15742 Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 

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). 

5Regulatory Circular 06–011, issued on October 

19, 2006. 

6On November 14, 2006, a new NSTS Fee 

Schedule became effective. See Securities Exchange 

Act Release No. 54753 (November 14, 2006), 71 FR 

67678 (November 22, 2006) (SR–NSX–2006–14). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55541; File No. SR–NSX–

2007–01] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change and 

Amendment No. 1 Thereto to Modify 

Fees for Transactions Executed 

Through NSTS and ITS Plans 

March 27, 2007. 

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 February 

5, 2007, the National Stock Exchange, 

Inc. (‘‘NSX’’ or ‘‘Exchange’’) 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 substantially prepared by the 

Exchange. On March 19, 2007, NSX 

submitted Amendment No. 1 to the 

proposed rule change. NSX has filed the 

proposal 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, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing various 

amendments to its fees for transactions 

executed through National Securities 

Trading System (‘‘NSTS’’), the 

Exchange’s legacy trading system, so 

that this fee schedule will correspond 

more closely to the existing fees for 

transactions executed through NSX 

BLADE, the Exchange’s new trading 

platform. These amendments involve 

proposed changes to old NSX Rule 

11.10(A) (which is applicable to NSTS 

transactions), and the associated NSTS 

Fee Schedule. The Exchange is also 

proposing corresponding changes to its 

Fee Schedule applicable to transactions 

under the Intermarket Trading System 

Plan and/or the Plan for the purpose of 

Creating and Operating an Intermarket 

Communications Linkage (‘‘ITS Plans’’) 

for transactions executed through the 

ITS Plans (‘‘ITS Transactions’’). The text 

of the proposed rule change is available 

at NSX, the Commission’s Public 

Reference Room, and http:// 

www.nsx.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, 

NSX 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. NSX 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 

Background 

The Exchange has created a new state 

of the art trading platform, known as 

NSX BLADE, which utilizes a strict 

price/time priority system as the 

ultimate replacement for NSTS. The 

Exchange is in the midst of phasing in 

NSX BLADE. NSX BLADE was 

launched on October 23, 2006. As of the 

date of the initial filing of this proposed 

rule change, all Tape ‘‘C’’ securities 

have been phased into NSX BLADE 

from NSTS, and the Exchange plans to 

transition all Tape ‘‘A’’ and Tape ‘‘B’’

securities from NSTS to NSX BLADE in 

the near future. 

During this transitional period of 

phasing in various securities to NSX 

BLADE, the Exchange will be operating 

both NSTS and NSX BLADE. Until such 

securities are phased into NSX BLADE, 

Tape ‘‘A’’ and ‘‘B’’ securities will 

continue to be traded via NSTS. 

Rule Set 

During this transitional period of 

phasing in various securities to NSX 

BLADE, the Exchange is operating both 

NSTS and NSX BLADE. Accordingly, 

the Exchange is operating under two 

sets of rules during this phase-in period. 

All transactions in NSTS are operating 

under the rules pertaining to NSTS (old 

Rule 11.9 (National Securities Trading 

System) and old Rule 11.10 (National 

Securities Trading System Fees) and any 

associated Fee Schedule) while all 

transactions in NSX BLADE are 

operating under the NSX BLADE trading 

rules approved in SR–NSX–2006–03 

and the new fee rules in Chapter XVI of 

the Exchange Rules. When the phase-in 

is complete and NSTS is no longer 

operational, old Rules 11.9 and 11.10 

(and any associated NSTS Fee 

Schedule) will be extinguished. The 

Exchange has issued a Notice to ETP 

Holders to advise them of the different 

trading systems and rules and fees 

applicable to each,5 and will issue a 

Notice advising them of the fee changes 

with this rule change. During this 

interim period, the Exchange has 

created a Fee Schedule applicable to 

NSTS Rules (‘‘NSTS Fee Schedule’’) 

under the authority of NSX Rule 16.1.6

Further, while the Fee Schedule for ITS 

Transactions is identical to the Fee 

Schedule for identical transactions 

entered in NSTS, the Exchange has 

decided to create a Fee Schedule for ITS 

Transactions to make it easier for parties 

to identify the specific fees associated 

with the ETP Holder’s transactions. 

