12426 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

38 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange has represented that it will 

submit a similar proposed rule change to adopt a 

corresponding rebate for displayed orders in Order 

Delivery Mode. The rebate on displayed orders will 

be the same as the rebate contained in this proposed 

rule change. Telephone conversation on March 12, 

2009 between Richard Holley III, Senior Special 

Counsel, Division of Trading and Markets 

(‘‘Division’’), Commission; David Michehl, Special 

Counsel, Division, Commission; Sara Hawkins, 

Special Counsel, Division, Commission; James 

Yong, Chief Regulatory Officer, NSX; and Phil Pinc, 

Vice President and Counsel, NSX. 

4As specified in Rule 11.11(c)(2)(A). 

5The Exchange’s two modes of order interaction 

are described in NSX Rule 11.13(b). 

6The first tier is $0.0022 per share (applicable to 

shares executed in AutoEx which added liquidity 

as Zero Display Orders), where Total ADV is greater 

than or equal to 1 million and less than 15 million. 

7The second tier is $0.0023 per share (applicable 

to shares executed in AutoEx which added liquidity 

as Zero Display Orders), where Total ADV is greater 

than or equal to 15 million and less than 30 million. 

8The third tier is $0.0025 per share (applicable 

to shares executed in AutoEx which added liquidity 

as Zero Display Orders), where Total ADV is greater 

than or equal to 30 million. 

2008–102), as modified by Amendment 

No. 2, be, and it hereby is, approved on 

a five month pilot basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6398 Filed 3–23–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59591; File No. SR–NSX– 

2009–01] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

NSX Fee Schedule To Implement a 

Program To Award Rebates for 

Liquidity Adding Zero Display Orders 

and Clarify the Definition of ‘‘Liquidity 

Adding Average Daily Volume’’ 

March 17, 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 February 

27, 2009, National Stock Exchange, Inc. 

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 Exchange. 

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 

National Stock Exchange, Inc. 

(‘‘NSX® ’’ or ‘‘Exchange’’) is proposing 

to amend the Fee and Rebate Schedule 

(the ‘‘Fee Schedule’’) issued pursuant to 

Exchange Rule 16.1(c) in order to (i) 

provide a rebate for adding liquidity in 

Zero Display Orders at one dollar or 

above in the Automatic Execution Mode 

of order interaction in the event that 

certain volume thresholds are achieved, 

(ii) provide a rebate for adding liquidity 

in Zero Display Orders at one dollar or 

above in the Order Delivery Mode of 

order interaction in the event that 

certain volume thresholds are 

achieved,3 and (iii) clarify the definition 

of ‘‘Liquidity Adding Average Daily 

Volume’’ to account for partial calendar 

months. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nsx.com, at the principal 

office of the Exchange, 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 

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 

With this rule change, the Exchange is 

proposing to provide a liquidity 

provider rebate for Zero Display (or 

‘‘Dark’’) Orders 4 entered in each of the 

Automatic Execution Mode of order 

interaction (‘‘AutoEx’’) and the Order 

Delivery Mode of order interaction 

(‘‘Order Delivery’’ or ‘‘O/D’’).5 In each 

case, the rebates apply only to securities 

priced one dollar and higher, and only 

after certain volume thresholds are 

achieved. 

AutoEx Liquidity Adding Zero Display 

Order Rebate 

For securities trading at one dollar or 

higher in AutoEx, this rule change 

proposes to provide a progressively 

higher rebate applicable to shares 

executed as liquidity providing Zero 

Display Orders of ETP Holders who 

achieve both a ‘‘Liquidity Adding 

Average Daily Volume’’ (‘‘Liquidity 

Adding ADV’’) of at least 50,000 and, in 

the same period, achieve ‘‘Total Average 

Daily Trading Volumes’’ (‘‘Total ADV’’) 

of 1 million,6 15 million 7 and 30 

million 8 shares (any such rebate 

hereinafter referred to as an ‘‘AutoEx 

Liquidity Adding Zero Display Order 

Rebate’’). 

