Federal Register / Vol. 72, No. 14 / Tuesday, January 23, 2007 / Notices 2913 

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). 

5See Securities Exchange Act Release No. 54548 

(September 29, 2006), 71 FR 59159 (October 6, 

2006) (SR–CHX–2006–28) (approving exchange-toexchange billing procedures under the Plan for the 

Purpose of Creating and Operating an Intermarket 

Communications Linkage Pursuant to Section 

11A(a)(3)(B) of the Securities Exchange Act of 1934 

(‘‘Linkage Plan’’)); Securities Exchange Act Release 

No. 54551 (September 29, 2006), 71 FR 59148 

(October 6, 2006) (approving Linkage Plan). 

6See Securities Exchange Act Release No. 54550 

(September 29, 2006), 71 FR 59563 (October 10, 

2006) (SR–CHX–2006–05) (approving rules to 

implement a new trading model (‘‘NTM’’) that 

allows Exchange participants to interact in a fullyautomated Matching System). 

7See Nasdaq Head Trader Alert #2006–199 

(November 30, 2006); Securities Exchange Act 

Release No. 55041 (January 4, 2007), 72 FR 1356 

(January 11, 2007) (SR–NSX–2006–17); Securities 

Exchange Act Release No. 54941 (December 14, 

2006), 71 FR 77079 (December 22, 2006) (SR–

PHLX–2006–70); and Securities Exchange Act 

Release No. 54795 (November 20, 2006), 71 FR 

68850 (November 28, 2006) (SR–BSE–2006–44). 8BeX has implemented a fee that charges $.0028/ 

share for taking liquidity, subject to a maximum of 

.3% of the quotation price per share, for securities 

with a share price less than $1.00. The CHX’s 

systems cannot currently calculate that type of fee 

cap and, for that reason, the CHX is not currently 

proposing that cap as part of its fees for routing 

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

Servicing Agreement, and for a period 

not less than six years thereafter, the 

first two years in an easily accessible 

place. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–905 Filed 1–22–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55103; File No. SR–CHX–

2006–39] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Relating to 

Participant Fees and Credits 

January 12, 2007. 

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 December 

21, 2006, the Chicago Stock Exchange, 

Inc. (‘‘CHX’’ 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 

CHX. The CHX has designated this 

proposal as one establishing or changing 

a member due, fee, or other charge 

imposed by the CHX pursuant to 

Section 19(b)(3)(A)(ii) 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 CHX proposes to amend its 

Schedule of Participant Fees and Credits 

(‘‘Fee Schedule’’) to include changes in 

the fees charged for orders routed 

through the NMS Linkage Plan 5 to The 

NASDAQ Stock Market (‘‘Nasdaq’’), the 

National Stock Exchange (‘‘NSX’’), the 

Boston Equities Exchange (‘‘BeX’’) and 

the Philadelphia Stock Exchange 

(‘‘PHLX’’). The text of this proposed rule 

change is available at the CHX, on the 

CHX’s Web site at http://www.chx.com/ 

rules/proposed_rules.htm, and in 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 

CHX 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 CHX 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 

The Exchange’s Fee Schedule, among 

other things, identifies the fees that are 

charged to participants on account of 

outbound NMS Linkage Plan orders. 

Section E.6 of the Fee Schedule applies 

to orders that are Matching Systemeligible 6 and therefore are routed from 

the Matching System to other market 

centers. Section E.8 of the Fee Schedule 

applies to orders that have not yet 

migrated to the Matching System and 

therefore are routed from the Exchange’s 

pre-new NTM facilities. 

When an outbound NMS Linkage Plan 

order is executed on another NMS 

Linkage participant market, that market 

will directly invoice the CHX for a 

transaction fee, in an amount that may 

not exceed the transaction fee that it 

would charge its own member for such 

an execution. The CHX is then 

responsible for payment of such invoice. 

Sections E.6 and E.8 of the Fee Schedule 

permit the CHX to collect a 

corresponding fee from the CHX 

participant that generated the outbound 

NMS Linkage Plan order. The CHX 

believes that it is appropriate to 

establish outbound NMS Linkage fee 

rates that reasonably correspond to the 

respective transaction fee rates being 

charged by the executing markets. 

Accordingly, it is submitting changes to 

Sections E.6 and E.8 of the Fee 

Schedule, to reflect recent 

developments regarding applicable 

transaction fees assessed by Nasdaq, 

NSX, PHLX, and BeX on account of 

NMS Linkage Plan executions.7

Specifically, the proposal would change 

the outbound fee for NMS Linkage 

orders routed to Nasdaq (in issues other 

than exchange-traded funds (‘‘ETFs’’)) 

from $.0015/share to $.0030/share, 

effective January 1, 2007. The proposal 

would also change the outbound fee for 

NMS Linkage orders routed to NSX and 

PHLX to $.0030/share for orders in all 

securities (ETFs and all other 

securities). Finally, the proposal would 

change the outbound fee for NMS 

Linkage orders routed to BeX to $.0028/ 

share for orders in all securities (ETFs 

and all other securities).8

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b)(4) of the 

Act 9 in that it provides for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and is 

consistent with the allocation of dues, 

fees and other charges utilized by other 

self-regulatory organizations that have 

implemented trading platforms similar 

to the CHX new trading model. 

