80_FR_42273 80 FR 42137 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Relating to Non-Penny Pilot Options Fees

80 FR 42137 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Relating to Non-Penny Pilot Options Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 136 (July 16, 2015)

Page Range42137-42139
FR Document2015-17396

Federal Register, Volume 80 Issue 136 (Thursday, July 16, 2015) 
[Federal Register Volume 80, Number 136 (Thursday, July 16, 2015)]
[Notices]
[Pages 42137-42139]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17396]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75423; File No. SR-NASDAQ-2015-070]


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

July 10, 2015.
    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 June 30, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 the Exchange's transaction fees at 
chapter XV, section 2 entitled ``NASDAQ Options Market--Fees and 
Rebates,'' which governs pricing for NASDAQ members using the NASDAQ 
Options Market (``NOM''), NASDAQ's facility for executing and routing 
standardized equity and index options.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated the amendments become operative on July 1, 
2015.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://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 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
    The Exchange proposes to amend the Non-Penny Pilot Options \3\ Fees 
for Removing Liquidity \4\ for all market participants, except 
Customers.\5\ The Exchange is also proposing to remove all fees for 
options overlying the PHLX Semiconductor Sector\SM\ (SOX\SM\).
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    \3\ The Penny Pilot was established in March 2008 is currently 
expanded and extended through June 30, 2015. 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); 
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); 68519 
(December 21, 2012), 78 FR 136 (January 2, 2013) (SR-NASDAQ-2012-
143) (notice of filing and immediate effectiveness and extension and 
replacement of Penny Pilot through June 30, 2013); 69787 (June 18, 
2013), 78 FR 37858 (June 24, 2013) (SR-NASDAQ-2013-082) (notice of 
filing and immediate effectiveness and extension and replacement of 
Penny Pilot through December 31, 2013); 71105 (December 17, 2013), 
78 FR 77530 (December 23, 2013) (SR-NASDAQ-2013-154) (notice of 
filing and immediate effectiveness and extension and replacement of 
Penny Pilot through June 30, 2014); 79 FR 31151 (May 23, 2014), 79 
FR 31151 (May 30, 2014) (SR-NASDAQ-2014-056) (notice of filing and 
immediate effectiveness and extension and replacement of Penny Pilot 
through December 31, 2014); 73686 (December 2, 2014), 79 FR 71477 
(November 25, 2014) (SR-NASDAQ-2014-115) (notice of filing and 
immediate effectiveness and extension and replacement of Penny Pilot 
through June 30, 2015); and 75283 (June 24, 2015), 80 FR 37347 (June 
30, 2015) (notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Extension of the Exchange's Penny 
Pilot Program and Replacement of Penny Pilot Issues That Have Been 
Delisted). See also NOM Rules, chapter VI, section 5.
    \4\ The Non-Penny Pilot Options pricing includes options 
overlying the Nasdaq 100 Index traded under the symbol NDX. For 
transactions in NDX, a surcharge of $0.15 per contract will be added 
to the Fee for Adding Liquidity and the Fee for Removing Liquidity 
in Non-Penny Pilot Options, except for a Customer who will not be 
assessed a surcharge.
    \5\ The term ``Customer'' applies to any transaction that is 
identified by a Participant for clearing in the Customer range at 
The Options Clearing Corporation (``OCC'') which is not for the 
account of broker or dealer or for the account of a ``Professional'' 
(as that term is defined in chapter I, section 1(a)(48)).
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Non-Penny Pilot Options Fees for Removing Liquidity
    The Exchange proposes to amend the Non-Penny Pilot Options Fees for 
Removing Liquidity (including NDX) for Professionals,\6\ Firms,\7\ Non-
NOM Market Makers,\8\ NOM Market Makers \9\ and Broker-Dealers \10\ 
from $0.89 to $0.94 per contract. Customers will continue to be 
assessed a Non-Penny Pilot Options Fee for Removing Liquidity of $0.85 
per contract. The Exchange believes that despite this fee increase, 
Fees for Removing Liquidity in Non-Penny Pilot Options remain 
competitive.
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    \6\ The term ``Professional'' means any person or entity that 
(i) is not a broker or dealer in securities, and (ii) places more 
than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s) pursuant to chapter 
I, section 1(a)(48). All Professional orders shall be appropriately 
marked by Participants.
    \7\ The term ``Firm'' or (``F'') applies to any transaction that 
is identified by a Participant for clearing in the Firm range at 
OCC.
    \8\ The term ``Non-NOM Market Maker'' or (``O'') is a registered 
market maker on another options exchange that is not a NOM Market 
Maker. A Non-NOM Market Maker must append the proper Non-NOM Market 
Maker designation to orders routed to NOM.
    \9\ The term ``NOM Market Maker'' means a Participant that has 
registered as a Market Maker on NOM pursuant to chapter VII, section 
2, and must also remain in good standing pursuant to chapter VII, 
section 4. In order to receive NOM Market Maker pricing in all 
securities, the Participant must be registered as a NOM Market Maker 
in at least one security.
    \10\ The term ``Broker-Dealer'' or (``B'') applies to any 
transaction which is not subject to any of the other transaction 
fees applicable within a particular category.
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SOX
    The Exchange is proposing to remove all fees related to SOX from 
chapter XV, section 2 of the NOM Rules. Currently, chapter XV, section 
2 specifies the following fees related to SOX:

