[Federal Register Volume 80, Number 163 (Monday, August 24, 2015)]
[Notices]
[Pages 51340-51342]
[FR Doc No: 2015-20790]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75723; File No. SR-BATS-2015-60]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of BATS Exchange, Inc.

August 18, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 7, 2015, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to BATS Rules
15.1(a) and (c) (``Fee Schedule'') to remove fees for BATS Investor Pro
and BATS Investor RT, as the Exchange will no longer make these
products available as of August 29, 2015.
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    \5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's
Web site

at www.batstrading.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 parts of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to remove fees for BATS Investor Pro and BATS
Investor RT, as the Exchange will no longer make these products
available as of August 29, 2015. The Exchange currently maintains a
revenue sharing program with Interactive Data Corporation, acting by
and through its division, Interactive Data Desktop Solutions, and its
subsidiary, Interactive Data Online Properties, Inc. (collectively
``IDC''), whereby the Exchange has agreed to make available, through
IDC, private labeled versions of IDC's Market-Q and LiveCharts products
(the ``Revenue Sharing Program'').\6\ Pursuant to an agreement (the
``Agreement'') between IDC and the Exchange, Market-Q has been marketed
by the Exchange under the private label name ``BATS Investor Pro'' and
LiveCharts has been marketed by the Exchange under the private label
name ``BATS Investor RT'' (BATS Investor Pro and BATS Investor RT,
collectively, the ``Private Labeled Products''). Under the Agreement,
the current price schedule charges subscribers a monthly fee of $125.00
for BATS Investor Pro and a monthly fee of $24.95 for BATS Investor
RT.\7\
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    \6\ See Securities Exchange Act Release Nos. 70264 (August 27,
2013), 78 FR 54338 (September 3, 2013) (SR-BATS-2013-045); and 70687
(October 15, 2013), 78 FR 62921 (October 22, 2013) (SR-BATS-2013-
055).
    \7\ Under the Agreement, IDC determines the price schedule for
the Private Labeled Products, and has the right to change the price
schedule at any time in its sole discretion upon prior notice to
BATS; provided, however, that such changes to the price schedule do
not become effective unless and until the applicable fees set forth
in the price schedule have been filed with and/or approved by the
Commission through a proposed rule change submitted by the Exchange
in accordance with the Act.
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    Pursuant to and in accordance with the terms and conditions of the
Agreement, on July 24, 2015, the Exchange provided written notice of
termination of the Agreement to IDC, effective as of August 29, 2015.
Therefore, inclusion of the Private Labeled Products within Exchange's
Fee Schedule would no longer serve any legitimate purpose upon the
Revenue Sharing Program being terminated by the Exchange. The Exchange
is terminating the Revenue Share Program with IDC due to lack of
interest from data recipients for the Private Labeled Products.
Currently, there are no active clients for either Private Labeled
Product.
Implementation Date
    The Exchange proposes to implement these amendments to its Fee
Schedule on August 31, 2015.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of section 6 of the Act,\8\ in general, and
furthers the objectives of section 6(b)(4),\9\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and other persons using its
facilities because it would delete fees for products that are to be
discontinued by the Exchange, thereby eliminating investor confusion.
In addition, the Exchange has no subscribers to either of the Private
Labeled Products, neither of the Private Labeled Products is a core
product offering by the Exchange, and the Exchange is not required by
the Act to offer such products. The proposed rule change will not
permit unfair discrimination among customers, brokers, or dealers
because the Private Labeled Products will no longer be offered by the
Exchange.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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    Lastly, the Exchange also believes that the proposed amendment to
its Fee Schedule is reasonable and non-discriminatory because it will
apply uniformly to all members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe its proposed amendments to its Fee
Schedule would impose any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The proposed
rule change will terminate the Revenue Sharing Program with IDC, as
well as the fees for the products offered thereunder from its fee
schedule, effective as of August 29, 2015, and is not designed to have
a competitive impact. Therefore, the Exchange does not believe the
proposed rule change will have any effect on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.

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) of the Act \10\ and paragraph (f) of Rule 19b-4
thereunder.\11\ 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f).