Fee Proposal 

In the instant rule filing, the Exchange 

is proposing amendments to old Rule 

11.10(A) and the associated NSTS Fee 

Schedule relating to transactions in 

Tape ‘‘A’’ and ‘‘B’’ securities on NSTS, 

and is proposing corresponding 

amendments to its Fee Schedule for ITS 

Transactions. As amended, old Rule 

11.10(A) and the associated NSTS Fee 

Schedule would provide for an 

execution fee of $0.0030 per share for 

removing liquidity from NSTS (in other 

words, a charge for taking liquidity 

against an order in NSTS), and a rebate 

of $0.0030 per share executed for adding 

liquidity into NSTS (in other words, a 

rebate for the addition of liquidity to 

NSTS, provided that it results in an 

execution through NSTS). Thus, ETP 

Holders taking liquidity against an order 

in NSTS will be charged a fee of $0.0030 

per share executed, and ETP Holders 

providing liquidity into NSTS will be 

paid a rebate of $0.0030 per share 

executed. In connection with this rule 

change, language is also proposed to be 

added to the NSTS Fee Schedule stating 

that with respect to ITS Transactions 

executed through NSTS, the Exchange 

will pay the applicable liquidity 

provider rebate only after it receives 

payment of the liquidity taker fee 

applicable to the execution. 

This liquidity taker fee and liquidity 

provider rebate are proposed to replace 

the current transaction fees applicable 

to transactions in Tape ‘‘A’’ and ‘‘B’’

securities on NSTS. Currently, old Rule 

11.10(A) provides for a variety of fees 

for executions in Tape ‘‘A’’ securities, 

and the NSTS Fee Schedule provides for 


hsrobinson on PROD1PC76 with NOTICES
Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 15743 

7All Tape ‘‘C’’ securities have been transitioned 

to NSX BLADE, so there will be no Tape ‘‘C’’

transactions on NSTS. 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(4). 

10 15 U.S.C. 78f(b)(1). 

11 15 U.S.C. 78s(b)(3)(A)(ii). 

12 17 CFR 240.19b–4(f)(2). 

13 15 U.S.C. 78s(b)(3)(C). For purposes of 

calculating the 60-day period within which the 

Commission may summarily abrogate the proposal, 

the Commission considers the period to commence 

on March 19, 2007, the date on which the Exchange 

submitted Amendment No. 1. 

a $0.0030 per share liquidity taker fee 

and a $0.0027 per share liquidity 

provider rebate for executions in Tape 

‘‘B’’ securities. These fees and rebates 

are proposed to be removed and 

replaced with the fee structure 

described herein.7 In connection with 

this filing, the Exchange also proposes 

to remove $50,000 monthly transaction 

fee cap for transactions on NSTS that is 

currently provided for in old Rule 

11.10(A)(i), and the quotation fee that is 

currently provided for in old Rule 

11.10(A)(s). The Exchange is proposing 

these changes to its fees for NSTS 

transactions in order to harmonize its 

NSTS fees with the fees applicable to 

transactions executed through NSX 

BLADE. One of the proposed changes 

described above—the proposed new 

language in the NSTS Fee Schedule 

relating to the timing of liquidity 

provider rebate payments on ITS 

Transactions—is a policy change and, as 

of the date of the initial filing of this 

rule change, similar language was not 

contained in the Fee Schedule 

applicable to transactions executed 

through NSX BLADE. 

The liquidity taker fee and liquidity 

provider rebate described above are 

contained in the NSTS Fee Schedule. 

The NSTS Fee Schedule supplements 

the fees and rebates contained in old 

NSX Rule 11.10. If the NSTS Fee 

Schedule does not contravene any fees 

stated in old NSX Rule 11.10, the ETP 

Holder effecting a transaction via NSTS 

will be charged the fees noted in old 

NSX Rule 11.10. 

