Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Amounts That Direct Edge ECN, in Its Capacity as an Introducing Broker for Non-ISE Members, Passes Through to Such Non-ISE Members, 22792-22794 [E9-11229]

Download as PDF 22792 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices other non-standard routing options such as Directed ISO’s, Dark Scan orders, and orders routed through its ‘‘DART’’ strategy to dark liquidity venues. For any security priced under $1.00 that is routed away and executed through an order type or routing strategy other than CYCLE, the Exchange will charge the specified fee or provide the specified rebate for such execution. For instance, an order for a security priced below $1.00 that is routed and executed through Dark Scan would receive the same $0.0001 rebate as a security priced above $1.00. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.6 Specifically, the Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,7 in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system which the Exchange operates or controls. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The Exchange believes that its fees and rebates are competitive with those charged by other venues. Finally, the Exchange believes that the proposed rates are equitable in that they apply uniformly to all Members. (B) Self-Regulatory Organization’s Statement of Burden on Competition The Exchange does not believe that the proposed rule change imposes 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 solicited or received. pwalker on PROD1PC71 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change other markets.’’ The Exchange intended this to apply only to orders routed through CYCLE, and believes that the proposed language clarifies this intent. 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(4). VerDate Nov<24>2008 17:37 May 13, 2009 Jkt 217001 pursuant to Section 19(b)(3)(A)(ii) of the Act 8 and Rule 19b–4(f)(2) thereunder,9 because it establishes or changes a due, fee or other charge imposed on members by the Exchange. Accordingly, the proposal is effective upon filing with the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal 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 No. SR–BATS–2009–011 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–BATS–2009–011. 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 changes 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 BATS. 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–BATS–2009–011 and should be submitted on or before June 4, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–11231 Filed 5–13–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59887; File No. SR–ISE– 2009–24] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Amounts That Direct Edge ECN, in Its Capacity as an Introducing Broker for Non-ISE Members, Passes Through to Such Non-ISE Members May 7, 2009. 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 May 6, 2009, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change. On May 7, 2009, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change, as modified by Amendment No. 1, is described in Items I and II below, which Items have been prepared by ISE. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons, and is approving the proposal on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the amounts that Direct Edge ECN 10 17 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 240.19b–4(f)(2). PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\14MYN1.SGM 14MYN1 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices (‘‘DECN’’), in its capacity as an introducing broker for non-ISE Members, passes through to such nonISE Members. The text of the proposed rule change is available on the Exchange’s Internet Web site at https://www.ise.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. pwalker on PROD1PC71 with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose DECN, a facility of ISE, operates two trading platforms, EDGX and EDGA. On May 1, 2009, the ISE filed for immediate effectiveness a proposed rule change to amend DECN’s fee schedule for ISE Members 3 to increase the per share rebate in securities reported to Tape A and Tape C from $0.0029 to $0.003 for orders that add liquidity on EDGX if the ISE Member satisfies any of the following three criteria on a daily basis, measured monthly: (i) Adding 40,000,000 shares or more on either EDGX, EDGA or EDGX and EDGA combined; (ii) adding 20,000,000 shares or more on either EDGX, EDGA or EDGX and EDGA combined and routing 20,000,000 shares or more through EDGA; or (iii) adding 10,000,000 shares or more of liquidity to EDGX, so long as added liquidity on EDGX is at least 5,000,000 shares greater than the previous calendar month.4 DECN is a member of ISE as well as a facility of ISE. The rebate described above is referred to as a ‘‘Super Tier Rebate’’ on the DECN fee schedule. In an effort to increase volume on EDGA, DECN currently offers volume discounts for ISE Members who route 20,000,000 shares or more on a daily basis, measured monthly, to Nasdaq through EDGA using order types that are solely eligible for routing to Nasdaq. Prior to SR–ISE–2009–23, orders were 3 References to ISE Members in this filing refer to DECN Subscribers who are ISE Members. 