Document ID: SEC-2009-0966-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Further Extend the Temporary Cap on Certain Fees for Members
Posted Date: 2009-07-14T04:00Z

[Federal Register Volume 74, Number 133 (Tuesday, July 14, 2009)]
[Notices]
[Pages 34060-34061]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-16580]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60257; File No. SR-BX-2009-036]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Further 
Extend the Temporary Cap on Certain Fees for Members

July 7, 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 June 30, 2009, NASDAQ OMX BX, Inc. (``BX'') 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 Exchange. BX filed the proposal pursuant to Section 
19(b)(3)(A)\3\ of the Act and Rule 19b-4(f)(2)\4\ thereunder. 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).
    \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

    BX proposes to extend the temporary cap on fees charged for OUCH 
ports to the Equities Market due to unanticipated delays in developing 
and implementing an anti-internalization function. The text of the 
proposed rule change is below. Proposed new language is underlined; 
deleted language is in brackets.\5\
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    \5\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http://nasdaqomxbx.cchwallstreet.com.
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* * * * *

7015. Access Services

    The following charges are assessed by the Exchange for ports to 
establish connectivity to the NASDAQ OMX BX Equities Market, as well as 
ports to receive data from the NASDAQ OMX BX Equities Market:
     $400 per month for each port pair, other than Multicast 
ITCH[supreg] data feed pairs, for which the fee is $1000 per month. 
Additional OUCH port pairs beyond 15 are at no cost for the months of 
May[and], June and July 2009.
     Internet Ports: An additional $200 per month for each 
Internet port that requires additional bandwidth.
* * * * *

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

    In its filing with the Commission, BX 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. BX 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
    BX is proposing to extend the temporary modification to its pricing 
for OUCH ports, which provide

[[Page 34061]]

connectivity to the NASDAQ OMX BX Equities Market. On May 1, 2009, BX 
filed an immediately effective rule change to eliminate fees for a 
member firm's OUCH ports in excess of 15 for the months of May and June 
2009.\6\ In that filing, BX noted member firms had complained that, 
because BX does not have an anti-internalization capability, they must 
purchase additional OUCH ports that they would otherwise not need to 
purchase solely to avoid unwanted execution against their customer 
orders. Internalization occurs when a member firm's customer order is 
posted on the market and executed all or in part by the same member 
firm. Member firms must avoid internalization of certain customer 
orders to avoid violating rules and regulations of the Employee 
Retirement Income Security Act that preclude and/or limit managing 
broker-dealers of such customer accounts from trading as principal with 
orders generated for those accounts. Currently, some member firms are 
only able to avoid internalization by purchasing additional OUCH ports 
through which they place all order flow that must not be internalized. 
Such additional ports have a [sic] discrete MPID numbers, which allow 
these member firms to identify the orders and avoid internalization.
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    \6\ See Securities Exchange Act Release No. 59894 (May 8, 2009), 
74 FR 23000 (May 15, 2009).
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    BX determined to limit the number of OUCH port pairs that a member 
is charged monthly to 15 for the months of May and June 2009, so that 
those firms affected by BX's lack of an anti-internalization function 
were provided relief until BX could implement such a function. BX noted 
in its rule change that it would either seek to remove the cap language 
from the rule upon its expiration or alternatively would seek to extend 
the cap until such time the anti-internalization function could be 
implemented. BX had originally anticipated developing and implementing 
the anti-internalization function by the end of June; however, BX has 
encountered unanticipated delays that will prevent the function from 
being implemented on schedule. As such, BX is proposing to further 
extend the temporary modification of its OUCH port pair pricing through 
July 2009, at which time BX anticipates the implementation of the anti-
internalization function will be complete and affected member firms can 
reduce the number of ports currently subscribed to solely due to the 
lack of such a function. BX will seek to remove the cap language from 
the rule upon its expiration or alternatively will seek to extend the 
cap until such time the anti-internalization function can be 
implemented.
2. Statutory Basis
    BX believes that the proposed rule change is 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 it provides 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. The proposed fee change applies 
uniformly to all BX members. BX has determined that temporarily 
instituting a cap on fees for OUCH ports in excess of 15 will provide 
relief to member firms required to purchase additional ports solely due 
to BX's lack of an anti-internalization function.
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    \7\ 15 U.S.C. 78f.
    \8\ 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, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor 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\9\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\10\ At any time within 60 days of the filing of the 
proposed rule change, the Commission may summarily abrogate 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2009-036 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-2009-036. 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 filings 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-2009-036 and should be 
submitted on or before August 4, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
 [FR Doc. E9-16580 Filed 7-13-09; 8:45 am]
BILLING CODE 8010-01-P