Self-Regulatory Organizations; National Stock Exchange; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New Chapter XVI of the NSX Rules Relating to Dues, Fees, Assessments, Charges, and Market Data Rebate Programs, 43258-43260 [E6-12149]
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43258
Federal Register / Vol. 71, No. 146 / Monday, July 31, 2006 / Notices
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2006–089 on the
subject line.
sroberts on PROD1PC70 with NOTICES
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASD–2006–089. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of NASD. 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–NASD–2006–089 and
should be submitted on or before
August 21, 2006.
VerDate Aug<31>2005
17:34 Jul 28, 2006
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For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–12176 Filed 7–28–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54194; File No. SR–NSX–
2006–10]
Self-Regulatory Organizations;
National Stock Exchange; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Adopt a
New Chapter XVI of the NSX Rules
Relating to Dues, Fees, Assessments,
Charges, and Market Data Rebate
Programs
July 24, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 13,
2006, National Stock Exchange (‘‘NSX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by NSX. NSX filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
thereunder,4 which renders it effective
upon filing with the Commission.5 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NSX proposes to adopt Chapter XVI of
its Rules relating to dues, fees,
assessments, charges and market data
revenue sharing programs. The text of
the proposed rule change is available at
the Commission, at NSX, and at
www.nsx.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NSX included statements concerning
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–(4)(f)(6).
5 NSX provided the Commission with written
notice of its intent to file the proposed rule change
on June 29, 2006. See Section 19(b)(3)(A) of the Act,
and Rule 19b–4(f)(6)(iii) thereunder. 15 U.S.C.
78s(b)(3)(A), 17 CFR 240.19b–4(f)(6)(iii).
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1 15
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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. NSX 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
NSX Rule 11.10 currently sets forth
the Exchange’s fees, dues and rebate
programs. NSX proposes to remove the
language in NSX Rule 11.10 concerning
fees, dues and rebate programs in
connection with the Exchange’s
proposed changes to Chapter XI of its
Rules, which are part of a separate
proposed rule change.6 The Exchange
proposes to adopt Chapter XVI relating
to fees, dues and rebate programs.
Chapter XVI will replace current NSX
Rule 11.10 when the Exchange’s
proposed changes to Chapter XI of its
Rules become effective.
Proposed NSX Rule 16.1(a) authorizes
the Exchange to prescribe such
reasonable dues, fees, assessments or
other charges as it may, in its discretion,
deem appropriate. Such dues, fees,
assessments and charges may include
ETP Holder dues, transaction fees,
communication and technology fees,
regulatory charges, listing fees, and
other fees and charges as the Exchange
may determine. NSX Rule 16.1 further
provides that all dues, fees and charges
shall be equitably allocated among ETP
Holders, issuers and other persons using
the Exchange’s facilities.
Proposed NSX Rule 16.1(b) provides
for a regulatory transaction fee pursuant
to Section 31 of the Act.7 This proposed
Rule is identical to current Exchange
Rule 11.10(q).
Proposed NSX Rule 16.1(c) states that
the Exchange will provide ETP Holders
with notice of all relevant dues, fees,
assessments and charges. The Exchange
proposes to maintain a separate fee
schedule that contains its current fees,
dues and other charges, instead of
including all of its specific fees, dues
and charges in the text of its Rules (as
it currently does with NSX Rule 11.10).
The Exchange notes that this approach
is consistent with the approach taken by
other national securities exchanges.8
6 See
SR–NSX–2006–08.
U.S.C. 78ee.
8 See, e.g., Chicago Stock Exchange, Article XIV,
Rules 1, 2 and 7; NYSE Arca Equities Rule 3.7.
7 15
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sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 71, No. 146 / Monday, July 31, 2006 / Notices
Proposed NSX Rule 16.2(a) provides
that crosses executed in Tape A, B and
C securities will not be subject to any
transaction fees. Under current NSX
Rule 11.10(A)(k), the Exchange
generally does not charge any
transaction fees for trades in Tape B
securities. Proposed NSX Rule 16.2(a)
would replace current NSX Rule
11.10(A)(k), and would eliminate fees
for crosses executed in Tape A and C
securities.9
Proposed NSX Rule 16.2(b) contains
the Exchange’s market data revenue
rebate programs, which are being moved
from current NSX Rule 11.10(A)(l). The
Exchange’s current rebate programs, as
reflected in NSX Rule 11.10(a)(l),
consist of a 50% transaction credit on
revenues generated by transactions in
Tape B and C securities. Proposed NSX
Rule 16.2(b) is equivalent to current
NSX Rule 11.10(A)(l), except that
proposed NSX Rule 16.2(b) also
establishes a rebate program for Tape A
securities.