An ETP Holder needs to achieve two 

volume eligibility thresholds before 

receiving the proposed AutoEx 

Liquidity Adding Zero Display Order 

Rebate. First, an ETP Holder must 

achieve at least 50,000 shares of 

Liquidity Adding ADV in the applicable 

time period. Liquidity Adding ADV 

means, with respect to an ETP Holder, 

‘‘the number of shares such ETP Holder 

has executed as a liquidity provider on 

average per trading day (excluding 

partial trading days and securities under 

one dollar) across all tapes on NSX for 

the calendar month (or partial month, as 

applicable) in which the executions 

occurred’’ (see the Explanatory 

Endnotes to the Fee Schedule). Second, 

and only after the first threshold is met, 

an ETP Holder must achieve a Total 

ADV of at least 1 million shares. Total 

ADV means, with respect to an ETP 

Holder, ‘‘the number of shares such ETP 

Holder has executed as a liquidity 

provider, liquidity taker and router of 

executed trades on average per trading 

day (excluding partial trading days and 

securities under one dollar) across all 

tapes on NSX for the calendar month (or 

partial month, as applicable) in which 

the executions occurred’’ (see the 

Explanatory Endnotes to the Fee 

Schedule). If both the foregoing 

eligibility thresholds are achieved, an 

ETP Holder will be entitled to 

progressively higher rebates ($0.0022, 

$0.0023 and $0.0025) on its shares 

executed in AutoEx as liquidity adding 

Zero Display Orders depending on the 

Total ADV volumes achieved (at least 1 

million but less than 15 million, at least 

15 million but less than 30 million, and 

at least 30 million, respectively). 

For purposes of clarity, if an ETP 

Holder fails to achieve Liquidity Adding 

ADV of at least 50,000 shares, or fails to 

achieve Total ADV of at least 1 million 

shares, in the same month (or partial 

month, as applicable), then no AutoEx 

Liquidity Adding Zero Display Order 

Rebate applies. In addition, for purposes 

of calculating an ETP Holder’s Total 

ADV, all such ETP Holder’s orders 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 12427 

9These examples are for illustrative purposes in 

respect of the calculation of the AutoEx Liquidity 

Adding Zero Display Order Rebate only, and do not 

take into account, nor illustrate, the rebates and/or 

fees applicable to displayed orders that add 

liquidity, orders that take liquidity, Zero Display 

Orders that add liquidity in O/D and orders routed 

away. 

executed at NSX or executed after 

routing through NSX in the given time 

frame are counted, regardless of whether 

such orders are displayed or 

undisplayed, executed in AutoEx or 

O/D, or are liquidity providing or 

taking. Finally, the AutoEx Liquidity 

Adding Zero Display Order Rebate 

applies only to those shares that are the 

subject of the ETP Holder’s liquidity 

adding Zero Display Orders executed in 

AutoEx (i.e., the rebate does not apply 

to all shares which constitute Total 

ADV, nor to non-Zero Display Order 

shares that add liquidity, nor to 

liquidity providing Zero Display Order 

shares in O/D). These details are set 

forth in an explanatory endnote to the 

Fee Schedule. 

The measurement period for 

calculating the AutoEx Liquidity 

Adding Zero Display Order Rebate is 

generally the calendar month. However, 

and as further discussed below, in the 

event a pricing or rebate program 

utilizing this definition is implemented, 

modified or discontinued on other than 

month’s end, the period of measurement 

used to determine ‘‘average daily 

volume’’ with respect to the rebate (as 

in the definition of Liquidity Adding 

ADV, Total ADV and elsewhere on the 

Fee Schedule) shall be that partial 

month during which the program’s 

terms are in effect. 

