Document ID: SEC-2012-1107-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2012-07-10T04:00Z

[Federal Register Volume 77, Number 132 (Tuesday, July 10, 2012)]
[Notices]
[Pages 40688-40692]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-16762]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67339; File No. SR-BX-2012-043]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt 
Transaction and Routing Fees

July 3, 2012.
    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 June 26, 2012, NASDAQ OMX BX, Inc. (``BX'' or ``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 Exchange proposes to amend Chapter XV, Section 2 entitled ``BX 
Options Market--Fees and Rebates'' to adopt rebates and fees relating 
to various options, including during the Opening Cross, and establish 
Routing Fees.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated these changes to be operative on July 2, 2012.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=BXRulefilings, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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 Exchange 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 Exchange 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 filed and received approval to operate a new options 
market.\3\ The new market, called NASDAQ OMX BX Options, or BX Options, 
is an all-electronic trading platform with no physical trading floor. 
At this time BX proposes to adopt various fees and rebates which would 
be effective as of July 2, 2012. There are no fees or rebates for 
transacting an options business on BX prior to this date, except for 
membership, services and equipment charges, which may be applicable, as 
noted in the 7000 Rules.
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    \3\ See Securities Exchange Act Release No. 67256 (June 26, 
2012) (SR-BX-2012-030).
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    BX proposes to amend Chapter XV, Section 2(1) to adopt rebates and 
fees for Customers, BX Options Market Makers \4\ and Non-Customers \5\ 
in various options \6\ as follows:
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    \4\ A BX Options Market Makers must be registered as such 
pursuant to Chapter VII, Section 2 of the BX Options Rules, and must 
also remain in good standing pursuant to Chapter VII, Section 4.
    \5\ A Non-Customer includes a Professional, Firm, Broker-Dealer 
and Non-BX Options Market Maker.
    \6\ The Exchange is proposing to adopt fees and rebates for 
options overlying iShares Russell 2000 (``IWM''), PowerShares QQQ 
Trust (``QQQ'')[supreg]; Standard and Poor's Depositary Receipts/
SPDRs (``SPY''), Bank of America Corporation (``BAC''), Citigroup, 
Inc. (``C''), Cisco Systems, Inc. (``CSCO''), Ford Motor Company 
Common Stock (``F''), Intel Corp (``INTC''), Microsoft Corporation 
(``MSFT''), JP Morgan Chase & Co. (``JPM''), SPDR Gold Shares 
(``GLD''), iShares Silver Trust (``SLV''), United States Oil Fund LP 
Units (``USO'') and all other Penny Pilot Options.

                                                Fees and Rebates
                                             [Per executed contract]
----------------------------------------------------------------------------------------------------------------
                                                                                 BX Options
                                                                Customer        market maker    Non-Customer \1\
----------------------------------------------------------------------------------------------------------------
IWM, QQQ, SPY:
    Rebate to Add Liquidity...............................         \2\ $0.15         \2\ $0.15             $0.00
    Fee to Add Liquidity..................................          \3\ 0.15          \3\ 0.15              0.43
    Rebate to Remove Liquidity............................              0.12              0.00              0.00
    Fee to Remove Liquidity...............................              0.00              0.43              0.43
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO:
    Rebate to Add Liquidity...............................          \2\ 0.15          \2\ 0.15              0.00
    Fee to Add Liquidity..................................          \3\ 0.37          \3\ 0.37              0.43
    Rebate to Remove Liquidity............................              0.32              0.00              0.00
    Fee to Remove Liquidity...............................              0.00              0.43              0.43

[[Page 40689]]

 
All Other Penny Pilot Options:
    Rebate to Add Liquidity...............................          \2\ 0.10          \2\ 0.10              0.00
    Fee to Add Liquidity..................................          \3\ 0.40          \3\ 0.40              0.43
    Rebate to Remove Liquidity............................              0.32              0.00              0.00
    Fee to Remove Liquidity...............................              0.00              0.43              0.43
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\1\ A Non-Customer includes a Professional, Firm, Broker-Dealer and Non-BX Options Market Maker.
\2\ The Rebate to Add Liquidity will be paid to a Customer or BX Options Market Maker only when the Customer or
  BX Options Market Maker is contra to a Non-Customer or BX Options Market Maker.
\3\ The Fee to Add Liquidity will be assessed to a Customer or BX Options Market Maker only when the Customer or
  BX Options Market Maker is contra to a Customer.