[[Page 42138]]



                                                                    Fees and Rebates
                                                                 [Per executed contract]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Non-NOM market
                                             Customer         Professional           Firm              maker         NOM Market maker    Broker-dealer
--------------------------------------------------------------------------------------------------------------------------------------------------------
SOX:
    Fee for Adding Liquidity..........              $0.40              $0.89              $0.89              $0.89              $0.40              $0.89
    Fee for Removing Liquidity........               0.40               0.89               0.89               0.89               0.40               0.89
--------------------------------------------------------------------------------------------------------------------------------------------------------

The Exchange is proposing to remove the above-referenced fees as will 
delist SOX from NOM as of July 1, 2015.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of section 6 of the Act,\11\ in general, and with 
section 6(b)(4) and 6(b)(5) of the Act,\12\ 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 NASDAQ operates or controls, and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4) and (5).
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Non-Penny Pilot Options Fees for Removing Liquidity
    The Exchange's proposal to increase the Professional, Firm, Non-NOM 
Market Maker, NOM Market Maker and Broker-Dealer Non-Penny Pilot 
Options Fees for Removing Liquidity from $0.89 to $0.94 per contract is 
reasonable because this fee remains competitive with fees at other 
exchanges.\13\ Further, these fees are designed to attract and compete 
for order flow to the Exchange, which provides a greater opportunity 
for trading by all market participants.\14\ In addition, the increased 
Non-Penny Pilot Options Fees for Removing Liquidity are reasonable 
because the fees generate revenue that would support the various 
rebates which NOM pays for adding liquidity, which attracts order flow 
to the Exchange.
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    \13\ See NYSE Arca's Options Fees and Charges. NYSE Arca 
assesses a take liquidity fee of $0.94 per contract to Professional 
Customers, Firms and Broker-Dealers in Non-Penny Pilot Options. A 
NYSE Market Maker is assessed a take liquidity fee of $0.92 per 
contract in Non-Penny Pilot Options. A Customer is assessed a take 
liquidity fee of $0.85 per contract in Non-Penny Pilot Options.
    \14\ Id.
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    The Exchange's proposal to increase the Professional, Firm, Non-NOM 
Market Maker, NOM Market Maker and Broker-Dealer Non-Penny Pilot 
Options Fee for Removing Liquidity from $0.89 to $0.94 per contract is 
equitable and not unfairly discriminatory because the Exchange would 
uniformly assess all non-Customers a Non-Penny Pilot Options Fee for 
Removing Liquidity of $0.94 per contract. Customers would be assessed 
the lowest Non-Penny Pilot Options Fee for Removing Liquidity of $0.85 
per contract. Customer order flow enhances liquidity on the Exchange 
for the benefit of all market participants and benefits all market 
participants by providing more trading opportunities, which attracts 
market makers. An increase in the activity of these market participants 
in turn facilitates tighter spreads, which may cause an additional 
corresponding increase in order flow from other market participants.
SOX
    The Exchange's proposal to remove the Fees for Adding and Removing 
Liquidity in options overlying SOX is reasonable because the Exchange 
is delisting SOX from NOM on July 1, 2015.
    The Exchange's proposal to remove the Fees for Adding and Removing 
Liquidity in options overlying SOX is equitable and not unfairly 
discriminatory because the Exchange is delisting SOX from NOM on July 
1, 2015 and therefore no market participant will be subject to these 
fees.