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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 email to<EMAIL_ADDRESS>Please include
File Number SR-BATS-2015-60 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2015-60. 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-BATS-2015-60, and should be
submitted on or before September 14, 2015.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-20790 Filed 8-21-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: May 9, 2006 (Volume 71, Number 89)]
[Notices]
[Page 26945-26946]
[DOCID:fr09my06-72]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP06-200-004]

Rockies Express Pipeline LLC; Notice of Compliance Filing

May 2, 2006.
    Take notice that on April 24, 2006, Rockies Express Pipeline LLC
(REX) tendered for filing as part of its FERC Gas Tariff, First Revised
Volume No. 1, First Revised Sheet No. 22, and First Revised Sheet No.
23, to be effective April 20, 2006.
    REX stated that a copy of this filing has been served upon all
parties to this

proceeding, REX's customers, the Colorado Public Utilities Commission
and the Wyoming Public Service Commission.
    Any person desiring to protest this filing must file in accordance
with Rule 211 of the Commission's Rules of Practice and Procedure (18
CFR 385.211). Protests to this filing will be considered by the
Commission in determining the appropriate action to be taken, but will
not serve to make protestants parties to the proceeding. Such protests
must be filed in accordance with the provisions of section 154.210 of
the Commission's regulations (18 CFR 154.210). Anyone filing a protest
must serve a copy of that document on all the parties to the
proceeding.
    The Commission encourages electronic submission of protests in lieu
of paper using the ``eFiling'' link at http://www.ferc.gov. Persons

unable to file electronically should submit an original and 14 copies
of the protest to the Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
 [FR Doc. E6-6959 Filed 5-8-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 200 (Tuesday, October 16, 2012)]
[Notices]
[Pages 63384-63388]
[FR Doc No: 2012-25357]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68029; File No. SR-NASDAQ-2012-114]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Non-Penny Pilot and Penny Pilot Options

October 10, 2012.
    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 October 1, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' 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 NASDAQ. 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 NASDAQ Stock Market LLC proposes to modify Chapter XV, entitled
``Options Pricing,'' at Section 2 governing pricing for NASDAQ members
using the NASDAQ Options Market (``NOM''), NASDAQ's facility for
executing and routing standardized equity and index options.
Specifically, NOM proposes to amend the Non-Penny Pilot Options and
Penny Pilot \3\ Options pricing.
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    \3\ The Penny Pilot was established in March 2008 and in October
2009 was expanded and extended through December 31, 2012. See
Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR
18587 (April 4, 2008) (SR-NASDAQ-2008-026) (notice of filing and
immediate effectiveness establishing Penny Pilot); 60874 (October
23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091)
(notice of filing and immediate effectiveness expanding and
extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292
(November 17, 2009) (SR-NASDAQ-2009-097) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-
2010-013) (notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 62029 (May 4, 2010), 75 FR
25895 (May 10, 2010) (SR-NASDAQ-2010-053) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
65969 (December 15, 2011), 76 FR 79268 (December 21, 2011) (SR-
NASDAQ-2011-169) (notice of filing and immediate effectiveness
extension and replacement of Penny Pilot); and 67325 (June 29,
2012), 77 FR 40127 (July 6, 2012) (SR-NASDAQ-2012-075) (notice of
filing and immediate effectiveness and extension and replacement of
Penny Pilot through December 31, 2012). See also NOM Rules, Chapter
VI, Section 5.
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    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.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. 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
    NASDAQ proposes to modify Chapter XV, entitled ``Options Pricing,''
at Section 2(1) governing the rebates and fees assessed for option
orders entered into NOM. The Exchange is proposing to amend the Non-
Penny Pilot pricing and the Penny Pilot Options pricing. This proposal
seeks to incentivize NOM Participants to send additional Customer order
flow to the Exchange in both Penny Pilot Options and Non-Penny Pilot
Options in order to obtain rebates.
