Justia Agencies And Commissions Securities And Exchange Commission Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Implementing a Financial Rebate of $.0015 per Share to the SLP That Posts Liquidity in Its Assigned Securities That Results in an Execution, Provided the SLP Meets Its Monthly Quoting Requirement for Rebates Averaging at Least 3% at the National Best Bid or the National Best Offer in Its Assigned Securities in Round Lots, 66091-66092 [E8-26444]

Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Implementing a Financial Rebate of $.0015 per Share to the SLP That Posts Liquidity in Its Assigned Securities That Results in an Execution, Provided the SLP Meets Its Monthly Quoting Requirement for Rebates Averaging at Least 3% at the National Best Bid or the National Best Offer in Its Assigned Securities in Round Lots, 66091-66092 [E8-26444]

Download as PDF Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices fees, which also range from $20,000 to $100,000, would be tiered based on the number of users authorized for access and the number of the years for which data is requested. The total cost of access to the full database would be capped based on the number of users at a particular firm. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Acting Secretary. [FR Doc. E8–26445 Filed 11–5–08; 8:45 am] III. Discussion and Commission Findings SECURITIES AND EXCHANGE COMMISSION The Commission has carefully reviewed the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,6 which requires that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using any facility or system which the exchange operates or controls. Nasdaq represented that it incurred hardware and software costs, as well as personnel and other technology costs, to establish the PORTAL Reference Database. Establishing the database required the retrieval, review, conversion, and organization of large volumes of documents. Nasdaq stated that there will be ongoing costs to maintain and update the database, as well. The Commission notes that the pricing structure should allow users to align and control the costs of access with their data needs, and that the information will be available to any participant that pays the fees. The Commission believes that the PORTAL Reference Database will make historical information about issuances of restricted equity and debt more available, which should assist market participants to make better-informed investment decisions regarding such securities. IV. Conclusion sroberts on PROD1PC70 with NOTICES It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change, (SR–NASDAQ– 2008–072), be, and hereby is, approved. 5 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(4). 7 15 U.S.C. 78s(b)(2). VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 BILLING CODE 8011–01–P [Release No. 34–58889; File No. SR–NYSE– 2008–110] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Implementing a Financial Rebate of $.0015 per Share to the SLP That Posts Liquidity in Its Assigned Securities That Results in an Execution, Provided the SLP Meets Its Monthly Quoting Requirement for Rebates Averaging at Least 3% at the National Best Bid or the National Best Offer in Its Assigned Securities in Round Lots October 30, 2008. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 28, 2008, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. 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 Exchange proposes to offer a financial rebate of $.0015 per share to the SLP that posts liquidity in its assigned securities that results in an execution, provided the SLP meets its monthly quoting requirement for rebates averaging at least 3% at the National Best Bid (‘‘NBB’’) or the National Best Offer (‘‘NBO’’) in its assigned securities in round lots. The text of the proposed rule change is available on the Exchange’s Web site (https://www.nyse.com), at NYSE’s principal office, and at the Commission’s Public Reference Room. 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 66091 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 self-regulatory organization 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 those 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 parts 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 has proposed a sixmonth pilot program (‘‘Pilot’’ or ‘‘program’’) to establish a new class of NYSE market participants that will be referred to as ‘‘Supplemental Liquidity Providers’’ (‘‘SLPs’’) and will be designated as Exchange Rule 107B.4 The proposed pilot program will commence on the date upon which the SEC will approve the New Market Model and will continue for six months thereafter ending on April 30, 2009. During this proposed pilot program, the Exchange will offer a financial rebate of $.0015 per share to the SLP that posts liquidity in its assigned securities that results in an execution, provided the SLP meets its monthly quoting requirement for rebates averaging at least 3% at the National Best Bid (‘‘NBB’’) or the National Best Offer (‘‘NBO’’) in its assigned securities in round lots. SLP Obligations In a given calendar month, an SLP is required to maintain a bid or an offer at the NBB or NBO on the Exchange averaging at least 5% of the trading day in round lots for each assigned security (see Rule 107B(a)). If an SLP fails to meet the 5% quoting requirement for three consecutive calendar months in any assigned security, the SLP Liaison Committee may, in its discretion, take the following non-regulatory action: (1) Revoke the assignment of the affected security(ies); (2) revoke the assignment of an additional, unaffected security from an SLP; and (3) disqualify a member organization’s status as