    The Exchange would pay the Rebate to Add Liquidity, in any symbol, 
to a Customer or BX Options Market Maker only when the Customer or BX 
Options Market Maker is contra to a Non-Customer or BX Options Market 
Maker. The Exchange would not pay a Rebate to Add Liquidity to a 
Customer or BX Options Market Maker if this qualifier is not met. 
Similarly, the Exchange would assess a Fee to Add Liquidity, in any 
symbol, to a Customer or BX Options Market Maker only when the Customer 
or BX Options Market Maker is contra to a Customer. The Exchange would 
not assess a Fee to Add Liquidity to a Customer or BX Options Market 
Maker if this qualifier is not met.
    The Exchange also proposes to amend Chapter XV, Section 2(2) to 
adopt rebates and fees for the Opening Cross to state that Customer 
orders will receive the Rebate to Remove Liquidity during the 
Exchange's Opening Cross, unless the contra-side is also a Customer (in 
which case no Fee to Remove Liquidity is assessed and no Rebate to 
Remove Liquidity is received). Professionals, Firms, Broker-Dealers and 
Non-BX Options Market Makers will be assessed the Fee to Remove 
Liquidity during the Exchange's Opening Cross.
    Finally, the Exchange proposes to amend Chapter XV, Section 2(4) to 
adopt fees for routing contracts to markets other the BX Options market 
as follows:

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                                                                            Firm/Market Maker/
                        Exchange                              Customer        Broker-Dealer       Professional
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BATS (Penny Pilot).....................................              $0.55              $0.55              $0.55
BOX....................................................               0.11               0.55               0.11
CBOE...................................................               0.11               0.55               0.31
CBOE orders greater than 99 contracts in ETFs, ETNs and               0.29                N/A               0.31
 HOLDRS)...............................................
C2.....................................................               0.55               0.55               0.55
ISE (Standard).........................................               0.11               0.55               0.29
ISE (Select Symbols) *.................................               0.31               0.55               0.39
NOM....................................................               0.11               0.55               0.55
NYSE Arca (Penny Pilot)................................               0.55               0.55               0.55
NYSE Amex..............................................               0.11               0.55               0.31
PHLX (for all options than PHLX Select Symbols)........               0.11               0.55               0.36
PHLX Select Symbols **.................................               0.50               0.55               0.55
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* These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing
  Liquidity in Select Symbols. See ISE's Schedule of Fees for the complete list of symbols that are subject to
  these fees.
** These fees are applicable to orders routed to PHLX that are subject to Rebates and Fees for Adding and
  Removing Liquidity in Select Symbols. See PHLX's Pricing Schedule for the complete list of symbols that are
  subject to these fees.

    The Exchange believes that the proposed fees and rebates are 
competitive and will encourage BX members to transact business on the 
Exchange. Specifically, the Exchange believes that the proposed rebates 
will incentivize BX members to direct orders to the Exchange, resulting 
in greater liquidity, which benefits all market participants. The 
proposed fees would enable the Exchange to fund the various proposed 
rebates and incentivize market participants to route orders to the 
Exchange. The Routing Fees are proposed to recoup costs that the 
Exchange incurs for routing and executing certain orders on away 
markets.
2. Statutory Basis
    BX believes that the proposed rule changes are consistent with the 
provisions of Section 6 of the Act,\7\ in general, and with Section 
6(b)(4) of the Act,\8\ in particular, in that they provide for the 
equitable allocation of reasonable dues, fees and other charges among 
members and issuers and other persons using any facility or system 
which BX operates or controls.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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Transaction Charges
    The Exchange believes that its proposal to assess different fees 
and rebates for IWM, QQQ and SPY as compared to BAC, C, CSCO, F, INTC, 
MSFT, JPM, GLD, SLV, USO and also different fees and rebates for all 
other Penny Pilot Options is reasonable given the fact that certain 
symbols such as IWM, QQQ and SPY, as well as other symbols which the 
Exchange differentiates, are highly liquid Penny Pilot Options as 
compared to other Penny Pilot Options. Additionally, other

