Document ID: SEC-2010-0295-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-02-25T05:00Z

[Federal Register: February 25, 2010 (Volume 75, Number 37)]
[Notices]               
[Page 8763-8765]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25fe10-137]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61536; File No. SR-BX-2010-014]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Order Routing on the Boston Options Exchange Facility

February 18, 2010.
    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 8, 2010, NASDAQ OMX BX, Inc. (the ``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 self-regulatory organization. The Exchange 
filed the proposed rule change 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASDAQ OMX BX, Inc. (the ``Exchange'') proposes to amend Chapter 
XII, Section 5 (Order Routing to Away Exchanges) of the Rules of the 
Boston Options Exchange Group, LLC (``BOX'') to make the Order Routing 
Pilot Permanent. The text of the proposed rule change is available from 
the principal office of the Exchange, on the Commission's Web site at 
http://www.sec.gov and also on the Exchange's Internet Web site at 
http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.

II. Self-Regulatory Organization's Statement of the Purpose of, and the 
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

[[Page 8764]]

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 remove Supplementary 
Material .03 to Chapter XII, Section 5, to make the rules governing the 
outbound order routing process permanent. On October 16, 2009 the 
Commission approved \5\ the Exchange's proposal to amend Chapter XII of 
the BOX Rules to provide for the use by BOX of certain non-affiliated 
third party routing broker/dealers (``Routing Broker(s)'') to route 
options orders to one or more Away Exchange(s) when such Away 
Exchange(s) display the Best Bid or Best Offer in accordance with the 
Options Order Protection and Locked/Crossed Market Plan 
(``Decentralized Plan'').\6\
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    \5\ See Securities Exchange Act Release No. 60832 (October 16, 
2009), 74 FR 54607 (October 22, 2009) (SR-BX-2009-066)(Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule 
Change Relating to Chapter XII of the BOX Rules) (``Approval 
Order''). See also Chapter XII, Section 5 of the BOX Rules. Chapter 
XII, Section 5 is consistent with rules approved for other national 
securities exchanges. See e.g. Approval Order at 54609, note 24. 
Terms not otherwise defined herein shall have the meaning proscribed 
in the BOX Rules.
    \6\ See Securities Exchange Act Release No. 60405 (July 30, 
2009), 74 FR 39362 (August 6, 2009) (File No. 4-546) (Order 
Approving the National Market System Plan Relating to Options Order 
Protection and Locked/Crossed Market Plan).
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    The Exchange requested that the proposal be approved on a pilot 
basis for three (3) months starting from the date of the approval of 
submission of filing. The Commission approved the Exchange's proposal 
on an accelerated basis \7\ for a pilot period to expire on January 15, 
2010.\8\ On January 15, 2010, the effective date of the Order Routing 
Pilot was extended until March 15, 2010.\9\ The Exchange believes 
permanent approval is appropriate. There have been no comments, or 
complaints pertaining to the Order Routing Pilot. The routing process 
is operating as intended. Moreover, as previously noted, Chapter XII, 
Section 5 is consistent with rules approved for other national 
securities exchanges.\10\
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    \7\ The Exchange requested accelerated approval to allow BOX to 
establish and implement mechanisms to remain fully compliant with 
the Decentralized Plan and BOX Rules and to no longer rely upon a 
Commission-granted exemption from Rule 608(c) of Regulations NMS. 
The pilot period also allowed interested parties an opportunity to 
comment on the proposal before it was permanently approved.
    \8\ See Supra note 5.
    \9\ See Securities Exchange Act Release No. 61399 (January 22, 
2010), 75 FR 4603 (January 28, 2010) (SR-BX-2010-007) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to the Order Routing Pilot on the Boston Options Exchange Facility).
    \10\ See Supra note 5.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\11\ in general, and Section 
6(b)(5) of the Act,\12\ in particular, in that it is designed 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 for a free and open market and a national market 
system and, in general, to protect investors and the public interest. 
In particular, the Exchange believes that permanent approval of the 
Order Routing Pilot will result in an ongoing benefit to investors by 
affording BOX Options Participants the choice, on a voluntary basis, to 
have their orders routed to one or more Away Exchange(s) when such Away 
Exchange(s) display the Best Bid or Best Offer, in accordance with the 
Decentralized Plan.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    This proposed rule change is filed pursuant to paragraph (A) of 
section 19(b)(3) of the Exchange Act \13\ and Rule 19b-4(f)(6) 
thereunder.\14\ This proposed rule change does not significantly affect 
the protection of investors or the public interest, does not impose any 
significant burden on competition, and, by its terms, 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. The Exchange believes that this 
proposed rule change, which is essential for competitive purposes and 
to promote a free and open market for the benefit of investors, does 
not raise any new, unique or substantive issues from those raised in 
the Exchanges initial proposal to implement the Order Routing Pilot or 
the recent extension tothe Pilot,\15\ and the rules are consistent with 
those of other exchanges.\16\ The Exchange believes permanent approval 
is appropriate. There have been no comments, or complaints pertaining 
to the Order Routing Pilot. The routing process is operating as 
intended.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, as required under Rule 
19b-4(f)(6)(iii), the Exchange has submitted to the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and the 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.
    \15\ See Supra note 5 and note 9.
    \16\ See Supra note 5.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2010-014 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2010-014. This file 
number should be included on the subject line if e-mail 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

[[Page 8765]]

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 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 Number SR-BX-
2010-014 and should be submitted on or before March 18, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-3774 Filed 2-24-10; 8:45 am]
BILLING CODE 8011-01-P