Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto To Implement a Fee Schedule Under NSX Rule 16.1(a) and 16.1(c) for Transactions Executed Through NSX BLADE, 70822-70824 [E6-20628]

Download as PDF 70822 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Notices Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NSCC–2006–11 on the subject line. Paper Comments PWALKER on PRODPC60 with NOTICES • 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–NSCC–2006–11. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filings also will be available for inspection and copying at the principal office of NSCC and on NSCC’s Web site at http:// www.nscc.com/legal/2006/2006–11.pdf. 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–NSCC–2006–11 and should be submitted on or before December 27, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.13 Nancy M. Morris, Secretary. [FR Doc. E6–20623 Filed 12–5–06; 8:45 am] during the phase-in period of NSX BLADE are the fees contained in old Exchange Rule 11.10. Below is the text of the proposed rule change, as amended. Proposed new language is in italics. BILLING CODE 8011–01–P 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: NATIONAL STOCK EXCHANGE, INC. FEE SCHEDULE SECURITIES AND EXCHANGE COMMISSION For Executions via NSX BLADESM as of October, 2006 [Release No. 34–54829; File No. SR–NSX– 2006–13] The following reflects the Schedule of Fees (pursuant to Rule 16.1(a) and Rule 16.1(c)) for all transactions executed via the National Stock Exchange System known as NSX BLADESM (the ‘‘System’’): 1. Order Matching. Orders in Tape C securities that are matched in the System will be subject to the following rebates and execution fees (computed on a monthly basis): A. Rebate for adding liquidity (per share executed): Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto To Implement a Fee Schedule Under NSX Rule 16.1(a) and 16.1(c) for Transactions Executed Through NSX BLADE November 29, 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 October 23, 2006, the National Stock Exchange, Inc. (‘‘NSX’’ 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 substantially prepared by the Exchange. On November 17, 2006, NSX submitted Amendment No. 1 to the proposed rule change. The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge applicable only to a member 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 proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to implement a fee schedule pursuant to the newly approved Chapter XVI of the Exchange Rules. The Fee Schedule would apply to executions through NSX’s new trading system, NSX BLADE. The fees for executions through the Exchange’s current trading system, National Securities Trading System (‘‘NSTS’’), U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). Average Daily Shares of Liquidity Provided Rebate for Adding Liquidity (Per Share Executed) Greater than 30 million ......... 30 million or less .................. ........................ $0.0027 B. Execution fee for removing liquidity: $0.0030 per share executed. 2. Order Routing. Orders that are routed through the System and executed in another market center shall be charged $0.0040 per share executed. * * * * * 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, as amended, 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 In anticipation of the approval of the new trading rules,5 the Exchange 1 15 2 17 13 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:03 Dec 05, 2006 Jkt 211001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 5 See Securities Exchange Act Release No. 54391 (August 31, 2006), 71 FR 52836 (September 7, 2006) (order approving File No. SR–NSX–2006–08). E:\FR\FM\06DEN1.SGM 06DEN1 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Notices recently amended its rules to add a Chapter XVI to set forth, in its own chapter, rules relating to fees, dues, assessments, and the tape rebate program. The rule change, SR–NSX– 2006–10, was filed pursuant to Section 19(b)(3)(A) of the Act,6 which rendered it effective upon filing.7 As part of the instant rule change, the Exchange is filing a Fee Schedule under NSX Rule 16.1(a) and 16.1(c) for executions through NSX BLADE.8 This Fee Schedule provides for, in connection with NSX BLADE transactions in Nasdaq-listed securities, an execution fee for removing liquidity from NSX BLADE (i.e., charging ETP Holders for taking liquidity against an order in the NSX BLADE System) of $0.0030 per share executed on NSX BLADE and a rebate for adding liquidity in NSX BLADE (i.e., providing a rebate to any ETP Holder that adds liquidity to the NSX BLADE System). The rebate for adding liquidity would depend upon the amount of liquidity added by the ETP Holder as set forth in the Fee Schedule. If the ETP Holder provides 30 million shares or less of added liquidity, the Exchange would provide a rebate of $0.0027 per share for all shares of liquidity provided that were executed on NSX BLADE. For those ETP Holders who provide, on an average daily basis, liquidity in excess of 30 million shares, the Exchange would rebate $0.0028 per share for all shares (including the first 30 million) of liquidity provided that were executed on