[Federal Register Volume 78, Number 153 (Thursday, August 8, 2013)]
[Notices]
[Pages 48518-48520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19142]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70095; File No. SR-BX-2013-046]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Options Fees and Rebates
August 2, 2013.
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 July 30, 2013, 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 add iPath S&P 500 VIX Short Term
Futures (``VXX'') to the list of options underlying certain penny pilot
options.
While the changes proposed herein are effective upon filing, the
Exchange has designated these changes to be operative on August 1,
2013.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.cchwallstreet.com, 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
BX proposes to amend Chapter XV, Section 2(1) to add VXX to the
list of options underlying certain penny pilot options (the others
include BAC, IWM, QQQ and SPY, collectively with VXX, the ``Specified
Penny Pilot Options'').
The proposed rule change will reflect the fees and rebates as
follows:
Fees and Rebates
[per executed contract]
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BX options Non-customer
Customer market maker \1\
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BAC, IWM, QQQ, SPY and VXX:
Rebate to Add Liquidity..................................... \2\ $0.00 \2\ $0.20 N/A
Fee to Add Liquidity........................................ \3\ 0.10 \3\ 0.10 0.45
Rebate to Remove Liquidity.................................. 0.00 N/A N/A
Fee to Remove Liquidity..................................... N/A 0.45 0.45
All Other Penny Pilot Options:
Rebate to Add Liquidity..................................... \2\ 0.00 \2\ 0.10 N/A
[[Page 48519]]
Fee to Add Liquidity........................................ \3\ 0.40 \3\ 0.40 0.45
Rebate to Remove Liquidity.................................. 0.32 N/A N/A
Fee to Remove Liquidity..................................... N/A 0.45 0.45
Non-Penny Pilot Options:
Fee to Add Liquidity........................................ \4\ 0.25/ \4\ 0.50/ 0.88
0.85 0.85
Rebate to Remove Liquidity.................................. 0.70 N/A N/A
Fee to Remove Liquidity..................................... N/A 0.88 0.88
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Currently, the fees that apply to VXX as are the listed above under
the ``All Other Penny Pilot Options'' category. The new fees applicable
to VXX as a Specified Penny Pilot Option are unchanged for Non-
Customers. The Rebate to Add Liquidity and the Fee to Remove Liquidity
for Customers also remains unchanged. For BX Options Market Makers,
both the Rebate and Fee to Remove Liquidity are unchanged. The Rebate
to Add Liquidity for BX Options Market Makers increases from $0.10 to
$0.20 per executed contract. The Fee to Add Liquidity for both
Customers and BX Options Market Makers decreases from $0.40 to $0.10
per executed contract. Finally, the Rebate to Remove Liquidity for
Customers decreases from $0.32 to $0.00 per executed contract.
The Exchange believes that including VXX to the list of Specified
Penny Pilot Options, is competitive and will encourage BX members to
transact business on the Exchange.
2. Statutory Basis
BX believes that the proposed rule changes are 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 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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\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that its proposal to include VXX in the list
of Specified Penny Pilot Options and subject to the fees and rebates
applicable thereto, is reasonable given the fact that certain symbols
such as the Specified Penny Pilot Options are highly liquid as compared
to other penny pilot options and pricing by symbol is not novel as
other options exchanges differentiate pricing by security today.\5\ The
Exchange believes that its proposal to assess an increase to the Rebate
to Add Liquidity for BX Options Market Makers, a decrease to the Fee to
Add Liquidity for both Customers and BX Options Market Makers, and a
decrease to the Rebate to Remove Liquidity for Customers for VXX (as is
the case for the other Specified Penny Pilot Options) as compared to
all other penny pilot options is equitable and not unfairly
discriminatory because it will help to attract order flow from BX
Options Market Makers and Customers to the Exchange to the benefit of
all market participants through increased liquidity.
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\5\ See NASDAQ OMX PHLX LLC's 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 at Chapter XV, Section 2(1), which distinguishes pricing for NDX
and MNX; the International Securities Exchange LLC's Fee Schedule,
which distinguishes pricing for Special Non-Select Penny Pilot
Symbols; and the Chicago Board Options Exchange, Incorporated's Fees
Schedule, which distinguishes index products.
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The Exchange operates in a highly competitive market comprised of
eleven 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 its proposal to include VXX in the list of
Specified Penny Pilot Options and subject to the fees and rebates
applicable thereto, is competitive and 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. The Exchange believes that the fee/rebate
pricing structure for VXX as included in the Specified Penny Pilot
Options list, would attract liquidity to and benefit order interaction
at the Exchange to the benefit of all market participants.
Additionally, since the fees and rebates for VXX as included in the
list of Specified Penny Pilot Options are comparable to those present
at other options venues, the Exchange believes the proposals discussed
herein do not pose a burden on competition amongst Exchange
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.\6\ 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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\6\ 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
[[Page 48520]]
Send an email to [email protected]. Please
include File Number SR-BX-2013-046 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-2013-046. 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
10:00 a.m. and 3:00 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-2013-046 and should be
submitted on or before August 29, 2013.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19142 Filed 8-7-13; 8:45 am]
BILLING CODE 8011-01-P