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

    NASDAQ 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's proposal to increase the 
Professional, Firm, Non-NOM Market Maker, NOM Market Maker and Broker-
Dealer Non-Penny Pilot Options Fee for Removing Liquidity from $0.89 to 
$0.94 per contract does not create an undue burden on competition. All 
market participants, other than Customers, will be assessed a Non-Penny 
Pilot Options Fee for Removing Liquidity of $0.94 per contract. 
Customers are assessed a lower Non-Penny Pilot Options Fee for Removing 
Liquidity because Customer order flow enhances liquidity on the 
Exchange for the benefit of all market participants.
    The Exchange's proposal to remove the Fees for Adding and Removing 
Liquidity in options overlying SOX does not create an undue burden on 
competition because no market participant will be subject to these 
fees.

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.\15\ 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: (i) Necessary or appropriate in the public 
interest; (ii) for the protection of investors; or (iii) 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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    \15\ 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
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2015-070 on the subject line.

[[Page 42139]]

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-070. 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-2015-070 and should 
be submitted on or before August 6, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-17396 Filed 7-15-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 136 / Thursday, July 16, 2015 / Notices 42137 For the Commission, by the Division of I. Self-Regulatory Organization’s A. Self-Regulatory Organization’s Trading and Markets, pursuant to delegated Statement of the Terms of Substance of Statement of the Purpose of, and authority.13 the Proposed Rule Change Statutory Basis for, the Proposed Rule Jill M. Peterson, The Exchange proposes to amend the Change Assistant Secretary. Exchange’s transaction fees at chapter 1. Purpose [FR Doc. 2015–17394 Filed 7–15–15; 8:45 am] XV, section 2 entitled ‘‘NASDAQ BILLING CODE 8011–01–P Options Market—Fees and Rebates,’’ The Exchange proposes to amend the which governs pricing for NASDAQ Non-Penny Pilot Options 3 Fees for members using the NASDAQ Options Removing Liquidity 4 for all market SECURITIES AND EXCHANGE Market (‘‘NOM’’), NASDAQ’s facility for participants, except Customers.5 The COMMISSION executing and routing standardized Exchange is also proposing to remove equity and index options. all fees for options overlying the PHLX While the changes proposed herein Semiconductor SectorSM (SOXSM). [Release No. 34–75423; File No. SR– are effective upon filing, the Exchange NASDAQ–2015–070] has designated the amendments become Non-Penny Pilot Options Fees for Self-Regulatory Organizations; The operative on July 1, 2015. Removing Liquidity The text of the proposed rule change NASDAQ Stock Market LLC; Notice of is available on the Exchange’s Web site The Exchange proposes to amend the Filing and Immediate Effectiveness of at http://nasdaq.cchwallstreet.com, at Non-Penny Pilot Options Fees for Proposed Rule Change to Relating to the principal office of the Exchange, and Removing Liquidity (including NDX) for Non-Penny Pilot Options Fees at the Commission’s Public Reference Professionals,6 Firms,7 Non-NOM July 10, 2015. Room. Market Makers,8 NOM Market Makers 9 II. Self-Regulatory Organization’s and Broker-Dealers 10 from $0.89 to Pursuant to section 19(b)(1) of the $0.94 per contract. Customers will Securities Exchange Act of 1934 Statement of the Purpose of, and Statutory Basis for, the Proposed Rule continue to be assessed a Non-Penny (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Pilot Options Fee for Removing Change notice is hereby given that on June 30, Liquidity of $0.85 per contract. The 2015, The NASDAQ Stock Market LLC In its filing with the Commission, the Exchange believes that despite this fee (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Exchange included statements increase, Fees for Removing Liquidity in Securities and Exchange Commission concerning the purpose of and basis for Non-Penny Pilot Options remain (‘‘SEC’’ or ‘‘Commission’’) the proposed the proposed rule change and discussed any comments it received on the competitive. rule change as described in Items I, II, proposed rule change. The text of these SOX and III, below, which Items have been statements may be examined at the prepared by the Exchange. The The Exchange is proposing to remove places specified in Item IV below. The Commission is publishing this notice to Exchange has prepared summaries, set all fees related to SOX from chapter XV, solicit comments on the proposed rule forth in sections A, B, and C below, of section 2 of the NOM Rules. Currently, change from interested persons. the most significant aspects of such chapter XV, section 2 specifies the statements. following fees related to SOX: 13 17 CFR 200.30–3(a)(12). and replacement of Penny Pilot through June 30, Customer range at The Options Clearing 1 15 U.S.C. 78s(b)(1). 