What is changing?

NASDAQ OMX plans to launch a new options market, BX Options, at the end of June, pending SEC approval. BX Options will offer an innovative approach through functionality and pricing to attract a rich participant mix. The new market will launch with a price/time priority execution algorithm.

After launch, BX Options will integrate additional functionality such as pro rata allocation with customer priority and directed participation in certain products. These enhancements will require additional SEC filings and approvals prior to implementation.

Have proposed BX Options rules been filed with the SEC?

Yes. The proposed rules mimic the NOM rules.

What interfaces will be available for BX Options?

BX Options will share the common architecture utilized by NOM and PHLX. Participants on the new BX Options market will be able to leverage their current connectivity to NOM/PHLX and will only need new logically separate BX Options ports.

The BX Options FIX specification will be identical to the NOM FIX specification.

The BX Options SQF & Clearing Trade Interface (CTI) specifications will be identical to the NOM and PHLX SQF and CTI specifications.

What are FIX, CTI and SQF?

• FIX - All participant types may use FIX for submitting orders to BX options.
• SQF - BX Options registered Market Makers provide two-sided liquidity to the BX Options Market using the SQF bulk-quoting API. The SQF interface is a high-throughput, low latency protocol allowing market makers to update up to 200 quotes in one block message.
• CTI - CTI provides subscribers with copies of clearing trades, similar to clearing trade information for trades sent to the OCC.

When will interface specifications be available?

FIX, SQF & CTI specifications are currently available at: http://www.nasdaqomxtrader.com/bxoptions.

How will firms connect to BX Options?

Firms can leverage their current connectivity to NOM/PHLX and will only need new logically separate BX Options ports. To order ports, firms need to fill out the BX Options port request form.

What market data will be available on BX Options?

BX Options will offer two proprietary data feeds that are identical in format to the existing NOM market data feeds:

• BX Options Top of Market (BX Top) - Is designed to provide the same BX Best Bid and Offer and last trade information that is provided to the Options Price Reporting Authority (OPRA). BX Top is identical to NOM BONO.
• BX Options Depth of Market (BX Depth) - Is designed to provide full quote and order depth, as well as last trade data and opening imbalance information. BX Depth is identical to NOM ITTO.
• BX Options Glimpse - A complement to BX Depth, this is a point to point data feed connection that provides direct data feed customers with the current state of the BX Options book.

How do firms order and connect to BX Options market data?

Data Feed Request forms and IP Address information will be available for BX Top and BX Depth at a later date. A separate announcement will be made regarding details.

When will market data specifications be available?

BX Top and BX Depth specifications are currently available at: http://www.nasdaqomxtrader.com/bxoptions.

When will testing be available?

Testing will be available daily in the BX Options Test Facility beginning May 16, 2012. Firms wishing to test must fill out a BX Options port request form to order test ports.

BX Options will also offer Saturday testing on the production system on the following dates:

• Saturday, June 9, 2012
• Saturday, June 23, 2012

Are there any fees associated with testing?

No. BX Options will not charge for testing or test ports.

What will be the BX Options fee structure?

Transaction fees will be announced at a later date. There will be no initial fees for ports or market data.

NASDAQ OMX BX^SM (BX^SM) membership fees will apply to those firms who are not currently members. Firms who are NASDAQ OMX BX equities members will not pay any additional membership fees.

How do firms become members of BX Options?

The BX Options membership process will mirror current practices on The NASDAQ Stock Market^® (NASDAQ^®) and NOM. All applications should be accompanied by a clearing Letter of Guarantee.

Please note: the Membership Department will be accepting membership applications immediately, but the rules of BX Options are subject to SEC approval.

• NASDAQ OMX BX members wishing to participate in the new BX Options market will be required to submit a BX Options Participant Application and Agreement.
• Broker-dealers who are already members of FINRA and/or NASDAQ, but not BX members, will qualify for the short form NASDAQ OMX BX membership application.
• Applicants who are not already approved for membership with FINRA and/or NASDAQ will be required to submit a full membership application. This is the same as the processes in place today for membership on NASDAQ and NOM.

Please submit applications to the NASDAQ OMX Membership Department:

ATTN: Deborah Siluk
NASDAQ OMX BX
Membership Department
1735 K Street, NW
Washington, DC 20006-1506
BX Membership Application Processing
Fax: +1 202 728 8341

Documents may also be submitted in PDF format via email to: Membership@nasdaqomx.com.

Where can I find more information?

• Refer to the BX Options page on the NASDAQ OMX Trader^® website.
• Refer to the BX Options FAQs.
• Refer to the BX Options Fact Sheet.
• Contact Transaction Services U.S. Market Sales at +1 800 846 0477.