Like the Exchange’s current Tape B
and C rebate programs, the proposed
new Tape A rebate program will provide
a 50% transaction credit on revenues
generated by transactions in Tape A
securities, and will be allocable to
members on a pro rata basis based upon
the Tape A revenue generated by such
members. The Exchange believes that
there is no regulatory reason to
distinguish Tape A transactions from
Tape B and C transactions, and is
therefore proposing an equivalent rebate
program. As with the Exchange’s
current Tape B and C rebate programs,
to the extent that market data revenue
from Tape A transactions is subject to
any adjustment, credits provided under
the Tape A program may be adjusted
accordingly.
The Exchange notes that, consistent
with its Tape B and C programs, the
Tape A rebate program will be based on
gross Tape A revenue. The Exchange
believes that the addition of this Tape
A rebate program, and the calculation of
rebates on a gross basis, will not impair
its ability to carry out its regulatory
responsibilities under the Act, as the
change is likely to lead to greater
transactional volume in Tape A
securities on the Exchange and therefore
greater revenues that may be applied to
the Exchange’s regulatory programs. The
Exchange is cognizant of its surveillance
and compliance responsibilities as a
self-regulatory organization; its
responsibilities as a self-regulatory
9 The Exchange’s current fees for crosses in Tape
A and C securities are contained in current NSX
Rule 11.10(A)(e). NSX Rule 11.10(A)(e) is proposed
to be removed as part of SR–NSX–2006–08.
VerDate Aug<31>2005
17:34 Jul 28, 2006
Jkt 208001
organization will be in no way
compromised by the implementation of
the changes proposed herein. The
Exchange notes that the calculation of
rebates based on gross revenues is
consistent with market data revenue
sharing programs of other national
securities exchanges.10
Proposed NSX Rule 16.3 provides that
Chapter XVI will become effective upon
written notice by the Exchange to ETP
Holders. The Exchange is proposing this
effectiveness provision in order to
ensure that the effectiveness of this new
Chapter coincides with the effectiveness
of the Exchange’s proposed changes to
its trading rules,11 and the launch of its
new trading system.
The Exchange believes this proposed
rule change is consistent with the
protection of investors and the public
interest because it is designed to lower
the cost of trading and market data to
broker–dealers and the investing public,
and to enhance competition in the
trading of Tape A securities.
2. Statutory Basis
NSX believes that the proposed rule
change is consistent with the provisions
of Section 6(b) of the Act,12 in general,
and with Section 6(b)(4) of the Act,13 in
particular, in that it is designed to
provide for the equitable allocation of
reasonable dues, fees and other charges
by crediting members on a pro rata
basis.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NSX does not believe that the
proposed rule change will impose any
inappropriate burden on competition.
10 NSX’s definition of ‘‘gross revenue’’ is the
revenue received by the Exchange from the tape
associations after the tape associations take into
account the ‘‘allocated support cost’’ and
‘‘unincorporated business costs.’’ Some markets,
such as the Chicago Stock Exchange (‘‘CHX’’),
provide for rebates based upon monthly tape
revenue from the Consolidated Tape Association
(less all direct TA costs) generated by a particular
Tape A or Tape B security (See CHX Fee Schedule,
Section M). Other markets, like the Nasdaq Stock
Market, allow members to earn credits from one or
two pools, with each pool representing 50% of the
tape revenue paid by the Consolidated Tape
Association for each of the Tape A or Tape B
transactions after deducting the amount that the
market pays to the Consolidated Tape Association
for capacity usage (See NASD Rule 7010(c)(2)).
While the NYSE Arca LLC has some limitations on
who is eligible to receive rebates, the amount of the
pool for calculation purposes is based on 50% of
the gross revenues derived from market data fees
(See NYSE Arca ‘‘Market Data Revenue Sharing
Credits’’ under Exchange Fees).
11 See SR–NSX–2006–08.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(4).
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43259
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) Impose any significant burden on
competition; and
(iii) Become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 14 and Rule 19b–4(f)(6)
thereunder.15 At any time within 60
days of the filing of the proposed rule
change, the Commission may summarily
abrogate 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.
The Exchange has asked that the
Commission waive the 30-day operative
delay to ensure that this proposed rule
change will be both effective and
operative on or before the effective date
of SR–NSX–2006–08 and the date of
NSX’s launch of its new trading system.
The Exchange expects to launch its new
system on August 1, 2006. Waiver of the
30-day operative delay will eliminate
the potential that the Exchange will not
have rules in place relating to dues, fees,
assessments, charges, and rebate
programs at the time it launches its new
system. In light of the foregoing, the
Commission believes such waiver is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission
designates the proposal to be effective
and operative upon filing with the
Commission.16
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.
