Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change 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, 1678-1680 [2010-297]

Download as PDF 1678 Federal Register / Vol. 75, No. 7 / Tuesday, January 12, 2010 / Notices 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: [FR Doc. 2010–298 Filed 1–11–10; 8:45 am] BILLING CODE 8011–01–P 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–NYSEAmex–2009–95 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. WReier-Aviles on DSKGBLS3C1PROD with NOTICES For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [Release No. 34–61290; File No. SR–ISE– 2009–109] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change 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 January 5, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the All submissions should refer to File ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Number SR–NYSEAmex–2009–95. This notice is hereby given that on December file number should be included on the 31, 2009, the International Securities subject line if e-mail is used. To help the Exchange, LLC (the ‘‘Exchange’’ or the Commission process and review your ‘‘ISE’’) filed with the Securities and comments more efficiently, please use Exchange Commission (‘‘Commission’’) only one method. The Commission will the proposed rule change as described post all comments on the Commission’s in Items I and II below, which Items Internet Web site (https://www.sec.gov/ have been prepared by the selfrules/sro.shtml). Copies of the regulatory organization. The submission, all subsequent Commission is publishing this notice to amendments, all written statements solicit comments on the proposed rule with respect to the proposed rule change from interested persons, and is approving the proposal on an change that are filed with the accelerated basis. Commission, and all written communications relating to the I. Self-Regulatory Organization’s proposed rule change between the Statement of the Terms of Substance of Commission and any person, other than the Proposed Rule Change those that may be withheld from the The Exchange proposes to modify the public in accordance with the amounts that Direct Edge ECN provisions of 5 U.S.C. 552, will be (‘‘DECN’’), in its capacity as an available for inspection and copying in introducing broker for non-ISE the Commission’s Public Reference Members, passes through to such nonRoom, 100 F Street, NE., Washington, ISE Members. DC 20549, on official business days The text of the proposed rule change between the hours of 10 a.m. and 3 p.m. is available on the Exchange’s Internet Copies of such filing also will be Web site at https://www.ise.com. available for inspection and copying at the principal office of the Exchange. All II. Self-Regulatory Organization’s Statement of the Purpose of, and comments received will be posted Statutory Basis for, the Proposed Rule without change; the Commission does Change not edit personal identifying information from submissions. You In its filing with the Commission, the should submit only information that self-regulatory organization included you wish to make publicly available. All statements concerning the purpose of, submissions should refer to File and basis for, the proposed rule change Number SR–NYSEAmex–2009–95 and and discussed any comments it received should be submitted on or before on the proposed rule change. The text February 2, 2010. 1 15 11 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 15:14 Jan 11, 2010 2 17 Jkt 220001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00096 Fmt 4703 Sfmt 4703 of these statements may be examined at the places specified in Item III 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 December 30, 2009, the ISE filed for immediate effectiveness a proposed rule change to amend Direct Edge ECN’s (‘‘DECN’’) fee schedule for ISE Members 3 to simplify its fee schedule by (i) eliminating the Super Tier and Ultra Tier rebates; 4 and (ii) amending 3 References to ISE Members in this filing refer to DECN Subscribers who are ISE Members. 