4 See SR–ISE–2009–23. VerDate Nov<24>2008 17:37 May 13, 2009 Jkt 217001 charged at $0.0025 per share with respect to EDGA routed volume. ISE Members routing 30,000,000 shares per day were charged $0.0024 per share with respect to EDGA routed volume. Recently, Nasdaq has amended its pricing by increasing its fee for orders that remove liquidity by $0.0004.5 Accordingly, in SR–ISE–2009–23, the Exchange amended the DECN volume discounts that apply to ISE Members by increasing each volume discount fee by $0.0004, which changed the fee to $0.0029 per share and $0.0028 per share, respectively. On April 1, 2009, the Exchange amended the DECN fee schedule to reduce the rebate from $0.0035 per share to $0.003 per share for orders that add liquidity on EDGX in securities priced at or above $1.00 that are reported to Tape B by ISE Members.6 In connection with this amendment, a portion of the corresponding footnote on the DECN fee schedule should have been deleted, but such deletion was overlooked at the time of the filing. The relevant portion of the footnote states ‘‘In the event that Direct Edge offers a rebate higher than $0.0029 per share for subscribers who do not meet the criteria for the Super Tier, then those who meet the aforementioned criteria will receive the higher rebate.’’ In SR–ISE–2009–23, the Exchange deleted this language as Direct Edge is no longer offering this incentive. In SR–ISE–2009–23, the Exchange also made certain clarifying changes to DECN’s fee schedule. DECN’s fee schedule includes a description of liquidity flags and associated fees. Flag D is appended to orders that are routed to and executed on the New York Stock Exchange (‘‘NYSE’’). Such orders are charged a fee on the NYSE because the order is removing liquidity. The fee assessed to this order is then passed back to the ISE Member that originated the order. In SR–ISE–2009–23, the Exchange amended the description of Flag D to include, not just orders that are routed to NYSE, but also orders that are re-routed to NYSE. Meaning, the order that originates at DECN may get routed to another market center for execution, but that market center may re-route the order to NYSE, where the order ultimately receives an execution that results in a removal of liquidity. In this circumstance, the fee assessed to the order will still be passed back to the ISE Member that originated the order as 5 See Securities and Exchange Commission Release No. 59843 (April 29, 2009), 74 FR 21046 (May 6, 2009) (SR–NASDAQ–2009–035). 6 See Securities and Exchange Commission Release Nos. 59692 (April 2, 2009), 74 FR 16024 (April 8, 2009) (SR–ISE–2009–17). PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 22793 if such order was originally routed to NYSE. Finally, in SR–ISE–2009–23, the Exchange deleted a portion of a footnote on DECN’s fee schedule that provides for a lower charge to ISE Members whose orders in securities that are reported to Tape A and Tape C first get routed to Nasdaq Stock Market (‘‘Nasdaq’’) and then get re-routed by Nasdaq. In this circumstance, the ISE Member would be charged a fee of $0.0026 per share for removing liquidity in Tape A and Tape C securities regardless of where the order ultimately gets executed and regardless of what the executing market center charges Nasdaq. Whereas, orders that get routed to any other market center and then re-routed by that market center get charged a fee of $0.003 per share when the order removes liquidity. In SR–ISE–2009–23, the Exchange proposed to delete the portion of the footnote that provides for this exception because Nasdaq has raised their fee to $0.003 per share for all orders that get routed to Nasdaq and then re-routed by Nasdaq. In its capacity as a member of ISE, DECN currently serves as an introducing broker for the non-ISE Member subscribers of DECN to access EDGX and EDGA. DECN, as an ISE Member and introducing broker, receives rebates from DECN for transactions it executes on EDGX or EDGA in its capacity as introducing broker for non-ISE Members. Since the amounts of such rebates were changed pursuant to SR– ISE–2009–23, DECN wishes to make corresponding changes to the amounts it passes through to non-ISE Member subscribers of DECN for which it acts as introducing broker. As a result, the per share amounts that non-ISE Member subscribers receive will be the same as the amounts that ISE Members receive. ISE is seeking accelerated approval of this proposed rule change, as well as a retroactive effective date of May 1, 2009. ISE represents that this proposal will ensure that both ISE Members and nonISE Members (by virtue of the passthrough described above) will in effect receive equivalent amounts and that the imposition of such amounts will begin on the same May 1, 2009 start date. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,7 in general, and furthers the objectives of Section 6(b)(4),8 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and 7 15 8 15 U.S.C. 78f. U.S.C. 78f(b)(4). E:\FR\FM\14MYN1.SGM 14MYN1 22794 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices other charges among its members and other persons using its facilities. In particular, this proposal will ensure that both ISE Members and non-ISE Members (by virtue of the pass-through described above) will receive equivalent rebates. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. pwalker on PROD1PC71 with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. 