, Section 13(A)(b). 

Subsequent applications are discussed in Section 

13(A)(c). 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

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–Phlx– 

2015–07, and should be submitted on or 

before February 17, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01252 Filed 1–23–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74097; File No. SR–BX– 

2015–004] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Regarding BX 

LMM and Penny Pilot Options 

January 20, 2015. 

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 9, 

2015, NASDAQ OMX BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Chapter XV, entitled ‘‘Options Pricing’’ 

and Section 2, entitled ‘‘Options 

Market—Fees and Rebates’’. 

Specifically, the Exchange proposes to: 

(1) Add the definition of Lead Market 

Maker (‘‘LMM’’) and amend the 

definition of Common Ownership in 

Chapter XV; (2) adopt three Monthly 

Volume Tiers in Section 2 that apply to 

LMMs in their specifically allocated 

options classes when adding liquidity in 

Penny Pilot options; (3) indicate in 

Section 2 that BAC, IWM, QQQ, SPY, 

and VXX are priced like all other Penny 

Pilot options; and (4) update the 

numbering of notes in Section 2. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxbx.cchwallstreet.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend Chapter XV, entitled 

‘‘Options Pricing’’ and Section 2, 

entitled ‘‘Options Market—Fees and 

Rebates’’. Specifically, the Exchange 

proposes to: (1) Add the definition of 

Lead Market Maker and amend the 

definition of Common Ownership in 

Chapter XV; (2) adopt three Monthly 

Volume Tiers in Section 2 that apply to 

LMMs (also known as ‘‘BX LMMs’’) in 

their specifically allocated options 

classes when adding liquidity in Penny 

Pilot options; (3) indicate in Section 2 

that BAC, IWM, QQQ, SPY, and VXX 3

are priced like all other Penny Pilot 

options; and (4) update the numbering 

of notes in Section 2. 

Lead Market Maker 

BX introduced LMMs this year on the 

Exchange,4 such that with respect to 

each class of options in an LMM’s 

appointment, an LMM is expected to 

engage, to a reasonable degree under the 

existing circumstances, in dealings for 

his own account when there exists, or 

it is reasonably anticipated that there 

will exist, a lack of price continuity, a 

temporary disparity between the supply 

of and demand for a particular option 

contract, or a temporary distortion of the 

price relationships between option 

contracts of the same class.5 Approved 

BX Options Market Makers 6 may 

become an LMM in one or more listed 

options. Initial application(s) to become 

an LMM shall be in a form and/or 

format prescribed by the Exchange and 

shall include the following: (1) 

Background information on the LMM 

including experience in trading options; 

(2) the LMM’s clearing arrangements; (3) 

adequacy of capital; and (4) adherence 

to Exchange rules and ability to meet 

obligations of an LMM.7 Once an 

applicant is approved by the Exchange 

as an LMM, any material change in 

capital shall be reported in writing to 

the Exchange within two business days 

after the change. The Exchange will not 

place any limit on the number of 

entities that may become LMMs, 

however the Exchange notes that there 

will only be one LMM per class. 

The Exchange is not, in this proposal, 

making any changes, substantive or 

otherwise, to how LMMs function. 

Rather, in that the proposed new 

volume tiers in Chapter XV, Section 2 

refer to LMMs, the Exchange is adding 

to Chapter XV a definition of LMM that 

refers back to Chapter VII, Section 13. 

Specifically, the Exchange proposes to 

state in Chapter XV: ‘‘The term ‘‘Lead 


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8See NOM Chapter XV. NOM is a facility of The 

NASDAQ Stock Market LLC (‘‘NASDAQ’’). 

NASDAQ, NASDAQ OMX PHLX LLC (‘‘Phlx’’) and 

the Exchange are self-regulatory organizations 

(‘‘SROs’’) that are wholly owned subsidiaries of The 

NASDAQ OMX Group, Inc. (‘‘NASDAQ’’). 

9The Penny Pilot was established in June 2012 

and last extended in December 2014. See Securities 

Exchange Act Release Nos. 67256 (June 26, 2012), 

77 FR 39277 (July 2, 2012) (SR–BX–2012–030) 

(order approving BX option rules and establishing 

Penny Pilot); and 73689 (November 25, 2014), 79 

FR 71488 (December 2, 2014) (SR–BX–2014–057) 

(notice of filing and immediate effectiveness 

extending the Penny Pilot through June 30, 2015). 

