Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Participant Fees and Credits, 2913-2914 [E7-907]

Download as PDF Federal Register / Vol. 72, No. 14 / Tuesday, January 23, 2007 / Notices Servicing Agreement, and for a period not less than six years thereafter, the first two years in an easily accessible place. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–905 Filed 1–22–07; 8:45 am] II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55103; File No. SR–CHX– 2006–39] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Participant Fees and Credits January 12, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 21, 2006, the Chicago Stock Exchange, Inc. (‘‘CHX’’ 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 CHX. The CHX has designated this proposal as one establishing or changing a member due, fee, or other charge imposed by the CHX pursuant to 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 from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The CHX proposes to amend its Schedule of Participant Fees and Credits (‘‘Fee Schedule’’) to include changes in the fees charged for orders routed through the NMS Linkage Plan 5 to The 1 15 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). 5 See Securities Exchange Act Release No. 54548 (September 29, 2006), 71 FR 59159 (October 6, 2006) (SR–CHX–2006–28) (approving exchange-toexchange billing procedures under the Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage Pursuant to Section 11A(a)(3)(B) of the Securities Exchange Act of 1934 (‘‘Linkage Plan’’)); Securities Exchange Act Release No. 54551 (September 29, 2006), 71 FR 59148 (October 6, 2006) (approving Linkage Plan). mstockstill on PROD1PC70 with NOTICES 2 17 VerDate Aug<31>2005 19:33 Jan 22, 2007 Jkt 211001 NASDAQ Stock Market (‘‘Nasdaq’’), the National Stock Exchange (‘‘NSX’’), the Boston Equities Exchange (‘‘BeX’’) and the Philadelphia Stock Exchange (‘‘PHLX’’). The text of this proposed rule change is available at the CHX, on the CHX’s Web site at http://www.chx.com/ rules/proposed_rules.htm, and in the Commission’s Public Reference Room. In its filing with the Commission, the CHX included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange’s Fee Schedule, among other things, identifies the fees that are charged to participants on account of outbound NMS Linkage Plan orders. Section E.6 of the Fee Schedule applies to orders that are Matching Systemeligible 6 and therefore are routed from the Matching System to other market centers. Section E.8 of the Fee Schedule applies to orders that have not yet migrated to the Matching System and therefore are routed from the Exchange’s pre-new NTM facilities. When an outbound NMS Linkage Plan order is executed on another NMS Linkage participant market, that market will directly invoice the CHX for a transaction fee, in an amount that may not exceed the transaction fee that it would charge its own member for such an execution. The CHX is then responsible for payment of such invoice. Sections E.6 and E.8 of the Fee Schedule permit the CHX to collect a corresponding fee from the CHX participant that generated the outbound NMS Linkage Plan order. The CHX believes that it is appropriate to establish outbound NMS Linkage fee rates that reasonably correspond to the respective transaction fee rates being 6 See Securities Exchange Act Release No. 54550 (September 29, 2006), 71 FR 59563 (October 10, 2006) (SR–CHX–2006–05) (approving rules to implement a new trading model (‘‘NTM’’) that allows Exchange participants to interact in a fullyautomated Matching System). PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 2913 charged by the executing markets. Accordingly, it is submitting changes to Sections E.6 and E.8 of the Fee Schedule, to reflect recent developments regarding applicable transaction fees assessed by Nasdaq, NSX, PHLX, and BeX on account of NMS Linkage Plan executions.7 Specifically, the proposal would change the outbound fee for NMS Linkage orders routed to Nasdaq (in issues other than exchange-traded funds (‘‘ETFs’’)) from $.0015/share to $.0030/share, effective January 1, 2007. The proposal would also change the outbound fee for NMS Linkage orders routed to NSX and PHLX to $.0030/share for orders in all securities (ETFs and all other securities). Finally, the proposal would change the outbound fee for NMS Linkage orders routed to BeX to $.0028/ share for orders in all securities (ETFs and all other securities).8 2. Statutory Basis The proposed rule change is consistent with Section 6(b)(4) of the Act 9 in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and is consistent with the allocation of dues, fees and other charges utilized by other self-regulatory organizations that have implemented trading platforms similar to the CHX new trading model. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a due, fee 7 See Nasdaq Head Trader Alert #2006–199 (November 30, 2006); Securities Exchange Act Release No. 55041 (January 4, 2007), 72 FR 1356 (January 11, 2007) (SR–NSX–2006–17); Securities Exchange Act Release No. 54941 (December 14, 2006), 71 FR 77079 (December 22, 2006) (SR– PHLX–2006–70); and Securities Exchange Act Release No. 54795 (November 20, 2006), 71 FR 68850 (November 28, 2006) (SR–BSE–2006–44). 