    The Exchange proposes to assess fees and pay rebates on options
overlying the Nasdaq 100 Index traded under the symbol NDX (``NDX'') as
a Non-Penny Pilot Option. Today, NDX has its own pricing separate and
apart from other Non-Penny Pilot pricing. The Exchange proposes to
eliminate the separate NDX pricing and instead assess fees and pay
rebates for NDX as a Non-Penny Pilot Option. In addition, the Exchange
proposes to assess a surcharge to all market participants, except
Customers, for transactions in NDX of $0.10 per contract. The surcharge
would be in addition to both the Fee for Adding Liquidity and the Fee
for Removing Liquidity in Non-Penny Pilot Options. Customers would not
be assessed a surcharge for transactions in NDX.
    The Exchange also proposes to amend the Non-Penny Pilot Option
pricing (including NDX) to be equivalent to the rebates and fees
currently in place for options overlying Facebook, Inc. (``FB''),
Google Inc. (``GOOG'') and Groupon, Inc. (``GRPN''), except for the
proposed changes to the Customer Rebate to Add Liquidity, which the
Exchange is amending as described herein.\4\ The Exchange would also
eliminate the FB, GOOG and GRPN separate pricing as those symbols would
be subject to the Non-Penny Pilot Option pricing pursuant to this
proposal.
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    \4\ The Exchange currently assesses FB, GOOG and GRPN the
following Fees for Adding Liquidity: Customers are not assessed a
fee, Professionals, Firms and Non-NOM Market Makers are assessed a
$0.45 per contract fee and NOM Market Makers are assessed a $0.25
per contract fee. The Fees for Removing Liquidity are as follows:
Customers and NOM Market Makers are assessed a $0.79 per contract
fee and Professionals, Firms and Non-NOM Market Makers are assessed
an $0.85 per contract fee. FB, GOOG and GRPN Customer transactions
receive a Rebate to Add Liquidity of $0.77 per contract. This rebate
is being amended by this proposal for the Non-Penny Pilot Options.
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    The Exchange proposes to amend the Non-Penny Pilot Option Pricing,
which will include NDX, FB, GOOG and GRPN, by increasing the
Professional Fee for Adding Liquidity from $0.30 to $0.45 per contract
and decreasing the NOM Market Maker Fee for Adding Liquidity from $0.30
to $0.25 per contract. Pursuant to this proposal, a Professional
transacting NDX would be assessed a decreased Fee for Adding Liquidity,
from $0.70 to $0.45 per contract,\5\ and a NOM Market Maker would be
assessed an increased or decreased fee depending on the market
participant that was on the contra-side of the order. For example,
today, if a NOM Market Maker transacts an order in NDX and the contra-
party is a Professional, Firm, NOM Market Maker or Non-NOM Market
Maker, the NOM Market Maker is paid a Rebate to Add Liquidity of $0.20
per contract or would be assessed a $0.65 per contract Fee to Add
Liquidity if the contra-party is a Customer. The Exchange proposes to
assess a NOM Market Maker a $0.25 per contract Fee for Adding Liquidity
in Non-Penny Pilot Options, regardless of the contra-party and proposes
to not pay a NOM Market Maker a Rebate to Add Liquidity.
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    \5\ Today a Professional is assessed a Fee to Add Liquidity of
$0.70 per contract in NDX.
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    Likewise, a Customer today receives a Rebate to Add Liquidity of
$0.20 per contra when the contra-party is a Professional, Firm, NOM
Market Maker or Non-NOM Market Maker, and is assessed a Fee to Add
Liquidity of $0.65 per contract when contra to another Customer. Under
this proposal, a Customer would be assessed no Fee for Adding Liquidity
in Non-Penny Pilot Options and would receive a Rebate to Add Liquidity
of $0.75 per contract or $0.77 per contract as described more fully
below.

    The Exchange is proposing to increase the current Customer Rebate
to Add Liquidity in Non-Penny Pilot Options (including NDX) from $0.20
to $0.75 per contract, unless a market participant adds Customer
liquidity in either or both Penny or Non-Penny Pilot Options of 115,000
contracts per day in a month, in which case the rebate would be
increased to $0.77 per contract. The Exchange also proposes to permit
NOM Participants under 75 percent common ownership or control to
aggregate their Customer volume to obtain the higher rebate.\6\ The
Exchange is also proposing to eliminate the Customer Rebate to Remove
Liquidity in NDX along with other NDX pricing. The Exchange is not
proposing to offer a Rebate to Remove Liquidity in Non-Penny Pilot
Options.\7\
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    \6\ As noted previously, the NDX pricing would be removed from
Section 2(1) of Chapter XV. Today, a Customer receives a Rebate to
Remove Liquidity of $0.40 per contract.