NSX BLADE. The Fee Schedule also provides for an order routing fee of $0.0040 per share executed. While SR–NSX–2006–10 was effective upon filing, NSX Rule 16.3 allows the Exchange to delay the effectiveness of the Rule until it gives written notice to its ETP Holders. This was done to allow the Exchange to file its rules while awaiting the launch of NSX BLADE. It is anticipated that NSX BLADE will be phased in gradually—first with a small group of Nasdaq-listed securities over several weeks until all Nasdaq-listed 6 15 U.S.C. 78s(b)(3)(A). Securities Exchange Act Release No. 54194 (July 24, 2006), 71 FR 43258 (July 31, 2006) (notice of filing and immediate effectiveness of File No. SR–NSX–2006–10). SR–NSX–2006–10 was effective upon filing on July 13, 2006. NSX Rule 16.3 provides that the new Chapter XVI would become effective upon written notice by the Exchange to the ETP Holders. Notice was provided declaring Chapter XVI effective on October 2 and 19, 2006 respecting ITS transactions and transactions in NSX BLADE, respectively. 8 As set forth in SR–NSX–2006–10, the Exchange proposed 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 formerly did prior to the adoption of Chapter XVI. PWALKER on PRODPC60 with NOTICES 7 See VerDate Aug<31>2005 16:03 Dec 05, 2006 Jkt 211001 securities have been transitioned to the new system. Once all Nasdaq-listed securities have been transitioned to NSX BLADE, the Exchange will then transition all non-Nasdaq-listed securities.9 The phase-in of NSX BLADE commenced on October 23, 2006 with the trading of one security.10 During this transitional period of phasing in various securities to the NSX BLADE System, the Exchange will be operating both NSTS and the NSX BLADE Systems. Accordingly, the Exchange will be operating under two sets of rules during the phase-in period. All transactions in the NSTS System will still operate under the rules pertaining to NSTS (old NSX Rule 11.9 (National Securities Trading System) and old NSX Rule 11.10 (National Securities Trading System Fees)) while all transactions in NSX BLADE will operate under the new trading rules approved in SR–NSX–2006–08 and the new fee rules in Chapter XVI.11 When the phase-in period has expired and NSTS is no longer operational, old NSX Rules 11.9 and 11.10 will be extinguished. The Exchange has issued a Notice to ETP Holders to advise them of the different trading systems and rules and fees applicable to each,12 and will issue a Notice advising them of the new Fee Schedule and rule change. Since NSX will first begin transitioning Nasdaq-listed securities, the fees contained in the NSX BLADE Fee Schedule apply only to Nasdaqlisted securities. Until transitioned to NSX BLADE, any transaction in Nasdaqlisted securities and non-Nasdaq-listed securities through the NSTS System will be charged the fees contained in old Exchange Rule 11.10. Pursuant to newly approved NSX Rule 16.1(c), the Exchange will ‘‘provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange.’’ ETP Holders using the Exchange will be advised of these fees through the Exchange’s Web site. In addition, the ETP Holders will, simultaneous with the filing, be notified through the issuance of a Regulatory Circular of the new NSX BLADE Fee Schedule. 9 The NSX BLADE Fee Schedule will be amended to reflect fees for executions for Tape A and B (nonNASDAQ ) securities prior to the time those securities are transitioned to NSX BLADE. 10 NSX plans to monitor this implementation and adjust the schedule as needed to maintain an orderly transition. 11 The Fee Schedule filed in SR–NSX–2006–12 is applicable to any transaction through an ITS Plan, regardless of whether the transaction was done through NSTS or NSX BLADE. 12 Regulatory Circular 06–011 issued on October 19, 2006. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 70823 NSX states the fees have been designed in this manner in order to ensure that the Exchange can continue to fulfill its obligations under Section 6(b) of the Act.13 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) of the Act,14 in general, and furthers the objectives of Section 6(b)(4) of the Act,15 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges. The Exchange also believes that the proposed rule change, as amended, furthers the objectives of Section 6(b)(1) of the Act 16 in that it helps to assure that the Exchange is so organized and has the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its ETP Holders with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change, as amended, will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change, as amended. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change, as amended, has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 17 and Rule 19b–4(f)(2) 18 thereunder, because it establishes or changes a due, fee, or other charge applicable only to a member imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission. At any time within 60 days of the filing of such 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, 13 15 U.S.C. 78f(b). U.S.C. 78f(b). 15 15 U.S.C. 78f(b)(4). 16 15 U.S.C. 78f(b)(1). 17 15 U.S.C. 78s(b)(3)(A)(ii). 18 17 CFR 240.19b–4(f)(2). 