Document ID: SEC-2011-0474-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2011-04-12T04:00Z

[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20426-20428]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8582]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64198; File No. SR-BX-2011-020]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX BX, Inc. To Amend 
the Fee Schedule of the Boston Options Exchange Facility

April 6, 2011.
    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 March 31, 2011, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II, 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

[[Page 20427]]

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)(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''). While changes to the BOX Fee 
Schedule pursuant to this proposal will be effective upon filing, the 
changes will become operative on April 1, 2011. The text of the 
proposed rule change is available from the principal office of the 
Exchange, at the Commission's Public Reference Room, on the Exchange's 
Internet Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, and on the Commission's Web site at http://www.sec.gov.

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
Fees and Credits in Section 7
    Currently, Section 7 of the BOX Fee Schedule specifies a $0.25 
credit and fee for transactions in the BOX Price Improvement Period 
(``PIP''). These credits and fees apply equally to all account types, 
whether Public Customer, Broker Dealer or Market Maker, and across 
options classes, both those within the Penny Pilot program and non-
Penny classes, and are in addition to any applicable trading fees, as 
described in Sections 1 through 3 of the BOX Fee Schedule. The Exchange 
proposes to increase the existing credits and fees within Section 7 for 
transactions in the PIP, from $0.25 to $0.30. This increase in credits 
and fees for PIP transactions is designed to provide all BOX market 
participants an additional incentive to submit their orders to the PIP 
and the opportunity to benefit from its potential price improvement.
    BOX believes that the change to PIP transaction fees and credits 
are competitive, fair and reasonable, and non-discriminatory in that 
they apply to all account types and options classes.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\5\ in general, and Section 
6(b)(4) of the Act,\6\ in particular, in that it provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities. The Exchange 
believes the proposal is an equitable allocation of reasonable fees and 
other charges among BOX Options Participants. The Exchange also 
believes that there is an equitable allocation of reasonable credits 
among BOX Options Participants.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that it is equitable to provide a credit to 
any Participant that removes liquidity through the PIP on behalf of its 
customer. The Exchange believes this credit will attract additional 
order flow to BOX, and to the PIP in particular, to the benefit of all 
market participants. The Exchange believes that it is an equitable 
allocation of the fees and credits for PIP transactions because such 
fees and credits apply uniformly to all categories of participants in 
PIP transactions, across all account types and options classes. All 
market participants that trade within the PIP, and all PIP transactions 
would be subject to the fees and credits in Section 7 of the BOX Fee 
Schedule.
    Further, the Exchange believes the proposed fees and credits 
related to PIP transactions to be reasonable. BOX operates within a 
highly competitive market in which market participants can readily 
direct order flow to any of eight other competing venues if they deem 
fee levels at a particular venue to be excessive. The changes to BOX 
credits and fees proposed by this filing are intended to attract order 
flow to BOX by offering incentives to all market participants to submit 
their orders to the PIP for potential price improvement. BOX notes that 
this proposed rule change will increase both the fees and credit for 
PIP transactions. The result is that BOX will collect a $.30 fee from 
Participants that add liquidity in the PIP and credit another 
Participant $.30 for removing liquidity. Stated otherwise, the fees 
collected will not necessarily result in additional revenue to BOX, but 
will simply allow BOX to provide the credit incentive to Participants 
to attract additional order flow to the PIP. BOX believes it is 
appropriate to provide incentives to market participants to use PIP, 
resulting in potential benefit to customers through potential price 
improvement, and to all market participants from greater liquidity.
    In particular, the proposed change will allow the fees charged on 
BOX to remain competitive with other exchanges as well as apply such 
fees in a manner which is equitable among all BOX Participants. The 
Exchange believes that the PIP transaction fees and credits it assesses 
are fair and reasonable and must be competitive with fees and credits 
in place on other exchanges. Further, the Exchange believes that this 
competitive marketplace impacts the fees and credits present on BOX 
today and influences the proposal set forth above.

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 Act \7\ and Rule 19b-4(f)(2) thereunder,\8\ 
because it establishes or changes a due, fee, or other charge 
applicable only to a member.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 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 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

[[Page 20428]]

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-2011-020 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-2011-020. 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 Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NW., 
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-2011-020 and should be 
submitted on or before May 3, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8582 Filed 4-11-11; 8:45 am]
BILLING CODE 8011-01-P