2013); 69787 (June 18, 2013), 78 FR 37858 (June 24, Corporation (‘‘OCC’’) which is not for the account 2 17 CFR 240.19b–4. 2013) (SR–NASDAQ–2013–082) (notice of filing of broker or dealer or for the account of a 3 The Penny Pilot was established in March 2008 and immediate effectiveness and extension and ‘‘Professional’’ (as that term is defined in chapter I, is currently expanded and extended through June replacement of Penny Pilot through December 31, section 1(a)(48)). 30, 2015. See Securities Exchange Act Release Nos. 2013); 71105 (December 17, 2013), 78 FR 77530 6 The term ‘‘Professional’’ means any person or 57579 (March 28, 2008), 73 FR 18587 (April 4, (December 23, 2013) (SR–NASDAQ–2013–154) entity that (i) is not a broker or dealer in securities, 2008) (SR–NASDAQ–2008–026) (notice of filing (notice of filing and immediate effectiveness and and (ii) places more than 390 orders in listed and immediate effectiveness establishing Penny extension and replacement of Penny Pilot through options per day on average during a calendar month Pilot); 60874 (October 23, 2009), 74 FR 56682 June 30, 2014); 79 FR 31151 (May 23, 2014), 79 FR for its own beneficial account(s) pursuant to chapter (November 2, 2009)(SR–NASDAQ–2009–091) 31151 (May 30, 2014) (SR–NASDAQ–2014–056) I, section 1(a)(48). All Professional orders shall be (notice of filing and immediate effectiveness (notice of filing and immediate effectiveness and appropriately marked by Participants. expanding and extending Penny Pilot); 60965 extension and replacement of Penny Pilot through 7 The term ‘‘Firm’’ or (‘‘F’’) applies to any (November 9, 2009), 74 FR 59292 (November 17, December 31, 2014); 73686 (December 2, 2014), 79 FR 71477 (November 25, 2014) (SR–NASDAQ– transaction that is identified by a Participant for 2009)(SR–NASDAQ–2009–097) (notice of filing and clearing in the Firm range at OCC. immediate effectiveness adding seventy-five classes 2014–115) (notice of filing and immediate 8 The term ‘‘Non-NOM Market Maker’’ or (‘‘O’’) is to Penny Pilot); 61455 (February 1, 2010), 75 FR effectiveness and extension and replacement of Penny Pilot through June 30, 2015); and 75283 a registered market maker on another options 6239 (February 8, 2010) (SR–NASDAQ–2010–013) exchange that is not a NOM Market Maker. A Non- (notice of filing and immediate effectiveness adding (June 24, 2015), 80 FR 37347 (June 30, 2015) (notice of Filing and Immediate Effectiveness of a Proposed NOM Market Maker must append the proper Non- seventy-five classes to Penny Pilot); 62029 (May 4, Rule Change Relating to Extension of the NOM Market Maker designation to orders routed to 2010), 75 FR 25895 (May 10, 2010) (SR–NASDAQ– Exchange’s Penny Pilot Program and Replacement NOM. 2010–053) (notice of filing and immediate 9 The term ‘‘NOM Market Maker’’ means a effectiveness adding seventy-five classes to Penny of Penny Pilot Issues That Have Been Delisted). See Pilot); 65969 (December 15, 2011), 76 FR 79268 also NOM Rules, chapter VI, section 5. Participant that has registered as a Market Maker on (December 21, 2011) (SR–NASDAQ–2011–169) 4 The Non-Penny Pilot Options pricing includes NOM pursuant to chapter VII, section 2, and must (notice of filing and immediate effectiveness options overlying the Nasdaq 100 Index traded also remain in good standing pursuant to chapter tkelley on DSK3SPTVN1PROD with NOTICES extension and replacement of Penny Pilot); 67325 under the symbol NDX. For transactions in NDX, VII, section 4. In order to receive NOM Market (June 29, 2012), 77 FR 40127 (July 6, 2012) (SR– a surcharge of $0.15 per contract will be added to Maker pricing in all securities, the Participant must NASDAQ–2012–075) (notice of filing and the Fee for Adding Liquidity and the Fee for be registered as a NOM Market Maker in at least one immediate effectiveness and extension and Removing Liquidity in Non-Penny Pilot Options, security. replacement of Penny Pilot through December 31, except for a Customer who will not be assessed a 10 The term ‘‘Broker-Dealer’’ or (‘‘B’’) applies to 2012); 68519 (December 21, 2012), 78 FR 136 surcharge. any transaction which is not subject to any of the (January 2, 2013) (SR–NASDAQ–2012–143) (notice 5 The term ‘‘Customer’’ applies to any transaction other transaction fees applicable within a particular of filing and immediate effectiveness and extension that is identified by a Participant for clearing in the category. VerDate Sep<11>2014 17:39 Jul 15, 2015 Jkt 235001 PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 E:\FR\FM\16JYN1.SGM 16JYN1