14 15 E:\FR\FM\06DEN1.SGM 06DEN1 70824 Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Notices or otherwise in furtherance of the purposes of the Act.19 be submitted on or before December 27, 2006. IV. Solicitation of Comments For the Commission, by the Division of Market Regulation, pursuant to delegated authority.20 Nancy M. Morris, Secretary. [FR Doc. E6–20628 Filed 12–5–06; 8:45 am] Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NSX–2006–13 on the subject line. Paper Comments PWALKER on PRODPC60 with NOTICES • 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–2006–13. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NSX–2006–13 and should 19 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposal, the Commission considers the period to commence on November 17, 2006, the date on which the Exchange submitted Amendment No. 1. VerDate Aug<31>2005 16:03 Dec 05, 2006 BILLING CODE 8011–01–P Jkt 211001 [Release No. 34–54820; File No. SR–NYSE– 2006–65] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of Proposed Rule Change and Amendment Nos. 1, 2, and 3 Thereto and Notice of Filing and Order Granting Accelerated Approval of Amendment No. 5 Thereto Relating to Exchange Rules Governing Certain Definitions, Systemic Processing of Certain Orders, and the Implementation Schedule of the NYSE Hybrid Market November 27, 2006. I. Introduction On August 23, 2006, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder, 2 a proposed rule change to amend certain aspects of its Hybrid Market. On September 11, 2006, September 15, 2006, and September 26, 2006, the Exchange filed Amendment Nos. 1, 2, and 3 respectively. The proposed rule change, as amended, was published for comment in the Federal Register on September 29, 2006.3 On November 2, 2006, the Exchange filed Amendment No. 5 to the proposed rule change.4 The Commission received 20 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 54520 (September 27, 2006), 71 FR 57590. On November 1, 2006, the Exchange filed Amendment No. 4 to the proposed rule change and subsequently withdrew Amendment No. 4 on November 2, 2006 due to inaccurate exhibits. 4 See Partial Amendment dated November 2, 2006 (‘‘Amendment No. 5’’). In Amendment No. 5, the Exchange: (1) Removed from Amendment No. 3 an incorrect exhibit of the proposed rule text; (2) reconciled the current rule text of the definition of an IOC Order as modified by a prior proposed rule change that designated Regulation NMS-compliant IOC orders; (3) corrected typographical errors in proposed NYSE Rules 60(e) and NYSE Rule 123F(b)(ii); (4) replaced the term ‘‘NYSE Bonds’’ with the term ‘‘Automated Bond System’’ in its three comment letters from two commenters on the proposal.5 On November 2, 2006, the Exchange filed a response to the comment letters.6 This order approves the proposed rule change, as amended by Amendment Nos. 1, 2 and 3, and grants accelerated approval to Amendment No. 5. The Commission is also providing notice and soliciting comments on Amendment No. 5. II. Description of Proposal On March 22, 2006, the Commission approved NYSE’s proposal to establish a Hybrid Market.7 In this proposed rule change, the Exchange proposes to amend certain Hybrid Market rules and other NYSE rules to reflect their operation in the Hybrid Market. A. Order Types 1. Auto Ex Order The Exchange proposes to amend its definition of Auto Ex Order to clarify that an Auto Ex Order is an order that initiates an automatic execution immediately upon entry into Exchange systems.8 Accordingly, the Exchange also proposes to delete elected stop, stop limit orders, and CAP–DI orders from the Auto Ex Order definition as these orders do not initiate an automatic execution upon their entry on the Exchange. Further, the Exchange proposes to clarify that ‘‘non-auto-ex’’ orders, i.e., those orders that do not initiate an automatic execution immediately upon entry into NYSE systems, would participate in automatic executions in accordance with the rules governing their operation. Finally, the Exchange proposes to amend NYSE Rules 1000–1004 to replace the term ‘‘auto ex’’ with the words ‘‘automatically executing’’ to reflect that such rules govern all automatic executions, not just those involving an Auto Ex Order. 2. Market Orders The current definition of an Auto Ex Order in NYSE Rule 13 includes a 1 15 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 rules; and (5) specified in NYSE Rule 1000 that the liquidity replenishment point (‘‘LRP’’) value would be calculated every 30 seconds. See also Securities Exchange Act Release No. 54611 (October 16, 2006), 71 FR 62143 (October 23, 2006). 5 See Letters from George Rutherfurd, Consultant, dated September 10, 2006 (‘‘Rutherfurd Letter I’’) and November 16, 2006 (‘‘Rutherfurd Letter II’’), and Junius W. Peake, Monfort Distinguished Professor Emeritus of Finance, Greeley, Colorado, dated October 3, 2006 (‘‘Peake Letter’’). 6 See Letter from Mary Yeager, Secretary, NYSE, to Nancy M. Morris, Secretary, Commission, dated November 2, 2006 (‘‘Response to Comments’’). 7 See Securities Exchange Act Release No. 53539, 71 FR 16353 (March 31, 2006) (‘‘Hybrid Market Order’’). 8 See proposed NYSE Rule 13 (‘‘Auto Ex Order’’). E:\FR\FM\06DEN1.SGM 06DEN1