an SLP (see Rule 107B(i)(1)(B), (C)(i)–(iii)). In order for an SLP to be entitled to a rebate, an SLP must post liquidity on 1 15 PO 00000 Frm 00082 Fmt 4703 4 See SR–NYSE–2008–108 (NYSE Rule 107B. Supplemental Liquidity Providers). Sfmt 4703 E:\FR\FM\06NON1.SGM 06NON1 66092 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices (‘‘DMM’’) rebate in the New Market Model. On balance, the customers have no quoting requirements and the SLPs have fewer quoting requirements than the DMMs. Therefore, the rebate is reasonable because, among other things, the rebate is commensurate with the SLP’s quoting requirement. The SLP rebate is also less than the rebates currently offered on any other exchanges or electronic communication networks (‘‘ECNs’’). Therefore, the SLP rebate constitutes a reasonable allocation of fees to its members. By providing this rebate to SLPs, the Exchange will encourage the SLP to add liquidity to the market thereby providing customers with a higher quality venue for price discovery, liquidity, competitive quotes and price improvement. SLP Rebate Calculation The SLP rebate will be $.0015 per share on executed volume when the SLP provides liquidity. The rebate will be paid for displayed and non-displayed orders provided the SLP meets the quoting requirement averaging 3% or more at the NBB or NBO in its assigned securities for a given month (see Rule 107B(i)(1)(A)). If an SLP does not meet the 3% or better average quoting requirement described above, such SLP will not be entitled to a rebate for the executions of the affected security(ies)(see Rule 107B(i)(1)(B)). sroberts on PROD1PC70 with NOTICES the Exchange that executes against incoming orders and meet the monthly quoting requirement averaging at least 3% at the NBB or the NBO in round lots in its assigned securities (see Rule 107B(b) and (i)(1)(A)). In a given calendar month, if an SLP maintains a quote at the NBB or the NBO averaging 3% of the trading day but less than the average of 5% of the trading day in any assigned security, the SLP will receive a financial rebate for that calendar month for all executed transactions, but failure to meet the 5% quoting requirement for each assigned security will be counted towards the three month disqualification period. In a given calendar month, if an SLP maintains a quote at the NBB or the NBO averaging less than 3% of the regular trading day in an assigned security, the SLP will not receive the financial rebate for that month for executed transactions in that particular security, and failure to meet the 5% quoting requirement for any assigned security will be counted towards the three month disqualification period (see Rule 107B(i)(1)(B) and (C)). C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 5 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 6 in general and Section 6(b)(4) of the Act 7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes that by providing SLPs with a rebate for posting quotes that result in an execution, the SLP will be motivated to aggressively add liquidity to the market. The SLP rebate of $.0015 is the median fee amount between the customer rebate and the Designated Market Maker U.S.C. 78f. U.S.C. 78a. 7 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 that is not necessary or appropriate in furtherance of the purposes of the Act. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 8 of the Act and subparagraph (f)(2) of Rule 19b–4 9 thereunder, because it establishes a due, fee, or other charge imposed by NYSE that is applicable only to a member. 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: 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–NYSE–2008–110 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-1090. All submissions should refer to File Number SR–NYSE–2008–110. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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 No. SR–NYSE–2008–110 and should be submitted on or before November 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Acting Secretary. [FR Doc. E8–26444 Filed 11–5–08; 8:45 am] BILLING CODE 8011–01–P 5 15 6 15 VerDate Aug<31>2005 19:11 Nov 05, 2008 8 15 9 17 Jkt 217001 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). Frm 00083 Fmt 4703 10 17 Sfmt 4703 E:\FR\FM\06NON1.SGM CFR 200.30–3(a)(12). 06NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 216 (Thursday, November 6, 2008)]
[Notices]
[Pages 66091-66092]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26444]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58889; File No. SR-NYSE-2008-110]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Implementing a Financial Rebate of $.0015 per Share to the SLP That 
Posts Liquidity in Its Assigned Securities That Results in an 
Execution, Provided the SLP Meets Its Monthly Quoting Requirement for 
Rebates Averaging at Least 3% at the National Best Bid or the National 
Best Offer in Its Assigned Securities in Round Lots

October 30, 2008.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on October 28, 2008, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the self-
regulatory organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to offer a financial rebate of $.0015 per 
share to the SLP that posts liquidity in its assigned securities that 
results in an execution, provided the SLP meets its monthly quoting 
requirement for rebates averaging at least 3% at the National Best Bid 
(``NBB'') or the National Best Offer (``NBO'') in its assigned 
securities in round lots.
    The text of the proposed rule change is available on the Exchange's 
Web site (https://www.nyse.com), at NYSE's principal office, and at the 
Commission's Public Reference Room.