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
16 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
15 17
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43260
Federal Register / Vol. 71, No. 146 / Monday, July 31, 2006 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–54195; File No. SR–NYSE–
2006–01]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NSX–2006–10 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
Self-Regulatory Organizations; New
York Stock Exchange, Inc. (n/k/a New
York Stock Exchange LLC); Order
Approving Proposed Rule Change to
Require Specialists to Publish a 100 x
100 Share Market to Suspend Direct+
for Exchange Rule 127 Block Cross
Transactions
July 24, 2006.
sroberts on PROD1PC70 with NOTICES
On January 17, 2006, the New York
Stock Exchange, Inc.1 (n/k/a New York
Stock Exchange LLC) (‘‘NYSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
All submissions should refer to File
19(b)(1) of the Securities Exchange Act
Number SR–NSX–2006–10. This file
of 1934 (‘‘Act’’) 2 and Rule 19b–4
number should be included on the
3
subject line if e-mail is used. To help the thereunder, a proposed rule change to
eliminate Exchange Rule 1000(v), which
Commission process and review your
suspends the Exchange’s Direct+ facility
comments more efficiently, please use
if the specialist publishes a bid and/or
only one method. The Commission will
offer that is more than five cents away
post all comments on the Commission’s
from the last reported transaction price
Internet Web site (https://www.sec.gov/
when an Exchange Rule 127 block cross
rules/ sro.shtml). Copies of the
transaction is being executed. The
submission, all subsequent
Exchange proposes to replace this
amendments, all written statements
procedure with a rule that requires the
with respect to the proposed rule
specialist to quote a 100 x 100 share
change that are filed with the
market when all Exchange Rule 127
Commission, and all written
block cross transactions are being
communications relating to the
executed, regardless of the amount the
proposed rule change between the
cross price is away from the last
Commission and any person, other than reported transaction price. The
proposed rule change was published for
those that may be withheld from the
comment in the Federal Register on
public in accordance with the
June 8, 2006.4 The Commission received
provisions of 5 U.S.C. 552, will be
no comments regarding the proposal.
available for inspection and copying in
The Commission finds that the
the Commission’s Public Reference
proposed rule change is consistent with
Room. Copies of such filing also will be
the requirements of the Act and the
available for inspection and copying at
rules and regulations thereunder
the principal office of NSX. All
applicable to a national securities
comments received will be posted
exchange, and, in particular, with the
without change; the Commission does
requirements of Section 6(b) of the Act.5
not edit personal identifying
Specifically, the Commission finds that
information from submissions. You
the proposed rule change is consistent
should submit only information that
with Section 6(b)(5) of the Act 6 in that
you wish to make available publicly. All it is designed to promote just and
submissions should refer to File
equitable principles of trade, to foster
Number SR–NSX–2006–10 and should
cooperation and coordination with
be submitted on or before August 21,
persons engaged in regulating, clearing,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.17
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–12149 Filed 7–28–06; 8:45 am]
BILLING CODE 8010–01–P
17 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
17:34 Jul 28, 2006
Jkt 208001
1 The Exchange is now known as the New York
Stock Exchange LLC. See Securities Exchange Act
Release No. 53382 (February 27, 2006), 71 FR 11251
(March 6, 2006).
2 15 U.S.C. 78s(b)(1).
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 53932
(June 1, 2006), 71 FR 33328.
5 15 U.S.C. 78f(b). In approving this proposed rule
change, the Commission considered the proposed
rule’s impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(5).
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settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
The Commission believes that
eliminating the requirement that
specialists quote a price that is more
than five cents away from the last
reported transaction price when a Rule
127 transaction is being executed
should simplify the procedure for
suspending Direct+ while a Rule 127
block transaction is being executed.7
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–NYSE–2006–
01) is hereby approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–12147 Filed 7–28–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54205; File No. SR–NYSE–
2005–38]
Self-Regulatory Organizations; New
York Stock Exchange, Inc. (n/k/a New
York Stock Exchange LLC); Order
Approving Proposed Rule Change and
Amendment No. 1 Thereto to Rules 104
(‘‘Dealings by Specialists’’) and 123E
(‘‘Specialist Combination Review
Policy’’) To Change the Exchange’s
Capital Requirements for Specialist
Organizations
July 25, 2006.