Agencies

[Federal Register Volume 71, Number 234 (Wednesday, December 6, 2006)]
[Notices]
[Pages 70822-70824]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20628]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54829; File No. SR-NSX-2006-13]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
and Amendment No. 1 Thereto To Implement a Fee Schedule Under NSX Rule 
16.1(a) and 16.1(c) for Transactions Executed Through NSX BLADE

November 29, 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 October 23, 2006, the National Stock Exchange, Inc. (``NSX'' 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 substantially prepared by the 
Exchange. On November 17, 2006, NSX submitted Amendment No. 1 to the 
proposed rule change. The Exchange has designated this proposal as one 
establishing or changing a due, fee, or other charge applicable only to 
a member 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 proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    The Exchange proposes to implement a fee schedule pursuant to the 
newly approved Chapter XVI of the Exchange Rules. The Fee Schedule 
would apply to executions through NSX's new trading system, NSX BLADE. 
The fees for executions through the Exchange's current trading system, 
National Securities Trading System (``NSTS''), during the phase-in 
period of NSX BLADE are the fees contained in old Exchange Rule 11.10. 
Below is the text of the proposed rule change, as amended. Proposed new 
language is in italics.

NATIONAL STOCK EXCHANGE, INC. FEE SCHEDULE

For Executions via NSX BLADE\SM\ as of October, 2006

    The following reflects the Schedule of Fees (pursuant to Rule 
16.1(a) and Rule 16.1(c)) for all transactions executed via the 
National Stock Exchange System known as NSX BLADE\SM\ (the ``System''):
    1. Order Matching. Orders in Tape C securities that are matched in 
the System will be subject to the following rebates and execution fees 
(computed on a monthly basis):
    A. Rebate for adding liquidity (per share executed):