[[Page 40690]]

options exchanges differentiate pricing by security today.\9\
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    \9\ See NASDAQ OMX PHLX LLC's (``Phlx'') Pricing Schedule, which 
has different pricing for its Select Symbols and different pricing 
for other Multiply Listed Options. See also the NASDAQ Options 
Market LLC (``NOM'') at Chapter XV, Section 2(1), which 
distinguishes pricing for NDX and MNX. See also the International 
Securities Exchange LLC's (``ISE'') Fee Schedule, which 
distinguishes pricing for Special Non-Select Penny Pilot Symbols. 
See also the Chicago Board Options Exchange, Incorporated's 
(``CBOE'') Fees Schedule, which distinguishes index products.
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    The Exchange believes that its proposal to assess different fees 
and rebates for IWM, QQQ and SPY as compared to BAC, C, CSCO, F, INTC, 
MSFT, JPM, GLD, SLV, USO and also different fees and rebates for all 
other Penny Pilot Options is equitable and not unfairly discriminatory 
as described hereafter. With respect to the proposed Rebate to Add 
Liquidity \10\ and Rebate to Remove Liquidity \11\ for IWM, QQQ, SPY, 
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny 
Pilot Options, the Exchange believes that these rebates will attract 
Customer order flow to the Exchange to the benefit of all market 
participants through increased liquidity. Further, the Exchange also 
believes it is reasonable, equitable and not unfairly discriminatory to 
only offer the Rebate to Remove Liquidity to Customers and not other 
market participants as an incentive to attract Customer order flow to 
the Exchange. It is an important Exchange function to provide an 
opportunity to all market participants to trade against Customer 
orders.
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    \10\ The Exchange proposes a Rebate to Add Liquidity for IWM, 
QQQ, SPY, BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO of $0.15 
per contract and a Rebate to Add Liquidity for all other Penny Pilot 
Options of $0.10 per contact.
    \11\ The Exchange proposes a Rebate to Remove Liquidity for IWM, 
QQQ, SPY, of $0.12 per contract and a Rebate to Remove Liquidity for 
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny 
Pilot Options of $0.32 per contact.
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    With respect to the Rebate to Add Liquidity, the Exchange is only 
paying the Rebate to Add Liquidity to a Customer or BX Options Market 
Maker when either the Customer or a BX Options Market Maker is contra 
to a Non-Customer \12\ or BX Options Market Maker. While the Customer 
and BX Options Market Maker are unaware at the time they enter a 
transaction whether they would earn a rebate, the Exchange believes 
that the possibility of earning a $0.15 or $0.10 per contract Rebate to 
Add Liquidity, depending on the security, when trading against a Non-
Customer (Professional, Firm, Broker-Dealer or Non-BX Options Market 
Maker) or BX Options Market Maker should incentivize these critical 
market participants to add liquidity. Increased liquidity benefits all 
market participants. The Exchange believes that offering both Customers 
and BX Options Market Makers the opportunity to receive a Rebate to Add 
Liquidity is reasonable because these market participants differ from 
other market participants. Customer order flow benefits all market 
participants by improving liquidity, the quality of order interaction 
and executions at the Exchange. BX Options Market Makers have 
obligations to the market and regulatory requirements,\13\ which 
normally do not apply to other market participants. A BX Options Market 
Maker has the obligation to make continuous markets, engage in course 
of dealings reasonably calculated to contribute to the maintenance of a 
fair and orderly market, and not make bids or offers or enter into 
transactions that are inconsistent with course of dealings. The 
proposed differentiation as between Customers and BX Options Market 
Makers and other market participants recognizes the differing 
contributions made to the liquidity and trading environment on the 