Examples of AutoEx Liquidity Adding 

Zero Display Order Rebate 9

The following illustrates application 

of the AutoEx Liquidity Adding Zero 

Display Order Rebate. In a given 

calendar month (or other applicable 

period), the following ETP Holders 

achieve the following average daily 

volumes of executed shares (in each 

case, counting only securities priced at 

one dollar or higher and excluding 

partial trading days): 

ETP Holder 

1 2 3 4 5 6 7 8 

(First 

Threshold 

in AutoEx) 

9 

(Second 

Threshold 

in AutoEx) 

AutoEx 

Displayed 

Liquidity 

Adding 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

O/D Zero 

Display 

Liquidity 

Adding 

Routed 

Away 

Liquidity 

Adding 

ADV (sum 

of columns 

1, 2, 5 

and 6) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

A ................................................................................ 30,000 30,000 30,000 30,000 30,000 30,000 30,000 120,000 210,000 

ETP Holder A will not receive an 

AutoEx Liquidity Adding Zero Display 

Order Rebate. Although ETP Holder A 

has a Liquidity Adding ADV of 120,000 

(column 8, which surpasses the 

Liquidity Adding ADV eligibility 

threshold of 50,000), ETP Holder A fails 

to satisfy the second eligibility 

requirement (ETP Holder A’s Total ADV 

of 210,000 (column 9) falls short of the 

minimum Total ADV of at least 1 

million necessary to obtain the first tier 

of the rebate). 

ETP Holder 

1 2 3 4 5 6 7 8 

(First 

Threshold 

in AutoEx) 

9 

(Second 

Threshold 

in AutoEx) 

AutoEx 

Displayed 

Liquidity 

Adding 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

O/D Zero 

Display 

Liquidity 

Adding 

Routed 

Away 

Liquidity 

Adding 

ADV (sum 

of columns 

1, 2, 5 

and 6) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

B ................................................................................ 920,000 30,000 30,000 30,000 30,000 30,000 30,000 1,010,000 1,100,000 

ETP Holder B will receive an AutoEx 

Liquidity Adding Zero Display Order 

Rebate. ETP Holder B has surpassed 

both the Liquidity Adding ADV 

eligibility threshold (with 1,010,000 

shares) and the Total ADV eligibility 

threshold (with 1,100,000 shares). ETP 

Holder B’s AutoEx Liquidity Adding 

Zero Display Order Rebate for the given 

period will equal the number of full 

trading days in the measurement period 

multiplied by 30,000 (column 2, the 

daily average number of shares which 

were executed in AutoEx as liquidity 

providing Zero Display Orders) 

multiplied by $0.0022 (the first rebate 

tier for which ETP Holder B is eligible 

based on Total ADV of at least 1 million 

and less than 15 million). 

ETP Holder 

1 2 3 4 5 6 7 8 

(First 

Threshold 

in AutoEx) 

9 

(Second 

Threshold 

in AutoEx) 

AutoEx 

Displayed 

Liquidity 

Adding 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

O/D Zero 

Display 

Liquidity 

Adding 

Routed 

Away 

Liquidity 

Adding 

ADV (sum 

of columns 

1, 2, 5 

and 6) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

C ................................................................................ 30,000 920,000 30,000 30,000 30,000 30,000 30,000 1,010,000 1,100,000 

mstockstill on PROD1PC66 with NOTICES

12428 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

10The first tier is $0.0008 per share, applicable 

to shares executed in O/D which added liquidity as 

Zero Display Orders, where the number of such 

shares is greater than or equal to 1 million and less 

than 10 million. 

11The second tier is $0.0010 per share, applicable 

to shares executed in O/D which added liquidity as 

Zero Display Orders, where the number of such 

shares is greater than or equal to 10 million and less 

than 20 million. 

12The third tier is $0.0012 per share, applicable 

to shares executed in O/D which added liquidity as 

Zero Display Orders, where the number of such 

shares is greater than or equal to 20 million. 

