Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.

Federal Register: December 30, 2009 (Volume 74, Number 249)

Notices

Page 69172-69173

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr30de09-131

SECURITIES AND EXCHANGE COMMISSION

Release No. 34-61229; File No. SR-BX-2009-083

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of

Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Fee Schedule of the Boston Options Exchange Facility

December 22, 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 December 16, 2009, NASDAQ OMX BX, Inc. (the ``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 self-regulatory organization. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) 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 from interested persons.

\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4.

\3\ 15 U.S.C. 78s(b)(3)(A)(ii).

\4\ 17 CFR 240.19b-4(f)(2).

1. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

   The Exchange proposes to amend the Fee Schedule of the Boston

   Options Exchange Group, LLC (``BOX''). The text of the proposed rule change is available from the principal office of the Exchange, at the

   Commission's Public Reference Room, on the Exchange's Internet Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, and on the Commission's Internet Web site at http://www.sec.gov/.

2. Self-Regulatory Organization's Statement of the Purpose of, and

   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.

   1. Self-Regulatory Organization's Statement of the Purpose of, and

      Statutory Basis for, the Proposed Rule Change 1. Purpose

      On November 13, 2006 BOX entered into a licensing agreement

      (``Agreement'') with The NASDAQ OMX Group, Inc. (``NASDAQ OMX'')

      (formerly known as the Nasdaq Stock Market, Inc.) to use various indices and trademarks in connection with the listing and trading of index options on the full value Nasdaq-100[supreg] (``NDX'')\5\

      Page 69173

      and the reduced value Nasdaq-100[supreg] Index (Mini-NDX[supreg] Index

      (MNX)).\6\ The Agreement established a license fee, currently $0.16 per contract, payable by BOX to NASDAQ OMX, for NDX and MNX options contracts traded on BOX.\7\

      \5\ Nasdaq[supreg], Nasdaq-100[supreg] and Nasdaq-100

      Index[supreg] are registered trademarks of The NASDAQ OMX Group,

      Inc. (which with its affiliates are the ``Corporations'') and are licensed for use by the Boston Options Exchange Group, LLC in connection with the trading of options products based on the Nasdaq- 100 Index[supreg]. The product(s) have not been passed on by the

      Corporations as to their legality or suitability. The product(s) are not issued, endorsed, sold, or promoted by the Corporations. The

      Corporations make no warranties and bear no liability with respect to the product(s). The Corporations do not guarantee the accuracy and/or uninterrupted calculation of the Nasdaq-100 Index[supreg] or any data included therein. The Corporations make no warranty, express or implied, as to results to be obtained by licensee, owners of the product(s), or any other person or entity from the use of the

      Nasdaq-100 Index[supreg] or any data included therein. The

      Corporations make no express or implied warranties, and expressly disclaim all warranties of merchantability or fitness for a particular purpose or use with respect to the Nasdaq-100

      Index[supreg] or any data included therein. Without limiting any of the foregoing, in no event shall the Corporations have any liability for any lost profits or special, incidental, punitive, indirect or consequential damages, even if notified of the possibility of such damages.

      \6\ Id.

      \7\ On November 14, 2006 the Exchange established a $0.15 surcharge fee for transactions in options on NDX and MNX. See

      Securities Exchange Act Release No. 55000 (December 21, 2006), 71 FR 78479 (December 29, 2006) (SR-BSE-2006-47). The Exchange subsequently increased the surcharge fee to $0.16 in response to a corresponding increase in the license fees charged by NASDAQ OMX to

      BOX. See Securities Exchange Act Release No. 57114 (January 8, 2008), 73 FR 2961 (January 16, 2008) (SR-BSE-2008-01).

      This Agreement between BOX and NASDAQ OMX was set to expire on

      December 31, 2009. BOX and NASDAQ OMX have entered into an extension of the Agreement whereby a six (6) cent increase in the per contract license fee charged to BOX by NASDAQ OMX has been agreed to.

      The Exchange is submitting this proposed rule change to increase the surcharge fee for transactions in NDX and MNX options by six (6) cents, to $0.22. This increase will correspondingly offset the increased costs incurred by BOX. As with certain other licensed options, the Exchange adopted and maintains a surcharge fee for trading in these options to defray the licensing costs. The Exchange believes that charging BOX Options Participants that trade these instruments is the most equitable means of recovering the costs of the license. 2. Statutory Basis

      The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,\8\ in general, and Section 6(b)(4) of the Act,\9\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities.

      \8\ 15 U.S.C. 78f(b).

      \9\ 15 U.S.C. 78f(b)(4).

   2. 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.

   3. 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.

3. 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 Exchange Act\10\ and Rule 19b-4(f)(2) thereunder,\11\ because it establishes or changes a due, fee, or other charge applicable only to a member.

   \10\ 15 U.S.C. 78s(b)(3)(A)(ii).

   \11\ 17 CFR 240.19b-4(f)(2).

   At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act.

4. 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-2009-083 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-2009-083. 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 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-2009-083 and should be submitted on or before January 20, 2010.

   For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\

   \12\ 17 CFR 200.30-3(a)(12).

   Florence E. Harmon,

   Deputy Secretary.

   FR Doc. E9-30926 Filed 12-29-09; 8:45 am

   BILLING CODE 8011-01-P