7642 Federal Register / Vol. 75, No. 34 / Monday, February 22, 2010 / Notices 

6For more information on dematerialization, see 

Securities Exchange Act Release No. 49405 (March 

11, 2004), 69 FR 12922 (March 18, 2004) ([File No. 

S7–13–04]). 

7 DWAC is a method of electronically transferring 

shares between a DTC Participant and the transfer 

agent for the shares. For more information about the 

DWAC service, see Securities Exchange Act Release 

No. 30283 (January 23, 1992), 56 FR 59307 

(November 18, 1991) (SR–DTC–91–16) (order 

granting approval of the DWAC service). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

participant, an investor, or a third party. 

Upon receipt of a WT instruction from 

a participant, DTC either sends a 

certificate to the transfer agent for 

reregistration in the name of the person 

or entity identified in the WT 

instruction or instructs the transfer 

agent to debit DTC’s FAST position and 

to issue securities in the name of the 

person or entity identified in the WT 

instruction. 

As part of DTC’s response to an 

industry effort to reduce the number of 

securities certificates in the U.S. market 

(sometimes referred to as 

‘‘dematerialization’’),6 DTC initiated a 

program of steadily increasing its fees 

for WTs and other withdrawals to create 

strong disincentives for the use of 

physical certificates. Consistent with 

that program, DTC is now proposing to 

eliminate a participant’s ability to use 

the WT service to have physical 

certificates issued for unsponsored 

ADRs that are a part of the FAST 

Program. DTC believes that this 

modification of its WT service reaffirms 

its goals of reducing the number of 

securities certificates in the U.S. 

markets. DTC participants will continue 

to have the ability to request a physical 

certificate directly from the transfer 

agent by using the DWAC process.7

The proposed rule change is 

consistent with the requirements of the 

Securities Exchange Act of 1934, as 

amended (‘‘Act’’), and the rules and 

regulations thereunder because it 

modifies a DTC service in order to 

reduce the use of physical certificates 

and the inherent risks associated with 

the use of physical certificates and as 

such facilitates the prompt and accurate 

clearance and settlement of securities. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

DTC does not believe that the 

proposed rule change would impose any 

burden on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments relating to the 

proposed rule change have not been 

solicited or received. DTC will notify 

the Commission of any written 

comments received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within thirty-five days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

ninety days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the proposed 

rule change or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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–DTC–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–DTC–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 Section, 100 F Street, NE., 

Washington, DC 20549–1090, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filings 

will also be available for inspection and 

copying at the principal office of DTC 

and on DTC’s Web site at http://

www.dtcc.com/downloads/legal/ 

rule_filings/2010/dtc/2010-03.pdf. 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–DTC–2010–03 and should 

be submitted on or before March 15, 

2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3329 Filed 2–19–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61515; File No. SR– 

NASDAQ–2010–014] 

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 and To Correct a 

Typographical Error in Rule 7018 

February 12, 2010. 

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 January 

26, 2010, 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. Pursuant to 

Section 19(b)(3)(A)(ii) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 NASDAQ 

has designated this proposal as 

establishing or changing a due, fee, or 

other charge, which renders the 

proposed rule change effective upon 

filing. The Commission is publishing 

this notice to solicit comments on the 


cprice-sewell on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 34 / Monday, February 22, 2010 / Notices 7643 

5The Commission notes that the ‘‘typographical 

error in Rule 7018’’ is more accurately characterized 

as a drafting error by Nasdaq that resulted in the 

omission and misplacement of rule language. 

6See http://www.directedge.com/SubscriberInfo/ 

FeeSchedule.aspx. 

7 17 CFR 242.610. 

8Securities Exchange Act Release No. 60430 

(August 4, 2009), 74 FR 40279 (August 11, 2009) 

(SR–NASDAQ–2009–072). 

9 17 CFR 240.19b–4(f)(1). 

10 17 CFR 240.19b–4(f)(2). 

11See http://www.sec.gov/rules/sro/nasdaq/2009/ 

34-60430.pdf. 