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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change establishes or changes a due, fee 

mstockstill on PROD1PC70 with NOTICES

2914 Federal Register / Vol. 72, No. 14 / Tuesday, January 23, 2007 / Notices 

10 15 U.S.C. 78f(b)(4). 

11 17 CFR 200.30–3(a)(12). 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, NASD clarified provisions 

of the proposed rule change. 

4See Exchange Act Release No. 54857 (Dec. 1, 

2006), 71 FR 71213 (Dec. 8, 2006). 

5See Exchange Act Release No. 51931 (June 28, 

2005) (File No. SR–NASD–2005–052), 70 FR 38989 

(July 6, 2005). 

6See Exchange Act Release No. 55038 (Jan. 3, 

2007) (File No. SR–NASD–2005–079). Previously, 

Rule 10322 allowed arbitrators and any counsel of 

record to the proceedings to issue subpoenas as 

provided by law. 

7For purposes of this rule, a contested motion is 

defined as a motion to issue a subpoena, the draft 

subpoena, a written objection from the party 

opposing the issuance of the subpoena, and any 

other documents supporting a party’s position. 

Arbitrators will not be entitled to receive the 

honorarium if a motion for a subpoena is 

uncontested. 

8This differs from other discovery-related 

motions, for which an arbitrator receives an 

honorarium for each motion considered. See IM–

or other charge imposed by the 

Exchange, it has become effective 

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

Act 10 and subparagraph (f)(2) of Rule 

19b–4 thereunder.11 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 

No. SR–CHX–2006–39 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CHX–2006–39. 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 such filing also will be 

available for inspection and copying at 

the principal office of the CHX. 

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–CHX–2006–39 and should 

be submitted on or before February 13, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–907 Filed 1–22–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55108; File No. SR–NASD–

2006–101] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Order Approving 

Proposed Rule Change and 

Amendment No. 1 Thereto To Provide 

for the Payment of a $200 Honorarium 

Per Case for Each Arbitrator Who 

Considers Contested Motions for the 

Issuance of Subpoenas 

January 16, 2007. 

I. Introduction 

On August 23, 2006, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend IM–10104 of the 

NASD Code of Arbitration Procedure 

(‘‘Code’’) to provide for the payment of 

a $200 honorarium per case for each 

arbitrator who considers contested 

motions for the issuance of subpoenas. 

On November 13, 2006, NASD filed 

Amendment No. 1 to the proposed rule 

change.3 The proposed rule change, as 

amended, was published for comment 

in the Federal Register on December 8, 

2006.4 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change, as 

amended. 

II. Description 

The purpose of the proposed rule 

change is to provide for the payment of 

a $200 honorarium per case for each 

arbitrator who considers contested 

motions for the issuance of subpoenas. 

NASD previously amended IM–10104, 

to provide arbitrators with an 

honorarium of $200 to decide discoveryrelated motions without a hearing 

session.5 The revised rule, however, 

does not address whether a contested 

motion concerning a subpoena 

constitutes a discovery-related motion. 

As a result, NASD has received 

questions regarding the appropriate 

payment, if any, for arbitrators who 

decide subpoena issues. These 

questions have focused on whether, 

under the rule, arbitrators should be 

paid to decide contested motions 

requesting the issuance of a subpoena. 

The issue of whether arbitrators 

should receive an honorarium for 

deciding contested subpoena motions 

has become even more significant with 

the Commission’s recent approval of 

amendments to NASD Rule 10322 

which, among other changes, permit 

only arbitrators to issue subpoenas in 

NASD arbitrations.6

In proposing the current rule change, 

NASD recognized that arbitrators may 

spend a considerable amount of time 

and effort deciding contested subpoena 

motions 7 and stated it believes that 

arbitrators should be compensated for 

this work. NASD anticipated that if its 

proposed changes to Rule 10322 were 

approved, under most circumstances, 

the chairperson would be the only 

arbitrator considering subpoena requests 

based on the documents supplied by the 

parties. If the entire panel decided a 

contested motion, each arbitrator who 

participates in the subpoena ruling 

would receive an honorarium of $200. 

The $200 honorarium paid to an 

arbitrator would provide payment for all 

contested subpoena motions in a case 

(i.e., the honorarium would be paid on 

a per case basis, regardless of the 

number of contested subpoena motions 

considered by an arbitrator or panel 

during the case).8 Furthermore, the 

mstockstill on PROD1PC70 with NOTICES