ETP Holder C will receive an AutoEx 

Liquidity Adding Zero Display Order 

Rebate. ETP Holder C has surpassed 

both the Liquidity Adding ADV 

eligibility threshold (with 1,010,000 

shares) and the Total ADV eligibility 

threshold (with 1,100,000 shares). ETP 

Holder C’s AutoEx Liquidity Adding 

Zero Display Order Rebate for the given 

period will equal the number of full 

trading days in the measurement period 

multiplied by 920,000 (column 2, the 

daily average number of shares which 

were executed in AutoEx as liquidity 

providing Zero Display Orders) 

multiplied by $0.0022 (the first rebate 

tier for which ETP Holder C is eligible 

based on Total ADV of at least 1 million 

and less than 15 million). 

ETP Holder 

1 2 3 4 5 6 7 8 

(First 

Threshold 

in AutoEx) 

9 

(Second 

Threshold 

in AutoEx) 

AutoEx 

Displayed 

Liquidity 

Adding 

(million) 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

(million) 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

(million) 

O/D Zero 

Display 

Liquidity 

Adding 

(million) 

Routed 

Away 

Liquidity 

Adding 

ADV (sum 

of columns 

1, 2, 5 

and 6) 

(million) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

D ................................................................................ 1 1 30,000 30,000 10 10 30,000 22 22,090,000 

ETP Holder D will receive an AutoEx 

Liquidity Adding Zero Display Order 

Rebate. ETP Holder D has surpassed 

both the Liquidity Adding ADV 

eligibility threshold (with 22 million 

shares) and the Total ADV eligibility 

threshold (with 22,090,000 shares). ETP 

Holder D’s AutoEx Liquidity Adding 

Zero Display Order Rebate for the given 

period will equal the number of full 

trading days in the measurement period 

multiplied by 1 million (column 2, the 

daily average number of shares which 

were executed in AutoEx as liquidity 

providing Zero Display Orders) 

multiplied by $0.0023 (the second 

rebate tier for which ETP Holder D is 

eligible based on Total ADV of at least 

15 million and less than 30 million). 

ETP Holder 

1 2 3 4 5 6 7 8 

(First 

threshold 

in AutoEx) 

9 

(Second 

threshold 

in AutoEx) 

AutoEx 

Displayed 

Liquidity 

Adding 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

(million) 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

O/D Zero 

Display 

Liquidity 

Adding 

(million) 

Routed 

Away 

Liquidity 

Adding 

ADV (sum 

of columns 

1, 2, 5 

and 6) 

(million) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

E ............................................................................ 0 10 0 0 0 20 30,000 30 30,030,000 

ETP Holder E will receive an AutoEx 

Liquidity Adding Zero Display Order 

Rebate. ETP Holder E has surpassed 

both the Liquidity Adding ADV 

eligibility threshold (with 30 million 

shares) and the Total ADV eligibility 

threshold (with 30,030,000 shares). ETP 

Holder E’s AutoEx Liquidity Adding 

Zero Display Order Rebate for the given 

period will equal the number of full 

trading days in the measurement period 

multiplied by 10 million (column 2, the 

daily average number of shares which 

were executed in AutoEx as liquidity 

providing Zero Display Orders) 

multiplied by $0.0025 (the third rebate 

tier for which ETP Holder E is eligible 

based on Total ADV of at least 30 

million). 

Order Delivery Liquidity Adding Zero 

Display Order Rebate 

For securities trading at one dollar or 

higher in O/D mode, this rule change 

also proposes to provide a progressively 

higher rebate applicable to shares 

executed as liquidity providing Zero 

Display Orders in O/D. ETP Holders 

who achieve an average daily volume of 

shares executed as Zero Display Orders 

in O/D (‘‘Liquidity Adding ADV (O/D 

Dark)’’) of 1 million,10 10 million 11 and 

20 million 12 shares will receive rebates 

of $0.0008, $0.0010 and $0.0012, 

respectively, with respect to such shares 

(any such rebate hereinafter referred to 

as an ‘‘O/D Liquidity Adding Zero 

Display Order Rebate’’). Liquidity 

Adding ADV (O/D Dark) means, with 

respect to an ETP Holder, ‘‘the number 

of Zero Display Order shares such ETP 

Holder has executed as a liquidity 

provider on average per trading day 

(excluding partial trading days and 

securities under one dollar) across all 

tapes in O/D mode for the calendar 

month (or partial month, as applicable) 

in which the executions occurred’’ (see 

the Explanatory Endnotes to the Fee 

Schedule). 