12See Securities Exchange Act Release No. 60430 

(August 4, 2009), 74 FR 40279 (August 11, 2009) 

(SR–NASDAQ–2009–072). 

13See http://www.nasdaqtrader.com/ 

Trader.aspx?id=PriceListTrading2. 

14SR–NASDAQ–2010–015 (January 26, 2010). 

15 15 U.S.C. 78f. 

16 15 U.S.C. 78f(b)(4). 

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, and to correct 

a typographical error in Rule 7018.5

NASDAQ will implement the proposed 

change to Rule 7018(b) on February 1, 

2010, and will implement the remainder 

of the filing immediately upon filing. 

The text of the proposed rule change is 

available at http:// 

nasdaqomx.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 modifying its fee 

structure for securities that execute at 

prices below $1. For these securities, 

NASDAQ currently charges members 

accessing liquidity a fee equal to 0.1% 

(10 basis points) of the total transaction 

cost and provides no credit to members 

providing liquidity. Under the new fee 

structure, members accessing liquidity 

will be charged 0.3% (30 basis points) 

of the total transaction cost, and 

members providing liquidity will be 

provided a credit equal to 0.2% (20 

basis points) of the total transaction 

cost. The change is intended to provide 

a competitive response to another 

trading venue that has adopted a similar 

‘‘maker-taker’’ pricing structure for 

securities priced below $1.6 The 

proposal is consistent with the 

provisions of Rule 610 under Regulation 

NMS 7 that govern access fees. 

NASDAQ is also proposing to correct 

a typographical error in Rule 7018. In 

SR–NASDAQ–2009–072,8 NASDAQ 

submitted a proposed rule change to 

make clerical changes designed to 

streamline and simplify Rule 7018. As 

stated in the ‘‘Purpose’’ section of 

NASDAQ’s Form 19b–4 filing, ‘‘[n]one 

of the clerical changes will modify any 

fee assessed or credit earned for trading 

on the NASDAQ Market Center.’’ 

However, due to a typographical error, 

Exhibit 5 introduced inaccuracies into 

the provisions of the rule describing the 

fees for orders in securities listed on the 

New York Stock Exchange (‘‘NYSE’’) that 

are routed to other venues without 

attempting to execute in NASDAQ for 

the full size of the order prior to routing. 

This portion of the fee schedule had 

previously been divided between 

sections governing fees for orders in 

NYSE-listed securities executed at 

NYSE and fees for orders executed at 

other venues. Both sections had 

included catch-all provisions governing 

‘‘other’’ orders that did not fit into more 

defined categories of routed orders; 

these catch-all provisions apply 

specifically to directed orders that are 

not designated as intermarket sweep 

orders (i.e., immediate-or-cancel orders 

that are directed to route to a venue 

specified by the member, and that may 

be executed by the receiving venue only 

if its quotation is at the national best bid 

or offer). In the case of such orders 

routed to NYSE, the fee is either $0.0020 

per share executed, or $0.0019 per share 

executed for members with an average 

daily volume through the Nasdaq 

Market Center in all securities during 

the month of more than 35 million 

shares of liquidity provided. In the case 

of such orders routed to other venues, 

the fee is $0.0035 per share executed. 

However, language describing the fee for 

routing to other venues was 

inadvertently deleted, while language 

describing the fee for routing to NYSE 

was moved but without language that 

had formerly limited its applicability to 

orders sent to NYSE. Accordingly, a 

reader of the amended rule may 

conclude that the fee of $0.0020 or 

$0.0019 per share executed is applicable 

to ‘‘other’’ orders routed to venues other 

than NYSE. 

