Document ID: SEC-2010-0033-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period To Receive Inbound Routes of Orders From Nasdaq Execution Services
Posted Date: 2010-01-08T05:00Z

[Federal Register Volume 75, Number 5 (Friday, January 8, 2010)]
[Notices]
[Pages 1102-1104]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: X10-800108]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61271; File No. SR-BX-2009-085]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Extending 
the Pilot Period To Receive Inbound Routes of Orders From Nasdaq 
Execution Services

December 31, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on December 23, 2009, NASDAQ OMX BX, Inc. (the ``Exchange'' or 
``BX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule

[[Page 1103]]

change as described in Items I and II, below, which Items have been 
prepared by BX. BX has designated the proposed rule change as 
constituting a non-controversial rule change under Rule 19b-4(f)(6) 
under the Act,\3\ 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\ 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

    BX submits this proposed rule change to extend the pilot period of 
BX's prior approval to receive inbound routes of equities orders from 
Nasdaq Execution Services, LLC (``NES'') through March 23, 2010.

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, BX 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. BX 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
    Currently, NES is the approved outbound routing facility of the 
NASDAQ Stock Market LLC (``NASDAQ'') for cash equities, providing 
outbound routing from NASDAQ to other market centers.\4\ BX also has 
been previously approved to receive inbound routes of equities orders 
by NES in its capacity as an order routing facility of NASDAQ.\5\ The 
Exchange's authority to receive inbound routes of equities orders by 
NES is subject to a pilot period ending December 23, 2009. The Exchange 
hereby seeks to extend the previously approved pilot period (with the 
attendant obligations and conditions) for an additional 3 months, 
through March 23, 2010.
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    \4\ See Securities Exchange Act Release Nos. 50311 (September 3, 
2004), 69 FR 54818 (September 10, 2004) (Order Granting Application 
for a Temporary Conditional Exemption Pursuant To Section 36(a) of 
the Exchange Act by the National Association of Securities Dealers, 
Inc. Relating to the Acquisition of an ECN by The Nasdaq Stock 
Market, Inc.) and 52902 (December 7, 2005), 70 FR 73810 (December 
13, 2005) (SRNASD-2005-128) (Order Approving a Proposed Rule Change 
To Establish Rules Governing the Operation of the INET System). See 
also Securities Exchange Act Release Nos. 58752 (October 8, 2008), 
73 FR 61181 (October 15, 2008) (SR-NASDAQ-2008-079); 58135 (July 10, 
2008), 73 FR 40898 (July 16, 2008) (SR-NASDAQ-2008-061); 58069 (June 
30, 2008), 73 FR 39360 (July 9, 2008) (SR-NASDAQ-2008-054); 56708 
(October 26, 2007), 72 FR 61925 (November 1, 2007) (SR-NASDAQ-2007-
078); 56867 (November 29, 2007), 72 FR 69263 (December 7, 2007) (SR-
NASDAQ-2007-065); 55335 (February 23, 2007), 72 FR 9369 (March 1, 
2007) (SR-NASDAQ-2007-005); 54613 (October 17, 2006), 71 FR 62325 
(October 24, 2006) (SR-NASDAQ 2006-043); 54271 (August 3, 2006), 71 
FR 45876 (August 10, 2006) (SR-NASDAQ-2006-027); and 54155 (July 14, 
2006), 71 FR 41291 (July 20, 2006) (SR-NASDAQ-2006-001).
    \5\ See Securities Exchange Act Release No. 59154 (December 23, 
2008), 73 FR 80468 (December 31, 2008).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\6\ in general, and with 
Section 6(b)(5) of the Act,\7\ 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, 
the proposed rule change will allow the Exchange to continue receiving 
inbound routes of equities orders from NES acting in its capacity as a 
facility of Nasdaq, in a manner consistent with prior approvals and 
established protections. The Exchange believes that extending the 
previously approved pilot period for three months is of sufficient 
length to permit both the Exchange and the Commission to assess the 
impact of the Exchange's authority to receive direct inbound routes of 
equities orders via NES (including the attendant obligations and 
conditions).
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    BX 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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\10\ 
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. BX has requested that the Commission 
waive the 30-day operative delay. BX notes that the proposal will allow 
the Exchange to continue receiving inbound routes of equities orders 
from NES, in a manner consistent with prior approvals and established 
protections, while also permitting the Exchange and the Commission to 
assess the impact of the pilot.\12\ The Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest because such waiver would allow the 
pilot period to be extended without interruption through March 23, 
2010. For this reason, the Commission designates the proposed rule 
change to be operative upon filing with the Commission.\13\
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    \10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
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 Exchange has satisfied this requirement.
    \11\ Id.
    \12\ See supra at II.A.2.
    \13\ For the 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).
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    At any time within 60 days of the filing of such proposed rule 
change the Commission may summarily abrogate

[[Page 1104]]

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-2009-085 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-2009-085. 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 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 inspection and 
copying 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-
2009-085 and should be submitted on or before January 29, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-78 Filed 1-7-10; 8:45 am]
BILLING CODE 8011-01-P