Exchange by Customers and BX Options Market Makers, as well as the 
differing mix of orders entered. Further, as noted herein, the Customer 
and BX Options Market Maker are unaware at the time the order is 
entered whether they would receive a $0.15 or $0.10 per contract Rebate 
to Add Liquidity, depending on the security, because they are unaware 
of the identity of the contra-party, which would determine whether they 
receive a rebate. The Exchange believes that the Customer and BX 
Options Market Maker rebate is equitable and not unfairly 
discriminatory because the Rebate to Add Liquidity, which is only being 
offered to Customers and BX Options Market Makers, would reward these 
participants for posting liquidity when they are contra to a Non-
Customer (Professionals, Firms, Broker-Dealer or Non-BX Options Market 
Makers) or a BX Options Market Maker.
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    \12\ For purposes of these fees and rebates in Chapter XV, 
Section 2(1), a Non-Customer includes a Professional, Firm, Broker-
Dealer and Non-BX Options Market Maker.
    \13\ Pursuant to Chapter VII (Market Participants), Section 5 
(Obligations of Market Makers), in registering as a Market Maker, an 
Options Participant commits himself to various obligations. 
Transactions of a Market Maker in its market making capacity must 
constitute a course of dealings reasonably calculated to contribute 
to the maintenance of a fair and orderly market, and Market Makers 
should not make bids or offers or enter into transactions that are 
inconsistent with such course of dealings. Further, all Market 
Makers are designated as specialists on BX for all purposes under 
the Act or rules thereunder. See Chapter VII, Section 5.
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    The Exchange believes that offering certain market participants a 
Rebate to Add Liquidity of $0.15 per contract for IWM, QQQ, SPY, BAC, 
C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and a Rebate to Add 
Liquidity of $0.10 per contract for all other Penny Pilot Options is 
reasonable, equitable and not unfairly discriminatory because options 
overlying IWM, QQQ, SPY, BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, 
USO are more liquid, with tighter bid/ask differentials and therefore 
the Exchange believes a higher Rebate to Add Liquidity is required to 
incentivize Customers or BX Options Market Makers to post liquidity for 
the opportunity to obtain a rebate. The Exchange believes that offering 
a $0.32 per contract Rebate to Remove Liquidity for options overlying 
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny 
Pilot Options is reasonable, equitable and not unfairly discriminatory 
because the Exchange desires to incentivize participants to transact 
Customer orders on the Exchange and obtain this rebate. The Exchange 
believes that this rebate will incentivize members to bring order flow 
and increase the liquidity on the Exchange to the benefit of all market 
participants. The Exchange believes that offering Customers a $0.12 per 
contract Rebate to Remove Liquidity for IWM, QQQ and SPY is reasonable, 
equitable and not unfairly discriminatory because the Exchange believes 
that the rebate will incentivize market participants to transact 
business on the Exchange and the opportunity to receive the rebate will 
bring liquidity to BX to the benefit of all market participants.
    The Exchange's proposal to create Fees to Add Liquidity, in certain 
circumstances, and Fees to Remove Liquidity for IWM, QQQ, SPY, BAC, C, 
CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny Pilot 
Options is reasonable because the fees would enable the Exchange to 
reward Customers and in some cases BX Options Market Makers that add or 
remove liquidity with rebates. The advantage of increased Customer 
order flow benefits all market participants. In addition, the proposed 
Fees to Add and Remove Liquidity are less than the rates assessed by 
other exchanges for similar fees.\14\ The Exchange's proposal to only 
assess the Fee to Add Liquidity to a Customer or BX Options Market 
Maker

