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
<![CDATA[
70822
Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Notices
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–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 (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
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 https://
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).
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16:03 Dec 05, 2006
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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
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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 (https://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 (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 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.
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\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.
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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\
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\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.
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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.
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\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.
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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\
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\13\ 15 U.S.C. 78f(b).
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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 (https://
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 (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 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