    \7\ No other market participant, other than a Customer receives
a Customer Rebate to Remove Liquidity today.
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    The Exchange proposes to eliminate note 1 which relates to the NDX
Rebate to Add Liquidity and Fee to Add Liquidity, which pricing is
eliminated with this proposal. The Exchange also proposes to rename
note ``+'' as note 1. The Exchange also proposes to add a new note 2 to
describe the $0.10 per contract NDX surcharge described herein as well
as a new note 3 to reflect the Customer Rebates to Add Liquidity
applicable to Non-Penny Pilot Options described herein. The Exchange
also proposes to delete the pricing for options on the one-tenth value
of the Nasdaq 100 Index traded under the symbol MNX (``MNX''). This
option was delisted on September 13, 2012 from NOM. The Exchange is
proposing to eliminate the MNX pricing from Sec. 2, Chapter XV of the
NOM Rules because the pricing is no longer necessary.
    The Exchange also proposes to amend the Non-Penny Pilot Option
(including NDX) Fee for Removing Liquidity by increasing those fees as
follows: a Customer that is today assessed $0.45 per contract would be
assessed an increased fee of $0.79 per contract; a Professional, Firm
and Non-NOM Market Maker that today is assessed a $0.50 per contract
fee would be assessed an increased fee of $0.85 per contract; and a NOM
Market Maker that today is assessed $0.50 per contract fee would be
assessed a $0.79 per contract fee. With respect to NDX, a Customer
transacting NDX today is not assessed a Fee for Removing Liquidity. The
Customer would now be assessed an increased Fee for Removing Liquidity
of $0.79 per contract in Non-Penny Pilot Options (including NDX). A
Professional, Firm or Non-NOM Market Maker that today pays $0.70 per
contract would pay an increased Fee for Removing Liquidity of $0.85 per
contract in Non-Penny Pilot Options (including NDX). Finally, a NOM
Market Maker that today pays a $0.70 Fee for Removing Liquidity in NDX
would pay a $0.79 per contract fee in Non-Penny Pilot Options
(including NDX).
    The Exchange also proposes to amend its Penny Pilot Option Customer
Rebate to Add Liquidity. The Exchange proposes to amend Tier 1 which
currently pays a $0.26 per contract rebate to market participants that
add Customer liquidity of up to 14,999 contracts per day in a month.
The Exchange would continue to pay a $0.26 per contract rebate, but
would increase the level of contracts from 14,999 to 34,999 contracts
per day. The Exchange proposes to eliminate current Tier 2 which pays a
$0.38 per contract rebate for market participants that add Customer
liquidity of 15,000 to 49,999 contracts per day in month. The Exchange
proposes to renumber Tier 3 as Tier 2. Tier 3 today pays market
participants $0.43 per contract for market participants that add
Customer liquidity between 50,000 and 74,999 contracts per day in a
month. The Exchange would continue to pay $0.43 per contract for newly
named Tier 2 but would lower the level of contracts to between 35,000
to 74,999 contracts per day in a month. The Exchange proposes to
renumber Tier 4 as Tier 3, Tier 5 as Tier 4 and Tier 6 as Tier 5 and
not otherwise amend these tiers.\8\ The Exchange also proposes to
conform notes a, b and c to the new tiers by reassigning the proper
letters to coordinate to the same tiers as today.
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    \8\ Tier 4 today pays $0.44 per contract for market participants
that add Customer liquidity of 75,000 or more contract per day in a
month. Tier 5 today pays market participants $0.42 per contact if
they (1) add Customer liquidity of 25,000 or more contracts per day
in a month, (2) have certified for the Investor Support Program set
forth in Rule 7014; and (3) executed at least one order on NASDAQ's
equity market. Tier 6 today pays market participants $0.45 per
contract if they have total volume of 130,000 contracts per day in a
month. The Exchange is simply proposing to renumber these last three
tiers.
