Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20761 

9The proposed rule change was published for 

notice and comment in the Federal Register on 

November 3, 2010. See supra note 2. The 180th date 

from publication in the Federal Register is May 2, 

2011 and an additional 60-days from that date 

would extend the time period to July 1, 2011. 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The rebate for displayed quotes/orders for such 

members is the basic rate of $0.0020 per share 

executed, unless the member otherwise qualifies for 

a more favorable rebate with respect to its displayed 

quotes/orders. 

4Securities Exchange Act Release No. 63648 

(January 5, 2011), 76 FR 2178 (January 12, 2011) 

(SR–NASDAQ–2011–003). 

5NASDAQ is, however, modifying the wording of 

the existing tier in Rule 7018 to improve its clarity. 

The changes do not result in any substantive 

changes to the applicability of the tier. 

the order approving or disapproving the 

proposed rule change by not more than 

60 days if the Commission determines 

that a longer period is appropriate and 

publishes the reasons for such 

determination, or the self-regulatory 

organization that filed the proposed rule 

change consents to the longer period. 

The Commission is extending the 180- 

day time period for the issuance of an 

order approving or disapproving the 

proposed rule change for an additional 

60 days.9 The Commission finds that it 

is appropriate to designate a longer 

period within which to issue an order 

approving or disapproving the proposed 

rule change so that the Commission has 

sufficient time to consider the 

Exchange’s proposal and whether it is 

consistent with the Act. The proposal 

would establish, for the first time, 

standards for listing securities of 

companies whose business plan is to 

buy and hold commodities. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,10 the Commission 

designates July 1, 2011 as the date by 

which the Commission shall issue an 

order either approving or disapproving 

the proposed rule change (File Number 

SR–NASDAQ–2010–134). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8872 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64246; File No. SR– 

NASDAQ–2011–048] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify Fees 

for Members Using the NASDAQ 

Market Center 

April 7, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 1, 

2011, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’) 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 NASDAQ. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

NASDAQ proposes to modify pricing 

for NASDAQ members using the 

NASDAQ Market Center. NASDAQ will 

implement the proposed change on 

April 1, 2011. The text of the proposed 

rule change is available at http:// 

nasdaq.cchwallstreet.com/, at 

NASDAQ’s principal office, 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, 

NASDAQ 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. 

NASDAQ 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 

NASDAQ is amending Rule 7018 to 

make modifications to its pricing 

schedule for execution of quotes/orders 

through the NASDAQ Market Center of 

securities priced at $1 or more. Under 

the pricing schedule, NASDAQ offers a 

credit to liquidity providers, with the 

size of the credit varying based on a 

range of parameters specified in the fee 

schedule. The lowest liquidity provider 

rebate is $0.0020 per share executed for 

displayed quotes/orders and $0.0010 

per share executed for non-displayed 

quotes/orders. One means by which 

members may currently receive a higher 

liquidity rebate is focused on the use of 

non-displayed quotes/orders: members 

providing 3 million shares or more of 

liquidity through one or more MPID 

using non-displayed quotes/orders 

receive a rebate of $0.0015 per share 

executed, rather than the basic rebate of 

$0.0010 per share executed, with 

respect to those quotes/orders.3

Effective April 1, 2011, NASDAQ will 

eliminate this rebate provision. As 

NASDAQ noted when it introduced this 

rebate provision in January 2011,4

NASDAQ believes that transparent 

markets should be encouraged wherever 

possible, but NASDAQ does offer 

members the option of providing 

liquidity through non-displayed quotes/ 

orders in order to allow it to compete 

better with alternative trading systems 

that operate as dark pools. Accordingly, 

it was NASDAQ’s expectation that the 

rebate tier might encourage some 

members that use dark pools extensively 

to make greater use of non-displayed 

liquidity on NASDAQ. Because such a 

response did not occur, NASDAQ has 

decided to eliminate the tier. NASDAQ 

notes that the tier’s elimination will not 

impact any members, because there are 

no members that currently qualify for 

the tier that do not also qualify for the 

same rebate for non-displayed quotes/ 

orders (and a higher rebate for displayed 

quotes/orders) under another volumebased pricing tier. 

Second, NASDAQ is introducing a 

new rebate tier for members that are 

active in both the NASDAQ Market 

Center and the NASDAQ Options 

Market. Currently, a member is eligible 

to receive an enhanced rebate of $0.0029 

per share executed for displayed quotes/ 

orders and of $0.0015 per share 

executed for non-displayed quotes/ 

orders if it achieves certain specified 

levels of activity in both markets. The 

required levels of monthly activity are 

an average daily volume of more than 10 

million shares of liquidity provided 

through the NASDAQ Market Center 

and an average daily volume of more 

than 130,000 options contracts accessed 

or provided through the NASDAQ 

Options Market. In each case, the 

member may achieve the required 

volume levels through one or more of its 

market participant identifiers (‘‘MPIDs’’). 

