Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change in Order To Amend the NSX Fee and Rebate Schedule and Rule 16.4, 18562-18563 [2010-8225]

Download as PDF 18562 Federal Register / Vol. 75, No. 69 / Monday, April 12, 2010 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61850; File No. SR–NSX– 2010–03] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change in Order To Amend the NSX Fee and Rebate Schedule and Rule 16.4 April 6, 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 March 31, 2010, National Stock Exchange, Inc. filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change, as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comment on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change National Stock Exchange, Inc. (‘‘NSX® ’’ or ‘‘Exchange’’) is proposing a rule change, operative at commencement of trading on April 1, 2010, which proposes to amend the NSX Fee and Rebate Schedule (the ‘‘Fee Schedule’’) and Rule 16.4 with respect to the liquidity taking fee in the Automatic Execution mode of order interaction and the rebates payable in the Order Delivery mode of order interaction. The text of the proposed rule change is available on the Exchange’s website at https://www.nsx.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. sroberts on DSKD5P82C1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose With this rule change, the Exchange is proposing to modify the Fee Schedule to lower the volume threshold necessary to obtain a lower take fee for securities priced one dollar and higher in the Automatic Execution mode of order interaction (‘‘AutoEx’’) 3. In addition, the Exchange is proposing to modify the text of Rule 16.4 and the Fee Schedule with respect to displayed orders in securities priced one dollar and above that add liquidity in Order Delivery mode of order interaction (‘‘Order Delivery’’) 4 so as to introduce an additional intermediate rebate tier and raise the eligibility threshold for the highest rebate tier. Finally, in Order Delivery, the proposed rule change modifies the definition used to calculate volume eligibility, and also introduces a rebate for displayed liquidity adding sub-dollar orders. AutoEx Take Fee for Securities Priced One Dollar and Higher For orders in securities priced one dollar and above that take liquidity in AutoEx, the proposed rule change lowers the volume threshold necessary to obtain a lower take fee. Prior to the effective date of the proposed rule change, the Fee Schedule provides that an ETP Holder pays a $0.0028 per share liquidity take fee if such ETP Holder’s liquidity adding average daily volume (as fully defined in Endnote 3 of the Fee Schedule, ‘‘Liquidity Adding ADV’’) is at least five million shares. If an ETP Holder’s Liquidity Adding ADV is less than five million shares, the ETP Holder pays a liquidity take fee of $0.0030 per share. The proposed rule change lowers this volume threshold from five million to 50,000 shares, thereby enabling ETP Holders to more easily achieve the lower take fee of $0.0028 per share. Order Delivery Rebates For displayed orders in securities priced one dollar and above that add liquidity in Order Delivery, the proposed rule change creates an additional intermediate rebate tier and raises the eligibility threshold for the highest rebate tier. Prior to the effective date of the proposed rule change, the Fee Schedule provides a rebate of $0.0008 per share if Liquidity Adding ADV is at least 1 million and less than 3 The 1 15 2 17 Exchange’s two modes of order interaction are described in NSX Rule 11.13(b). 4 Id. U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Nov<24>2008 17:58 Apr 09, 2010 Jkt 220001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 5 million (‘‘Tier 1’’), and a rebate of $0.0024 per share plus 50% of attributable market data revenue if Liquidity Adding ADV is at least 5 million shares (‘‘Tier 2’’). The proposed rule change modifies Tier 2 such that an ETP Holder achieving a Liquidity Adding ADV of at least 5 million shares, but less than 30 million shares, receives a rebate of $0.0024 per share plus 35% of attributable market data revenue. Further, a third tier (‘‘Tier 3’’) is introduced such that ETP Holders with at least 30 million Liquidity Adding ADV receive a rebate of $0.0024 per share plus 50% of attributable market data revenue. The proposed rule change also excludes securities priced under one dollar from the definition of Liquidity Adding ADV in the context of Order Delivery rebates. Finally, the proposed rule change introduces a rebate for orders of securities priced under one dollar that add liquidity in Order Delivery in an amount equal to 0.20 percent of the trade value. Like the equivalent rebate for liquidity adding sub-dollar securities in AutoEx, Zero Display Reserve Orders of sub-dollar securities in Order Delivery are not eligible to receive the liquidity adding rebate. Rationale The Exchange has determined that these changes are necessary to create further incentive for ETP Holders to submit increased order volumes in AutoEx and Order Delivery and, ultimately, to increase the revenues of the Exchange for the purpose of continuing to adequately fund its regulatory and general business functions. The Exchange has further determined that the proposed fee adjustments are necessary for competitive reasons. The Exchange believes that these rebate changes will not impair the Exchange’s ability to fulfill its regulatory responsibilities. The