As noted above, however, the filing 

that introduced this error in Rule 7018 

stated that it was not modifying any fees 

or credits, and in fact, was filed as a 

‘‘stated policy, practice, or interpretation 

with respect to the meaning, 

administration, or enforcement of an 

existing rule’’ under SEC Rule 19b– 

4(f)(1) 9 rather than a fee change under 

SEC Rule 19b–4(f)(2).10 Moreover, 

NASDAQ’s intent not to modify fees 

through SR–NASDAQ–2009–072 was 

reflected in the Commission’s notice of 

the filing on the SEC Web site 11 and in 

the Federal Register,12 and the 

applicable fees have been accurately 

described in the pricing schedule that 

appears on NASDAQ’s Web site.13

Accordingly, this filing corrects the 

typographical error. NASDAQ has been 

billing members in accordance with the 

correct fees since the effective date of 

SR–NASDAQ–2009–072 on July 24, 

2009, and accordingly believes that all 

of its members are cognizant of the 

correct fee. However, because this filing 

is immediately effective and therefore 

cannot take effect retroactively, 

NASDAQ is also submitting a filing for 

notice and comment under Section 

19(b)(2) of the Act to seek Commission 

approval for charging the correct fee 

during the period from July 24, 2009 

through January 25, 2010.14 Finally, 

NASDAQ is making non-substantive 

changes to Rule 7018 to reflect clearly 

that the category of ‘‘other’’ fees is, with 

respect to all types of securities, a 

charge for directed orders where the fees 

are not described by other provisions of 

Rule 7018. NASDAQ believes that this 

change will enhance the clarity of the 

rule. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,15 in 

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

Act,16 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. 

NASDAQ is adapting the ‘‘maker-taker’’ 

pricing model that is prevalent across 

most U.S. transaction venues for 

securities priced at $1 or higher and 

applying it securities priced below $1. 

This change is a competitive response to 


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7644 Federal Register / Vol. 75, No. 34 / Monday, February 22, 2010 / Notices 

17 15 U.S.C. 78s(b)(3)(a)(ii). 

18 17 CFR 240.19b–4(f)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(2). 

another trading venue that has already 

introduced this pricing model for lowpriced securities. The change will result 

in a fee increase for firms when they 

access liquidity in these securities and 

a fee reduction for firms when they 

provide liquidity in these stocks. 

NASDAQ is also correcting a 

typographical error in Rule 7018. 

The impact of the changes upon the 

net fees paid by a particular market 

participant will depend upon a number 

of variables, including the prices of the 

market participant’s quotes and orders 

relative to the national best bid and offer 

(i.e., its propensity to add or remove 

liquidity) and the extent to which it 

trades in low-priced securities. 

NASDAQ notes that it operates in a 

highly competitive market in which 

market participants can readily direct 

order flow to competing venues if they 

deem fee levels at a particular venue to 

be excessive. NASDAQ believes that the 

change will further enhance the 

competitiveness of its fees in 

comparison with those charged by other 

venues, and that its fees are reasonable 

and equitably allocated to members on 

the basis of whether they opt to direct 

orders to NASDAQ. 

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. 

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. 

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 17 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder.18 At any time within 60 

days of the filing of the 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. 

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–2010–014 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–2010–014. 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–2010–014, and 

should be submitted on or before March 

15, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3332 Filed 2–19–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61512; File No. SR– 

NYSEArca–2010–05] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Its Fee 

Schedule 

February 12, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

28, 2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ 

or the ‘‘Exchange’’) through its whollyowned subsidiary NYSE Arca Equities, 

Inc. (‘‘NYSE Arca Equities’’), filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. NYSE Arca 

filed the proposal pursuant to Section 

19(b)(3)(A) 4 of the Act and Rule 19b– 

4(f)(2) 5 thereunder. 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Schedule of Fees and Charges for 

Exchange Services (the ‘‘Schedule’’). 

While changes to the Schedule pursuant 

to this proposal will be effective upon 

filing, the changes will become 

operative on February 1, 2010. The text 

of the proposed rule change is available 

on the Exchange’s Web site at http:// 

www.nyse.com, on the Commission’s 

Web site at http://www.sec.gov, at the 

Exchange, and at the Commission’s 

Public Reference Room. A copy of this 

filing is available on the Exchange’s 

Web site at http://www.nyse.com, at the 

Exchange’s principal office and at the 

Commission’s Public Reference Room. 


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