While retaining this tier,5 NASDAQ is 

proposing to add an additional tier for 

a market participant with (i) shares of 

liquidity provided through the 

NASDAQ Market Center in all securities 

during the month equal to 1% or more 

of the average total consolidated volume 

reported to all consolidated transaction 

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20762 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

6Specifically, a member qualifies for the same 

rebate if it has an average daily volume through the 

NASDAQ Market Center in all securities during the 

month of: (i) More than 95 million shares of 

liquidity provided, if average total consolidated 

volume reported to all consolidated transaction 

reporting plans by all exchanges and trade reporting 

facilities is more than 10 billion shares per day 

during the month; (ii) more than 85 million shares 

of liquidity provided, if average total consolidated 

volume is between 9,000,000,001 and 10 billion 

shares per day during the month; (iii) more than 75 

million shares of liquidity provided, if average total 

consolidated volume is between 8,000,000,001 and 

9 billion shares per day during the month; and (iv) 

more than 65 million shares of liquidity provided, 

if average total consolidated volume is 8 billion or 

fewer shares per day during the month. In each 

case, however, the member is required to achieve 

the required level through a single MPID. 

7 15 U.S.C. 78f. 

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

9Securities Exchange Act Release No. 64003 

(March 2, 2011), 76 FR 12784 (March 8, 2011) (SR– 

NASDAQ–2011–028); Securities Exchange Act 

Release No. 59879 (May 6, 2009), 74 FR 22619 (May 

13, 2009) (SR–NASDAQ–2009–041). 

reporting plans by all exchanges and 

trade reporting facilities during the 

month, and (ii) an average daily volume 

during the month of more than 300,000 

contracts of liquidity accessed or 

provided through the Nasdaq Options 

Market. In each case, the member may 

achieve the required volume levels 

through one or more of its MPIDs. A 

member reaching these volume levels 

would receive a liquidity provider 

rebate of $0.00295 per share executed 

for displayed liquidity, and $0.0015 per 

share executed for non-displayed 

liquidity. These rebate levels are equal 

to the rebate levels currently available to 

members that provide high levels of 

liquidity through the NASDAQ Market 

Center but that do not trade options 

contracts in volume through the 

NASDAQ Options Market.6

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,7 in 

general, and with Section 6(b)(4) of the 

Act,8 in particular, in that it provides for 

the equitable allocation of reasonable 

dues, fees and other charges among 

members and issuers and other persons 

using any facility or system which 

NASDAQ operates or controls. All 

similarly situated members are subject 

to the same fee structure, and access to 

NASDAQ is offered on fair and nondiscriminatory terms. With respect to 

the elimination of the favorable rebate 

tier for non-displayed quotes/orders, 

NASDAQ believes that the change is 

equitable in that there are no members 

that currently qualify for the tier that do 

not also qualify for the same rebate for 

non-displayed quotes/orders (and a 

higher rebate for displayed quotes/ 

orders) under another volume-based 

pricing tier; accordingly, its elimination 

will not impact the fees paid by any 

members. Moreover, NASDAQ believes 

that its liquidity provider rebates 

continue to be set at reasonable levels. 

Depending on their levels of liquidity 

provision using displayed and/or nondisplayed quotes/orders, members are 

eligible to receive a rebate of $0.0015 

per share executed for non-displayed 

quotes/orders, as well as rebates for 

displayed quotes/orders that are higher 

than the base rate of $0.0020 per share 

executed. 

With respect to its pricing change for 

members active on both the NASDAQ 

Market Center and the NASDAQ 

Options Market, NASDAQ has noted in 

its prior filings with regard to the 

existing rebate tier focused on such 

members that the tier is responsive to 

the convergence of trading in which 

members simultaneously trade different 

asset classes within a single strategy.9

NASDAQ also notes that cash equities 

and options markets are linked, with 

liquidity and trading patterns on one 

market affecting those on the other. 

Accordingly, pricing incentives that 

encourage market participant activity in 

both markets recognize that activity in 

the options markets also supports price 

discovery and liquidity provision in the 

NASDAQ Market Center. 

