Document ID: SEC-2010-0149-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Order Routing Pilot on the Boston Options Exchange Facility
Posted Date: 2010-01-28T05:00Z

[Federal Register: January 28, 2010 (Volume 75, Number 18)]
[Notices]               
[Page 4603-4605]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28ja10-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61399; File No. SR-BX-2010-007]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the Order Routing Pilot on the Boston Options Exchange Facility

January 22, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 15, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'' or 
``BX'') filed with the Securities and Exchange Commission (the 
``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

[[Page 4604]]

pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) 
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 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 XII, Section 5 (Order 
Routing to Away Exchanges) of the Rules of the Boston Options Exchange 
Group, LLC (``BOX'') to extend the effective date of the Order Routing 
Pilot. The text of the proposed rule change is available from the 
principal office of the Exchange, on the Commission's Web site at 
http://www.sec.gov and also on the Exchange's Web Site at http://
nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.

II. Self-Regulatory Organization's Statement of the Purpose of, and the 
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 October 16, 2009 the Commission approved \5\ the Exchange's 
proposal to amend Chapter XII of the BOX Rules to provide for the use 
by BOX of certain non-affiliated third party routing broker/dealers 
(``Routing Broker(s)'') to route options orders to one or more Away 
Exchange(s) when such Away Exchange(s) display the Best Bid or Best 
Offer in accordance with the Options Order Protection and Locked/
Crossed Market Plan (``Decentralized Plan'').\6\ In particular, the 
Commission approved adding new Section 5 to Chapter XII of the BOX 
Rules as new rule text that would govern the outbound order routing 
process (``Order Routing Rule'').\7\
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    \5\ See Securities Exchange Act Release No. 60832 (October 16, 
2009), 74 FR 54607 (October 22, 2009) (SR-BX-2009-066) (Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule 
Change Relating to Chapter XII of the BOX Rules). Terms not 
otherwise defined herein shall have the meaning proscribed in the 
BOX Rules.
    \6\ See Securities Exchange Act Release No. 60405 (July 30, 
2009), 74 FR 39362 (August 6, 2009) (File No. 4-546) (Order 
Approving the National Market System Plan Relating to Options Order 
Protection and Locked/Crossed Market Plan).
    \7\ See Chapter XII, Section 5 of the BOX Rules.
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    The Exchange requested that the proposal be approved on a pilot 
basis for three (3) months starting from the date of the approval of 
submission of filing. The Commission approved the Exchange's proposal 
on an accelerated basis for a pilot period to expire on January 15, 
2010 (``Order Routing Pilot'').\8\
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    \8\ See supra note 5.
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    The Exchange now proposes to extend the effective date of the Order 
Routing Pilot on BOX until March 15, 2010.
2. Statutory Basis
    This proposed rule change seeks to extend the effective date of the 
Order Routing Pilot on BOX. Such an extension will afford the 
Commission further time to consider the merits and impact of the Order 
Routing Pilot in advance of any request from the Exchange that the 
Order Routing Pilot be made permanent. Accordingly, the Exchange 
believes that the proposal is consistent with the requirements of 
Section 6(b) of the Act,\9\ in general, and Section 6(b)(5) of the 
Act,\10\ in particular, in that it is designed to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism for a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ 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 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\13\ 
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 has requested that the 
Commission waive the 30-day operative delay. The Exchange notes that 
the proposal will allow the Order Routing Pilot on BOX to remain 
operational on an uninterrupted basis to the benefit of investors, and 
does not raise any additional or substantive issues from those raised 
when the Exchange initially sought to implement the Order Routing 
Pilot.\15\ 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 allow the pilot period to be 
extended without interruption through March 15, 2010. For this reason, 
the Commission designates the proposed rule change to be operative upon 
filing with the Commission.\16\
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    \13\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing 
of the proposed rule change, or such shorter time as designated by 
the Commission. The Exchange has satisfied this requirement.
    \14\ Id.
    \15\ See SR-BX-2010-007, Item 7.
    \16\ For the purposes only of waiving the 30-day operative 
delay, 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 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.

[[Page 4605]]

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-2010-007 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-2010-007. 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 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-
2010-007 and should be submitted on or before February 18, 2010.

    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. 2010-1692 Filed 1-27-10; 8:45 am]
BILLING CODE 8011-01-P