[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Notices]
[Pages 69507-69508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28453]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63251; File No. SR-NSX-2010-14]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the NSX Fee and Rebate Schedule
November 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 October 29, 2010, National Stock Exchange, Inc. 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 Exchange. The Commission is publishing this notice to
solicit comment on the proposed rule change from interested persons.
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\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
The National Stock Exchange, Inc. (``NSX[supreg]'' or the
``Exchange'') is proposing a rule change, operative at commencement of
trading on November 1, 2010, which proposes to amend the NSX Fee and
Rebate Schedule (the ``Fee Schedule'') with respect to certain rebates
payable in the Automatic Execution mode of order interaction.
The text of the proposed rule change is available on the Exchange's
Web site at http://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 adjust volume threshold necessary to obtain rebates with
respect to displayed orders in Tape A and C securities priced one
dollar and above that add liquidity in the Automatic Execution mode of
order interaction (``AutoEx'').\3\
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\3\ The Exchange's two modes of order interaction are described
in NSX Rule 11.13(b).
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For executions of displayed orders in Tape A and C securities
priced one dollar and above that add liquidity in AutoEx, the proposed
rule modifies the volume thresholds necessary to achieve rebates. Prior
to the effective date of the proposed rule change, the Fee Schedule
provides a rebate of $0.0026 per share if an ETP Holder's liquidity
adding average daily volume (as fully defined in Endnote 3 of the Fee
Schedule, ``Liquidity Adding ADV'') is less than 25 million shares
(``Tier 1''); a rebate of $0.0027 per share if Liquidity Adding ADV is
at least 25 million shares and less than 40 million shares (``Tier
2''); and a rebate of $0.0028 per share if Liquidity Adding ADV is at
least 40 million shares (``Tier 3'').
The proposed rule change modifies the rebate measurement criteria
from a set number of shares to a percentage, expressed in basis points,
of Total Consolidated Average Daily Volume (``TCADV''). As set forth in
Explanatory Endnote 13, TCADV means average daily volume reported by
all exchanges and trade reporting facilities to the consolidated
transaction reporting plans for Tape A, B and C securities. The
proposed rule change also eliminates a rebate tier. Accordingly, after
the effective date, an ETP Holder would receive a rebate of $0.0026 per
share with respect to its displayed Tape A and C orders priced one
dollar or higher that add liquidity in AutoEx if such ETP Holder's
Liquidity Adding ADV is less than 20 basis points of TCADV. The Tier 2
rebate of $0.0027 is proposed to be deleted entirely. An ETP Holder
would receive a rebate of $0.0028 per share if such ETP Holder's
Liquidity Adding ADV is equal to or exceeds 20 basis points of TCADV.
The proposed rule change does not modify other rebates or fees that
are contained in the Fee Schedule.
Rationale
The Exchange has determined that these changes are necessary to
create further incentive for ETP Holders to submit increased order
volumes 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 submit orders in Tape A and C securities in
AutoEx, and are not discriminatory because qualified ETP Holders are
free to elect whether or not to send such orders. 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
effective on filing of this proposed rule, operative for trading on
November 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 (http://www.nsx.com).
[[Page 69508]]
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) of the Act,\4\ in general, and
Section 6(b)(4) of the Act,\5\ 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 qualified 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.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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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 \6\ and subparagraph (f)(2) of Rule
19b-4 \7\ 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 summarily may
temporarily suspend 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.
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\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
\7\ 17 CFR 240.19b-4.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NSX-2010-14 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-2010-14. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for 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 such filing also will be available for
inspection and copying at the principal office of NSX. 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-2010-14 and should be
submitted on or before December 3, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28453 Filed 11-10-10; 8:45 am]
BILLING CODE 8011-01-P