Document ID: SEC-2009-1135-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2009-08-11T04:00Z

[Federal Register: August 11, 2009 (Volume 74, Number 153)]
[Notices]               
[Page 40258-40259]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11au09-134]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60444; File No. SR-BX-2009-044]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Fee Schedule of the Boston Options Exchange Facility To Implement The 
Non-Penny Pilot Class Pricing Structure

August 5, 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 July 30, 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 self-regulatory organization. The Exchange filed 
the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the 
Act,\3\ and Rule 19b-4(f)(2) 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 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Fee Schedule of the Boston 
Options Exchange Group, LLC (``BOX''). 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 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
    The Exchange proposes to add the Non-Penny Pilot Class Pricing 
Structure as Section 8 of the BOX Fee Schedule. The Non-Penny Pilot 
Class Pricing Structure will apply to all classes listed for trading on 
BOX that are not included in the Penny Pilot Program, as referenced in 
Chapter V, Section 33 of the BOX Rules (``Non-Penny Pilot 
Classes'').\5\ The Exchange requests that the effective date of the 
proposed rule change be August 3, 2009.
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    \5\ A recent proposal submitted by the Exchange for immediately 
effectiveness removed the following three (3) exchange-traded fund 
share classes from the Liquidity Make or Take pricing structure: (1) 
Standard & Poor's Depositary Receipts[supreg] (SPY); (2) 
Powershares[reg] QQQ Trust Series 1 (QQQQ); and (3) iShares Russell 
2000[supreg] Index Fund (IWM). See Securities Exchange Act Release 
No. 60221 (July 1, 2009), 74 FR 32996 (July 9, 2009) (SR-BX-2009-
033). These three classes will remain subject only to `standard' 
fees.
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    In proposed Section 8, for Non-Penny Pilot Classes, the Exchange 
will charge a fee of $0.30 for transactions that add liquidity to the 
BOX Book and provide a credit of $0.30 for transactions that remove 
liquidity from the BOX Book. These fees and credits will apply equally 
to all account types, whether Public Customer, Firm or Market Maker and 
will be in addition to any applicable `standard' trading fees and/or 
volume discounts, as described in Sections 1 through 4 of the BOX Fee 
Schedule.\6\
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    \6\ Corresponding changes to Sections 1, 2, 3, and 4 of the Fee 
Schedule are being proposed to reflect the addition of the Non-Penny 
Pilot Class Pricing Structure. The Volume Discount will continue to 
be applicable for classes not included in The Liquidity Make or Take 
Pricing Structure of Section 7 of the Fee Schedule.
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    For example, a Public Customer order is entered into the BOX 
Trading Host and executes against a Broker Dealer's order resting on 
the BOX Book. The Public Customer is the remover of liquidity and the 
Broker Dealer is the adder of liquidity. The Public Customer will 
receive a $0.30 credit and the Broker Dealer will be charged a $0.30 
fee according to the Non-Penny Pilot Class pricing structure. The 
Public Customer will receive a $0.30 credit and the broker dealer will 
be charged $0.50 (the $0.30 Non-Penny Pilot Class Pricing Structure 
removal fee in addition to the standard $0.20 transaction fee).
    The Exchange believes that the proposed fees are competitive, fair 
and reasonable, and non-discriminatory in

[[Page 40259]]

that they apply equally to all BOX Participants and customers. This 
proposal is in response to various `Payment for Order Flow' programs 
currently in operation on other options exchanges. The Exchange will 
monitor the trading of options on these Non-Penny Pilot Classes to 
ensure that the proposal is operating in a fashion that promotes the 
interests of investors.
    The Exchange also proposes to make a non-substantive change to 
Section 3 of the Fee Schedule to reflect that the differentiation 
between Market Maker volume in assigned and unassigned classes is no 
longer pertinent for billing purposes.\7\
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    \7\ See Securities Exchange Act Release No. 59865 (May 5, 2009), 
74 FR 22198 (May 12, 2009) (SR-BX-2009-022).
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2. 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 provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and issuers and other persons using its facilities. In 
particular, the proposed change will allow the fees charged on BOX to 
remain competitive with other exchanges.
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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 
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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Exchange Act \10\ and Rule 19b-4(f)(2) 
thereunder,\11\ because it establishes or changes a due, fee, or other 
charge applicable only to a member.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the rule change if it 
appears to the Commission that the action is necessary or appropriate 
in the public interest, for the protection of investors, or would 
otherwise further 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-2009-044 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-2009-044. 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, 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 available publicly. All 
submissions should refer to File Number SR-BX-2009-044 and should be 
submitted on or before September 1, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-19146 Filed 8-10-09; 8:45 am]

BILLING CODE 8010-01-P