10The Rebate to Add Liquidity is paid to a BX 

Options Market Maker only when the BX Options 

Market Maker is contra to a Non-Customer or BX 

Options Market Maker. A Non-Customer includes a 

Professional, Firm, Broker-Dealer and Non-BX 

Options Market Maker. 

11See Securities Exchange Act Release No. 70539 

(September 27, 2013), 78 FR 61418 (October 3, 

2013) (SR–BX–2013–052) (notice of filing and 

immediate effectiveness regarding special rates for 

BAC, IWM, QQQ, SPY, and VXX). 

12A BX Options Market Maker must be registered 

as such pursuant to Chapter VII, Section 2 of the 

BX Options Rules, and must also remain in good 

standing pursuant to Chapter VII, Section 4. 

13The term ‘‘Customer’’ means a Public Customer 

or a broker-dealer, and the term ‘‘Public Customer’’ 

means a person that is not a broker or dealer in 

securities. See Chapter I, Section 1(a)(22) and 

1(a)(50). 

14A Non-Customer includes a Professional, Firm, 

Broker-Dealer and Non-BX Options Market Maker. 

15These unchanged notes are: ‘‘1A Non-Customer 

includes a Professional, Firm, Broker-Dealer and 

Non-BX Options Market Maker. 2The Rebate to Add 

Liquidity will be paid to a Customer or BX Options 

Market Maker only when the Customer or BX 

Options Market Maker is contra to a Non-Customer 

or BX Options Market Maker. 3The Fee to Add 

Liquidity will be assessed to a Customer or BX 

Options Market Maker only when the Customer or 

BX Options Market Maker is contra to a Customer.’’ 

16For the Fee to add Liquidity for Customer for 

Penny Pilot Options, note 3 continues to apply. 

Note 3 states: ‘‘The Fee to Add Liquidity will be 

assessed to a Customer or BX Options Market Maker 

only when the Customer or BX Options Market 

Maker is contra to a Customer.’’ 

Market Maker’’ or (‘‘LMM’’) applies to a 

registered BX Options Market Maker 

that is approved pursuant to Chapter 

VII, Section 13 to be the LMM in an 

options class (options classes).’’ This 

makes the proposed volume tiers 

language easier to understand and read 

within Chapter XV, Section 2. 

Common Ownership 

The concept of common ownership is 

present in Exchange rules. Currently, 

Chapter XV states that the term 

‘‘Common Ownership’’ shall mean 

Participants under 75% common 

ownership or control. The Exchange is, 

as discussed below, proposing Monthly 

Volume Tiers for execution of options 

on BX that meet certain volume 

thresholds. As such, the Exchange 

simply proposes to incorporate volume 

tiers into the definition of ‘‘Common 

Ownership’’ in Chapter XV by adding 

the language: ‘‘Common Ownership 

shall apply to all pricing in Chapter XV, 

Section 2 for which a volume threshold 

or volume percentage is required to 

obtain the pricing.’’ This conforms 

Chapter XV internally and reduces the 

possibility of confusion. It also 

conforms the definition of Common 

Ownership in BX Chapter XV with a 

similar definition in the rules of the 

NASDAQ Options Market (‘‘NOM’’).8

Fees and Rebates for Penny Pilot 

Options 

The Penny Pilot, an industry-wide 

program, has been in place on the 

Exchange for well over a year and has 

allowed options to quote and trade in 

penny increments.9 The Exchange’s 

options pricing for execution on the BX 

Options Market currently has a separate 

section for fees and rebates 10 for Penny 

Pilot options on BAC, IWM, QQQ, SPY, 

and VXX (known as ‘‘special rates’’)—as 

opposed to All Other Penny Pilot 

Options.11 The Exchange proposes to 

delete the special rates for BAC, IWM, 

QQQ, SPY, and VXX. By doing so, BAC, 

IWM, QQQ, SPY, and VXX would have 

the same fees and rebates as all other 

Penny Pilot options. Thus, as a result of 

this filing deleting the special rates, the 

rebate to add liquidity for a BX Options 

Market Maker 12 when contra to a NonCustomer, BX Options Market Maker, or 

BX LMM would increase from $0.00 to 

$0.10 (per executed contract); the rebate 

to remove liquidity for Customer 13

would increase from $0.00 to $0.35; the 

fee to add liquidity for Customer when 

contra to a Customer would increase 

from $0.10 to $0.40; and the fee to add 

liquidity for BX Options Market Maker 

when contra to a Customer would 

increase from $0.00 to as much as 

$0.40—according to three Monthly 

Volume Tiers in new note 4 applicable 

to LMMs as discussed below. As such, 

all Penny Pilot Options, including BAC, 

IWM, QQQ, SPY, and VXX, would have 

the same fees and rebates. 