proposed modifications are reasonable and equitably allocated to those ETP Holders that opt to submit orders in AutoEx and Order Delivery, and are not discriminatory because ETP Holders are free to elect whether or not to send such orders. The proposed modifications continue to incentivize ETP Holders to submit displayed orders over Zero Display Reserve Orders in Order Delivery. Based upon the information above, the Exchange believes that the proposed rule change is consistent with the protection of investors and the public interest. Operative Date and Notice The Exchange intends to make the proposed modifications, which are E:\FR\FM\12APN1.SGM 12APN1 Federal Register / Vol. 75, No. 69 / Monday, April 12, 2010 / Notices effective on filing of this proposed rule, operative for trading on April 1, 2010. Pursuant to Exchange Rule 16.1(c), the Exchange will ‘‘provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange’’ through the issuance of a Regulatory Circular of the changes to the Fee Schedule and will post a copy of the rule filing on the Exchange’s Web site (https://www.nsx.com). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act,5 in general, and Section 6(b)(4) of the Act,6 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 the facilities of the Exchange. Moreover, the proposed rule change is not discriminatory in that all ETP Holders are eligible to submit (or not submit) trades and quotes at any price in AutoEx and Order Delivery in all tapes, as either displayed or undisplayed and as liquidity adding or liquidity taking, and may do so at their discretion. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. sroberts on DSKD5P82C1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has taken effect upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act 7 and subparagraph (f)(2) of Rule 19b–4 8 thereunder, because, as provided in (f)(2), it changes ‘‘a due, fee or other charge applicable only to a member’’ (known on the Exchange as an ETP Holder). At any time within sixty (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 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 7 15 U.S.C. 78s(b)(3)(A)(ii). 8 17 CFR 240.19b–4. 6 15 VerDate Nov<24>2008 17:58 Apr 09, 2010 Jkt 220001 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–NSX–2010–03 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. 18563 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–8225 Filed 4–9–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61840; File No. SR–NYSE– 2010–28] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Operation of Its Supplemental Liquidity Providers Pilot, NYSE Rule 107B Until the Earlier of the Securities and Exchange Commission’s Approval To Make Such Pilot Permanent or September 30, 2010 April 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 March All submissions should refer to File 30, 2010, New York Stock Exchange Number SR–NSX–2010–03. This file LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed number should be included on the subject line if e-mail is used. To help the with the Securities and Exchange Commission (the ‘‘Commission’’) the Commission process and review your proposed rule change as described in comments more efficiently, please use only one method. The Commission will Items I and II below, which Items have post all comments on the Commission’s been prepared by the self-regulatory organization. The Commission is Internet Web site (https://www.sec.gov/ publishing this notice to solicit rules/sro.shtml). Copies of the comments on the proposed rule change submission, all subsequent from interested persons. amendments, all written statements with respect to the proposed rule I. Self-Regulatory Organization’s change that are filed with the Statement of the Terms of Substance of Commission, and all written the Proposed Rule Change communications relating to the The Exchange proposes to extend the proposed rule change between the Commission and any person, other than operation of its Supplemental Liquidity Providers Pilot (‘‘SLP Pilot’’ or ‘‘Pilot’’) those that may be withheld from the (see Rule 107B), until the earlier of the public in accordance with the Securities and Exchange Commission’s provisions of 5 U.S.C. 552, will be approval to make such pilot permanent available for Web site viewing and or September 30, 2010. The text of the printing in the Commission’s Public proposed rule change is available on Reference Room, 100 F Street, NE., NYSE’s Web site at https:// Washington, DC 20549, on official www.nyse.com, on the Commission’s business days between the hours of 10 a.m. and 3 p.m. Copies of the filing will Web site at https://www.sec.gov, and at the Commission’s Public Reference also be available for inspection and Room. copying at the principal office of the self-regulatory organization. All II. Self-Regulatory Organization’s comments received will be posted Statement of the Purpose of, and without change; the Commission does Statutory Basis for, the Proposed Rule not edit personal identifying Change information from submissions. You In its filing with the Commission, the should submit only information that self-regulatory organization included you wish to make available publicly. All submissions should refer to File 9 17 CFR 200.30–3(a)(12). Number SR–NSX–2010–03 and should 1 15 U.S.C.78s(b)(1). be submitted on or before May 3, 2010. 2 17 CFR 240.19b–4. PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\12APN1.SGM 12APN1