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    The Exchange also proposes to amend the Penny Pilot Option Fee for
Removing Liquidity which today provides that Professionals, Firms, Non-
NOM Market Makers and NOM Market Makers Penny Pilot Options Fees for
Removing Liquidity will be reduced by $0.01 per contract for
transactions in which the same NOM Participant is the buyer and seller.
The Exchange proposes to also permit NOM Participants under common
ownership to also receive the $0.01 per contract reduction if a NOM
Participant under common ownership is the buyer and seller. The
Exchange is not amending the Penny Pilot Option Fees for Removing
Liquidity otherwise.\9\
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    \9\ Today, the Exchange assesses the following Penny Pilot
Option Fees for Removing Liquidity: Customers pay $0.45 per contract
and Professionals, Firms, Non-NOM Market Makers and NOM Market
Makers pay a $0.47 per contract fee.
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2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\10\ in general, and with
Section 6(b)(4) of the Act,\11\ 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 NASDAQ operates or controls.
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    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed elimination of separate
fees and rebates for NDX and inclusion of NDX in the Non-Penny Pilot
Options is reasonable, equitable and not unfairly discriminatory
because the Exchange is proposing to amend the Non-Penny Pilot Options
fees and rebates to approximate those fees and rebates currently
subject to FB, GOOG and GRPN pricing. The Exchange believes that it is
reasonable to assess NDX the amended Non-Penny Pilot Option fees which
are substantially similar to the fees assessed today for FB, GOOG and
GRPN \12\ because NDX has the same minimum trading increments as other
Non-Penny Pilot Options. Additionally, the Exchange believes that it is
reasonable to pay Customers transacting options in NDX the amended Non-
Penny Pilot Options Rebate to Add Liquidity because the higher Customer
Rebate to Add Liquidity of $0.75 per contract with the possibility of
qualifying for a $0.77 per contract rebate approximates the rebates
currently offered for FB, GOOG and GRPN.\13\ The Exchange would also
not assess Customers a Fee for Adding Liquidity,

as is the case today with FB, GOOG and GRPN and would also not continue
to pay a Rebate to Remove Liquidity as that rebate would be eliminated.
The Exchange believes that it is reasonable to assess Non-Penny Pilot
Option fees and pay rebates similar to FB, GOOG and GRPN today, with
the amended Customer Rebate to Add Liquidity, and eliminate NDX, FB,
GRPN and GOOG pricing, as well as the delisted MNX pricing which is no
longer necessary from Section 2, Chapter XV.
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    \12\ The Exchange currently assesses FB, GOOG and GRPN the
following Fees for Adding Liquidity: Customers are not assessed a
fee, Professionals, Firm and Non-NOM Market Makers are assessed a
$0.45 per contract fee and NOM Market Makers are assessed a $0.25
per contract fee. The Fees for Removing Liquidity are as follows:
Customers and NOM Market Makers are assessed a $0.79 per contract
fee and Professionals, Firms and Non-NOM Market Makers are assessed
an $0.85 per contract fee. FB, GOOG and GRPN Customer transactions
receive a Rebate to Add Liquidity of $0.77 per contract. This rebate
is being amended by this proposal for the Non-Penny Pilot Options.
    \13\ Today, FB, GOOG and GRPN pay a Customer Rebate to Add
Liquidity of $0.77 per contract.
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    The Exchange believes that it is equitable and not unfairly
discriminatory to assess/pay the Non-Penny Pilot Option pricing to the
various market participants as noted in this proposal and not assess/
pay separate pricing for NDX, FB, GRPN and GOOG. All market
participants transacting Non-Penny Pilot Options would be subject to
the fees and rebates noted herein. The Exchange would no longer pay a
Rebate to Remove Liquidity to any market participant under the
proposal. Customers would be subject to a $0.79 per contract Fee to
Remove Liquidity in Non-Penny Pilot Options as compared to no fee today
in NDX. Also, NOM Market Makers would be assessed a $0.25 per contract
Fee for Adding Liquidity regardless of the contra-party and would no
longer be entitled to a Rebate to Add Liquidity as is the case with NDX
today.\14\ Professionals would be subject to the same decreased $0.45
per contract Fee for Adding Liquidity as Firms and Non-NOM Market
Makers.\15\ Also, the elimination of the MNX pricing is equitable and
not unfairly discriminatory because no market participant is subject to
this pricing as of the date it was delisted. In summary, the Exchange
believes that assessing all Non-Penny Pilot Options securities the
amended Non-Penny Pilot Option pricing is reasonable, equitable and not
unfairly discriminatory for the reasons discussed hereafter which
describes the basis for the amendments to that pricing. These
amendments conform the pricing for all Non-Penny Pilot options symbols.