4 On July 1, 2009, the Exchange adopted a new Ultra Tier Rebate whereby ISE Members were provided a $0.0032 rebate per share for securities priced at or above $1.00 when ISE Members add liquidity on EDGX if the attributed MPID satisfies one of the following criteria on a daily basis, measured monthly: (i) Adding 100,000,000 shares or more on EDGX; or (ii) adding 50,000,000 shares or more of liquidity on EDGX, so long as added liquidity on EDGX is at least 20,000,000 shares greater than the previous calendar month. The rebate described above is referred to as an ‘‘Ultra Tier Rebate’’ on the DECN fee schedule. See Securities and Exchange Act Release No. 60232 (July 2, 2009), 74 FR 33309 (July 10, 2009)(SR–ISE– 2009–43). On October 1, 2009, the Exchange amended the criteria for meeting this tier by allowing ISE Members to receive a $0.0032 rebate per share for securities priced at or above $1.00 when ISE Members add liquidity on EDGX if the attributed MPID posts 1% of the total consolidated volume (‘‘TCV’’) in average daily volume (‘‘ADV’’). TCV is defined as volume reported by all exchanges and trade reporting facilities to the consolidated transaction reporting plans for Tape A, B, and C securities. See Securities Exchange Act Release No. 60769 (October 2, 2009) 74 FR 51903 (October 8, 2009)(SR–ISE–2009–68). On May 1, 2009, the Exchange amended the Super Tier rebate, which provides a $0.0030 rebate per share for liquidity added on EDGX if the attributed MPID 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. See Securities Exchange Act Release No. 59887 (May 7, 2009), 74 FR 22792 (May 14, 2009)(SR–ISE–2009–24). To adjust DECN’s pricing model to be more consistent with other exchanges (even though DECN is not an exchange), in SR–ISE–2009–108, the Exchange proposed to de-link the pricing structures of DECN to eliminate pricing offers that are contingent on activity across both platforms. Secondly, in that filing, the Exchange proposed to simplify its fee schedule, which will provide Members with greater consistency and transparency during the period that the EDGA and EDGX E:\FR\FM\12JAN1.SGM 12JAN1 Federal Register / Vol. 75, No. 7 / Tuesday, January 12, 2010 / Notices WReier-Aviles on DSKGBLS3C1PROD with NOTICES its fees and rebates.5 The changes made Exchanges are preparing to launch, when volume will be transitioning from DECN to the EDGA and EDGX Exchanges (assuming their respective Form 1 applications are approved by the Commission). Finally, the Exchange believes that the proposed rate changes will help to maintain the competitive position of DECN. On May 7, 2009, each of EDGA Exchange, Inc. and EDGX Exchange, Inc. (the ‘‘EDGA and EDGX Exchanges’’) filed their respective Form 1 applications to register as a national securities exchange (‘‘Form 1’’) pursuant to Section 6 of the Securities Exchange Act of 1934. On July 30, 2009, the Exchanges filed Amendment No. 1 to the Form 1 Application. On September 17, 2009, the Form 1 was published in the Federal Register for notice and comment. See Securities Exchange Act Release No. 60651 (September 11, 2009), 74 FR 47827 (September 17, 2009). To effectuate the foregoing, in SR–ISE–2009–108, the Exchange deleted the Super Tier and Ultra Tier rebates discussed above. 5 In SR–ISE–2009–108, the Exchange amended its fee schedule for adding liquidity on EDGX from free to 0.15% of the dollar value of the transaction for securities priced less than $1. For removing liquidity on EDGX, the Exchange amended its fee schedule for the removal fee from 0.20% of the dollar value of the transaction to 0.30% of the dollar value of the transaction. DECN does not charge port charges to Members executing 200,000 shares or more of combined liquidity on EDGX and/or EDGA on a monthly basis, per port. Any port (or number of ports) in excess of this, however, was charged $50 per port, per month. In SR–ISE–2009–108, the Exchange eliminated this contingency and provided that all port charges are free irrespective of how much volume the Member executes. Previously, the Exchange provided that the removal rate on EDGA, which was a rebate of $0.0002 per share, was contingent on the attributed MPID adding or routing a minimum average daily share volume, measured monthly, of 50,000 shares on EDGA. In SR–ISE–2009–108, the Exchange provided that hidden order executions (Flag H) also count toward this volume. As a result, any attributed MPID not meeting this minimum will be