I. Introduction
On May 26, 2005, the New York Stock
Exchange, Inc. (n/k/a New York Stock
Exchange LLC) (the ‘‘Exchange’’ or
‘‘NYSE’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or the
‘‘Commission’’) a proposed rule change
to amend Rules 104 (‘‘Dealings by
Specialists’’) and 123E (‘‘Specialist
Combination Review Policy’’) in order
to change the Exchange’s capital
requirements for specialist organizations
pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
7 The Commission notes that this rule will not be
in effect upon the implementation of the Hybrid
Market. See Securities Exchange Act Release No.
53539 (March 22, 2006), 71 FR 16353 (March 31,
2006).
8 15 U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
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]]>Agencies
[Federal Register Volume 71, Number 146 (Monday, July 31, 2006)]
[Notices]
[Pages 43258-43260]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12149]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54194; File No. SR-NSX-2006-10]
Self-Regulatory Organizations; National Stock Exchange; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a
New Chapter XVI of the NSX Rules Relating to Dues, Fees, Assessments,
Charges, and Market Data Rebate Programs
July 24, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 13, 2006, National Stock Exchange (``NSX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by NSX. NSX filed the proposed rule change pursuant
to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it effective upon filing with the
Commission.\5\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-(4)(f)(6).
\5\ NSX provided the Commission with written notice of its
intent to file the proposed rule change on June 29, 2006. See
Section 19(b)(3)(A) of the Act, and Rule 19b-4(f)(6)(iii)
thereunder. 15 U.S.C. 78s(b)(3)(A), 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NSX proposes to adopt Chapter XVI of its Rules relating to dues,
fees, assessments, charges and market data revenue sharing programs.
The text of the proposed rule change is available at the Commission, at
NSX, and at www.nsx.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSX 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. NSX 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
NSX Rule 11.10 currently sets forth the Exchange's fees, dues and
rebate programs. NSX proposes to remove the language in NSX Rule 11.10
concerning fees, dues and rebate programs in connection with the
Exchange's proposed changes to Chapter XI of its Rules, which are part
of a separate proposed rule change.\6\ The Exchange proposes to adopt
Chapter XVI relating to fees, dues and rebate programs. Chapter XVI
will replace current NSX Rule 11.10 when the Exchange's proposed
changes to Chapter XI of its Rules become effective.
---------------------------------------------------------------------------
\6\ See SR-NSX-2006-08.
---------------------------------------------------------------------------
Proposed NSX Rule 16.1(a) authorizes the Exchange to prescribe such
reasonable dues, fees, assessments or other charges as it may, in its
discretion, deem appropriate. Such dues, fees, assessments and charges
may include ETP Holder dues, transaction fees, communication and
technology fees, regulatory charges, listing fees, and other fees and
charges as the Exchange may determine. NSX Rule 16.1 further provides
that all dues, fees and charges shall be equitably allocated among ETP
Holders, issuers and other persons using the Exchange's facilities.
Proposed NSX Rule 16.1(b) provides for a regulatory transaction fee
pursuant to Section 31 of the Act.\7\ This proposed Rule is identical
to current Exchange Rule 11.10(q).
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78ee.
---------------------------------------------------------------------------
Proposed NSX Rule 16.1(c) states that the Exchange will provide ETP
Holders with notice of all relevant dues, fees, assessments and
charges. The Exchange proposes to maintain a separate fee schedule that
contains its current fees, dues and other charges, instead of including
all of its specific fees, dues and charges in the text of its Rules (as
it currently does with NSX Rule 11.10). The Exchange notes that this
approach is consistent with the approach taken by other national
securities exchanges.\8\
---------------------------------------------------------------------------
\8\ See, e.g., Chicago Stock Exchange, Article XIV, Rules 1, 2
and 7; NYSE Arca Equities Rule 3.7.
---------------------------------------------------------------------------
[[Page 43259]]
Proposed NSX Rule 16.2(a) provides that crosses executed in Tape A,
B and C securities will not be subject to any transaction fees. Under
current NSX Rule 11.10(A)(k), the Exchange generally does not charge
any transaction fees for trades in Tape B securities. Proposed NSX Rule
16.2(a) would replace current NSX Rule 11.10(A)(k), and would eliminate
fees for crosses executed in Tape A and C securities.\9\
---------------------------------------------------------------------------
\9\ The Exchange's current fees for crosses in Tape A and C
securities are contained in current NSX Rule 11.10(A)(e). NSX Rule
11.10(A)(e) is proposed to be removed as part of SR-NSX-2006-08.