8 BeX has implemented a fee that charges $.0028/ share for taking liquidity, subject to a maximum of .3% of the quotation price per share, for securities with a share price less than $1.00. The CHX’s systems cannot currently calculate that type of fee cap and, for that reason, the CHX is not currently proposing that cap as part of its fees for routing orders to BeX. 9 15 U.S.C. 78f(b)(4). E:\FR\FM\23JAN1.SGM 23JAN1 2914 Federal Register / Vol. 72, No. 14 / Tuesday, January 23, 2007 / Notices or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and subparagraph (f)(2) of Rule 19b–4 thereunder.11 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, or otherwise in furtherance of the purposes of the Act. 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: mstockstill on PROD1PC70 with 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 No. SR–CHX–2006–39 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CHX–2006–39. 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 CHX. All comments received will be posted without change; the Commission does 10 15 11 17 U.S.C. 78f(b)(4). CFR 200.30–3(a)(12). VerDate Aug<31>2005 19:33 Jan 22, 2007 Jkt 211001 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–CHX–2006–39 and should be submitted on or before February 13, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–907 Filed 1–22–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55108; File No. SR–NASD– 2006–101] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change and Amendment No. 1 Thereto To Provide for the Payment of a $200 Honorarium Per Case for Each Arbitrator Who Considers Contested Motions for the Issuance of Subpoenas January 16, 2007. I. Introduction On August 23, 2006, the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend IM–10104 of the NASD Code of Arbitration Procedure (‘‘Code’’) to provide for the payment of a $200 honorarium per case for each arbitrator who considers contested motions for the issuance of subpoenas. On November 13, 2006, NASD filed Amendment No. 1 to the proposed rule change.3 The proposed rule change, as amended, was published for comment in the Federal Register on December 8, 2006.4 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. II. Description The purpose of the proposed rule change is to provide for the payment of 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In Amendment No. 1, NASD clarified provisions of the proposed rule change. 4 See Exchange Act Release No. 54857 (Dec. 1, 2006), 71 FR 71213 (Dec. 8, 2006). 1 15 PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 a $200 honorarium per case for each arbitrator who considers contested motions for the issuance of subpoenas. NASD previously amended IM–10104, to provide arbitrators with an honorarium of $200 to decide discoveryrelated motions without a hearing session.5 The revised rule, however, does not address whether a contested motion concerning a subpoena constitutes a discovery-related motion. As a result, NASD has received questions regarding the appropriate payment, if any, for arbitrators who decide subpoena issues. These questions have focused on whether, under the rule, arbitrators should be paid to decide contested motions requesting the issuance of a subpoena. The issue of whether arbitrators should receive an honorarium for deciding contested subpoena motions has become even more significant with the Commission’s recent approval of amendments to NASD Rule 10322 which, among other changes, permit only arbitrators to issue subpoenas in NASD arbitrations.6 In proposing the current rule change, NASD recognized that arbitrators may spend a considerable amount of time and effort deciding contested subpoena motions 7 and stated it believes that arbitrators should be compensated for this work. NASD anticipated that if its proposed changes to Rule 10322 were approved, under most circumstances, the chairperson would be the only arbitrator considering subpoena requests based on the documents supplied by the parties. If the entire panel decided a contested motion, each arbitrator who participates in the subpoena ruling would receive an honorarium of $200. The $200 honorarium paid to an arbitrator would provide payment for all contested subpoena motions in a case (i.e., the honorarium would be paid on a per case basis, regardless of the number of contested subpoena motions considered by an arbitrator or panel during the case).8 Furthermore, the 5 See Exchange Act Release No. 51931 (June 28, 2005) (File No. SR–NASD–2005–052), 70 FR 38989 (July 6, 2005). 6 See Exchange Act Release No. 55038 (Jan. 3, 2007) (File No. SR–NASD–2005–079). Previously, Rule 10322 allowed arbitrators and any counsel of record to the proceedings to issue subpoenas as provided by law. 7 For purposes of this rule, a contested motion is defined as a motion to issue a subpoena, the draft subpoena, a written objection from the party opposing the issuance of the subpoena, and any other documents supporting a party’s position. Arbitrators will not be entitled to receive the honorarium if a motion for a subpoena is uncontested. 8 This differs from other discovery-related motions, for which an arbitrator receives an honorarium for each motion considered. See IM– E:\FR\FM\23JAN1.SGM 23JAN1

