Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 / Notices 51903 

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

2 17 CFR 240.19b–4. 

3References to ISE Members in this filing refer to 

DECN Subscribers who are ISE Members. 

4See Securities and Exchange Act Release No. 

60232 (July 2, 2009), 74 FR 33309 (July 10, 2009) 

(SR–ISE–2009–43). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60769; File No. SR–ISE– 

2009–68] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating To Amending the 

Direct Edge ECN Fee Schedule 

October 2, 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 

September 30, 2009, the International 

Securities Exchange, LLC (the 

‘‘Exchange’’ or the ‘‘ISE’’) 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 self-regulatory 

organization. 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 

Direct Edge ECN’s (‘‘DECN’’) fee 

schedule for ISE Members 3 to (i) adopt 

new fees and rebates and associated 

flags; (ii) amend the criteria for meeting 

the Ultra Tier; (iii) to amend the 

descriptions of certain flags in the 

schedule; and (iv) to amend its fee 

schedule to reflect pass through charges 

of other market centers. All of the 

changes described herein are applicable 

to ISE Members. 

All of the changes described herein 

are applicable to ISE Members. The text 

of the proposed rule change is available 

on the Exchange’s Internet Web site at 

http://www.ise.com. 

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 

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 self-regulatory organization 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 

DECN, a facility of ISE, operates two 

trading platforms, EDGX and EDGA. On 

July 1, 2009,4 the Exchange adopted a 

new Ultra Tier Rebate, as defined below, 

whereby ISE Members are provided a 

$0.0032 rebate per share for securities 

priced at or above $1.00 when ISE 

Members add liquidity on EDGX if the 

attributed MPID satisfies one of the 

following criteria on a daily basis, 

measured monthly: (i) Adding 

100,000,000 shares or more on EDGX; or 

(ii) adding 50,000,000 shares or more of 

liquidity to EDGX, so long as added 

liquidity on EDGX is at least 20,000,000 

shares greater than the previous 

calendar month. The rebate described 

above is referred to as an ‘‘Ultra Tier 

Rebate’’ on the DECN fee schedule. 

The Exchange is now proposing to 

amend the criteria for meeting this tier 

by allowing ISE Members to receive a 

$0.0032 rebate per share for securities 

priced at or above $1.00 when ISE 

Members add liquidity on EDGX if the 

attributed MPID posts 1% of the Total 

Consolidated Volume (‘‘TCV’’) in 

average daily volume (‘‘ADV’’). TCV is 

defined as volume reported by all 

exchanges and trade reporting facilities 

to the consolidated transaction reporting 

plans for Tape A, B, and C securities. At 

the same time, the Exchange is 

proposing to delete the Full Sweep Tier, 

which provided a $0.0035 rebate per 

share for liquidity added on EDGX if the 

attributed MPID added 50,000,000 

shares or more on a daily basis, 

measured monthly, by using the ROUT 

routing strategy. 

The Ultra Tier rebate ($0.0032 per 

share), which is a higher rebate than the 

Super Tier ($0.0030 per share), is also 

more difficult to reach than the Super 

Tier rebate, as a higher volume 

threshold is required based on recent 

TCV figures. For example, 1% of the 

average TCV for July 2009 (8.8 billion) 

was approximately 88 million shares. 

This threshold far exceeds the criteria to 

meet the Super Tier rebate. In addition, 

the higher rebate also results in part 

from lower administrative costs 

associated with higher volume. 

The Exchange also proposes to adopt 

additional fees and rebates. First, the 

Exchange proposes to add new fee 

categories for the INET order type. 

When a member routes to Nasdaq using 

the INET order type and removes 

liquidity on Tapes A or C, the member 

would incur a fee of $0.0030 on either 

EDGA or EDGX. Such situation would 

yield new Flag ‘‘L’’. The INET order 

type sweeps the EDGA or EDGX book, 

and routes the remainder to Nasdaq. If 

the order is marketable, it will remove 

liquidity from the EDGA or EDGX book, 

as applicable, first. If the order is nonmarketable, the order will post on 

Nasdaq. With regards to a Member’s use 

of the INET order type for Tapes A or 

C securities, Members routing an ADV: 

(i) Less than 5,000,000 shares will be 

charged $0.0030 per share, as described 

in the schedule; (ii) equal to or greater 

than 5,000,000 shares but less than 

20,000,000 shares will be charged 

$0.0027 per share; (iii) equal to or 

greater than 20,000,000 shares but less 

than 30,000,001 shares will be charged 

$0.0026 per share; and (iv) equal to or 

greater than 30,000,001 shares will be 

charged $0.0025 per share. The rates, in 

all cases, are calculated for shares 

removed from Nasdaq. The Exchange 

believes that these tier-based rates will 

incent Members to sweep the EDGA or 

EDGX book first and then offer a 

discounted rate to Nasdaq’s rates if the 

remainder of the order is routed to 

Nasdaq. These discounted rates arise in 

part from reduced administrative costs 

associated with certain volume levels. 