For purposes of clarity, if an ETP 

Holder fails to achieve Liquidity Adding 

ADV (O/D Dark) of at least 1 million 

shares in a given month (or partial 

month, as applicable), then no O/D 

Liquidity Adding Zero Display Order 

Rebate applies. In addition, for purposes 

of calculating an ETP Holder’s Liquidity 

Adding ADV (O/D Dark), only such ETP 

Holder’s liquidity adding Zero Display 

Orders executed in O/D in the given 

time frame are counted. Finally, the 

O/D Liquidity Adding Zero Display 

Order Rebate applies only to those 

shares of an ETP Holder executed in 

O/D as liquidity adding Zero Display 

Orders (i.e., the rebate does not apply to 

shares of non-Zero Display (i.e., 

displayed) Orders that add liquidity in 

O/D, nor to shares of liquidity providing 

Zero Display Orders in AutoEx). These 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 12429 

13As in the examples of the AutoEx Liquidity 

Adding Zero Display Order Rebate, these examples 

merely illustrate the calculation of the rebates for 

Zero Display Orders that Add Liquidity in Order 

Delivery. They do not calculate, nor show, the 

rebates and fees applicable to displayed orders that 

add liquidity, Zero Display Orders that add 

liquidity in AutoEx, orders that take liquidity, or 

fees for routing. 

14This column is the same as column 6 in the 

previous chart of examples of the AutoEx Liquidity 

Adding Zero Display Order Rebate which bore the 

header ‘‘O/D Zero Display Liquidity Adding’’. 

details are set forth in an explanatory 

endnote to the Fee Schedule. 

Like other calculations of ‘‘average 

daily volume’’ in the Fee Schedule, the 

measurement period for calculating the 

O/D Liquidity Adding Zero Display 

Order Rebate is generally the calendar 

month. However, and as further 

discussed below, in the event a pricing 

or rebate program utilizing this 

definition is implemented, modified or 

discontinued on other than month’s 

end, the period of measurement used to 

determine ‘‘average daily volume’’ with 

respect to the rebate (as used in the 

definition of Liquidity Adding ADV 

(O/D Dark) and elsewhere on the Fee 

Schedule) shall be that partial month 

during which the program’s terms are in 

effect. 

Examples of Order Delivery Liquidity 

Adding Zero Display Order Rebate 13

The 14 following charts (which are the 

same charts as set forth above with 

respect to illustrations of the AutoEx 

Liquidity Adding Zero Display Order 

Rebate) may be used to illustrate 

application of the O/D Liquidity Adding 

Zero Display Order Rebate. In a given 

calendar month (or other applicable 

period), the following ETP Holders 

achieve the following average daily 

volumes of executed shares (in each 

case, counting only securities priced at 

one dollar or higher and excluding 

partial trading days): 

ETP Holder 

1 2 3 4 5 6 

(Threshold in O/ 

D) 

7 8 9 

AutoEx 

Displayed 

Liquidity 

Adding 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

Liquidity 

Adding 

ADV (O/D 

Dark) 14

Routed 

Away 

Liquidity 

Adding 

ADV (sum 

of columns 

1, 2, 5 

and 6) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

A ............................................................................ 30,000 30,000 30,000 30,000 30,000 30,000 30,000 120,000 210,000 

B ............................................................................ 920,000 30,000 30,000 30,000 30,000 30,000 30,000 1,010,000 1,100,000 

C ............................................................................ 30,000 920,000 30,000 30,000 30,000 30,000 30,000 1,010,000 1,100,000 

ETP Holder A will not receive an O/ 

D Liquidity Adding Zero Display Order 

Rebate. ETP Holder A fails to satisfy the 

eligibility requirement (ETP Holder A’s 

Liquidity Adding ADV (O/D Dark) of 

30,000 (column 6) falls short of the first 

rebate tier of at least 1 million). ETP 

Holder B and ETP Holder C similarly 

fail to achieve the first tier of the O/D 

Liquidity Adding Zero Display Order 

Rebate. 

