Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 38245 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(2). 

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). 

4 17 CFR 240.19b–4(f)(2). 

19(b)(3)(A) 6 of the Act and 

subparagraph (f)(2) of Rule 19b–4 7

thereunder, because it establishes a due, 

fee, or other charge imposed by NYSE 

Arca only upon its members. 

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. In 

addition, the Commission seeks 

comment generally on whether the 

proposed elimination of the firm 

facilitation fee is equitable as that term 

is used in Section 6(b)(4) of the Act. 

Specifically: 

1. Do you agree with the Exchange’s 

claim that the proposed rule change 

‘‘creates a level playing field for all 

similarly situated participants, by 

charging a Firm Facilitation Fee of $0.00 

to all firms executing facilitation trades 

regardless of the firm’s volume’’? 

2. The Exchange further argues that 

‘‘this proposal is in fact more equitable 

than fee caps only by large broker dealer 

firms. For example, certain large broker 

dealers are capable of reaching the fee 

cap at certain options exchanges on the 

first day of trading in a given month, 

making their transaction fees equal to 

zero for the remainder of the month.’’ 

Do you believe that the Exchange’s 

argument is valid, given that the fee 

caps applied by other options exchanges 

apply to firm proprietary orders 

generally, while the Exchange is 

proposing to eliminate fees only for one 

particular type of proprietary order (firm 

facilitation orders)? 

3. The Exchange notes that, under its 

current fee schedule and industry 

practice, different types of market 

participants are often assessed different 

transaction fees. The Exchange has 

proposed to widen the differential 

between the fees charged to firms for 

facilitation transactions and the fees 

charged to other market participants 

(besides customers, who pay zero) to 

participate in the same transactions. Is 

widening the differential in this manner 

equitable as that term is used in Section 

6(b)(4) of the Act? At what point would 

the differential become so large as to be 

inequitable? 

4. Does it impose a burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act and prohibited 

under Section 6(b)(4) of the Act to 

charge firms facilitating a customer 

order no fees and charge other noncustomer members? If so, please explain 

how. 

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–NYSEArca–2009–62 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–NYSEArca–2009–62. 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 inspection and copying 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 also will be available 

for inspection and copying at the 

principal office 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–NYSEArca–2009–62 and 

should be submitted on or before 

August 21, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18272 Filed 7–30–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60378; File No. SR– 

NYSEAmex–2009–38] 

Self-Regulatory Organizations; NYSE 

Amex, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Implementing the 

Schedule of Fees and Charges for 

Exchange Services 

July 23, 2009. 

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 July 1, 

2009, NYSE Amex, LLC (‘‘NYSE Amex’’ 

or the ‘‘Exchange’’) 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 Exchange. The 

Exchange filed the proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(2) thereunder,4

which renders the proposal effective 

upon filing with the Commission. 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 changes to the 

section of its Schedule of Fees and 

Charges for Exchange Services (the 

‘‘Schedule’’). Changes to the Schedule 

pursuant to this proposal will be 

effective and operative upon filing. The 

amended section of the Schedule is 

included as Exhibit 5 hereto. 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. 

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 

self-regulatory organization included 


PWALKER on DSK8KYBLC1PROD with NOTICES
38246 Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 

5See Securities Exchange Act Release No. 59393 

(February 11, 2009), 74 FR 7721 (February 19, 2009) 

(SR–Phlx–2009–12)(increasing the Firm-Related 

Equity Option and Index Option Cap to $75,000 and 

excluding JBO participants). 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(2). 

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 those 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 

The purpose of this proposed rule 

filing is to amend the Schedule to reflect 

new transaction pricing and extend the 

waiver of the Cancellation Fee. The 

Exchange proposes to reduce the Firm 

Facilitation Fee to $0.00. Currently, the 

Firm Facilitation Fee is $0.15. The Firm 

Facilitation Fee applies to any 

transaction involving a firm’s 

proprietary trading account, which has 

a customer of that same firm on the 

contra side of the transaction. The 

Exchange proposes to reduce the Broker 

Dealer and Firm Manual fee from $0.26 

to $0.25. The Exchange also proposes to 

reduce the Broker Dealer and Firm 

Electronic Fee from $0.50 to $0.15. 

Finally, the Exchange proposes to 

extend the waiver of the Cancellation 

Fee until August 1, 2009. 

The proposed fees are part of the 

Exchange’s ongoing effort to offer 

attractive transaction rates, and will 

become operative on July 1, 2009. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act, in general, and Section 

6(b)(4), in particular, in that it provides 

for the equitable allocation of dues, fees 

and other charges among its members 

and other market participants that use 

the trading facilities of NYSE Amex. 

The Exchange believes the reduced 

Firm Facilitation Fee is equitable 

because it applies uniformly to all 

similarly situated users, specifically 

firms facilitating customer order flow. 

Reduction of the fee to zero also follows 

precedent currently in place on other 

exchanges that have established fee 

caps.5 The Exchange believes this 

proposal is in fact more equitable than 

fee caps attainable only by large broker 

dealer firms. For example, certain large 

broker dealers are capable of reaching 

the fee cap at certain options exchanges 

on the first day of trading in a given 

month, making their transaction fees 

equal to zero for the remainder of the 

month. This treatment favors larger 

firms capable of reaching the 

established fee cap. In comparison to fee 

caps, this proposed change creates a 

level playing field for all similarly 

situated participants, by charging a Firm 

Facilitation Fee of $0.00 to all firms 

executing facilitation trades regardless 

of the firm’s volume. 