charged $0.0030 per share for removing liquidity from EDGA. In addition, the Exchange eliminated this contingency (in footnote 1 of the fee schedule) as it applies to EDGX or EDGA/EDGX combined volume. As mentioned above, the Exchange delinked the pricing structures of DECN (EDGA/ EDGX) to eliminate pricing offers that are contingent on activity across both platforms. For adding liquidity on EDGA, Members were charged $0.0002 per share to add liquidity on EDGA unless the attributed MPID added a minimum average daily share volume, measured monthly, of at least 50,000,000 shares on EDGA. Any attributed MPID meeting this minimum would not be charged to add liquidity on EDGA. In SR–ISE–2009–108, the Exchange deleted the above paragraph in footnote 1 as the current charge of $0.0002 per share to add liquidity on EDGA is no longer dependent on Members adding a minimum average daily share volume, measured monthly, of at least 50,000,000 shares on EDGA. In addition, any attributed MPID meeting this minimum will also be charged $0.0002 per share to add liquidity on EDGA. Therefore, the text in footnote 1 has been deleted to reflect this change. Members could qualify for a rebate of $0.0032 per share for all liquidity posted on EDGX if they: (i) Added or route at least 10,000,000 shares of average daily volume prior to 9:30 a.m. or after 4 p.m. (includes all flags except 6); and (ii) added a minimum of 75,000,000 shares of average daily volume on EDGX in total, including during both market hours and pre- and post-trading hours. In SR–ISE–2009–108, for EDGX, the Exchange amended this as follows: for Members adding VerDate Nov<24>2008 19:19 Jan 11, 2010 Jkt 220001 1679 pursuant to SR–ISE–2009–108 became operative on January 1, 2010. 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 and is assessed charges 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 and charges were changed pursuant to SR–ISE– 2009–108, 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 and are charged will be the same as the amounts that ISE Members receive and are charged. ISE is seeking accelerated approval of this proposed rule change, as well as an effective date of January 1, 2010. 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 and be charged equivalent amounts and that the imposition of such amounts will begin on the same January 1, 2010 start date. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,6 in general, and furthers the objectives of Section 6(b)(4),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. In particular, this proposal will ensure that dues, fees and other charges imposed on ISE Members are equitably allocated to both ISE Members and non-ISE Members (by virtue of the pass-through described above). volume in securities priced $1 and over, they will receive a rebate of $0.0031 per share for all liquidity posted on EDGX if they: (i) add or route at least 5,000,000 shares of average daily volume prior to 9:30 a.m. or after 4 p.m. (includes all flags except 6); and (ii) add a minimum of 50,000,000 shares of average daily volume on EDGX in total, including during both market hours and pre- and post-trading hours (emphasis added). The new thresholds allow more Members to receive this rebate and is designed to reward members who add or route significant order flow to EDGX both during market hours and pre- and post-trading hours. It is also designed to increase liquidity during pre- and posttrading hours. For all Members, including Members not meeting the above thresholds, the Exchange now proposes to rebate $0.0029 per share for adding liquidity (to EDGX) in securities on all Tapes. This replaced the Super Tier and Ultra Tier structure that had been in place and is described above. Conforming amendments were made to flags B, V, Y, 3 & 4 (‘‘add liquidity’’ flags) to reflect this fee change. For removing liquidity, the Exchange charged $0.0028 per share for removing liquidity on EDGX for securities on all Tapes. In SR–ISE–2009–108, the Exchange amended the fee schedule to charge $0.0029 per share for removing liquidity on EDGX. The Exchange believes that this fee structure will enable it to compete effectively with other market centers. Conforming amendments were made to the N, W, and 6 flags (‘‘remove liquidity’’ flags) to reflect this fee change. Finally, in SR–ISE–2009–108, the Exchange amended the fee for EDGA orders routed to EDGX. Previously, the Exchange charged $0.0028 per share and this event yielded flag ‘‘I’’. In SR–ISE–2009– 108, the Exchange increased this fee to $0.0029 per share on the EDGA platform. The Exchange believes that this rate change will enable it to maintain a competitive position with regards to other away market centers. 