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 self-regulatory organization 
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 those 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 parts 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 has proposed a six-month pilot program (``Pilot'' or 
``program'') to establish a new class of NYSE market participants that 
will be referred to as ``Supplemental Liquidity Providers'' (``SLPs'') 
and will be designated as Exchange Rule 107B.\4\ The proposed pilot 
program will commence on the date upon which the SEC will approve the 
New Market Model and will continue for six months thereafter ending on 
April 30, 2009. During this proposed pilot program, the Exchange will 
offer a financial rebate of $.0015 per share to the SLP that posts 
liquidity in its assigned securities that results in an execution, 
provided the SLP meets its monthly quoting requirement for rebates 
averaging at least 3% at the National Best Bid (``NBB'') or the 
National Best Offer (``NBO'') in its assigned securities in round lots.
---------------------------------------------------------------------------

    \4\ See SR-NYSE-2008-108 (NYSE Rule 107B. Supplemental Liquidity 
Providers).
---------------------------------------------------------------------------

SLP Obligations

    In a given calendar month, an SLP is required to maintain a bid or 
an offer at the NBB or NBO on the Exchange averaging at least 5% of the 
trading day in round lots for each assigned security (see Rule 
107B(a)). If an SLP fails to meet the 5% quoting requirement for three 
consecutive calendar months in any assigned security, the SLP Liaison 
Committee may, in its discretion, take the following non-regulatory 
action: (1) Revoke the assignment of the affected security(ies); (2) 
revoke the assignment of an additional, unaffected security from an 
SLP; and (3) disqualify a member organization's status as an SLP (see 
Rule 107B(i)(1)(B), (C)(i)-(iii)).
    In order for an SLP to be entitled to a rebate, an SLP must post 
liquidity on

[[Page 66092]]

the Exchange that executes against incoming orders and meet the monthly 
quoting requirement averaging at least 3% at the NBB or the NBO in 
round lots in its assigned securities (see Rule 107B(b) and (i)(1)(A)). 
In a given calendar month, if an SLP maintains a quote at the NBB or 
the NBO averaging 3% of the trading day but less than the average of 5% 
of the trading day in any assigned security, the SLP will receive a 
financial rebate for that calendar month for all executed transactions, 
but failure to meet the 5% quoting requirement for each assigned 
security will be counted towards the three month disqualification 
period. In a given calendar month, if an SLP maintains a quote at the 
NBB or the NBO averaging less than 3% of the regular trading day in an 
assigned security, the SLP will not receive the financial rebate for 
that month for executed transactions in that particular security, and 
failure to meet the 5% quoting requirement for any assigned security 
will be counted towards the three month disqualification period (see 
Rule 107B(i)(1)(B) and (C)).

SLP Rebate Calculation

    The SLP rebate will be $.0015 per share on executed volume when the 
SLP provides liquidity. The rebate will be paid for displayed and non-
displayed orders provided the SLP meets the quoting requirement 
averaging 3% or more at the NBB or NBO in its assigned securities for a 
given month (see Rule 107B(i)(1)(A)). If an SLP does not meet the 3% or 
better average quoting requirement described above, such SLP will not 
be entitled to a rebate for the executions of the affected 
security(ies)(see Rule 107B(i)(1)(B)).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 \5\ of the Securities Exchange Act of 
1934 (the ``Act'') \6\ in general and Section 6(b)(4) of the Act \7\ in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78a.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that by providing SLPs with a rebate for 
posting quotes that result in an execution, the SLP will be motivated 
to aggressively add liquidity to the market. The SLP rebate of $.0015 
is the median fee amount between the customer rebate and the Designated 
Market Maker (``DMM'') rebate in the New Market Model. On balance, the 
customers have no quoting requirements and the SLPs have fewer quoting 
requirements than the DMMs. Therefore, the rebate is reasonable 
because, among other things, the rebate is commensurate with the SLP's 
quoting requirement. The SLP rebate is also less than the rebates 
currently offered on any other exchanges or electronic communication 
networks (``ECNs''). Therefore, the SLP rebate constitutes a reasonable 
allocation of fees to its members. By providing this rebate to SLPs, 
the Exchange will encourage the SLP to add liquidity to the market 
thereby providing customers with a higher quality venue for price 
discovery, liquidity, competitive quotes and price improvement.

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 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by NYSE that is applicable only to a member. 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2008-110 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2008-110. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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 No. SR-NYSE-2008-110 and should be 
submitted on or before November 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Acting Secretary.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

 [FR Doc. E8-26444 Filed 11-5-08; 8:45 am]
BILLING CODE 8011-01-P

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