[[Page 40691]]

when the Customer or BX Options Market Maker is contra to a Customer is 
reasonable, equitable and not unfairly discriminatory because the 
Exchange would only pay a Rebate to Remove Liquidity to a Customer and 
this fee enables the Exchange to reward Customers by offering a rebate. 
As previously, mentioned, attracting Customer order flow to the 
Exchange benefits all market participants. Also, BX Options Market 
Makers have burdens, as previously noted, that do not apply to other 
market participants. All Non-Customer market participants 
(Professionals, Firms, Broker-Dealers and Non-BX Options Market Makers) 
would be assessed the same Fee to Add Liquidity on every transaction. 
The Exchange's proposal to create Fees to Add Liquidity and Fees to 
Remove Liquidity for IWM, QQQ, SPY, BAC, C, CSCO, F, INTC, MSFT, JPM, 
GLD, SLV, USO and all other Penny Pilot Options is equitable and not 
unfairly discriminatory for the reasons which follow hereafter. The 
Exchange is not assessing Customers a Fee to Remove Liquidity for any 
security. The Exchange believes that attracting Customer orders to BX 
benefits all market participants and it is an important Exchange 
function to provide an opportunity to all market participants to trade 
against Customer orders. The Exchange is also uniformly assessing all 
other market participants (BX Options Market Makers, Professionals, 
Firms, Broker-Dealers and Non-BX Options Market Makers) the same $0.43 
per contract Fee to Remove Liquidity.
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    \14\ See BATS Exchange, Inc.'s Fee Schedule. See also NOM 
Chapter XV, Section 2 (the Penny Pilot Fees to Remove Liquidity are 
$0.45 per contract for all market participants).
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    The Exchange is assessing Customers and BX Options Market Makers 
lower Fees to Add Liquidity, and only when contra a Customer, as 
compared to other market participants because as previously stated 
Customers and BX Options Market Makers make different contributions to 
the liquidity and trading environment on the Exchange as compared to 
other market participants. Non-Customer participants do not bring the 
unique benefits that Customer order flow provides the market nor do 
these participants have the obligations that were described herein for 
BX Options Market Makers. The Exchange is uniformly assessing all other 
market participants (Professionals, Firms, Broker-Dealers and Non-BX 
Options Market Makers) a $0.43 per contract Fee to Add Liquidity, 
similar to the Fee to Remove Liquidity.
    The Exchange's proposal to pay Customers a Rebate to Remove 
Liquidity during the Opening Cross \15\ except when contra to a 
Customer, while all market participants except the Customer, the Non-
Customer and BX Options Market Maker are assessed the Fee to Remove 
Liquidity, is reasonable because the Exchange seeks to continue to 
incentivize market participants to transact orders at the Exchange 
during the Opening Cross. Further, the Exchange's proposal to assess 
Non-Customers and BX Options Market Makers a Fee to Remove Liquidity 
enables the Exchange to reward those Customer orders that remove 
liquidity. While the Customer is unaware at the time the transaction is 
entered whether a rebate would be earned, the Exchange believes that 
the possibility of earning a Rebate to Remove Liquidity when trading 
against a Non-Customer should incentivize Customer order flow to the 
benefit of all market participants.
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    \15\ The Opening Cross is the process for determining the price 
at which orders shall be executed at the open and for executing 
those orders.
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    The Exchange's proposal to pay a Customer a Rebate to Remove 
Liquidity during the Opening Cross except when contra to a Customer, 
while all market participants except the Customer, the Non-Customer and 
BX Options Market Maker are assessed the Fee to Remove Liquidity, is 
equitable and not unfairly discriminatory because as mentioned 
previously Customer order flow benefits all market participants and 
similar to other rebates proposed herein, the Customer traditionally 
pays lower fees. Customer order flow benefits all market participants 
by improving liquidity, the quality of order interaction and executions 
at the Exchange. Also, the Exchange is proposing to assess a Fee to 
Remove Liquidity on all market participants uniformly, other than a 
Customer, during the Opening Cross to fund the proposed rebate. This is 
similar to a rebate and fee offered in the Opening Cross on the 
NOM.\16\
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    \16\ See The NASDAQ Stock Market, LLC Rules at Chapter XV, 
Section 2.
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    The Exchange's proposed requirement that a BX Options Market Maker 