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 ISE. 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–ISE–2009–24 and should be submitted by June 4, 2009. IV. Commission’s Findings and Order Granting Accelerated Approval of Proposed Rule Change The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.9 Specifically, the III. Solicitation of Comments Commission finds that the proposed Interested persons are invited to rule change is consistent with Section submit written data, views, and 6(b)(4),10 of the Act, which requires that arguments concerning the foregoing, the rules of a national securities including whether the proposed rule exchange provide for the equitable change is consistent with the Act. allocation of reasonable dues, fees and Comments may be submitted by any of other charges among members and the following methods: issuers and other persons using any facilities. Electronic Comments ISE recently amended DECN’s fee • Use the Commission’s Internet schedule to increase the Super Tier comment form (https://www.sec.gov/ Rebate in securities reported to Tape A rules/sro.shtml); or and Tape C and revise other rebates and • Send an e-mail to rulefees.11 DECN receives rebates and comments@sec.gov. Please include File charges fees for transactions it executes No. SR–ISE–2009–24 on the subject on EGDX or EDGA in its capacity as an line. introducing broker for its non-ISE member subscribers. Paper Comments The current proposal, which will • Send paper comments in triplicate apply retroactively to May 1, 2009, will to Elizabeth M. Murphy, Secretary, allow DECN to pass through the revised Securities and Exchange Commission, rebates and fees to the non-ISE member 100 F Street, NE., Washington, DC subscribers for which it acts as an 20549–1090. introducing broker. The Commission All submissions should refer to File finds that the proposal is consistent Number SR–ISE–2009–24. This file with the Act because it will provide number should be included on the rebates and charge fees to non-ISE subject line if e-mail is used. To help the member subscribers that are equivalent Commission process and review your to those established for ISE member comments more efficiently, please use subscribers in the Member Fee Filing.12 only one method. The Commission will ISE has requested that the post all comments on the Commission’s Commission find good cause for Internet Web site (https://www.sec.gov/ approving the proposed rule change rules/sro.shtml). Copies of the prior to the thirtieth day after submission, all subsequent amendments, all written statements 9 In approving this proposal, the Commission has with respect to the proposed rule considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). change that are filed with the 10 15 U.S.C. 78f(b)(4). Commission, and all written 11 See Securities Exchange Act Release No. 34– communications relating to the 59888 (May 7, 2009) (notice of filing and immediate proposed rule change between the effectiveness of File No. SR–ISE–2009–23) (the Commission and any person, other than ‘‘Member Fee Filing’’). 12 See note 11, supra. those that may be withheld from the VerDate Nov<24>2008 17:37 May 13, 2009 Jkt 217001 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 publication of notice in the Federal Register. As discussed above, the proposal will allow DECN to pass through to non-ISE member subscribers the revised rebate and fees established for ISE member subscribers in the Member Fee Filing, resulting in equivalent rebates and fees for ISE member and non-member subscribers. In addition, because the proposal will apply the revised rebates and fees retroactively to May 1, 2009, the revised rebates and fees will have the same effective date, thereby promoting consistency in the DECN’s fee schedule. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act for approving the proposed rule change prior to the thirtieth day after the date of publication of notice thereof in the Federal Register. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,13 that the proposed rule change, as amended (SR– ISE–2009–24) be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–11229 Filed 5–13–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59875; File No. SR– NASDAQ–2009–043] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify DOT, SCAN and STGY Routing Strategies To Incorporate an Optional Pre-Routing Display Period May 6, 2009. 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 April 30, 2009, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by Nasdaq. Nasdaq has designated the proposed rule change as constituting a non-controversial rule change under Rule 19b–4(f)(6) under the 13 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 14 17 E:\FR\FM\14MYN1.SGM 14MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 92 (Thursday, May 14, 2009)]
[Notices]
[Pages 22792-22794]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-11229]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59887; File No. SR-ISE-2009-24]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval to a
Proposed Rule Change, as Modified by Amendment No. 1, Relating to the
Amounts That Direct Edge ECN, in Its Capacity as an Introducing Broker
for Non-ISE Members, Passes Through to Such Non-ISE Members