Also, the additional $0.10 per contact NDX surcharge that will be added
to the Fees for Adding and Removing Liquidity in Non-Penny Pilot
Options for transactions in NDX, except for Customers, is reasonable,
equitable and not unfairly discriminatory because the Exchange
currently pays a license fee \16\ to list NDX on NOM and is seeking to
recoup a portion of that fee.\17\
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    \14\ Today, NOM Market Makers are assessed a $0.65 per contract
Fee to Add Liquidity when transacting an order in NFX [sic] contra a
Customer and are paid a Rebate to Add Liquidity of $0.20 per
contract when transacting an order in NDX contra a Professional,
Firm, Non-NOM Market Maker or NOM Market Maker.
    \15\ Professionals currently are assessed a $0.70 per contract
Fee to Add Liquidity in NDX similar to Firms and Non-NOM Market
Makers.
    \16\ NOM is assessed a license fee of $0.22 per contract to list
NDX.
    \17\ Non-Penny Pilot Options, other than NDX, are not subject to
a license fee.
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    The Exchange believes that increasing the Professional Fee for
Adding Liquidity and the Fees for Removing Liquidity in Non-Penny Pilot
Options is reasonable because the higher fees would enable the Exchange
to reward Customers that remove liquidity with higher Customer Rebates
to Add Liquidity in Non-Penny Pilot Options. The Exchange believes that
its success at attracting Customer order flow benefits all market
participants by improving the quality of order interaction and
executions at the Exchange. Additionally, the proposed fees and rebates
for Non-Penny Pilot Options are similar to fees and rebates currently
in place at the BATS Exchange, Inc. (``BATS'').\18\ The Exchange also
believes that decreasing the NOM Market Maker Fee for Removing [sic]
Liquidity in Non-Penny Pilot Options is reasonable because the Exchange
seeks to encourage NOM Market Makers to post liquidity on NOM.
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    \18\ See BATS BZX Exchange Fee Schedule. BATS assesses a Non-
Penny Pilot Option Fee for Accessing Liquidity of $0.80 per contract
for a Professional, Firm or Market Maker order that removes
liquidity from the BATS Options order book and a $0.75 per contract
rebate for a Customer order that remove liquidity from the BATS
Options order book. Additionally, BATS pays a $0.70 per contract
rebate for a Professional, Firm or Market Maker order that adds
liquidity to the BATS Options order book and a $0.75 rebate per
contract for a Customer order that adds liquidity to the BATS
Options order book. Also, the Fees for Removing Liquidity for FB,
GOOG and GRPN as well as the Fees for Adding Liquidity are the same
as those proposed for Non-Penny Pilot Options.
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    The Exchange believes that increasing the Professional Fee for
Adding Liquidity in Non-Penny Pilot Options is equitable and not
unfairly discriminatory because Professionals, Firms and Non-NOM Market
Makers will be assessed the same $0.45 per contract fee. The Exchange
also believes that not assessing a Customer a Fee for Adding Liquidity
in Non-Penny Pilot Options and assessing a NOM Market Maker a lower Fee
for Adding Liquidity of $0.25 per contract, as compared to
Professionals, Firms and Non-NOM Market Makers is equitable and not
unfairly discriminatory because Customers and NOM Market Makers differ
from other market participants. Customer order flow benefits all market
participants by improving liquidity, the quality of order interaction
and executions at the Exchange. Also, NOM Market Makers have
obligations to the market and regulatory requirements,\19\ which
normally do not apply to other market participants. A NOM Market Maker
has the obligation to make continuous markets, engage in course of
dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market, and not make bids or offers or enter into
transactions that are inconsistent with course of dealings. The
proposed differentiation as between Customers and NOM Market Makers and
other market participants recognizes the differing contributions made
to the liquidity and trading environment on the Exchange by Customers
and NOM Market Makers, as well as the differing mix of orders entered.