---------------------------------------------------------------------------
Proposed NSX Rule 16.2(b) contains the Exchange's market data
revenue rebate programs, which are being moved from current NSX Rule
11.10(A)(l). The Exchange's current rebate programs, as reflected in
NSX Rule 11.10(a)(l), consist of a 50% transaction credit on revenues
generated by transactions in Tape B and C securities. Proposed NSX Rule
16.2(b) is equivalent to current NSX Rule 11.10(A)(l), except that
proposed NSX Rule 16.2(b) also establishes a rebate program for Tape A
securities.
Like the Exchange's current Tape B and C rebate programs, the
proposed new Tape A rebate program will provide a 50% transaction
credit on revenues generated by transactions in Tape A securities, and
will be allocable to members on a pro rata basis based upon the Tape A
revenue generated by such members. The Exchange believes that there is
no regulatory reason to distinguish Tape A transactions from Tape B and
C transactions, and is therefore proposing an equivalent rebate
program. As with the Exchange's current Tape B and C rebate programs,
to the extent that market data revenue from Tape A transactions is
subject to any adjustment, credits provided under the Tape A program
may be adjusted accordingly.
The Exchange notes that, consistent with its Tape B and C programs,
the Tape A rebate program will be based on gross Tape A revenue. The
Exchange believes that the addition of this Tape A rebate program, and
the calculation of rebates on a gross basis, will not impair its
ability to carry out its regulatory responsibilities under the Act, as
the change is likely to lead to greater transactional volume in Tape A
securities on the Exchange and therefore greater revenues that may be
applied to the Exchange's regulatory programs. The Exchange is
cognizant of its surveillance and compliance responsibilities as a
self-regulatory organization; its responsibilities as a self-regulatory
organization will be in no way compromised by the implementation of the
changes proposed herein. The Exchange notes that the calculation of
rebates based on gross revenues is consistent with market data revenue
sharing programs of other national securities exchanges.\10\
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\10\ NSX's definition of ``gross revenue'' is the revenue
received by the Exchange from the tape associations after the tape
associations take into account the ``allocated support cost'' and
``unincorporated business costs.'' Some markets, such as the Chicago
Stock Exchange (``CHX''), provide for rebates based upon monthly
tape revenue from the Consolidated Tape Association (less all direct
TA costs) generated by a particular Tape A or Tape B security (See
CHX Fee Schedule, Section M). Other markets, like the Nasdaq Stock
Market, allow members to earn credits from one or two pools, with
each pool representing 50% of the tape revenue paid by the
Consolidated Tape Association for each of the Tape A or Tape B
transactions after deducting the amount that the market pays to the
Consolidated Tape Association for capacity usage (See NASD Rule
7010(c)(2)). While the NYSE Arca LLC has some limitations on who is
eligible to receive rebates, the amount of the pool for calculation
purposes is based on 50% of the gross revenues derived from market
data fees (See NYSE Arca ``Market Data Revenue Sharing Credits''
under Exchange Fees).
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Proposed NSX Rule 16.3 provides that Chapter XVI will become
effective upon written notice by the Exchange to ETP Holders. The
Exchange is proposing this effectiveness provision in order to ensure
that the effectiveness of this new Chapter coincides with the
effectiveness of the Exchange's proposed changes to its trading
rules,\11\ and the launch of its new trading system.
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\11\ See SR-NSX-2006-08.
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The Exchange believes this proposed rule change is consistent with
the protection of investors and the public interest because it is
designed to lower the cost of trading and market data to broker-dealers
and the investing public, and to enhance competition in the trading of
Tape A securities.
2. Statutory Basis
NSX believes that the proposed rule change is consistent with the
provisions of Section 6(b) of the Act,\12\ in general, and with Section
6(b)(4) of the Act,\13\ in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees and other
charges by crediting members on a pro rata basis.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NSX does not believe that the proposed rule change will impose any
inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \14\ and
Rule 19b-4(f)(6) thereunder.\15\ At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate 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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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
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The Exchange has asked that the Commission waive the 30-day
operative delay to ensure that this proposed rule change will be both
effective and operative on or before the effective date of SR-NSX-2006-
08 and the date of NSX's launch of its new trading system. The Exchange
expects to launch its new system on August 1, 2006. Waiver of the 30-
day operative delay will eliminate the potential that the Exchange will
not have rules in place relating to dues, fees, assessments, charges,
and rebate programs at the time it launches its new system. In light of
the foregoing, the Commission believes such waiver is consistent with
the protection of investors and the public interest. Accordingly, the
Commission designates the proposal to be effective and operative upon
filing with the Commission.\16\
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\16\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(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.
[[Page 43260]]
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NSX-2006-10 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSX-2006-10. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of NSX. 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-NSX-2006-10 and should be submitted on or before August 21, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-12149 Filed 7-28-06; 8:45 am]
BILLING CODE 8010-01-P