May 7, 2009.
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 May 6, 2009, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change. On May 7, 2009,
the Exchange filed Amendment No. 1 to the proposed rule change. The
proposed rule change, as modified by Amendment No. 1, is described in
Items I and II below, which Items have been prepared by ISE. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as modified by Amendment No. 1, from interested
persons, and is approving the proposal on an accelerated basis.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 modify the amounts that Direct Edge ECN

[[Page 22793]]

(``DECN''), in its capacity as an introducing broker for non-ISE
Members, passes through to such non-ISE Members.
The text of the proposed rule change is available on the Exchange's
Internet Web site at https://www.ise.com.

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

In its filing with the Commission, 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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
DECN, a facility of ISE, operates two trading platforms, EDGX and
EDGA. On May 1, 2009, the ISE filed for immediate effectiveness a
proposed rule change to amend DECN's fee schedule for ISE Members \3\
to increase the per share rebate in securities reported to Tape A and
Tape C from $0.0029 to $0.003 for orders that add liquidity on EDGX if
the ISE Member satisfies any of the following three criteria on a daily
basis, measured monthly: (i) Adding 40,000,000 shares or more on either
EDGX, EDGA or EDGX and EDGA combined; (ii) adding 20,000,000 shares or
more on either EDGX, EDGA or EDGX and EDGA combined and routing
20,000,000 shares or more through EDGA; or (iii) adding 10,000,000
shares or more of liquidity to EDGX, so long as added liquidity on EDGX
is at least 5,000,000 shares greater than the previous calendar
month.\4\ DECN is a member of ISE as well as a facility of ISE. The
rebate described above is referred to as a ``Super Tier Rebate'' on the
DECN fee schedule.
---------------------------------------------------------------------------

\3\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
\4\ See SR-ISE-2009-23.
---------------------------------------------------------------------------

In an effort to increase volume on EDGA, DECN currently offers
volume discounts for ISE Members who route 20,000,000 shares or more on
a daily basis, measured monthly, to Nasdaq through EDGA using order
types that are solely eligible for routing to Nasdaq. Prior to SR-ISE-
2009-23, orders were charged at $0.0025 per share with respect to EDGA
routed volume. ISE Members routing 30,000,000 shares per day were
charged $0.0024 per share with respect to EDGA routed volume. Recently,
Nasdaq has amended its pricing by increasing its fee for orders that
remove liquidity by $0.0004.\5\ Accordingly, in SR-ISE-2009-23, the
Exchange amended the DECN volume discounts that apply to ISE Members by
increasing each volume discount fee by $0.0004, which changed the fee
to $0.0029 per share and $0.0028 per share, respectively.
---------------------------------------------------------------------------

\5\ See Securities and Exchange Commission Release No. 59843
(April 29, 2009), 74 FR 21046 (May 6, 2009) (SR-NASDAQ-2009-035).
---------------------------------------------------------------------------

On April 1, 2009, the Exchange amended the DECN fee schedule to
reduce the rebate from $0.0035 per share to $0.003 per share for orders
that add liquidity on EDGX in securities priced at or above $1.00 that
are reported to Tape B by ISE Members.\6\ In connection with this
amendment, a portion of the corresponding footnote on the DECN fee
schedule should have been deleted, but such deletion was overlooked at
the time of the filing. The relevant portion of the footnote states
``In the event that Direct Edge offers a rebate higher than $0.0029 per
share for subscribers who do not meet the criteria for the Super Tier,
then those who meet the aforementioned criteria will receive the higher
rebate.'' In SR-ISE-2009-23, the Exchange deleted this language as
Direct Edge is no longer offering this incentive.
---------------------------------------------------------------------------

\6\ See Securities and Exchange Commission Release Nos. 59692
(April 2, 2009), 74 FR 16024 (April 8, 2009) (SR-ISE-2009-17).
---------------------------------------------------------------------------