Agencies

[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Notices]
[Pages 18562-18563]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-8225]



[[Page 18562]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61850; File No. SR-NSX-2010-03]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change in 
Order To Amend the NSX Fee and Rebate Schedule and Rule 16.4

April 6, 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 March 31, 2010, National Stock Exchange, Inc. filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change, as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Commission is publishing this notice 
to solicit comment on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    National Stock Exchange, Inc. (``NSX[supreg] '' or ``Exchange'') is 
proposing a rule change, operative at commencement of trading on April 
1, 2010, which proposes to amend the NSX Fee and Rebate Schedule (the 
``Fee Schedule'') and Rule 16.4 with respect to the liquidity taking 
fee in the Automatic Execution mode of order interaction and the 
rebates payable in the Order Delivery mode of order interaction.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.nsx.com, at the principal office of the Exchange, 
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 Exchange 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 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
    With this rule change, the Exchange is proposing to modify the Fee 
Schedule to lower the volume threshold necessary to obtain a lower take 
fee for securities priced one dollar and higher in the Automatic 
Execution mode of order interaction (``AutoEx'') \3\. In addition, the 
Exchange is proposing to modify the text of Rule 16.4 and the Fee 
Schedule with respect to displayed orders in securities priced one 
dollar and above that add liquidity in Order Delivery mode of order 
interaction (``Order Delivery'') \4\ so as to introduce an additional 
intermediate rebate tier and raise the eligibility threshold for the 
highest rebate tier. Finally, in Order Delivery, the proposed rule 
change modifies the definition used to calculate volume eligibility, 
and also introduces a rebate for displayed liquidity adding sub-dollar 
orders.
---------------------------------------------------------------------------

    \3\ The Exchange's two modes of order interaction are described 
in NSX Rule 11.13(b).
    \4\ Id.
---------------------------------------------------------------------------