The Exchange believes that increasing the Professional, Firm and Non-
NOM Market Maker Fees for Removing Liquidity in Non-Penny Pilot Options
to $0.85 per contract is equitable and not unfairly discriminatory
because Professionals, Firms and Non-NOM Market Makers will be assessed
the same fee. Customers and NOM Market Makers would be assessed a lower
Fee for Removing Liquidity in Non-Penny Pilot Options as compared to
Professionals, Firms and Non-NOM Market Makers because as mentioned
herein the fees recognize the differing contributions made to the
liquidity and trading environment on the Exchange by Customers and NOM
Market Makers, as well as the differing mix of orders entered.
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    \19\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a market maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on NOM for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
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    The Exchange also believes that overall the higher Fees for
Removing Liquidity are equitable and not unfairly discriminatory
because in the current U.S. options market, many of the contracts are
quoted in pennies. Under this pricing structure, the minimum penny tick
increment equates to a $1.00 economic value difference per contract,
given that a single standardized U.S. option contract covers 100 shares
of the underlying stock. Where contracts are quoted in $0.05 increments
(non-pennies), the value per tick is $5.00 in proceeds to the investor
transacting in these contracts. Liquidity rebate and

access fee structures on the make-take exchanges, including NOM, for
securities quoted in penny increments are commonly in the $0.30 to
$0.45 per contract range.\20\ A $0.30 per contract rebate in a penny
quoted security is a rebate equivalent to 30% of the value of the
minimum tick. A $0.45 per contract fee in a penny quoted security is a
charge equivalent to 45% of the value of that minimum tick. In other
words, in penny quoted securities, where the price is improved by one
tick with an access fee of $0.45 per contract, an investor paying to
access that quote is still $0.55 better off than trading at the wider
spread, even without the access fee ($1.00 of price improvement--$0.45
access fee = $0.55 better economics). This computation is equally true
for securities quoted in wider increments. Rebates and access fees near
the $0.85 per contract level equate to only 17% of the value of the
minimum tick in Non-Penny Pilot Options, less than the experience today
in Penny Pilot Options. For example, a retail investor transacting a
single contract in a non-penny quoted security quoted a single tick
tighter than the rest of the market, and paying an access fee of $0.79
per contract, is receiving an economic benefit of $4.21 ($0.05 improved
tick = $5.00 in proceeds - $0.79 access fee = $4.21). The Exchange
believes that encouraging NOM Market Makers to quote more aggressively
by reducing transaction fees \21\ and incentivizing Customer orders to
post on NOM will narrow the spread in Non-Penny Pilot Options to the
benefit of investors and all market participants by improving the
overall economics of the resulting transactions that occur on the
Exchange, even if the access fee paid in connection with such
transactions is higher. Accordingly, the Exchange believes that the
proposed fees and rebates for the Non-Penny Pilot Options are
reasonable, equitable and not unfairly discriminatory.
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    \20\ NOM is proposing to only pay a Customer a Rebate to Add
Liquidity in Non-Penny Pilot Options. Other market participants
would not be entitled to a rebate.
    \21\ The Exchange notes that the proposed $0.25 per contract NOM
Market Maker Fee for Adding in FB, GOOG and GRPN is significantly
less than transaction fees plus payment for order flow fees assessed
by other options exchanges. For example, on NASDAQ OMX PHLX LLC
(``Phlx''), the combined payment for order flow fee plus the
transaction fee is $0.92 per contract. See Phlx's Pricing Schedule.
Unlike Penny Pilot Options, the Exchange believes this significant
reduction in fees for adding liquidity will have the same effect as
a rebate in non-Penny Pilot Options in terms of a narrower spread.