------------------------------------------------------------------------
                                                            Rebate for
                                                              Adding
       Average Daily Shares of Liquidity Provided         Liquidity (Per
                                                               Share
                                                             Executed)
------------------------------------------------------------------------
Greater than 30 million.................................         $0.0028
30 million or less......................................         $0.0027
------------------------------------------------------------------------

    B. Execution fee for removing liquidity: $0.0030 per share 
executed.
    2. Order Routing. Orders that are routed through the System and 
executed in another market center shall be charged $0.0040 per share 
executed.
* * * * *

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, as 
amended, 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
    In anticipation of the approval of the new trading rules,\5\ the 
Exchange

[[Page 70823]]

recently amended its rules to add a Chapter XVI to set forth, in its 
own chapter, rules relating to fees, dues, assessments, and the tape 
rebate program. The rule change, SR-NSX-2006-10, was filed pursuant to 
Section 19(b)(3)(A) of the Act,\6\ which rendered it effective upon 
filing.\7\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54391 (August 31, 
2006), 71 FR 52836 (September 7, 2006) (order approving File No. SR-
NSX-2006-08).
    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ See Securities Exchange Act Release No. 54194 (July 24, 
2006), 71 FR 43258 (July 31, 2006) (notice of filing and immediate 
effectiveness of File No. SR-NSX-2006-10). SR-NSX-2006-10 was 
effective upon filing on July 13, 2006. NSX Rule 16.3 provides that 
the new Chapter XVI would become effective upon written notice by 
the Exchange to the ETP Holders. Notice was provided declaring 
Chapter XVI effective on October 2 and 19, 2006 respecting ITS 
transactions and transactions in NSX BLADE, respectively.
---------------------------------------------------------------------------

    As part of the instant rule change, the Exchange is filing a Fee 
Schedule under NSX Rule 16.1(a) and 16.1(c) for executions through NSX 
BLADE.\8\ This Fee Schedule provides for, in connection with NSX BLADE 
transactions in Nasdaq-listed securities, an execution fee for removing 
liquidity from NSX BLADE (i.e., charging ETP Holders for taking 
liquidity against an order in the NSX BLADE System) of $0.0030 per 
share executed on NSX BLADE and a rebate for adding liquidity in NSX 
BLADE (i.e., providing a rebate to any ETP Holder that adds liquidity 
to the NSX BLADE System). The rebate for adding liquidity would depend 
upon the amount of liquidity added by the ETP Holder as set forth in 
the Fee Schedule. If the ETP Holder provides 30 million shares or less 
of added liquidity, the Exchange would provide a rebate of $0.0027 per 
share for all shares of liquidity provided that were executed on NSX 
BLADE. For those ETP Holders who provide, on an average daily basis, 
liquidity in excess of 30 million shares, the Exchange would rebate 
$0.0028 per share for all shares (including the first 30 million) of 
liquidity provided that were executed on NSX BLADE. The Fee Schedule 
also provides for an order routing fee of $0.0040 per share executed.
---------------------------------------------------------------------------

    \8\ As set forth in SR-NSX-2006-10, the Exchange proposed 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 formerly did 
prior to the adoption of Chapter XVI.
---------------------------------------------------------------------------

    While SR-NSX-2006-10 was effective upon filing, NSX Rule 16.3 
allows the Exchange to delay the effectiveness of the Rule until it 
gives written notice to its ETP Holders. This was done to allow the 
Exchange to file its rules while awaiting the launch of NSX BLADE. It 
is anticipated that NSX BLADE will be phased in gradually--first with a 
small group of Nasdaq-listed securities over several weeks until all 
Nasdaq-listed securities have been transitioned to the new system. Once 
all Nasdaq-listed securities have been transitioned to NSX BLADE, the 
Exchange will then transition all non-Nasdaq-listed securities.\9\ The 
phase-in of NSX BLADE commenced on October 23, 2006 with the trading of 
one security.\10\
---------------------------------------------------------------------------