Agencies

[Federal Register Volume 72, Number 14 (Tuesday, January 23, 2007)]
[Notices]
[Pages 2913-2914]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-907]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55103; File No. SR-CHX-2006-39]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Participant Fees and Credits

January 12, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 21, 2006, the Chicago Stock Exchange, Inc. (``CHX'' 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 CHX. 
The CHX has designated this proposal as one establishing or changing a 
member due, fee, or other charge imposed by the CHX pursuant to 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 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 CHX proposes to amend its Schedule of Participant Fees and 
Credits (``Fee Schedule'') to include changes in the fees charged for 
orders routed through the NMS Linkage Plan \5\ to The NASDAQ Stock 
Market (``Nasdaq''), the National Stock Exchange (``NSX''), the Boston 
Equities Exchange (``BeX'') and the Philadelphia Stock Exchange 
(``PHLX''). The text of this proposed rule change is available at the 
CHX, on the CHX's Web site at http://www.chx.com/rules/proposed_
rules.htm, and in the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54548 (September 29, 
2006), 71 FR 59159 (October 6, 2006) (SR-CHX-2006-28) (approving 
exchange-to-exchange billing procedures under the Plan for the 
Purpose of Creating and Operating an Intermarket Communications 
Linkage Pursuant to Section 11A(a)(3)(B) of the Securities Exchange 
Act of 1934 (``Linkage Plan'')); Securities Exchange Act Release No. 
54551 (September 29, 2006), 71 FR 59148 (October 6, 2006) (approving 
Linkage Plan).
---------------------------------------------------------------------------

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 CHX included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The CHX has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange's Fee Schedule, among other things, identifies the 
fees that are charged to participants on account of outbound NMS 
Linkage Plan orders. Section E.6 of the Fee Schedule applies to orders 
that are Matching System-eligible \6\ and therefore are routed from the 
Matching System to other market centers. Section E.8 of the Fee 
Schedule applies to orders that have not yet migrated to the Matching 
System and therefore are routed from the Exchange's pre-new NTM 
facilities.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 54550 (September 29, 
2006), 71 FR 59563 (October 10, 2006) (SR-CHX-2006-05) (approving 
rules to implement a new trading model (``NTM'') that allows 
Exchange participants to interact in a fully-automated Matching 
System).
---------------------------------------------------------------------------

    When an outbound NMS Linkage Plan order is executed on another NMS 
Linkage participant market, that market will directly invoice the CHX 
for a transaction fee, in an amount that may not exceed the transaction 
fee that it would charge its own member for such an execution. The CHX 
is then responsible for payment of such invoice. Sections E.6 and E.8 
of the Fee Schedule permit the CHX to collect a corresponding fee from 
the CHX participant that generated the outbound NMS Linkage Plan order. 
The CHX believes that it is appropriate to establish outbound NMS 
Linkage fee rates that reasonably correspond to the respective 
transaction fee rates being charged by the executing markets. 
Accordingly, it is submitting changes to Sections E.6 and E.8 of the 
Fee Schedule, to reflect recent developments regarding applicable 
transaction fees assessed by Nasdaq, NSX, PHLX, and BeX on account of 
NMS Linkage Plan executions.\7\ Specifically, the proposal would change 
the outbound fee for NMS Linkage orders routed to Nasdaq (in issues 
other than exchange-traded funds (``ETFs'')) from $.0015/share to 
$.0030/share, effective January 1, 2007. The proposal would also change 
the outbound fee for NMS Linkage orders routed to NSX and PHLX to 
$.0030/share for orders in all securities (ETFs and all other 
securities). Finally, the proposal would change the outbound fee for 
NMS Linkage orders routed to BeX to $.0028/share for orders in all 
securities (ETFs and all other securities).\8\
---------------------------------------------------------------------------

    \7\ See Nasdaq Head Trader Alert 2006-199 (November 30, 
2006); Securities Exchange Act Release No. 55041 (January 4, 2007), 
72 FR 1356 (January 11, 2007) (SR-NSX-2006-17); Securities Exchange 
Act Release No. 54941 (December 14, 2006), 71 FR 77079 (December 22, 
2006) (SR-PHLX-2006-70); and Securities Exchange Act Release No. 
54795 (November 20, 2006), 71 FR 68850 (November 28, 2006) (SR-BSE-
2006-44).
    \8\ BeX has implemented a fee that charges $.0028/share for 
taking liquidity, subject to a maximum of .3% of the quotation price 
per share, for securities with a share price less than $1.00. The 
CHX's systems cannot currently calculate that type of fee cap and, 
for that reason, the CHX is not currently proposing that cap as part 
of its fees for routing orders to BeX.
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b)(4) of the 
Act \9\ in that it provides for the equitable allocation of reasonable 
dues, fees and other charges among its members and is consistent with 
the allocation of dues, fees and other charges utilized by other self-
regulatory organizations that have implemented trading platforms 
similar to the CHX new trading model.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition.

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change establishes or changes a 
due, fee

[[Page 2914]]

or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(2) 
of Rule 19b-4 thereunder.\11\ 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, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-CHX-2006-39 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CHX-2006-39. 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 CHX.
    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-CHX-2006-39 
and should be submitted on or before February 13, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-907 Filed 1-22-07; 8:45 am]
BILLING CODE 8011-01-P