Document ID: SEC-2009-0495-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing of Proposed Rule Change To Modify Fees for Members Using the NASDAQ OMX BX Equities System
Posted Date: 2009-04-08T04:00Z

[Federal Register: April 8, 2009 (Volume 74, Number 66)]
[Notices]               
[Page 16015-16016]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ap09-110]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59682; File No. SR-BX-2009-018]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing of Proposed Rule Change To Modify Fees for Members Using the 
NASDAQ OMX BX Equities System

April 1, 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 March 25, 2009, NASDAQ OMX BX, Inc. (``BX'') 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

    BX proposes to modify pricing for BX members using the NASDAQ OMX 
BX Equities System. BX will implement this rule change on April 1, 
2009. The text of the proposed rule change is available at http://
nasdaqomx.cchwallstreet.com/, at BX's principal office, 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, BX included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed

[[Page 16016]]

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 parts 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 modify its pricing for execution of orders in 
securities listed on The NASDAQ Stock Market (``NASDAQ'') and the New 
York Stock Exchange (``NYSE''). Specifically, BX will eliminate the 
current $0.0020 per share executed credit for orders that provide 
liquidity through BX, and will instead institute a $0.0006 per share 
executed credit for orders that access liquidity in securities priced 
at $1 or more per share. BX currently charges $0.0014 for such orders. 
For securities priced at less than $1, the fee will remain 0.1% of the 
total cost of the transaction. Fees and credits to access and provide 
liquidity in securities listed on exchanges other than Nasdaq and NYSE 
will remain unchanged.
    Since its launch on January 16, 2009, BX has begun to acquire 
market share in U.S. equities trading, a move accelerated by 
promotional price reductions introduced in March 2009 that made the net 
cost of trading a share on BX (i.e., the difference between the fee to 
access and the credit to provide liquidity) negative six cents per one 
hundred shares. BX has observed, however, that widespread reductions in 
the quoted prices of cash equities have increased the relative costs of 
accessing liquidity by making bid-ask spreads account for a greater 
percentage of that cost. Members have become more focused than ever on 
paying the lowest possible cost when accessing liquidity. Accordingly, 
BX is eliminating its credit for liquidity provision and instead 
introducing a credit for accessing liquidity. The net cost of trading a 
share remains negative six cents per one hundred shares. As with the 
pricing introduced in March 2009 (which continues for securities listed 
on exchanges other than NASDAQ and NYSE), the pricing structure will 
remain in effect for a limited promotional period, the exact duration 
of which will be determined by BX based on the effect of the pricing on 
members' use of BX's execution services.
2. Statutory Basis
    BX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\3\ in general, and with Section 
6(b)(4) of the Act,\4\ 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. The impact of the changes upon a 
particular market participant will depend upon the order types that it 
uses and the prices of its quotes and orders (i.e., its propensity to 
add or remove liquidity). BX notes that it operates in a highly 
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed changes will lower the cost of 
accessing liquidity through BX, while maintaining the net cost of a 
trade at a constant level.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    BX 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 \5\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\6\ 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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    \5\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \6\ 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-2009-018 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-2009-018. 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 the filing will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-
2009-018 and should be submitted on or before April 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-7869 Filed 4-7-09; 8:45 am]

BILLING CODE 8010-01-P