Because the rebates available through 

the new tier are equal to the highest 

rebates otherwise available to market 

participants, members seeking to qualify 

for the new tier are required to maintain 

fairly high levels of activity on the 

NASDAQ Market Center and the 

NASDAQ Options Market. NASDAQ 

notes, however, that the new tier is not 

the only means of qualifying for the 

rebate levels associated with the new 

tier, and that the other means do not 

require any activity on the NASDAQ 

Options Market. Specifically, any 

member that provides the levels of 

liquidity on the NASDAQ Market Center 

required under the new tier would 

already qualify for the same rebate 

($0.00295 per share for displayed 

liquidity and $0.0015 per share for nondisplayed liquidity) under existing tiers 

focused solely on volume of liquidity 

provision, as long as the liquidity was 

provided through a single MPID. Under 

the new tier, however, a member that 

could not reach the NASDAQ Stock 

Market volume levels required to earn 

the highest rebate through a single MPID 

could be eligible for the same rebate 

level if it was able to attain high volume 

levels on the NASDAQ Stock Market 

through multiple MPIDs and also 

achieved required levels of activity 

through the NASDAQ Options Market. 

Accordingly, NASDAQ believes that the 

new tier is not unreasonably 

discriminatory, because NASDAQ 

already provides alternative means to 

achieve the same rebate level without 

use of the NASDAQ Options Market. 

NASDAQ also believes that the new tier 

is reasonable and equitable because it 

will provide members with an 

alternative method to earn the highest 

rebate, thereby potentially resulting in 

reduced fees for a wider range of market 

participants. 

NASDAQ further notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

NASDAQ must continually adjust its 

fees to remain competitive with other 

exchanges and with alternative trading 

systems that are exempted from 

compliance with the statutory standards 

applicable to exchanges. In the case of 

the fee changes effected by this filing, (i) 

the elimination of the enhanced rebate 

for non-displayed liquidity will impact 

no members, since those members that 

qualify for the tier also currently qualify 

to receive the same rebate for nondisplayed quotes/orders (and a higher 

rebate for displayed quotes/orders) 

through other pricing tiers, and (ii) the 

new options tier will widen 

opportunities for market participants to 

earn the highest rebate and thereby 

reduce their fees. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Because the market for order execution 

and routing is extremely competitive, 

members may readily opt to disfavor 

NASDAQ’s execution services if they 

believe that alternatives offer them 

better value. For this reason and the 

reasons discussed in connection with 

the statutory basis for the proposed rule 

change, NASDAQ does not believe that 

the proposed changes will impair the 

ability of members or competing order 

execution venues to maintain their 

competitive standing in the financial 

markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20763 

10 15 U.S.C. 78s(b)(3)(a)(ii). 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4 . 

3See Securities Exchange Act Release No. 62886 

(September 10, 2010), 75 FR 56613 (September 16, 

2010) (SR–NSX–2010–07). 

4See Securities Exchange Act Release No. 63484 

(December 9, 2010), 75 FR 78330 (December 15, 

2010) (SR–NSX–2010–16). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.10 At any time 

within 60 days of the filing of the 

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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2011–048 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–NASDAQ–2011–048. 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 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 offices of the Exchange. 

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–NASDAQ–2011–048, and 

should be submitted on or before May 

4, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8871 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64242; File No. SR–NSX– 

2011–05] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

Its Rules To Extend Pilot Program 

Regarding Clearly Erroneous 

Executions 

April 7, 2011. 

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 April 6, 

2011, 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. 

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 to 

amend its rules to extend a certain pilot 

program regarding clearly erroneous 

executions. 

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 extend the pilot program 

currently in effect regarding clearly 

erroneous executions under NSX Rule 

11.19. Currently, unless otherwise 

extended or approved permanently, this 

pilot program will expire on April 11, 

2011. The instant rule filing proposes to 

extend the pilot program until the 

earlier of August 11, 2011 or the date on 

which the limit up/limit down 

mechanism to address extraordinary 

market volatility, if adopted, applies to 

the Circuit Breaker Securities as defined 

in Commentary .05 of Rule 11.20. 

NSX Rule 11.19 (Clearly Erroneous 

Executions) was approved by the 

Securities and Exchange Commission 

(the ‘‘Commission’’) on September 10, 

2010 on a pilot basis to end on 

December 10, 2010.3 The pilot program 

end date was subsequently extended 

until April 11, 2011.4 Similar rule 

changes were adopted by other markets 

in the national market system in a 

coordinated manner. During the pilot 

period, the Exchange, in conjunction 

with the Commission and other markets, 

has continued to assess the effectiveness 

of the pilot program. The Exchange, in 

consultation with other markets and the 

Commission, has determined that the 

duration of this pilot program should be 

extended until August 11, 2011 or to 

coincide, if applicable, with the earlier 

implementation date of the limit up/ 

limit down mechanism. Accordingly, 

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