    \9\ The NSX BLADE Fee Schedule will be amended to reflect fees 
for executions for Tape A and B (non-NASDAQ ) securities prior to 
the time those securities are transitioned to NSX BLADE.
    \10\ NSX plans to monitor this implementation and adjust the 
schedule as needed to maintain an orderly transition.
---------------------------------------------------------------------------

    During this transitional period of phasing in various securities to 
the NSX BLADE System, the Exchange will be operating both NSTS and the 
NSX BLADE Systems. Accordingly, the Exchange will be operating under 
two sets of rules during the phase-in period. All transactions in the 
NSTS System will still operate under the rules pertaining to NSTS (old 
NSX Rule 11.9 (National Securities Trading System) and old NSX Rule 
11.10 (National Securities Trading System Fees)) while all transactions 
in NSX BLADE will operate under the new trading rules approved in SR-
NSX-2006-08 and the new fee rules in Chapter XVI.\11\ When the phase-in 
period has expired and NSTS is no longer operational, old NSX Rules 
11.9 and 11.10 will be extinguished. The Exchange has issued a Notice 
to ETP Holders to advise them of the different trading systems and 
rules and fees applicable to each,\12\ and will issue a Notice advising 
them of the new Fee Schedule and rule change.
---------------------------------------------------------------------------

    \11\ The Fee Schedule filed in SR-NSX-2006-12 is applicable to 
any transaction through an ITS Plan, regardless of whether the 
transaction was done through NSTS or NSX BLADE.
    \12\ Regulatory Circular 06-011 issued on October 19, 2006.
---------------------------------------------------------------------------

    Since NSX will first begin transitioning Nasdaq-listed securities, 
the fees contained in the NSX BLADE Fee Schedule apply only to Nasdaq-
listed securities. Until transitioned to NSX BLADE, any transaction in 
Nasdaq-listed securities and non-Nasdaq-listed securities through the 
NSTS System will be charged the fees contained in old Exchange Rule 
11.10.
    Pursuant to newly approved NSX Rule 16.1(c), the Exchange will 
``provide ETP Holders with notice of all relevant dues, fees, 
assessments and charges of the Exchange.'' ETP Holders using the 
Exchange will be advised of these fees through the Exchange's Web site. 
In addition, the ETP Holders will, simultaneous with the filing, be 
notified through the issuance of a Regulatory Circular of the new NSX 
BLADE Fee Schedule.
    NSX states the fees have been designed in this manner in order to 
ensure that the Exchange can continue to fulfill its obligations under 
Section 6(b) of the Act.\13\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act,\14\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act,\15\ in particular, in 
that it is designed to provide for the equitable allocation of 
reasonable dues, fees, and other charges. The Exchange also believes 
that the proposed rule change, as amended, furthers the objectives of 
Section 6(b)(1) of the Act \16\ in that it helps to assure that the 
Exchange is so organized and has the capacity to be able to carry out 
the purposes of the Act and to comply, and to enforce compliance by its 
ETP Holders with the Act.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4).
    \16\ 15 U.S.C. 78f(b)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as 
amended, will impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

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

    The Exchange neither solicited nor received comments on the 
proposed rule change, as amended.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change, as amended, has been designated 
as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act \17\ and 
Rule 19b-4(f)(2) \18\ thereunder, because it establishes or changes a 
due, fee, or other charge applicable only to a member imposed by the 
Exchange. Accordingly, the proposal will take effect upon filing with 
the Commission. At any time within 60 days of the filing of such 
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,

[[Page 70824]]

or otherwise in furtherance of the purposes of the Act.\19\
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    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 17 CFR 240.19b-4(f)(2).
    \19\ 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-
day period within which the Commission may summarily abrogate the 
proposal, the Commission considers the period to commence on 
November 17, 2006, the date on which the Exchange submitted 
Amendment No. 1.
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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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NSX-2006-13 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-2006-13. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NSX-2006-13 and should be submitted on or before 
December 27, 2006.
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    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\20\
Nancy M. Morris,
Secretary.
[FR Doc. E6-20628 Filed 12-5-06; 8:45 am]
BILLING CODE 8011-01-P