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    The Exchange believes that its proposal to offer a higher Customer
Rebate to Add Liquidity in Non-Penny Pilot Options (from $0.20 to $0.75
per contract) is reasonable, equitable and not unfairly discriminatory
because other market participants will benefit from the increased order
flow to the Exchange. The proposal to offer an even higher Customer
Rebate to Add Liquidity in Non-Penny Pilot Options ($0.77 per
contract), provided a market participant adds Customer liquidity of
115,000 contracts per day in a month in either or both a Penny Pilot or
Non-Penny Pilot Option, is reasonable, equitable and not unfairly
discriminatory because the benefits to the Exchange of increased
liquidity will benefit all market participants because market
participants will strive to post and remove liquidity on NOM to achieve
the higher rebate.
    The Exchange believes that the proposed amendments to the notes
associated with the Penny and Non-Penny Pilot Options Pricing,
specifically renumbering note ``+'' as note 1, eliminating current note
1 and adding notes 3 and 4, are reasonable, equitable and not unfairly
discriminatory because the notes add more clarity to the rule.
    The Exchange believes that it is reasonable, equitable and not
unfairly discriminatory to permit NOM Participants with 75 percent
common ownership to aggregate their volume for purposes of obtaining a
higher Customer Rebate to Add Liquidity in Non-Penny Pilot Options.
Certain NOM Participants chose to segregate their businesses into
different legal entities for purposes of conducting business. The
Exchange believes that these NOM Participants should be treated as one
entity for purposes of qualifying for the increased Customer Rebate to
Add Liquidity in Non-Penny Pilot Options as long as there is at least
75% common ownership or control among the NOM Participants. The
Exchange also believes that it is reasonable, equitable and not
unfairly discriminatory to provide that Professionals, Firms, Non-NOM
Market Makers, and NOM Market Makers Penny Pilot Option Fees will be
reduced by $0.01 per contract for transactions in which the same NOM
Participant or a NOM Participant under common ownership is the buyer
and the seller. For the reasons mentioned herein, the Exchange believes
that NOM Participants that chose to segregate their businesses into
different legal entities should still be afforded the opportunity to
receive the discount as if they were the same NOM Participant on both
sides of the transaction.
    The Exchange's proposed amendments to the Customer Rebate to Add
Liquidity in Penny Pilot Options are reasonable because the Exchange is
attempting to incentivize market participants to send additional
Customer order flow to the Exchange. By increasing the Tier 1 to
encompass up to 34,999 contracts per day in a month and amending new
Tier 2 to between 35,000 and 74,999 contracts, the Exchange is
attempting to encourage market participants that are receiving rebates
by qualifying for Tiers 1 and 2 to send additional orders to the
Exchange to continue to qualify for those rebates. The Customer
liquidity that the Exchange attracts by offering Customer rebates
benefits all market participants. The Exchange believes that the
amendments to the Customer Rebate to Add Liquidity in Penny Pilot
Options are equitable and not unfairly discriminatory because there is
no required minimum volume of Customer orders to qualify for a Customer
Rebate to Add Liquidity. Tier 1 will pay a rebate for NOM Participants
that add Customer liquidity from 1 contract to 34,999 contracts under
the proposal. All NOM Participants that transact Customer orders in
Penny Pilot Options are eligible for the Customer rebates.
    The Exchange believes that the technical amendments to the Customer
Rebate to Add Liquidity in Penny Pilot Options which assign a new
letter to the tiers to coordinate with the amended rule are reasonable,
equitable and not unfairly discriminatory because they clarify the
Rule.
    The Exchange operates in a highly competitive market comprised of
ten 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 or
rebate opportunities to be inadequate. The Exchange believes that the
proposed rebate scheme and fees are competitive and similar to other
fees, rebates and tier opportunities in place on other exchanges. The
Exchange believes that this competitive marketplace materially impacts
rebates and fees present on the Exchange today and substantially
influences the proposal set forth above.

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule changes will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. To the contrary,
NASDAQ has designed its rebates and fees to compete effectively for the
execution and routing of options contracts and to reduce the overall
cost to investors of options trading. The Exchange believes that

incentivizing NOM Participants to transact greater Customer volume on
the Exchange benefits all market participants because of the increased
liquidity to the market.

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.\22\ 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.
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    \22\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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 email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-114 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-NASDAQ-2012-114. 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-NASDAQ-2012-114 and should
be submitted on or before November 6, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25357 Filed 10-15-12; 8:45 am]
BILLING CODE 8011-01-P