Document ID: SEC-2009-0693-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing of Proposed Rule Change To Retroactively Amend the Fee Schedule To Clarify and Correct References to the Volume Discount Given to Market Makers
Posted Date: 2009-05-21T04:00Z

[Federal Register: May 21, 2009 (Volume 74, Number 97)]
[Notices]               
[Page 23915-23916]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my09-138]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59919; File No. SR-BX-2009-025]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing of Proposed Rule Change To Retroactively Amend the Fee Schedule 
To Clarify and Correct References to the Volume Discount Given to 
Market Makers

May 14, 2009.
    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 May 8, 2009, 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 Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the proposed rule change is to amend the Fee 
Schedule of the Boston Options Exchange Group, LLC (``BOX'') on a 
retroactive basis to clarify and correct references relating to the 
volume discount (``Volume Discount'') given to Market Makers. The text 
of the proposed rule change is available from the principal office of 
the Exchange, at the Commission's Public Reference Room 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 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend on a retroactive basis Section 3 
(Market Maker Trading Fees) of the BOX Fee Schedule.\3\ BOX applies a 
Volume Discount to the fees charged to BOX Market Makers who engage in 
particularly active trading volume on BOX. The proposed changes will 
clarify and correct the Fee Schedule to reflect that trading volume in 
options classes included within the Liquidity Make or Take Pricing 
Structure (``Make or Take''), as set forth in Section 7 of the BOX Fee 
Schedule, is excluded when determining a Market Maker's Volume 
Discount.\4\ The text explicitly stating this was inadvertently removed 
from the BOX Fee Schedule in a prior filing, SR-BSE-2007-52.\5\
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    \3\ The BOX Fee Schedule can be found on the BOX Web site at 
http://www.bostonoptions.com.
    \4\ Make or Take volume is excluded when determining a Market 
Maker's monthly trading volume for purposes of the Volume Discount 
and is not eligible to have a Volume Discount applied to it.
    \5\ See Securities Exchange Act Release No. 56948 (December 12, 
2007), 72 FR 72426 (December 20, 2007) (SR-BSE-2007-52).
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    The Exchange requests that the current proposed changes be made 
effective retroactive to November 30, 2007, which is the date of filing 
and effectiveness of SR-BSE-2007-52. The Exchange believes that the 
proposed changes will eliminate any gap in the treatment of Make or 
Take volume when calculating the Volume Discount and is consistent with 
previous Commission action on similar matters pertaining to the 
allocation of exchange member fees and dues.\6\ Additionally, the 
Exchange

[[Page 23916]]

believes that the inadvertent elimination of the language in question 
from the BOX Fee Schedule did not alter BOX Market Makers' 
understanding that Make or Take volume was excluded from the 
calculation of the Volume Discount.\7\
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    \6\ See Securities Exchange Act Release No. 55549 (March 28, 
2007), 72 FR 16837 (April 5, 2007) (SR-CHX-2007-02) (Order Granting 
Accelerated Approval of a Proposed Rule Change To Amend the CHX Fee 
Schedule on a Retroactive Basis To Clarify the Application of a 
Credit Against Specialist Fixed Fees). The approval order stated 
that the rule change clarified the application of a specialist fixed 
fee credit that the exchange was offering as an incentive for 
specialists and would reconcile the discrepancy between the manner 
in which the exchange intended to apply the credit and the 
description of the credit in a prior proposal. The order also stated 
that approval would clarify ambiguity about the application of the 
specialist fixed fee credit. The Commission believed that 
accelerated approval would provide clarity without delay. See also 
Securities Exchange Act Release No. 57347 (February 19, 2008), 73 FR 
10080 (February 25, 2008) (SR-NASDAQ-2007-100) (Order Approving 
Proposed Rule Change to Nasdaq Rule 7033 To Modify the Fees Charged 
for the Mutual Fund Quotation Service and To Correct Certain Errors 
in the Rule Manual). The Commission approved a Nasdaq proposal 
seeking retroactive approval for the implementation of previously 
approved Mutual Fund Quotation Service (``MFQS'') fees which Nasdaq 
failed to transfer from the NASD rule to the corresponding Nasdaq 
rule when Nasdaq commenced operations as a national securities 
exchange, more than one and one half year earlier, on August 1, 
2006. The Commission stated that such approval was appropriate as it 
corrected an omission in Nasdaq's rules. See also Securities 
Exchange Act Release No. 56240 (August 13, 2007), 72 FR 46527 
(August 20, 2007) (SR-ISE-2007-49) (Order Approving Proposed Rule 
Change Relating to Fee Changes on a Retroactive Basis). The 
Commission stated that application of the amendments to ISE's 
Schedule of Fees on a retroactive basis, to a point in time 
approximately six months prior, were appropriate and aligned revenue 
collected from members with license costs charged to ISE.
    \7\ See BOX Information Circular entitled ``Amended BOX Fee 
Schedule--Expansion of ``Make or Take'' and Elimination of Minimum 
Activity Charger (MAC)'' that was distributed to Participants on 
November 28, 2007 which stated that the establishment of the Make or 
Take Credit set forth in the then proposed rule filing SR-BSE-2007-
52 would not impact Volume Discounts. Specifically, the BOX 
Information Circular stated: ``Current discounts based upon average 
daily volumes (ADV) of over 25,000 and 50,000 contracts will be 
maintained.''
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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,\8\ in general, and Section 
6(b)(4) of the Act,\9\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other persons using its 
facilities. The proposed changes will result in clarification of the 
fees charged for trading activity on BOX. The Exchange believes that 
retroactive approval of the proposed rule change will clarify the BOX 
Fee Schedule and eliminate any concern of inequitable allocation of 
fees as between the Market Makers and other Options Participants during 
the retroactive period.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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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 
result in any burden on competition that is 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2009-025 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-2009-025. 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 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-
2009-025 and should be submitted on or before June 11, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11810 Filed 5-20-09; 8:45 am]

BILLING CODE 8010-01-P