must be registered as a BX Options Market Maker in at least one 
security to qualify for the fees and rebates applicable to a BX Options 
Market Maker in Chapter XV, Section 2 is reasonable, equitable and not 
unfairly discriminatory because the Exchange desires to incentivize BX 
Options Market Makers to be actively engaged in market making to 
qualify for the fees and rebates proposed herein. Also, NOM has the 
same requirement for its transaction fees in Chapter XV, Section 2 of 
the NOM Rules.\17\ The Exchange would uniformly apply this standard in 
paying rebates and assessing fees to BX Options Market Makers.
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    \17\ See Securities Exchange Act Release No. 62543 (July 21, 
2010), 75 FR 44037 (July 27, 2010) (SR-NASDAQ-2012-075).
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Routing Fees
    The proposed Routing Fees are reasonable because they seek to 
recoup costs that are incurred by the Exchange when routing Customer, 
Firm, Market Maker, Broker-Dealer and Professional orders to away 
markets on behalf of members. Each destination market's transaction 
charge varies and there is a standard clearing charge for each 
transaction incurred by the Exchange along with other administrative 
and technical costs \18\ that are incurred by the Exchange. The 
Exchange believes that the proposed Routing Fees would enable the 
Exchange to recover the remove fees assessed to each market participant 
by the away market, plus clearing and other administrative and 
technical fees \19\ for the execution of orders routed to BX and 
executed on an away market.
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    \18\ The Exchange utilizes the Nasdaq Options Services LLC 
(``NOS''), a member of the Exchange and the Exchange's exclusive 
order router to route orders in options listed and open for trading 
on the BX to destination markets. See Securities Exchange Act 
Release No. 67256 (June 26, 2012) (SR-BX-2012-030).
    \19\ The Exchange assesses the away market's remove fee plus a 
$0.06 clearing cost and another $0.05 per contract associated with 
administrative and technical costs associated with operating NOS. 
Each time NOS routes to away markets NOS is charged a $0.06 clearing 
fee and, in the case of certain exchanges, a transaction fee is also 
charged in certain symbols, which fees are passed through to the 
Exchange. There are also membership fees at away markets, and 
technical costs associated with routing.
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    The Exchange also believes that the proposed Routing Fees are 
equitable and not unfairly discriminatory because they would be 
uniformly applied to all market participant orders that are routed to 
an away market and to cover the respective cost to route the order. The 
Exchange applied a similar methodology in calculating the Routing Fees 
for each market participant by adding not more than a $0.11 per 
contract fee to the away market's remove fee to determine the Routing 
Fees.
    The Exchange operates in a highly competitive market comprised of 
ten U.S. options exchanges in which sophisticated and knowledgeable 
market participants can and do send order flow to competing exchanges 
if they deem fee levels at a particular exchange to be excessive. The 
Exchange believes that the proposed fee and rebate scheme is 
competitive and

[[Page 40692]]

similar to other fees and rebates in place on other exchanges. The 
Exchange believes that this competitive marketplace materially impacts 
the fees and rebates present on the Exchange today and substantially 
influences the proposal set forth above.

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. To the contrary, BX has designed its fees and 
rebates to compete effectively for the execution and routing of options 
contracts and to reduce the overall cost to investors of options 
trading. The Exchange believes that the proposed fee/rebate pricing 
structure would attract liquidity to and benefit order interaction at 
the Exchange to the benefit of all market participants.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\20\ 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.
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    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 email to rule-comments@sec.gov. Please include 
File Number SR-BX-2012-043 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-2012-043. This file 
number should be included on the subject line if email 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 NE., 
Washington, DC 20549, 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-2012-043 and should be 
submitted on or before July 31, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-16762 Filed 7-9-12; 8:45 am]
BILLING CODE 8011-01-P