The fee reduction is also consistent 

with the current fee schedule and 

industry precedent that allows for 

different rates to be charged for different 

orders types originated by dissimilarly 

classified market participants. The 

Exchange, along with other options 

exchanges, currently applies different 

rates to firms facilitating their own 

customer order flow as opposed to 

solicited orders. The degree of 

difference between the rates charged for 

different order types is the result of 

competitive forces in the marketplace 

and reflects certain competitive 

differences amongst market participants. 

For example, under the Exchange’s 

current fee schedule, the customer side 

of a firm facilitation trade is $0.00, 

while the facilitation side is currently 

$0.15. The current $0.15 Facilitation Fee 

is $0.11 less than the $0.26 charged for 

manual broker dealer executions and 

$0.02 less than the market maker nondirected fee of $0.17. These differences 

exist, in part, because customers have 

historically been at a competitive 

disadvantage in the options markets as 

compared to firms actively engaged in 

the market, thus firms are appropriately 

incentivized to facilitate customer order 

flow. The Exchange believes that 

reducing the Firm Facilitation Fee to 

zero follows existing precedent for rate 

differentials and further encourages 

firms to facilitate customer order flow, 

thereby assisting customers in their 

attempt to transact in the options 

markets. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 6 of the Act and 

subparagraph (f)(2) of Rule 19b–4 7

thereunder, because it establishes a due, 

fee, or other charge imposed by NYSE 

Amex only upon its members. 

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. In 

addition, the Commission seeks 

comment generally on whether the 

proposed elimination of the firm 

facilitation fee is equitable as that term 

is used in Section 6(b)(4) of the Act. 

Specifically: 

1. Do you agree with the Exchange’s 

claim that the proposed rule change 

‘‘creates a level playing field for all 

similarly situated participants, by 

charging a Firm Facilitation Fee of $0.00 

to all firms executing facilitation trades 

regardless of the firm’s volume’’? 

2. The Exchange further argues that 

‘‘this proposal is in fact more equitable 

than fee caps only by large broker dealer 

firms. For example, certain large broker 

dealers are capable of reaching the fee 

cap at certain options exchanges on the 

first day of trading in a given month, 

making their transaction fees equal to 

zero for the remainder of the month.’’ 

Do you believe that the Exchange’s 

argument is valid, given that the fee 

caps applied by other options exchanges 

apply to firm proprietary orders 

generally, while the Exchange is 

proposing to eliminate fees only for one 

particular type of proprietary order (firm 

facilitation orders)? 

3. The Exchange notes that, under its 

current fee schedule and industry 

practice, different types of market 

participants are often assessed different 

transaction fees. The Exchange has 

proposed to widen the differential 

between the fees charged to firms for 

facilitation transactions and the fees 

charged to other market participants 

(besides customers, who pay zero) to 


PWALKER on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 38247 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

participate in the same transactions. Is 

widening the differential in this manner 

equitable as that term is used in Section 

6(b)(4) of the Act? At what point would 

the differential become so large as to be 

inequitable? 

4. Does it impose a burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act and prohibited 

under Section 6(b)(4) of the Act to 

charge firms facilitating a customer 

order no fees and charge other noncustomer members? If so, please explain 

how. 

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–NYSEAmex–2009–38 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–NYSEAmex-2009–38. 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 inspection and copying 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 also will be available 

for inspection and copying at the 

principal office 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–NYSEAmex–2009–38 and 

should be submitted on or before 

August 21, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18271 Filed 7–30–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60384; File No. SR– 

NASDAQ–2009–071] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change to Modify Its 

Optional Anti-Internalization 

Functionality 

July 24, 2009. 

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 July 22, 

2009, The NASDAQ Stock Market LLC 

(the ‘‘Exchange’’ or ‘‘Nasdaq’’) 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 

Exchange has designated the proposed 

rule change as effecting a change 

described under Rule 19b–4(f)(6) under 

the Act,3 which renders the proposal 

effective upon filing with the 

Commission. 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 is filing with the 

Commission a proposed rule change to 

modify its optional anti-internalization 

functionality. 

The text of the proposed rule change 

is below. Proposed new language is 

underlined and proposed deletions are 

in brackets. 

* * * * * 

4757. Book Processing 

(a) System orders shall be executed 

through the Nasdaq Book Process set 

forth below: 

(1)–(3) No Change. 

(4) Exception: Anti-Internalization— 

Market participants may direct that 

quotes/orders entered into the System 

not execute against quotes/orders 

entered under the same MPID. [In such 

a case, the later entered of the quote/ 

orders will be cancelled back to the 

entering party.] In such a case, if the 

interacting orders from the same MPID 

are equivalent in size, both orders will 

be cancelled back to their entering 

parties. If the interacting orders from the 

same MPID are not equivalent in size, 

share amounts equal to size of the 

smaller of the two orders will be 

cancelled back to their originating 

parties with the remainder of the larger 

order being retained by the System for 

potential execution. 

* * * * * 

(b) and (c) Not applicable. [sic] 

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 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 proposing to modify its 

voluntary anti-internalization 

functionality. Under the proposal, 

market participants entering quotes/ 

orders under a specific market 

participant identifier (‘‘MPID’’) may 

voluntarily direct that they not execute 

against other quotes/orders entered into 

the System under the same MPID. In 

such a case, if the orders from the same 

MPID are equivalent in size, both orders 

will be cancelled back to their entering 

parties. If the orders from the same 

MPID are not equivalent in size, share 

amounts equal to [sic] size of the 

smaller of the two orders will be 

cancelled back to their respective 

originating parties with the remainder of 

the larger order being retained by the 

System for potential execution. 

The above replaces Nasdaq’s currently 

approved, but not yet operational, antiinternalization functionality that would 


PWALKER on DSK8KYBLC1PROD with NOTICES