In SR-ISE-2009-23, the Exchange also made certain clarifying
changes to DECN's fee schedule. DECN's fee schedule includes a
description of liquidity flags and associated fees. Flag D is appended
to orders that are routed to and executed on the New York Stock
Exchange (``NYSE''). Such orders are charged a fee on the NYSE because
the order is removing liquidity. The fee assessed to this order is then
passed back to the ISE Member that originated the order. In SR-ISE-
2009-23, the Exchange amended the description of Flag D to include, not
just orders that are routed to NYSE, but also orders that are re-routed
to NYSE. Meaning, the order that originates at DECN may get routed to
another market center for execution, but that market center may re-
route the order to NYSE, where the order ultimately receives an
execution that results in a removal of liquidity. In this circumstance,
the fee assessed to the order will still be passed back to the ISE
Member that originated the order as if such order was originally routed
to NYSE.
Finally, in SR-ISE-2009-23, the Exchange deleted a portion of a
footnote on DECN's fee schedule that provides for a lower charge to ISE
Members whose orders in securities that are reported to Tape A and Tape
C first get routed to Nasdaq Stock Market (``Nasdaq'') and then get re-
routed by Nasdaq. In this circumstance, the ISE Member would be charged
a fee of $0.0026 per share for removing liquidity in Tape A and Tape C
securities regardless of where the order ultimately gets executed and
regardless of what the executing market center charges Nasdaq. Whereas,
orders that get routed to any other market center and then re-routed by
that market center get charged a fee of $0.003 per share when the order
removes liquidity. In SR-ISE-2009-23, the Exchange proposed to delete
the portion of the footnote that provides for this exception because
Nasdaq has raised their fee to $0.003 per share for all orders that get
routed to Nasdaq and then re-routed by Nasdaq.
In its capacity as a member of ISE, DECN currently serves as an
introducing broker for the non-ISE Member subscribers of DECN to access
EDGX and EDGA. DECN, as an ISE Member and introducing broker, receives
rebates from DECN for transactions it executes on EDGX or EDGA in its
capacity as introducing broker for non-ISE Members. Since the amounts
of such rebates were changed pursuant to SR-ISE-2009-23, DECN wishes to
make corresponding changes to the amounts it passes through to non-ISE
Member subscribers of DECN for which it acts as introducing broker. As
a result, the per share amounts that non-ISE Member subscribers receive
will be the same as the amounts that ISE Members receive.
ISE is seeking accelerated approval of this proposed rule change,
as well as a retroactive effective date of May 1, 2009. ISE represents
that this proposal will ensure that both ISE Members and non-ISE
Members (by virtue of the pass-through described above) will in effect
receive equivalent amounts and that the imposition of such amounts will
begin on the same May 1, 2009 start date.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\7\ in general, and
furthers the objectives of Section 6(b)(4),\8\ in particular, in that
it is designed to provide for the equitable allocation of reasonable
dues, fees and

[[Page 22794]]

other charges among its members and other persons using its facilities.
In particular, this proposal will ensure that both ISE Members and non-
ISE Members (by virtue of the pass-through described above) will
receive equivalent rebates.
---------------------------------------------------------------------------

\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

The proposed rule change does not 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 has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

III. 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 No. SR-ISE-2009-24 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2009-24. 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 ISE. 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-ISE-2009-24 and should be submitted by June 4, 2009.

IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

The Commission finds that the proposed rule change, as amended, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\9\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4),\10\ of the Act, which requires that
the rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facilities.
---------------------------------------------------------------------------

\9\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
\10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

ISE recently amended DECN's fee schedule to increase the Super Tier
Rebate in securities reported to Tape A and Tape C and revise other
rebates and fees.\11\ DECN receives rebates and charges fees for
transactions it executes on EGDX or EDGA in its capacity as an
introducing broker for its non-ISE member subscribers.
---------------------------------------------------------------------------

\11\ See Securities Exchange Act Release No. 34-59888 (May 7,
2009) (notice of filing and immediate effectiveness of File No. SR-
ISE-2009-23) (the ``Member Fee Filing'').
---------------------------------------------------------------------------

The current proposal, which will apply retroactively to May 1,
2009, will allow DECN to pass through the revised rebates and fees to
the non-ISE member subscribers for which it acts as an introducing
broker. The Commission finds that the proposal is consistent with the
Act because it will provide rebates and charge fees to non-ISE member
subscribers that are equivalent to those established for ISE member
subscribers in the Member Fee Filing.\12\
---------------------------------------------------------------------------

\12\ See note 11, supra.
---------------------------------------------------------------------------

ISE has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after publication
of notice in the Federal Register. As discussed above, the proposal
will allow DECN to pass through to non-ISE member subscribers the
revised rebate and fees established for ISE member subscribers in the
Member Fee Filing, resulting in equivalent rebates and fees for ISE
member and non-member subscribers. In addition, because the proposal
will apply the revised rebates and fees retroactively to May 1, 2009,
the revised rebates and fees will have the same effective date, thereby
promoting consistency in the DECN's fee schedule. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2) of the Act
for approving the proposed rule change prior to the thirtieth day after
the date of publication of notice thereof in the Federal Register.

V. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\13\ that the proposed rule change, as amended (SR-ISE-2009-24) be,
and hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

\13\ 15 U.S.C. 78s(b)(2).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11229 Filed 5-13-09; 8:45 am]
BILLING CODE 8010-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.