Changes are also being proposed to 

the Fee Schedule for ITS Transactions, 

to provide for a corresponding $0.0030 

per share liquidity taker fee for ITS 

Transactions executed through NSTS. 

Thus ETP Holders taking liquidity will 

be charged under the NSTS Fee 

Schedule, and executions through an 

ITS Plan will be charged under the Fee 

Schedule for ITS Transactions (although 

the rates of the two execution fees are 

identical). The Exchange bills non-ETP 

Holders using the facilities of the 

Exchange for ITS Transactions under 

the Fee Schedule for ITS Transactions. 

Pursuant to NSX Rule 16.1(c), the 

Exchange will ‘‘provide ETP Holders 

with notice of all relevant dues, fees, 

assessments and charges of the 

Exchange.’’ ETP Holders and others, 

including self-regulatory organizations 

that are the subject of exchange-toexchange billing, using the Exchange 

will be advised of these fees through the 

Exchange’s Web site. In addition, ETP 

Holders will, simultaneously with this 

filing, be notified through the issuance 

of a Regulatory Circular of the changes 

to the Fee Schedules applicable to 

transactions through NSTS and the ITS 

Plans. 

The fees have been designed in this 

manner in order to ensure that the 

Exchange can continue to fulfill its 

obligations under the Act. 

2. Statutory Basis 

NSX believes that the proposed rule 

change is consistent with the provisions 

of Section 6 of the Act,8 in general, and 

with Sections 6(b)(4) of the Act,9 in 

particular, in that the proposal provides 

for the equitable allocation of reasonable 

dues, fees, and other charges. In 

addition, NSX believes that the 

proposed rule change furthers the 

objectives of Section 6(b)(1) of the Act 10

in that it helps to assure that the 

Exchange is so organized and has the 

capacity to be able to carry out the 

purposes of the Act and to comply, and 

to enforce compliance by its ETP 

Holders with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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. 

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 foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 11 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder 12 because it establishes or 

changes a due, fee, or other charge 

applicable only to a member imposed by 

the self-regulatory organization. 

Accordingly, the proposal is effective 

upon Commission receipt of the filing. 

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.13

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–NSX–2007–01 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NSX–2007–01. 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. Copies of the filing also will be 

available for inspection and copying at 

the principal office of NSX. 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–2007–01 and should 


hsrobinson on PROD1PC76 with NOTICES
15744 Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Amendment No. 1. 

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

5 17 CFR 240.19b–4(f)(6). The Commission 

considers the 60-day abrogation period to have 

commenced on March 19, 2007, the date NSX filed 

Amendment No. 1. 

6See Securities Exchange Act Release No. 53963 

(June 8, 2006), 71 FR 34660 (June 15, 2006) (order) 

(SR–NSX–2006–034). 

7Regulatory Circular 06–011, issued on October 

19, 2006. 

be submitted on or before April 23, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5984 Filed 3–30–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55542; File No. SR–NSX–

2007–02] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change and 

Amendment No. 1 Thereto to Amend 

the Exchange’s Tape Rebate Programs 

for Transactions Through NSTS to 

Establish an Equivalent Tape A Rebate 

Program 

March 27, 2007. 

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 February 

15, 2007, the National Stock Exchange, 

Inc. (‘‘NSX’’ or ‘‘Exchange’’) 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 substantially by NSX. 

NSX amended the proposed rule change 

on March 19, 2007.3 NSX filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act4 and Rule 

19b–4(f)(6) thereunder,5 which renders 

it effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

old NSX Rule 11.10(A)(1), which is 

applicable to transactions through the 

Exchange’s legacy trading system, 

National Securities Trading System 

(‘‘NSTS’’), to provide for a rebate 

program for Tape A securities that is 

equivalent to the Exchange’s current 

Tape A rebate program applicable to 

transactions executed through the 

Exchange’s new trading system, NSX 

BLADE. This proposed Tape A rebate 

program is also equivalent to the 

Exchange’s current Tape B and Tape C 

rebate programs applicable to NSTS an 

NSX BLADE transactions. 

