Document ID: SEC-2010-1998-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-12-28T05:00Z

[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Notices]
[Pages 81687-81689]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32615]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63591; File No. SR-BX-2010-091]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Continue 
the Practice Governing the Directed Order Process on BOX

December 21, 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 December 16, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule

[[Page 81688]]

change as described in Items I and II below, which Items have been 
prepared by the self-regulatory organization. The Commission is 
publishing this notice to solicit comments on the proposed rule 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Chapter VI, Section 5 (Obligations 
of Market Makers) of the Rules of the Boston Options Exchange Group, 
LLC (``BOX'') to extend the date of effectiveness of the Directed Order 
\3\ process (``Pilot Program'') from December 31, 2010, to June 30, 
2011 while the Commission considers the Exchange's proposal to amend 
the BOX Rules to permit Executing Participants (``EPs'') to only 
receive Directed Orders through the BOX Trading Host from Order Flow 
Providers (``OFPs'') whom the EP has designated.\4\ The text of the 
proposed rule change is available on the Exchange's website at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, on the Commission's 
Web site at http://www.sec.gov, at the Exchange, and at the 
Commission's Public Reference Room.
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    \3\ Capitalized terms not otherwise defined herein shall have 
the meanings prescribed within the BOX Rules.
    \4\ See Securities Exchange Act Release No. 63539 (December 14, 
2010) (SR-BX-2010-079).
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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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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
    On December 13, 2010, the Exchange filed SR-BX-2010-080, a proposal 
to amend the BOX Rules to continue the practice governing the 
Exchange's Directed Order process on BOX.\5\ Specifically, pursuant to 
SR-BX-2010-080, the BOX Rules state that the BOX Trading Host 
identifies to an Executing Participant the identity of the firm 
entering the Directed Order on BOX. The amended rule as set forth in 
SR-BX-2010-080 was to be effective on a pilot basis until December 31, 
2010, while the Commission considered the Exchange's proposal to amend 
the BOX Rules to permit EPs to only receive Directed Orders through the 
BOX Trading Host from OFPs whom the EP has designated.\6\
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    \5\ See Securities Exchange Act Release No. 63540 (December 14, 
2010) (SR-BX-2010-080).
    \6\ See Securities Exchange Act Release Nos. 63540 (December 14, 
2010) (SR-BX-2010-080) and 63539 (December 14, 2010) (SR-BX-2010-
079).
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    The purpose of this proposed rule change is to amend Chapter VI, 
Section 5(c)(i) of the BOX Rules to extend the date of effectiveness of 
the amended Directed Order rule from December 31, 2010, to June 30, 
2011. This extension of the pilot period will afford the Commission the 
necessary time to consider the Exchange's proposal SR-BX-2010-079 
referenced above.\7\ In the event the Commission reaches a decision 
with respect to Exchange proposal SR-BX-2010-079 before June 30, 2011, 
the proposed Pilot Program governing the Directed Order process on BOX 
will cease to be effective at the time of that decision.
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    \7\ See Securities Exchange Act Release No. 63539 (December 14, 
2010) (SR-BX-2010-079).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ 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, and to 
remove impediments to and perfect the mechanisms of 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 the proposed extension of the pilot period will afford the 
Commission the necessary time to consider the Exchange's proposal SR-
BX-2010-079 which would amend the BOX Rules to permit EPs to only 
receive Directed Orders through the BOX Trading Host from OFPs whom the 
EP has designated.\10\ Additionally, the Exchange believes that the 
proposed extension will allow the Directed Order Pilot Program to 
remain in effect on BOX without interruption.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ See Securities Exchange Act Release No. 63539 (December 14, 
2010) (SR-BX-2010-079).
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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 Regarding 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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) \11\ of the Act and Rule 19b-4(f)(6) 
thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
may not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\15\ which would make the rule change effective and 
operative upon filing. 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 continue the pilot for 
Directed Orders that has operated under SR-BX-2010-080. A waiver would 
therefore continue to permit the Directed Order Pilot Program to remain 
in effect on BOX without interruption.\16\

[[Page 81689]]

Accordingly, the Commission designates the proposed rule change 
operative upon filing with the Commission.
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    \13\ Id.
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ Id.
    \16\ For purposes only of waiving the operative delay for this 
proposal, 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 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.

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-2010-091 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-2010-091. 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 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 website 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 publicly available. All submissions 
should refer to File Number SR-BX-2010-091 and should be submitted on 
or before January 18, 2011.

    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. 2010-32615 Filed 12-27-10; 8:45 am]
BILLING CODE 8011-01-P