Document ID: SEC-2011-0135-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2011-01-31T05:00Z

[Federal Register Volume 76, Number 20 (Monday, January 31, 2011)]
[Notices]
[Pages 5423-5424]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1988]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63769; File No. SR-BX-2011-003]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Extending 
the Pilot Period To Receive Inbound Routes of Orders From Nasdaq 
Execution Services

January 25, 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 January 19, 2011, NASDAQ OMX BX, Inc. (``BX'' or 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 BX. The Exchange has designated the proposed rule 
change as constituting a non-controversial rule change under Rule 19b-
4(f)(6) under the Act,\3\ 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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    BX submits this proposed rule change to extend the pilot period of 
BX's prior approval to receive inbound routes of equities orders from 
Nasdaq Execution Services, LLC (``NES'') through June 15, 2011.

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
    Currently, NES is the approved outbound routing facility of the 
NASDAQ Stock Market LLC (``NASDAQ'') for cash equities, providing 
outbound routing from NASDAQ to other market centers.\4\ BX also has 
been previously approved to receive inbound routes of equities orders 
by NES in its capacity as an order routing facility of NASDAQ on a 
pilot basis.\5\ The Exchange hereby seeks to extend a previously 
approved pilot period for such inbound routing (with the attendant 
obligations and conditions) for an additional 6 months from the date of 
this filing through June 15, 2011.\6\
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    \4\ See Securities Exchange Act Release Nos. 50311 (September 3, 
2004), 69 FR 54818 (September 10, 2004) (Order Granting Application 
for a Temporary Conditional Exemption Pursuant To Section 36(a) of 
the Exchange Act by the National Association of Securities Dealers, 
Inc. Relating to the Acquisition of an ECN by The Nasdaq Stock 
Market, Inc.) and 52902 (December 7, 2005), 70 FR 73810 (December 
13, 2005) (SR-NASD-2005-128) (Order Approving a Proposed Rule Change 
To Establish Rules Governing the Operation of the INET System). See 
also SR-NASDAQ-2011-004 (January 14, 2011); Securities Exchange Act 
Release Nos. 63083 (October 13, 2010), 75 FR 64370 (October 19, 
2010) (SR-NASDAQ-2010-127); 62736 (August 17, 2010), 75 FR 51861 
(August 23, 2010) (SR-NASDAQ-2010-100); 61682 (March 10, 2010), 75 
FR 12592 (March 16, 2010) (SR-NASDAQ-2010-030); 61460 (February 1, 
2010), 75 FR 6077 (February 5, 2010) (SR-NASDAQ-2010-018); 60039 
(June 3, 2009), 74 FR 27365 (June 9, 2009) (SR-NASDAQ-2009-050); 
59875 (May 6, 2009), 74 FR 22794 (May 14, 2009) (SR-NASDAQ-2009-
043); 59807 (April 21, 2009), 74 FR 19251 (April 28, 2009) (SR-
NASDAQ-2009-036); 59153 (December 23, 2008), 73 FR 80485 (December 
31, 2008) (SR-NASDAQ-2008-098); 58752 (October 8, 2008), 73 FR 61181 
(October 15, 2008) (SR-NASDAQ-2008-079); 58135 (July 10, 2008), 73 
FR 40898 (July 16, 2008) (SR-NASDAQ-2008-061); 58069 (June 30, 
2008), 73 FR 39360 (July 9, 2008) (SR-NASDAQ-2008-054); 56708 
(October 26, 2007), 72 FR 61925 (November 1, 2007) (SR-NASDAQ-2007-
078); 56867 (November 29, 2007), 72 FR 69263 (December 7, 2007) (SR-
NASDAQ-2007-065); 55335 (February 23, 2007), 72 FR 9369 (March 1, 
2007) (SR-NASDAQ-2007-005); 54613 (October 17, 2006), 71 FR 62325 
(October 24, 2006) (SR-NASDAQ 2006-043); 54271 (August 3, 2006), 71 
FR 45876 (August 10, 2006) (SR-NASDAQ-2006-027); and 54155 (July 14, 
2006), 71 FR 41291 (July 20, 2006) (SR-NASDAQ-2006-001).
    \5\ See Securities Exchange Act Release Nos. 59154 (December 23, 
2008), 73 FR 80468 (December 31, 2008) (SR-BX-2008-048); 61271 
(December 31, 2009), 75 FR 1102 (January 8, 2010) (SR-BX-2009-085); 
61782 (March 25, 2010), 75 FR 16534 (April 1, 2010) (SR-BX-2010-
021); 62528 (July 19, 2010), 75 FR 43210 (July 23, 2010) (SR-BX-
2010-048).
    \6\ During this pilot period, the Exchange will file a separate 
proposal with the Commission seeking permanent approval of the BX 
and NES Routing Relationship.
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2. Statutory Basis
    The Exchange 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)(5) of the Act,\8\ in particular, in that the proposal is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, 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 of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Specifically, 
the proposed rule change will allow the Exchange to continue receiving 
inbound routes of equities orders from NES acting in its capacity as a 
facility of Nasdaq, in a manner consistent with prior approvals and 
established protections. The Exchange believes that extending the 
previously approved pilot period for six months is of sufficient length 
to permit both the Exchange and the Commission to assess the impact of 
the Exchange's authority to receive direct inbound routes of equities 
orders via NES (including the attendant obligations and conditions).
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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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, as amended.

[[Page 5424]]

C. Self-Regulatory Organization's Statement on Comments Regarding 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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) \9\ of the Act and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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.\11\ 
However, Rule 19b-4(f)(6)(iii) \12\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. BX has requested that the Commission 
waive the 30-day operative delay. BX notes that the proposal will allow 
the Exchange to continue receiving inbound routes of equities orders 
from NES, in a manner consistent with prior approvals and established 
protections, while also permitting the Exchange and the Commission to 
assess the impact of the pilot.\13\ 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 undue delay through June 15, 2011. 
For this reason, the Commission designates the proposed rule change to 
be operative upon filing with the Commission.\14\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 Commission is waiving this five-day pre-filing requirement.
    \12\ Id.
    \13\ See supra Section II.A.2.
    \14\ 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 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.

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-2011-003 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-2011-003. 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 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 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 publicly available. All submissions 
should refer to File Number SR-BX-2011-003 and should be submitted on 
or before February 22, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-1988 Filed 1-28-11; 8:45 am]
BILLING CODE 8011-01-P