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: PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 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. 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–ISE–2009–109 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–2009–109. 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 6 15 7 15 E:\FR\FM\12JAN1.SGM U.S.C. 78f. U.S.C. 78f(b)(4). 12JAN1 1680 Federal Register / Vol. 75, No. 7 / Tuesday, January 12, 2010 / Notices WReier-Aviles on DSKGBLS3C1PROD with NOTICES 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 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–2009–109 and should be submitted on or before February 2, 2010. IV. Commission’s Findings and Order Granting Accelerated Approval of Proposed Rule Change The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.8 Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) 9 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 its facilities. As described more fully above, ISE recently amended DECN’s fee schedule for ISE Members pursuant to SR–ISE– 2009–108 (the ‘‘Member Fee Filing’’). The fee changes made pursuant to the Member Fee Filing became operative on January 1, 2010. DECN receives rebates and is charged fees for transactions it executes on EGDX or EDGA in its capacity as an introducing broker for its non-ISE member subscribers. The current proposal, which will apply retroactively to January 1, 2010, 8 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(4). VerDate Nov<24>2008 15:14 Jan 11, 2010 Jkt 220001 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.10 ISE has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after publication of notice of filing thereof 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 January 1, 2010, 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 of filing thereof in the Federal Register. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–ISE–2009– 109) be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–297 Filed 1–11–10; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 6864] Culturally Significant Objects Imported for Exhibition Determinations: ‘‘Roman Art’’ SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and 10 Id. 11 15 12 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00098 Fmt 4703 Sfmt 4703 Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition ‘‘Roman Art,’’ imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at the Metropolitan Museum of Art, New York, NY, from on or about January 2010 until on or about January 2014, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the Federal Register. FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Carol B. Epstein, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/632–6473). The address is U.S. Department of State, SA–5, L/PD, Fifth Floor, Washington, DC 20522– 0505. Dated: January 4, 2010. Maura M. Pally, Deputy Assistant Secretary for Professional and Cultural Exchanges, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 2010–358 Filed 1–11–10; 8:45 am] BILLING CODE 4710–05–P DEPARTMENT OF STATE [Public Notice 6863] Culturally Significant Objects Imported for Exhibition: Determinations: ‘‘Giovanni Boldini in Impressionist Paris’’ SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition ‘‘Giovanni Boldini in Impressionist Paris,’’ imported from abroad for temporary E:\FR\FM\12JAN1.SGM 12JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 75, Number 7 (Tuesday, January 12, 2010)]
[Notices]
[Pages 1678-1680]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-297]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61290; File No. SR-ISE-2009-109]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval to a
Proposed Rule Change 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