42138 Federal Register / Vol. 80, No. 136 / Thursday, July 16, 2015 / Notices FEES AND REBATES [Per executed contract] Non-NOM market NOM Market Customer Professional Firm Broker-dealer maker maker SOX: Fee for Add- ing Liquidity $0.40 $0.89 $0.89 $0.89 $0.40 $0.89 Fee for Re- moving Li- quidity ........ 0.40 0.89 0.89 0.89 0.40 0.89 The Exchange is proposing to remove to $0.94 per contract is equitable and Removing Liquidity because Customer the above-referenced fees as will delist not unfairly discriminatory because the order flow enhances liquidity on the SOX from NOM as of July 1, 2015. Exchange would uniformly assess all Exchange for the benefit of all market non-Customers a Non-Penny Pilot participants. 2. Statutory Basis The Exchange’s proposal to remove Options Fee for Removing Liquidity of NASDAQ believes that the proposed $0.94 per contract. Customers would be the Fees for Adding and Removing rule change is consistent with the assessed the lowest Non-Penny Pilot Liquidity in options overlying SOX does provisions of section 6 of the Act,11 in Options Fee for Removing Liquidity of not create an undue burden on general, and with section 6(b)(4) and $0.85 per contract. Customer order flow competition because no market 6(b)(5) of the Act,12 in particular, in that enhances liquidity on the Exchange for participant will be subject to these fees. it provides for the equitable allocation the benefit of all market participants of reasonable dues, fees and other C. Self-Regulatory Organization’s and benefits all market participants by Statement on Comments on the charges among members and issuers and providing more trading opportunities, other persons using any facility or Proposed Rule Change Received From which attracts market makers. An Members, Participants, or Others system which NASDAQ operates or increase in the activity of these market controls, and is not designed to permit participants in turn facilitates tighter No written comments were either unfair discrimination between spreads, which may cause an additional solicited or received. customers, issuers, brokers, or dealers. corresponding increase in order flow III. Date of Effectiveness of the Non-Penny Pilot Options Fees for from other market participants. Proposed Rule Change and Timing for Removing Liquidity SOX Commission Action The Exchange’s proposal to increase The foregoing rule change has become The Exchange’s proposal to remove the Professional, Firm, Non-NOM effective pursuant to section the Fees for Adding and Removing Market Maker, NOM Market Maker and 19(b)(3)(A)(ii) of the Act.15 At any time Liquidity in options overlying SOX is Broker-Dealer Non-Penny Pilot Options within 60 days of the filing of the reasonable because the Exchange is Fees for Removing Liquidity from $0.89 proposed rule change, the Commission delisting SOX from NOM on July 1, to $0.94 per contract is reasonable summarily may temporarily suspend 2015. because this fee remains competitive such rule change if it appears to the The Exchange’s proposal to remove with fees at other exchanges.13 Further, Commission that such action is: (i) the Fees for Adding and Removing these fees are designed to attract and Necessary or appropriate in the public Liquidity in options overlying SOX is compete for order flow to the Exchange, interest; (ii) for the protection of equitable and not unfairly which provides a greater opportunity for investors; or (iii) otherwise in discriminatory because the Exchange is trading by all market participants.14 In furtherance of the purposes of the Act. delisting SOX from NOM on July 1, If the Commission takes such action, the addition, the increased Non-Penny Pilot 2015 and therefore no market Options Fees for Removing Liquidity are Commission shall institute proceedings participant will be subject to these fees. to determine whether the proposed rule reasonable because the fees generate revenue that would support the various B. Self-Regulatory Organization’s should be approved or disapproved. rebates which NOM pays for adding Statement on Burden on Competition IV. Solicitation of Comments liquidity, which attracts order flow to NASDAQ does not believe that the Interested persons are invited to the Exchange. proposed rule change will impose any The Exchange’s proposal to increase submit written data, views, and burden on competition not necessary or arguments concerning the foregoing, the Professional, Firm, Non-NOM appropriate in furtherance of the Market Maker, NOM Market Maker and including whether the proposed rule purposes of the Act. The Exchange’s change is consistent with the Act. Broker-Dealer Non-Penny Pilot Options proposal to increase the Professional, Fee for Removing Liquidity from $0.89 Comments may be submitted by any of Firm, Non-NOM Market Maker, NOM the following methods: Market Maker and Broker-Dealer Non- 11 15 U.S.C. 78f. Penny Pilot Options Fee for Removing Electronic Comments 12 15 U.S.C. 78f(b)(4) and (5). 13 See NYSE Arca’s Options Fees and Charges. Liquidity from $0.89 to $0.94 per • Use the Commission’s Internet tkelley on DSK3SPTVN1PROD with NOTICES NYSE Arca assesses a take liquidity fee of $0.94 per contract does not create an undue comment form (http://www.sec.gov/ contract to Professional Customers, Firms and burden on competition. All market rules/sro.shtml); or Broker-Dealers in Non-Penny Pilot Options. A participants, other than Customers, will • Send an email to rule-comments@ NYSE Market Maker is assessed a take liquidity fee be assessed a Non-Penny Pilot Options of $0.92 per contract in Non-Penny Pilot Options. sec.gov. Please include File Number SR– A Customer is assessed a take liquidity fee of $0.85 Fee for Removing Liquidity of $0.94 per NASDAQ–2015–070 on the subject line. per contract in Non-Penny Pilot Options. contract. Customers are assessed a lower 14 Id. Non-Penny Pilot Options Fee for 15 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 17:39 Jul 15, 2015 Jkt 235001 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 E:\FR\FM\16JYN1.SGM 16JYN1

