[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Notices]
[Pages 18562-18563]
From the Federal Register Online via the Government Publishing 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.
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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
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 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 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.
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\3\ The Exchange's two modes of order interaction are described
in NSX Rule 11.13(b).
\4\ Id.
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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 (http://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.
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\5\ 15 U.S.C. 78f(b).
\6\ 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 \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.
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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 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-2010-03 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 (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 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\
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\9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8225 Filed 4-9-10; 8:45 am]
BILLING CODE 8011-01-P