ETP Holder 

1 2 3 4 5 6 

(Threshold 

in O/D) 

7 8 9 

AutoEx 

Displayed 

Liquidity 

Adding 

(million) 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

(million) 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

(million) 

Liquidity 

Adding ADV 

(O/D Dark) 

(million) 

Routed 

Away 

Liquidity 

Adding ADV 

(sum of columns 1, 2, 

5 and 6) 

(million) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 6 

and 7) 

D ........................................................................ 1 1 30,000 30,000 10 10 30,000 22 22,090,000 

ETP Holder D will receive an O/D 

Liquidity Adding Zero Display Order 

Rebate. ETP Holder D’s Liquidity 

Adding ADV (O/D Dark) of 10 million 

meets the second tier of the rebate. 

Accordingly, ETP Holder D’s O/D 

Liquidity Adding Zero Display Order 

Rebate for the given period will equal 

the number of full trading days in the 

measurement period multiplied by 10 

million multiplied by $0.0010 (the 

second rebate tier for which ETP Holder 

D is eligible based on Liquidity Adding 

ADV (O/D Dark) of at least 10 million 

and less than 20 million). 

ETP Holder 

1 2 3 4 5 6 

(Threshold 

in O/D) 

7 8 9 

AutoEx 

Displayed 

Liquidity 

Adding 

AutoEx 

Zero 

Display 

Liquidity 

Adding 

(million) 

AutoEx 

Displayed 

Liquidity 

Taking 

AutoEx 

Zero 

Display 

Liquidity 

Taking 

O/D 

Displayed 

Liquidity 

Adding 

Liquidity 

Adding ADV 

(O/D Dark) 

(million) 

Routed 

Away 

Liquidity 

Adding ADV 

(sum of 

columns 1, 

2, 5 and 6) 

(million) 

Total ADV 

(sum of 

columns 1, 

2, 3, 4, 5, 

6 and 7) 

E ........................................................................ 0 10 0 0 0 20 30,000 30 30,030,000 

ETP Holder E will receive an O/D 

Liquidity Adding Zero Display Order 

Rebate. ETP Holder E has achieved the 

third tier of the Liquidity Adding ADV 

(O/D Dark) eligibility threshold (with 20 

million shares). Accordingly, ETP 

Holder E’s O/D Liquidity Adding Zero 

Display Order Rebate for the given 

period will equal the number of full 

mstockstill on PROD1PC66 with NOTICES

12430 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

15A mid-month modification to the Fee Schedule 

could have either a negative or a positive impact 

on an ETP Holder based on fluctuations in the 

volume of its order flow to the Exchange over the 

course of a calendar month. A mid-month 

modification or discontinuation may potentially 

negatively impact an ETP Holder, if any, whose 

volume tends to increase during the course of the 

calendar month such that, but for the 

discontinuation or modification of the Fee Schedule 

mid-month, the ETP Holder would have achieved 

cheaper liquidity taking fees based on achievement 

of the Liquidity Adding ADV threshold of 50,000 

shares. Conversely, a mid-month modification or 

discontinuation may potentially positively impact 

an ETP Holder, if any, whose volume tends to 

decrease during the course of the calendar month 

such that, but for the discontinuation or 

modification of the Fee Schedule mid-month, the 

ETP Holder would not have achieved cheaper 

liquidity taking fees based on achievement of the 

Liquidity Adding ADV threshold of 50,000 shares. 

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

17 15 U.S.C. 78f(b)(4). 

18 15 U.S.C. 78s(b)(3)(A)(ii). 

19 17 C.F.R. 240.19b–4(f)(2). 

trading days in the measurement period 

multiplied by 20 million multiplied by 

$0.0012. 