AutoEx Take Fee for Securities Priced One Dollar and Higher
    For orders in securities priced one dollar and above that take 
liquidity in AutoEx, the proposed rule change lowers the volume 
threshold necessary to obtain a lower take fee. Prior to the effective 
date of the proposed rule change, the Fee Schedule provides that an ETP 
Holder pays a $0.0028 per share liquidity take fee if such ETP Holder's 
liquidity adding average daily volume (as fully defined in Endnote 3 of 
the Fee Schedule, ``Liquidity Adding ADV'') is at least five million 
shares. If an ETP Holder's Liquidity Adding ADV is less than five 
million shares, the ETP Holder pays a liquidity take fee of $0.0030 per 
share. The proposed rule change lowers this volume threshold from five 
million to 50,000 shares, thereby enabling ETP Holders to more easily 
achieve the lower take fee of $0.0028 per share.
Order Delivery Rebates
    For displayed orders in securities priced one dollar and above that 
add liquidity in Order Delivery, the proposed rule change creates an 
additional intermediate rebate tier and raises the eligibility 
threshold for the highest rebate tier. Prior to the effective date of 
the proposed rule change, the Fee Schedule provides a rebate of $0.0008 
per share if Liquidity Adding ADV is at least 1 million and less than 5 
million (``Tier 1''), and a rebate of $0.0024 per share plus 50% of 
attributable market data revenue if Liquidity Adding ADV is at least 5 
million shares (``Tier 2''). The proposed rule change modifies Tier 2 
such that an ETP Holder achieving a Liquidity Adding ADV of at least 5 
million shares, but less than 30 million shares, receives a rebate of 
$0.0024 per share plus 35% of attributable market data revenue. 
Further, a third tier (``Tier 3'') is introduced such that ETP Holders 
with at least 30 million Liquidity Adding ADV receive a rebate of 
$0.0024 per share plus 50% of attributable market data revenue. The 
proposed rule change also excludes securities priced under one dollar 
from the definition of Liquidity Adding ADV in the context of Order 
Delivery rebates.
    Finally, the proposed rule change introduces a rebate for orders of 
securities priced under one dollar that add liquidity in Order Delivery 
in an amount equal to 0.20 percent of the trade value. Like the 
equivalent rebate for liquidity adding sub-dollar securities in AutoEx, 
Zero Display Reserve Orders of sub-dollar securities in Order Delivery 
are not eligible to receive the liquidity adding rebate.
Rationale
    The Exchange has determined that these changes are necessary to 
create further incentive for ETP Holders to submit increased order 
volumes in AutoEx and Order Delivery and, ultimately, to increase the 
revenues of the Exchange for the purpose of continuing to adequately 
fund its regulatory and general business functions. The Exchange has 
further determined that the proposed fee adjustments are necessary for 
competitive reasons. The Exchange believes that these rebate changes 
will not impair the Exchange's ability to fulfill its regulatory 
responsibilities.
    The proposed modifications are reasonable and equitably allocated 
to those ETP Holders that opt to submit orders in AutoEx and Order 
Delivery, and are not discriminatory because ETP Holders are free to 
elect whether or not to send such orders. The proposed modifications 
continue to incentivize ETP Holders to submit displayed orders over 
Zero Display Reserve Orders in Order Delivery. Based upon the 
information above, the Exchange believes that the proposed rule change 
is consistent with the protection of investors and the public interest.
Operative Date and Notice
    The Exchange intends to make the proposed modifications, which are

[[Page 18563]]

effective on filing of this proposed rule, operative for trading on 
April 1, 2010. Pursuant to Exchange Rule 16.1(c), the Exchange will 
``provide ETP Holders with notice of all relevant dues, fees, 
assessments and charges of the Exchange'' through the issuance of a 
Regulatory Circular of the changes to the Fee Schedule and will post a 
copy of the rule filing on the Exchange's Web site (https://www.nsx.com).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\5\ in general, and 
Section 6(b)(4) of the Act,\6\ 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 the facilities of the 
Exchange. Moreover, the proposed rule change is not discriminatory in 
that all ETP Holders are eligible to submit (or not submit) trades and 
quotes at any price in AutoEx and Order Delivery in all tapes, as 
either displayed or undisplayed and as liquidity adding or liquidity 
taking, and may do so at their discretion.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 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 inappropriate burden on competition.

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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The proposed rule change has taken effect upon filing pursuant to 
Section 19(b)(3)(A)(ii) of the Act \7\ and subparagraph (f)(2) of Rule 
19b-4 \8\ thereunder, because, as provided in (f)(2), it changes ``a 
due, fee or other charge applicable only to a member'' (known on the 
Exchange as an ETP Holder). At any time within sixty (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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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-NSX-2010-03 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-NSX-2010-03. 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 Web site viewing and 
printing 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 the filing will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-NSX-
2010-03 and should be submitted on or before May 3, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8225 Filed 4-9-10; 8:45 am]
BILLING CODE 8011-01-P
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