The fee schedule after the filing will 

reflect Penny Pilot Options fees and 

rebates for Customer, BX Options 

Market Maker, and Non Customer 14 as 

follows: 

FEES AND REBATES

[Per executed contract] 

Customer BX Options 

Market Maker Non-Customer 1

Penny Pilot Options: 

Rebate to Add Liquidity ...................................................................................................... $0.00 2 .............. $0.10 2 .............. N/A. 

Fee to Add Liquidity ............................................................................................................ $0.40 3 .............. $0.40[sic] 4 .......... $0.45. 

Rebate to Remove Liquidity ............................................................................................... $0.35 ................ N/A ................... N/A. 

Fee to Remove Liquidity ..................................................................................................... N/A ................... $0.46 ................ $0.46. 

There are three notes applicable to this 

Fees and Rebates section, which do not 

change.15 The Exchange is adding new 

note 4 in respect of volume tiers 

applicable to LMMs. 

New note 4 adds Monthly Volume 

Tiers A, B, and C applicable to BX 

LMMs in their specifically allocated 

options classes. These tiers apply to the 

Fee to add Liquidity for BX LMMs for 

Penny Pilot Options.16 The fee is 

indicated at $0.40, $0.38, and $0.37 

depending on Monthly Volume Tier 

thresholds. Tier A indicates a fee of 

$0.40 for Total Volume up to 0.20% of 

total industry customer equity and ETF 

option average daily volume (‘‘ADV’’) 

contracts per day. Tier B indicates a fee 

of $0.38 for Total Volume above 0.20% 

to 0.30% of total industry customer 

equity and ETF option ADV contracts 

per day in a month. And Tier C 

indicates a fee of $0.37 for a Total 

Volume 0.31% or more of total industry 

customer equity and ETF option ADV 

contracts per day in a month. In 

addition, because new tiers A, B, and C 

refer to Total Volume, this term is 

defined as follows: ‘‘Total Volume’’ 

shall be defined as Customer, BX 

Options Market Marker, LMM, and NonCustomer volume in Penny Pilot 

Options and/or Non-Penny Pilot 

Options which either adds or removes 

liquidity on BX Options. For purposes 

of determining Monthly Volume Tiers, 


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17The Exchange notes that NOM also has a tiered 

system for fees and rebates, albeit a different one 

than proposed by the Exchange. 

18Renumbered note 5 is unchanged and states: 

‘‘The higher Fee to Add Liquidity will be assessed 

to a Customer or BX Options Market Maker only 

when the Customer or BX Options Market Maker is 

contra to a Customer.’’ 

19 In addition, Chapter VII, Section 14(b)(vi) 

requires, in part, that in the event the bid/ask 

differential in the underlying security is greater 

than the bid/ask differential set forth in subsections 

(b)(iv)–(v), the permissible price differential for any 

in-the-money option series may be identical to 

those in the underlying security market. In the case 

of the at-the-money and out-of-the-money series, BX 

Regulation may waive the requirements of 

subsections (b)(iv)–(v) on a case-by-case basis when 

the bid/ask differential for the underlying security 

is greater than .50. In such instances, the bid/ask 

differentials for the at-the-money series and the outof-the-money series may be half as wide as the bid/ 

ask differential in the underlying security in the 

primary market. For obligations with respect to 

unusual conditions, see Section 14(c). In the LMM 

approval order (Securities Exchange Act Release 

No. 72883), the Commission noted that the 

proposed rules regarding LMMs are substantially 

similar to the rules of other exchanges such as, for 

example, NASDAQ OMX PHLX Rules 501, 505, 506 

and 511 and NYSE Arca Rules 6.37A and 6.37B. 

20 15 U.S.C. 78f(b). 21 15 U.S.C. 78f(b)(5). 

22Per note 2, the Rebate to Add Liquidity will be 

paid to a Customer or BX Options Market Maker 

only when the Customer or BX Options Market 

Maker is contra to a Non-Customer or BX Options 

Market Maker. 