The text of the proposed rule change 

is available at NSX, http:// 

www.nsx.com, and 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, 

NSX 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. NSX 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 

NSX proposes to amend old Exchange 

Rule 11.10(A)(1), which is applicable to 

transactions through NSTS, to provide 

for a rebate program for Tape A 

securities that is equivalent to the 

Exchange’s current Tape A rebate 

program applicable to transactions 

executed through NSX BLADE. This 

proposed Tape A rebate program is also 

equivalent to the Exchange’s current 

Tape B and Tape C rebate programs 

applicable to NSTS and NSX BLADE 

transactions. 

The Exchange has created a new 

trading platform, known as NSX 

BLADE, which uses a strict price/time 

priority system as the ultimate 

replacement for NSTS. The Exchange is 

in the midst of phasing in NSX BLADE. 

NSX BLADE was launched on October 

23, 2006. As of the date of the initial 

filing of this proposed rule change, all 

Tape C securities have been phased into 

NSX BLADE from NSTS, and the 

Exchange plans to transition all Tape A 

and Tape B securities from NSTS to 

NSX BLADE in the near future. 

During this transitional period of 

phasing in various securities to NSX 

BLADE, the exchange will be operating 

both NSTS and NSX BLADE. Until such 

securities are phased into NSX BLADE, 

Tape A and Tape B securities will 

continue to be traded via NSTS. 

During this transitional period of 

phasing in various securities to NSX 

BLADE, the Exchange is operating both 

NSTS and NSX BLADE. Accordingly, 

the Exchange is operating under two 

sets of rules during the phase-in period. 

All transactions in the NSTS System are 

operating under the rules pertaining to 

NSTS (old Exchange Rule 11.9 (National 

Securities Trading System) and old 

Exchange Rule 11.10 (National 

Securities Trading System Fees) and any 

associated Fee Schedule) while all 

transactions in NSX BLADE are 

operating under the NSX BLADE trading 

rules approved in SR–NSX–2006–036

and the new fee rules in Chapter XVI. 

When the phase-in is complete and 

NSTS is no longer operational, old 

Rules 11.9 and 11.10 will be 

extinguished. The Exchange has issued 

a Notice to ETP Holders to advise them 

of the different trading systems and 

rules and fees applicable to each,7 and 

will issue a Notice advising them of the 

fee changes with this proposed rule 

change. 

Additionally, the Exchange currently 

offers rebate programs for Tape A, B and 

C transactions executed through NSX 

BLADE, each consisting of a 50 percent 

transaction credit on revenues generated 

by transactions executed through NSX 

BLADE in Tape A, B or C securities, 

respectively. Old Rule 11.10(A)(1), 

which is applicable to transactions 

executed through NSTS, currently 

provides for equivalent 50 percent Tape 

B and C rebate programs for transactions 

executed through NSTS. Under each of 

the Exchange’s current rebate programs, 

the credit is allocable to ETP Holders on 

a pro rata basis based upon Tape A, B 

or C revenue generated by an ETP 

Holder’s transactions on NSX BLADE or 

NSTS, as applicable. 

With the instant proposed rule 

change, the Exchange is proposing to 

adopt a rebate program for NSTS 

transactions in Tape A securities that is 

equivalent to the Exchange’s current 

Tape A rebate program applicable to 

NSX BLADE transactions. As with the 

Exchange’s other tape rebate programs, 

this proposed Tape A rebate program 

will provide a 50 percent transaction 

credit on revenues generated by 

transactions executed through NSTS in 

Tape A securities, and will be allocable 

to ETP Holders on a pro rata basis based 

upon the Tape A revenue generated by 

such ETP Holder’s transactions on 

NSTS. The Exchange believes that there 


hsrobinson on PROD1PC76 with NOTICES