Definition of ‘‘Liquidity Adding ADV’’ 

Modified To Allow for Partial Calendar 

Months 

The current rule filing also proposes 

to modify the definition of ‘‘Liquidity 

Adding ADV’’ to provide additional 

clarity if the Exchange makes 

modifications to its fee and rebate 

program effective on other than month 

end. Prior to the proposed rule change, 

‘‘Liquidity Adding ADV’’ is defined as, 

with respect to an ETP Holder, ‘‘the 

number of shares such ETP Holder has 

executed as a liquidity provider on 

average per trading day (excluding 

partial trading days and securities under 

one dollar) across all tapes on NSX for 

the calendar month in which the 

executions occurred’’ (see Explanatory 

Endnotes to the Fee Schedule). For 

business reasons from time to time the 

Exchange may determine to modify or 

discontinue its Fee Schedule on other 

than month end. The proposed rule 

change is intended to clarify the 

Exchange’s ability to respond to 

changing business necessities through 

modification of its pricing model 

without implementing changes to the 

Fee Schedule that relate to Liquidity 

Adding ADV only on month’s end.15

Accordingly, in order to clarify how 

‘‘Liquidity Adding ADV’’ is determined 

for any period, the proposed rule change 

adds the parenthetical clause ‘‘(or 

partial month, as applicable)’’ after the 

words ‘‘for the calendar month’’ in the 

definition of Liquidity Adding ADV, 

and also adds an additional explanatory 

endnote to the Fee Schedule which 

addresses partial month calculations 

(see Explanatory Endnotes to the Fee 

Schedule). These changes clarify that 

the Exchange will calculate Liquidity 

Adding ADV on less than a calendar 

month basis if necessary due to 

modification or discontinuation of one 

or more features utilizing that definition 

in the Fee Schedule. This exception is 

likewise included in the proposed 

definition of other ‘‘average daily 

volume’’ calculations in the proposed 

Fee Schedule, namely in the definitions 

of ‘‘Total ADV’’ and Liquidity Adding 

ADV (O/D Dark)’’. 

Rationale 

The Exchange has determined that 

these changes are necessary to increase 

the volume of Zero Display Order in 

order to increase the revenue of the 

Exchange and to adequately fund its 

regulatory and general business 

functions. In addition, the modification 

to the definition of Liquidity Adding 

ADV is necessary to enhance the 

Exchange’s flexibility to commence, 

modify and discontinue fee pricing 

programs utilizing that definition on 

dates other than calendar month end. 

The proposed modifications are 

reasonable and equitably allocated to 

those ETP Holders that opt to provide 

and take liquidity in displayed orders 

and Zero Display Orders, and is not 

discriminatory because ETP Holders are 

free to elect whether or not to send 

displayed orders or Zero Display Orders 

via O/D Mode or AutoEx, and as a 

liquidity provider or liquidity taker. 

ETP Holders are further free to elect 

what volumes to send to the Exchange 

during the course of a calculation 

measurement period. Based upon the 

information above, the Exchange 

believes that the proposed rule change 

is consistent with the protection of 

investors and the public interest. 

Operative Date and Notice 

The Exchange intends to make the 

proposed credit and rebate structure 

effective on filing of this proposed rule 

for trading on March 2, 2009. Pursuant 

to Exchange Rule 16.1(c), the Exchange 

will ‘‘provide ETP Holders with notice 

of all relevant dues, fees, assessments 

and charges of the Exchange’’ through 

the issuance of a Regulatory Circular of 

the changes to the Fee Schedule and 

will post a copy of the rule filing on the 

Exchange’s Web site (http:// 

www.nsx.com). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6(b) of the 

Act,16 in general, and Section 6(b)(4) of 

the Act,17 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 the facilities of the 

Exchange. Moreover, the proposed fee 

and rebate structure is not 

discriminatory in that all ETP Holders 

are eligible to submit (or not submit) 

liquidity adding trades and quotes in 

O/D Mode or AutoEx in all tapes and as 

either displayed or undisplayed, and 

may do so at their discretion in the daily 

volumes they choose during the course 

of the measurement period. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any inappropriate burden on 

competition. 