23 In all Penny Pilot Options, Customer continues 

to be entitled to a Rebate to Remove Liquidity in 

Penny Pilot Options; BX Options Market Maker 

continues to be entitled to a Rebate to Add 

Liquidity; and BX Options Market Maker and nonCustomer continues to be assessed a Fee to Remove 

Liquidity. 

any day that the market is not open for 

the entire trading day will be excluded 

from such calculation.’’ 17

Finally, in the rebates and fees section 

for Non-Penny Pilot Options, note 4 is 

renumbered to note 5.18 There are no 

other changes to this section. 

The Exchange believes that having the 

same fees and rebates across the board 

for all Penny Pilot Options will 

incentivize BX Options Market Makers, 

Customers, and non-Customers to 

interact with a greater number of Penny 

Pilot Options orders on the Exchange. 

The proposed differentiation between 

BX LMMs and other market participants 

in terms of tiers recognizes the differing 

contributions made to the liquidity and 

trading environment on the Exchange by 

these market participants. LMMs have 

heightened quoting obligations. Chapter 

VII, Section 14(a) indicates that 

transactions of an LMM should 

constitute a course of dealings 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market, and no LMM should enter into 

transactions or make bids or offers that 

are inconsistent with such a course of 

dealings. Section 14(b) indicates that 

obligations of LMMs with respect to 

each class of options in his or her 

appointment specifically include the 

following: (i) To compete with other 

LMMs and Market Makers to improve 

the market in all series of options 

classes to which the LMM is appointed; 

(ii) To make markets that will be 

honored for the number of contracts 

entered into the Trading System in all 

series of options classes within the 

LMM’s appointment; (iii) To update 

market quotations in response to 

changed market conditions in all series 

of options classes within the LMM’s 

appointment; (iv) Options traded on the 

Trading System may be quoted with a 

difference not to exceed $5 between the 

bid and offer regardless of the price of 

the bid; (v) BX Regulation may establish 

quote width differences other than as 

provided in subparagraph (iv) for one or 

more options series.19

The Exchange believes that the 

proposed changes are consistent with 

the Act and raise no novel issues. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 20 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 21

in particular, in that it 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 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. BX Options operates in 

an intensely competitive environment 

and seeks to offer the same services that 

its competitors offer and in which its 

customers find value. 

The Exchange believes that applying 

the same Rebates and Fees to all 

Customers, BX Options Market Makers, 

and Non-Customers in all Penny Pilot 

Options promotes just and equitable 

principles of trade, and fosters 

cooperation and coordination with 

persons engaged in facilitating 

transactions in Penny Pilot Options. The 

Exchange will uniformly apply the same 

Fees and Rebates to all Customer, 

Market Maker and non-Customer Penny 

Pilot Options and will no longer 

differentiate Fees and Rebates for BAC, 

IWM, QQQ, SPY, and VXX. 

The proposed rule change also 

protects investors and the public 

interest and seeks to establish and 

promote just and equitable principles of 

trade by creating more uniformity and 

consistency among the Exchange’s rules 

related to Fees and Rebates for all Penny 

Pilot Options. The Exchange believes 

that the proposal will not diminish and 

in fact may increase, market making 

activity on the Exchange by ensuring 

fees and rebates that are reasonable and 

already in place for Penny Pilot 

Options. With this proposal, the same 

rebates and fees will apply across the 

board to all Penny Pilot options. 