January 5, 2010.
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 31, 2009, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') 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
the self-regulatory organization. The Commission is publishing this
notice to solicit comments on the proposed rule change 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
(``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 III 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 December 30, 2009, the ISE filed for immediate effectiveness a
proposed rule change to amend Direct Edge ECN's (``DECN'') fee schedule
for ISE Members \3\ to simplify its fee schedule by (i) eliminating the
Super Tier and Ultra Tier rebates; \4\ and (ii) amending

[[Page 1679]]

its fees and rebates.\5\ The changes made pursuant to SR-ISE-2009-108
became operative on January 1, 2010.
---------------------------------------------------------------------------

\3\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
\4\ On July 1, 2009, the Exchange adopted a new Ultra Tier
Rebate whereby ISE Members were provided a $0.0032 rebate per share
for securities priced at or above $1.00 when ISE Members add
liquidity on EDGX if the attributed MPID satisfies one of the
following criteria on a daily basis, measured monthly: (i) Adding
100,000,000 shares or more on EDGX; or (ii) adding 50,000,000 shares
or more of liquidity on EDGX, so long as added liquidity on EDGX is
at least 20,000,000 shares greater than the previous calendar month.
The rebate described above is referred to as an ``Ultra Tier
Rebate'' on the DECN fee schedule. See Securities and Exchange Act
Release No. 60232 (July 2, 2009), 74 FR 33309 (July 10, 2009)(SR-
ISE-2009-43).
On October 1, 2009, the Exchange amended the criteria for
meeting this tier by allowing ISE Members to receive a $0.0032
rebate per share for securities priced at or above $1.00 when ISE
Members add liquidity on EDGX if the attributed MPID posts 1% of the
total consolidated volume (``TCV'') in average daily volume
(``ADV''). TCV is defined as volume reported by all exchanges and
trade reporting facilities to the consolidated transaction reporting
plans for Tape A, B, and C securities. See Securities Exchange Act
Release No. 60769 (October 2, 2009) 74 FR 51903 (October 8,
2009)(SR-ISE-2009-68).
On May 1, 2009, the Exchange amended the Super Tier rebate,
which provides a $0.0030 rebate per share for liquidity added on
EDGX if the attributed MPID 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. See Securities Exchange Act Release No.
59887 (May 7, 2009), 74 FR 22792 (May 14, 2009)(SR-ISE-2009-24).
To adjust DECN's pricing model to be more consistent with other
exchanges (even though DECN is not an exchange), in SR-ISE-2009-108,
the Exchange proposed to de-link the pricing structures of DECN to
eliminate pricing offers that are contingent on activity across both
platforms. Secondly, in that filing, the Exchange proposed to
simplify its fee schedule, which will provide Members with greater
consistency and transparency during the period that the EDGA and
EDGX Exchanges are preparing to launch, when volume will be
transitioning from DECN to the EDGA and EDGX Exchanges (assuming
their respective Form 1 applications are approved by the
Commission). Finally, the Exchange believes that the proposed rate
changes will help to maintain the competitive position of DECN. On
May 7, 2009, each of EDGA Exchange, Inc. and EDGX Exchange, Inc.
(the ``EDGA and EDGX Exchanges'') filed their respective Form 1
applications to register as a national securities exchange (``Form
1'') pursuant to Section 6 of the Securities Exchange Act of 1934.
On July 30, 2009, the Exchanges filed Amendment No. 1 to the Form 1
Application. On September 17, 2009, the Form 1 was published in the
Federal Register for notice and comment. See Securities Exchange Act
Release No. 60651 (September 11, 2009), 74 FR 47827 (September 17,
2009).
To effectuate the foregoing, in SR-ISE-2009-108, the Exchange
deleted the Super Tier and Ultra Tier rebates discussed above.
\5\ In SR-ISE-2009-108, the Exchange amended its fee schedule
for adding liquidity on EDGX from free to 0.15% of the dollar value
of the transaction for securities priced less than $1. For removing
liquidity on EDGX, the Exchange amended its fee schedule for the
removal fee from 0.20% of the dollar value of the transaction to
0.30% of the dollar value of the transaction.
DECN does not charge port charges to Members executing 200,000
shares or more of combined liquidity on EDGX and/or EDGA on a
monthly basis, per port. Any port (or number of ports) in excess of
this, however, was charged $50 per port, per month. In SR-ISE-2009-
108, the Exchange eliminated this contingency and provided that all
port charges are free irrespective of how much volume the Member
executes.
Previously, the Exchange provided that the removal rate on EDGA,
which was a rebate of $0.0002 per share, was contingent on the
attributed MPID adding or routing a minimum average daily share
volume, measured monthly, of 50,000 shares on EDGA. In SR-ISE-2009-
108, the Exchange provided that hidden order executions (Flag H)
also count toward this volume. As a result, any attributed MPID not
meeting this minimum will be charged $0.0030 per share for removing
liquidity from EDGA. In addition, the Exchange eliminated this
contingency (in footnote 1 of the fee schedule) as it applies to
EDGX or EDGA/EDGX combined volume. As mentioned above, the Exchange
de-linked the pricing structures of DECN (EDGA/EDGX) to eliminate
pricing offers that are contingent on activity across both
platforms.
For adding liquidity on EDGA, Members were charged $0.0002 per
share to add liquidity on EDGA unless the attributed MPID added a
minimum average daily share volume, measured monthly, of at least
50,000,000 shares on EDGA. Any attributed MPID meeting this minimum
would not be charged to add liquidity on EDGA. In SR-ISE-2009-108,
the Exchange deleted the above paragraph in footnote 1 as the