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 taken 

effect upon filing pursuant to Section 

19(b)(3)(A)(ii) of the Act 18 and 

subparagraph (f)(2) of Rule 19b–4 19

thereunder, because, as provided in 

(f)(2), it changes ‘‘a due, fee or other 

charge applicable only to a member’’ 

(known on the Exchange as an ETP 

Holder). At any time within sixty (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–NSX–2009–01 on the 

subject line. 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 12431 

20 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. 

4See Securities Exchange Act Release No. 57323 

(February 13, 2008), 73 FR 9371 (February 20, 2008) 

(SR–NYSE–2008–09). 

5See Securities Exchange Act Release No. 57826 

(May 15, 2008), 73 FR 29802 (May 22, 2008) (SR– 

NASDAQ–2007–001). 

6See Securities Exchange Act Release No. 58328 

(August 8, 2008), 73 FR 47247 (August 13, 2008) 

(SR–NYSE–2008–63). 

7See Securities Exchange Act Release No. 58732 

(October 3, 2008), 73 FR 61183 (October 15, 2008) 

(SR–NYSE–2008–99). 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NSX–2009–01. 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, 100 F Street, NE., Washington, 

DC 20549, 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 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 publicly available. All 

submissions should refer to File 

Number SR–NSX–2009–01 and should 

be submitted on or before April 14, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6352 Filed 3–23–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59581; File No. SR–NYSE– 

2009–26] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Extending Until 

June 9, 2009, the Operation of Interim 

NYSE Rule 128 Which Permits the 

Exchange To Cancel or Adjust Clearly 

Erroneous Executions if They Arise 

Out of the Use or Operation of Any 

Quotation, Execution or 

Communication System Owned or 

Operated by the Exchange, Including 

Those Executions That Occur in the 

Event of a System Disruption or 

System Malfunction 

March 16, 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 March 9, 

2009, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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 extend 

until June 9, 2009, the operation of 

interim NYSE Rule 128 (‘‘Clearly 

Erroneous Executions for NYSE 

Equities’’) which permits the Exchange 

to cancel or adjust clearly erroneous 

executions if they arise out of the use or 

operation of any quotation, execution or 

communication system owned or 

operated by the Exchange, including 

those executions that occur in the event 

of a system disruption or system 

malfunction. 

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 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend 

until June 9, 2009, the operation of 

interim NYSE Rule 128 (‘‘Clearly 

Erroneous Executions for NYSE 

Equities’’) which permits the Exchange 

to cancel or adjust clearly erroneous 

executions if they arise out of the use or 

operation of any quotation, execution or 

communication system owned or 

operated by the Exchange, including 

those executions that occur in the event 

of a system disruption or system 

malfunction. 

Prior to the implementation of NYSE 

Rule 128 on January 28, 2008,4 the 

NYSE did not have a rule providing the 

Exchange with the authority to cancel or 

adjust clearly erroneous trades of 

securities executed on or through the 

systems and facilities of the NYSE. 

In order for the NYSE to be consistent 

with other national securities exchanges 

which have some version of a clearly 

erroneous execution rule, the Exchange 

is drafting an amended clearly 

erroneous rule which will accommodate 

such other exchanges but will be 

appropriate for the NYSE market model. 

The NYSE notes that the Commission 

approved an amended clearly erroneous 

execution rule for Nasdaq in May 2008.5

On July 28, 2008, the Exchange filed 

with the SEC a request to extend the 

operation of interim Rule 128 until 

October 1, 2008 6 in order to review the 

provisions of Nasdaq’s clearly erroneous 

rule and to consider integrating similar 

standards into its own amendment to 

Rule 128. On October 1, 2008,7 the 

Exchange filed with the SEC a further 

request to extend the operation of 

interim Rule 128 until January 9, 2009 

in order to consider integrating similar 

standards into the amendment to Rule 

mstockstill on PROD1PC66 with NOTICES