Similarly, the Exchange also proposes 

to add an additional fee category for the 

INET order type when a member routes 

to Nasdaq using the INET order type 

and removes liquidity on Tape B. Such 

situation would yield new flag ‘‘2’’. 

With regards to a Member’s use of the 

INET order type for Tape B securities, 

Members routing an ADV: (i) Less than 

20,000,000 shares will be charged 

$0.0030 per share, as described in the 

schedule; (ii) equal to or greater than 

20,000,000 but less than 30,000,001 

shares will be charged $0.0029 per 

share; and (iii) equal to or greater than 

30,000,001 shares will be charged 

$0.0028 per share. 

Furthermore, the Exchange proposes 

to adopt a new rebate. Members will 

receive a rebate of $0.0032 per share for 

all liquidity posted on EDGX if they add 

or route at least 10,000,000 shares of 

ADV to EDGX prior to 9:30 AM EST or 

after 4:00 PM EST (includes all flags 

except N and W) and add a minimum 

of 75,000,000 shares of ADV on EDGX 

in total, including during both market 

hours and pre- and post-trading hours. 

This rebate is designed to reward 

members who add or route significant 

order flow to EDGX both during market 

mstockstill on DSKH9S0YB1PROD with NOTICES

51904 Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 / Notices 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 19b–4(f)(2). 

9 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a et seq. 

3 17 CFR 240.19b–4. 

hours and pre and post-trading hours. It 

is also designed to increase the liquidity 

of the pre and post markets. 

The Exchange proposes to amend the 

descriptions of the ‘‘N’’ and ‘‘W’’ flags 

to display which Tape liquidity is 

removed from. For the ‘‘N’’ flag, the 

Exchange proposes to amend the 

description to state that liquidity is 

removed from Tapes B & C. For the ‘‘W’’ 

flag, the Exchange proposes to amend 

the description to state that liquidity is 

removed from Tape A. 

Finally, the Exchange proposes to 

pass through to Exchange members the 

actual transaction fees assessed by away 

markets. Specifically, the Exchange is 

proposing to amend its fees schedule to 

reflect Nasdaq’s reduction in rebate 

from 0.0006 to 0.0001 for removing 

liquidity from Nasdaq OMX BX. 

The fee changes discussed in this 

filing will become operative on October 

1, 2009. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,5

in general, and furthers the objectives of 

Section 6(b)(4),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 its facilities. In 

particular, adopting an additional rebate 

and providing tier-based rates if 

Members use the INET order type 

provide pricing incentives to market 

participants who route orders to DECN, 

allowing DECN to remain competitive. 

ISE notes that DECN 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. The proposed rule change 

reflects a competitive pricing structure 

designed to incent market participants 

to direct their order flow to DECN. ISE 

believes the fees and credits remain 

competitive with those charged by other 

venues and therefore continue to be 

reasonable and equitably allocated to 

those members that opt to direct orders 

to DECN rather than competing venues. 

The rebates also provide incentives to 

members who add or route significant 

order flow to EDGX both during market 

hours and pre and post-trading hours 

and are designed to increase the 

liquidity of the pre and post markets. 

Finally, the Exchange believes that the 

proposed rates are equitable in that they 

apply uniformly to all Members and 

provide higher rebates for higher 

volume thresholds, resulting from lower 

administrative costs. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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) of 

the Act 7 and Rule 19b–4(f)(2) 8

thereunder. At any time within 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. 

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–ISE–2009–68 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–ISE–2009–68. 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 ISE. 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–ISE–2009–68 and should be 

submitted on or before October 29, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24263 Filed 10–7–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60768; File No. SR–NYSE– 

2009–98] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC To Discontinue 

Rebates Paid to Floor Brokers for 

Orders Swept Into the Close 

October 2, 2009. 

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 

September 24, 2009, New York Stock 

Exchange LLC (the ‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

mstockstill on DSKH9S0YB1PROD with NOTICES