current charge of $0.0002 per share to add liquidity on EDGA is no
longer dependent on Members adding a minimum average daily share
volume, measured monthly, of at least 50,000,000 shares on EDGA. In
addition, any attributed MPID meeting this minimum will also be
charged $0.0002 per share to add liquidity on EDGA. Therefore, the
text in footnote 1 has been deleted to reflect this change.
Members could qualify for a rebate of $0.0032 per share for all
liquidity posted on EDGX if they: (i) Added or route at least
10,000,000 shares of average daily volume prior to 9:30 a.m. or
after 4 p.m. (includes all flags except 6); and (ii) added a minimum
of 75,000,000 shares of average daily volume on EDGX in total,
including during both market hours and pre- and post-trading hours.
In SR-ISE-2009-108, for EDGX, the Exchange amended this as follows:
for Members adding volume in securities priced $1 and over, they
will receive a rebate of $0.0031 per share for all liquidity posted
on EDGX if they: (i) add or route at least 5,000,000 shares of
average daily volume prior to 9:30 a.m. or after 4 p.m. (includes
all flags except 6); and (ii) add a minimum of 50,000,000 shares of
average daily volume on EDGX in total, including during both market
hours and pre- and post-trading hours (emphasis added). The new
thresholds allow more Members to receive this rebate and is designed
to reward members who add or route significant order flow to EDGX
both during market hours and pre- and post-trading hours. It is also
designed to increase liquidity during pre- and post-trading hours.
For all Members, including Members not meeting the above thresholds,
the Exchange now proposes to rebate $0.0029 per share for adding
liquidity (to EDGX) in securities on all Tapes. This replaced the
Super Tier and Ultra Tier structure that had been in place and is
described above. Conforming amendments were made to flags B, V, Y, 3
& 4 (``add liquidity'' flags) to reflect this fee change.
For removing liquidity, the Exchange charged $0.0028 per share
for removing liquidity on EDGX for securities on all Tapes. In SR-
ISE-2009-108, the Exchange amended the fee schedule to charge
$0.0029 per share for removing liquidity on EDGX. The Exchange
believes that this fee structure will enable it to compete
effectively with other market centers. Conforming amendments were
made to the N, W, and 6 flags (``remove liquidity'' flags) to
reflect this fee change.
Finally, in SR-ISE-2009-108, the Exchange amended the fee for
EDGA orders routed to EDGX. Previously, the Exchange charged $0.0028
per share and this event yielded flag ``I''. In SR-ISE-2009-108, the
Exchange increased this fee to $0.0029 per share on the EDGA
platform. The Exchange believes that this rate change will enable it
to maintain a competitive position with regards to other away market
centers.
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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 and is assessed charges 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 and charges were changed
pursuant to SR-ISE-2009-108, 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 and are charged will be
the same as the amounts that ISE Members receive and are charged.
ISE is seeking accelerated approval of this proposed rule change,
as well as an effective date of January 1, 2010. 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 and
be charged equivalent amounts and that the imposition of such amounts
will begin on the same January 1, 2010 start date.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\6\ in general, and
furthers the objectives of Section 6(b)(4),\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. In particular, this proposal will ensure that dues,
fees and other charges imposed on ISE Members are equitably allocated
to both ISE Members and non-ISE Members (by virtue of the pass-through
described above).
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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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-2009-109 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-2009-109. 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

[[Page 1680]]

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 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-2009-109 and should be submitted on or before
February 2, 2010.

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

The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\8\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) \9\ 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 its facilities.
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\8\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

As described more fully above, ISE recently amended DECN's fee
schedule for ISE Members pursuant to SR-ISE-2009-108 (the ``Member Fee
Filing''). The fee changes made pursuant to the Member Fee Filing
became operative on January 1, 2010. DECN receives rebates and is
charged fees for transactions it executes on EGDX or EDGA in its
capacity as an introducing broker for its non-ISE member subscribers.
The current proposal, which will apply retroactively to January 1,
2010, 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.\10\
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\10\ Id.
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ISE has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after publication
of notice of filing thereof 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 January 1, 2010, 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 of filing thereof in the Federal Register.

V. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-ISE-2009-109) be, and hereby
is, approved on an accelerated basis.
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\11\ 15 U.S.C. 78s(b)(2).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-297 Filed 1-11-10; 8:45 am]
BILLING CODE 8011-01-P

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