Federal Register / Vol. 80, No. 136 / Thursday, July 16, 2015 / Notices 42139 Paper Comments SECURITIES AND EXCHANGE clearing member positions (i.e., COMMISSION computes margin requirements) through • Send paper comments in triplicate its STANS methodology.7 to Brent J. Fields, Secretary, Securities [Release No. 34–75427; File No. SR–OCC– Asian Options use an ‘‘Asian-style’’ and Exchange Commission, 100 F Street 2015–010] methodology for determining the NE., Washington, DC 20549–1090. Self-Regulatory Organizations; The exercise settlement amount of an option, Options Clearing Corporation; Order which is the difference between the All submissions should refer to File Granting Approval of Proposed Rule aggregate exercise price and the Number SR–NASDAQ–2015–070. This aggregate current underlying interest file number should be included on the Change Concerning the Implementation of New Risk Models in value, which is based on the average of subject line if email is used. To help the twelve monthly price ‘‘observations.’’ Commission process and review your Order To Support the Clearance and Settlement of Asian-Style Flexibly OCC states that traders of Asian Options comments more efficiently, please use will select an observation date as well only one method. The Commission will Structured Options and Flexibly Structured Cliquet Options as an expiration date.8 post all comments on the Commission’s Cliquet Options use a cliquet 9 Internet Web site (http://www.sec.gov/ July 10, 2015. method for determining the exercise rules/sro.shtml). Copies of the settlement amount of the option, which I. Introduction is the greater of: (i) Zero (i.e., the submission, all subsequent amendments, all written statements On May 1, 2015, The Options Clearing underlying index had negative returns with respect to the proposed rule Corporation (‘‘OCC’’) filed with the during the option’s tenor); and, (ii) the change that are filed with the Securities and Exchange Commission difference between the aggregate Commission, and all written (‘‘Commission’’) the proposed rule exercise price and the aggregate current communications relating to the change SR–OCC–2015–010 pursuant to underlying interest value, which is proposed rule change between the section 19(b)(1) of the Securities based on the sum of the Capped Returns Exchange Act of 1934 (‘‘Act’’) 1 and Rule of the underlying index on 12 Commission and any person, other than 19b–4 thereunder.2 The proposed rule predetermined ‘‘observation dates’’ 10 those that may be withheld from the change was published for comment in (each an ‘‘Observation Date,’’ and the public in accordance with the the Federal Register on May 22, 2015.3 computed value an ‘‘Observation’’).11 provisions of 5 U.S.C. 552, will be The Commission received no comment available for Web site viewing and letters regarding the proposed change. and Russell 2000 Index, among other underlying printing in the Commission’s Public For the reasons discussed below, the indexes. Reference Room, 100 F Street NE., Commission is granting approval of the 7 See http://www.theocc.com/risk-management/ Washington, DC 20549, on official margins/ for a description of OCC’s margin proposed rule change. methodology. See also OCC Rule 601. business days between the hours of 8 OCC provides that, since Expiration dates must 10:00 a.m. and 3:00 p.m. Copies of the II. Description be within 50 to 53 calendar weeks from the date of filing also will be available for OCC is proposing to implement new listing, all Asian Options that it will clear will have risk models to support the clearance and a term of approximately one year. OCC explains inspection and copying at the principal that if the expiration date precedes the observation office of the Exchange. All comments settlement of Asian-style and Cliquet date in the final month, then the final ‘‘observation’’ received will be posted without change; flexibly structured options 4 (‘‘Asian will be the current underlying interest value on Options’’ and ‘‘Cliquet Options,’’ expiration date and not the observation date, and the Commission does not edit personal if one of the observation dates falls on a weekend identifying information from respectively). OCC already clears other or holiday, the value used will be from the previous submissions. You should submit only flexibly structured options (‘‘Current business day. information that you wish to make Index Flex Options’’) 5 on various 9 Cliquet style settlement provides for payout available publicly. All submissions securities indices 6 and risk manages based on the (positive) sum of ‘‘capped’’ returns of an index on pre-determined dates over a specified should refer to File Number SR– 1 15 period of time. U.S.C. 78s(b)(1). NASDAQ–2015–070 and should be 2 17 CFR 240.19b–4. 10 OCC states that the parties to a Cliquet Option will designate a set of Observation Dates for each submitted on or before August 6, 2015. 3 Securities Exchange Act Release No. 34–74966 contract as well as an expiration date. According to (May 14, 2015), 80 FR 29784 (May 22, 2015) (SR– OCC, Observation Dates will generally be a given For the Commission, by the Division of OCC–2015–010). The proposed rule change was date each month for the twelve months preceding Trading and Markets, pursuant to delegated published in the Federal Register on May 22, 2015, the expiration date, with the last Observation Date authority.16 but was deemed published on May 1, 2015, being the expiration date. If the Observation Date Jill M. Peterson, pursuant section 19b(2)(E) of the Act. chosen by the parties to a Cliquet Option precedes 4 Flexibly structured options permit the buyer the expiration date then OCC states that there will Assistant Secretary. and seller to negotiate and customize certain be two Observation Dates in the final month (i.e., [FR Doc. 2015–17396 Filed 7–15–15; 8:45 am] variable terms pursuant to exchange rules. See OCC the expiration date will always be an Observation By-Laws Article 1, section 1(F)(5). For example, Date) and ten other Observation Dates; one date in BILLING CODE 8011–01–P parties may select from a variety of underlying each of the ten months preceding the expiration indices, pick a strike price and expiration date as month that will coincide with the Observation Date well as pick the exercise-style of the option—i.e., that was chosen by the parties to a Cliquet Option American or European exercise. Options with an (not the expiration date). OCC explains that American style exercise may be exercised at any expiration dates must be within 50 to 53 calendar time prior to, and including, expiration. Options weeks from the date of listing, and that if one of with a European style exercise may only be the Observation Dates falls on a weekend or exercised at expiration. holiday, the previous business day will be deemed 5 The exercise settlement amount for Current to be the Observation Date. tkelley on DSK3SPTVN1PROD with NOTICES Index Flex Options is determined based entirely on 11 OCC explains that, on each Observation Date, the strike price of a given option and the current the exchange on which the Cliquet Options is listed underlying interest value on the day of exercise, in will determine the actual return of the underlying the case of American style Current Index Flex index from observation period-to-observation Options, or final day of trading, in the case of period, which will be compared to the observation European style Current Index Flex Options. cap, an amount designated the parties to the Cliquet 6 OCC clears Current Index Flex Options on the Option. OCC further states that the Capped Return 16 17 CFR 200.30–3(a)(12). S&P 500 Index, S&P 100 Index, Nasdaq 100 Index Continued VerDate Sep<11>2014 17:39 Jul 15, 2015 Jkt 235001 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 E:\FR\FM\16JYN1.SGM 16JYN1


Document Created: 2015-12-15 13:13:11
Document Modified: 2015-12-15 13:13:11
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 42137 
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