The proposal is reasonable, equitable, 

and not unfairly discriminatory. The 

Exchange believes that it is reasonable, 

equitable, and not unfairly 

discriminatory to treat fees and rebates 

regarding all Penny Pilot Options, 

including BAC, IWM, QQQ, SPY and 

VXX, exactly the same. This would, for 

BAC, IWM, QQQ, SPY and VXX, 

effectively increase the Rebate to Add 

Liquidity for BX Options Market Makers 

when contra to a Non-Customer, BX 

Options Market Maker, or BX LMM 

from $0.00 to $0.10;22 would increase 

the Fee to Add Liquidity for Customers 

when contra to a Customer from $0.10 

to $0.40, and for BX Options Market 

Makers when contra to a Customer from 

$0.00 to as much as $0.40 per Tiers A, 

B, and C; and would increase the Rebate 

to Remove Liquidity for Customers from 

$0.00 to $0.35. As noted, the proposal 

would make all Penny Pilot Options 

exactly the same in terms of fees and 

rebates. The Exchange’s model would 

thus assess a fee to add liquidity— 

across the board for all Penny Pilot 

Options for Customer, BX Options 

Market Maker and BX LMM, and NonCustomer. The proposed differentiation 

between BX Options Market Makers 

according to LMM tiers recognizes the 

differing contributions made to the 

liquidity and trading environment on 

the Exchange by BX Options Market 

Makers. In all Penny Pilot Options, 

Customer would continue to be assessed 

a smaller fee of $0.40 to Add Liquidity 

as opposed to a fee of $0.45 for nonCustomer to Add Liquidity; and the 

Exchange would continue to uniformly 

assess, without tiers, the Fee to Add 

Liquidity in all Penny Pilot Options to 

all Customers and Non-Customers.23 In 

all Penny Pilot Options, Customers 

would continue to not be assessed a Fee 

to Remove Liquidity while BX Options 

Market Makers and Non-Customers are 

assessed a $0.46 per contract Fee to 

Remove Liquidity. All fees and rebates 

would be applied uniformly by category 

of market participant per fee schedule. 

Moreover, the Exchange believes that 

adding the definition of LMM and 

amending the definition of Common 

Ownership in Chapter XV and updating 

the numbering of notes in Section 2 


emcdonald on DSK67QTVN1PROD with NOTICES
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24For example, pursuant to Chapter VII (Market 

Participants), Section 5 (Obligations of Market 

Makers), in registering as a Market Maker, an 

Options Participant commits himself to various 

obligations. Transactions of a Market Maker in its 

market making capacity must constitute a course of 

dealings reasonably calculated to contribute to the 

maintenance of a fair and orderly market, and 

Market Makers should not make bids or offers or 

enter into transactions that are inconsistent with 

such course of dealings. Further, all Market Makers 

are designated as specialists on BX for all purposes 

under the Act or rules thereunder. See Chapter VII, 

Section 5. 25 15 U.S.C. 78s(b)(3)(A)(ii). 26 17 CFR 200.30–3(a)(12). 

clarifies the uniformly applicable 

rebates and fees for Penny Pilot Options. 

The Exchange further believes the 

previous pricing scheme employed in 

the above referenced symbols to 

incentivize BX Options Market Makers 

to provide liquidity is no longer 

necessary in light of the LMM changes 

and proposed rates discussed herein. 

The proposed differentiation between 

BX LMMs and other market participants 

in terms of tiers recognizes the differing 

contributions made to the liquidity and 

trading environment on the Exchange by 

these market participants. The Exchange 

believes that this is reasonable, 

equitable, and not unfairly 

discriminatory. The Exchange notes that 

as a result of this proposal all rebates 

and fees would be applied uniformly to 

all market participants (Customers, BX 

Options Market Makers, and nonCustomers). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

To the contrary, BX has designed its fees 

and rebates to compete effectively for 

the execution and routing of Penny Pilot 

Options contracts on the Exchange. 

The Exchange believes that the 

proposed amended fees and rebates will 

attract market participants and BX 

Options Market Makers to engage in 

market making activities at the 

Exchange, which results in tighter 

markets and order interaction and 

benefits all market participants. 

Moreover, BX Options Market Makers 

have obligations to the market and 

regulatory requirements, which 

normally do not apply to other market 

participants.24 While BX Options 

Market Makers will be paying a Fee to 

Add Liquidity in all Penny Pilot 

Options that will not be higher than for 

Customers, Customers will pay a fee 

which is lower than that assessed to 

Non-Customers. The Exchange believes 

that this does not present an undue 

burden on competition because the 

pricing seeks to reward liquidity 

providers, which in turn benefits all 

market participants. The proposed 

differentiation between BX Options 

Market Makers, BX LMMs, and other 

market participants, which includes 

Tiers A, B, and C for BX LMMs, 

recognizes the differing above-discussed 

contributions made to the liquidity and 

trading environment on the Exchange by 

these market participants. 

The Exchange believes the proposals 

discussed herein do not pose an undue 

burden on intermarket competition. The 

Exchange operates in a highly 

competitive market comprised of twelve 

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. The Exchange 

believes that the proposed fee and 

rebate scheme discussed herein is 

competitive. 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. 

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 

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

the Act,25 the Exchange has designated 

this proposal as establishing or changing 

a due, fee, or other charge imposed by 

the self-regulatory organization on any 

person, whether or not the person is a 

member of the self-regulatory 

organization, 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. 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 rule-comments@

sec.gov. Please include File Number SR– 

BX–2015–004 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2015–004. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml ). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of 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– 

2015–004 and should be submitted on 

or before February 17, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01250 Filed 1–23–15; 8:45 am] 

BILLING CODE 8011–01–P 


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