Federal Register / Vol. 75, No. 92 / Thursday, May 13, 2010 / Notices 27029 

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. 

4This fee filing relates to the trading facility 

operated by ISE and not EDGA Exchange, Inc. and 

EDGX Exchange, Inc. Direct Edge ECN LLC (EDGA 

and EDGX) will cease to operate in its capacity as 

an electronic communications network following 

the commencement of operations of EDGA 

Exchange, Inc. and EDGX Exchange, Inc. as national 

securities exchanges. 

5See Nasdaq OMX Equity Trader Alert, #2010– 

27 (April 19, 2010) (‘‘Firms will be charged 0.10% 

(i.e., 10 basis points) of the total dollar value of the 

transaction when removing liquidity in stocks with 

prices below $1.00’’). 

6The INET order type sweeps the EDGA or EDGX 

book and removes liquidity from Nasdaq, if the 

order is marketable, or posts on Nasdaq, if the order 

is non-marketable. 

7The Access Rule of Regulation NMS limits the 

fees any trading center can charge, or allow to be 

charged, for accessing its protected quotations, both 

displayed and reserve size, to no more than $0.003 

per share. See Rule 610(c) of Regulation NMS, 

Continued 

advisory. Each Agency alone will make 

any determinations of action to be taken 

and policy to be expressed with respect 

to matters within their respective 

authority as to which the Committee 

provides advice or makes 

recommendations. 

The Chairmen of the Agencies affirm 

that the establishment of the Committee 

is necessary and in the public interest. 

Pursuant to 41 CFR 102–3.65(b), the 

Secretariat has found good cause for 

approving the establishment of this 

advisory committee prior to the fifteenth 

day after publication of notice of 

establishment in the Federal Register so 

that the Committee members can 

quickly begin to identify emerging 

regulatory issues and their potential 

impact on investors and the securities 

markets. The Committee will lend the 

CFTC and SEC expertise that ranges 

across the securities and futures 

markets. 

By the Securities and Exchange 

Commission. 

Dated: May 10, 2010. 

Elizabeth M. Murphy, 

Committee Management Officer. 

By the Commodity Futures Trading 

Commission. 

Martin White, 

Committee Management Officer. 

[FR Doc. 2010–11507 Filed 5–12–10; 8:45 am] 

BILLING CODE 8010–01–P; 6351–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62050; File No. SR–ISE– 

2010–37] 

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 

May 6, 2010. 

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 April 30, 

2010, 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 selfregulatory 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) change 

the rates for routing in securities priced 

less than $1.00 to certain away market 

centers; (ii) reintroduce the rebate on 

securities priced less than $1.00 that 

add liquidity to EDGX; (iii) pass through 

rebates/fees from other market centers; 

and (iv) increase the rebate for Members 

meeting the Ultra Tier. 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.4

The Exchange is proposing to amend 

the routing rates to certain away market 

centers associated with the removal of 

liquidity from EDGA and EDGX in 

securities priced less than $1.00. 

Currently, for orders in securities priced 

less than $1.00 that are routed to Nasdaq 

BX in Tapes A & C securities and that 

remove liquidity, orders are charged the 

Exchange’s standard routing charge for 

securities less than $1.00 (0.30% of the 

total dollar value of the transaction, 

both on EDGA and EDGX). As a result 

of a decrease in fees by Nasdaq OMX 

when removing liquidity in securities 

priced less than $1.00,5 the Exchange 

proposes to amend its fee schedule in 

order to charge 0.10% of the total dollar 

value of the transaction (instead of 

0.30%) when orders are routed to 

Nasdaq BX in Tapes A & C securities 

and remove liquidity. This is proposed 

to be indicated by footnote number 3 on 

the existing ‘‘C’’ flag. A conforming 

amendment has also been made to the 

fee schedule to append footnote number 

3 to indicate an exception to the 

standard rate (0.30% of dollar value) for 

routing liquidity in securities priced 

less than $1.00. 

Additionally, the Exchange proposes 

to charge 0.20% of the total dollar value 

of the transaction when orders are 

routed to Nasdaq and remove liquidity 

in securities on all Tapes or orders are 

routed to Nasdaq using the INET6 order 

type and remove liquidity in securities 

on all Tapes. This is proposed to be 

indicated by footnote number 3 

appended to the existing ‘‘J,’’ ‘‘L,’’ and ‘‘2’’ 

flags. A conforming amendment has also 

been made to the fee schedule to 

append footnote number 3 to indicate 

an exception to the standard rate (0.30% 

of dollar value) for routing liquidity in 

securities priced less than $1.00. 

The Exchange believes that this rate 

change will seek to incentivize the 

removal of liquidity from EDGA and 

EDGX in securities priced less than 

$1.00 that are routed to certain away 

market centers. 

Re-Introduction of Rebate 

Currently, there is no rebate for 

adding liquidity on EDGX in securities 

priced less than $1.00. The Exchange is 

proposing to re-introduce a rebate of 

$0.00003 per share for orders that add 

liquidity to EDGX in securities priced 

less than $1.00. The Exchange believes 

that this rebate is appropriate as it 

represents 30% of the minimum price 

increment for securities priced less than 

$1.00 ($0.0001) and effectively aligns 

the rebate with access fee caps under 

Regulation NMS.7


sroberts on DSKD5P82C1PROD with NOTICES
27030 Federal Register / Vol. 75, No. 92 / Thursday, May 13, 2010 / Notices 

Securities and Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

8 15 U.S.C. 78f. 

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

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 19b–4(f)(2). 

12The text of the proposed rule change is 

available on ISE’s Web site at http://www.ise.com, 

on the Commission’s Web site at http:// 

www.sec.gov, at ISE, and at the Commission’s 

Public Reference Room. 

13 17 CFR 200.30–3(a)(12). 

Amendment to Ultra-Tier Rebate 

The Exchange’s fee schedule currently 

provides that Members can qualify for a 

rebate of $0.0031 per share for all 

liquidity posted on EDGX if they add or 

route at least 5,000,000 shares of average 

daily volume prior to 9:30 a.m. or after 

4 p.m. (includes all flags except 6) and 

add a minimum of 50,000,000 shares of 

average daily volume on EDGX in total, 

including during both market hours and 

pre- and post-trading hours. Effective 

May 1, 2010, the Exchange is proposing 

to increase this rebate to $0.0032 per 

share to further incentivize posting 

liquidity to EDGX. In addition, the 

higher rebate also results, in part, from 

lower administrative costs associated 

with higher volume. 

Pass-through of NYSE Fees/Rebates 

The NYSE recently announced 

changes, effective May 2010, that it will 

increase the fee for removing liquidity 

in Tape A securities to $0.0021 per 

share (from 0.0018 per share) and 

increase the rebate for trading in Tape 

A securities to $0.0013 per share (from 

$0.0010 per share). Flag D, which 

indicates orders that are routed or rerouted to NYSE, and remove liquidity, 

will be amended to reflect the charge of 

$0.0021 per share. A conforming 

amendment is also proposed to Flag F 

(routed to NYSE, adds liquidity) to 

increase the rebate to $0.0013 per share. 

Footnote 3 is proposed to be amended 

to reflect NYSE’s fee change for trading 

in securities with a per share price 

below $1.00 (from $0.0018 per share to 

$0.0021 per share). In addition, the ‘‘Q’’ 

flag, which denotes an order type 

(ROUC) that routes to the NYSE, is 

proposed to be increased from $0.0015 

per share to $0.0018 per share on EDGA 

and EDGX to reflect the increase. 

The changes discussed in this filing 

will become operative on May 1, 2010. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,8

in general, and furthers the objectives of 

Section 6(b)(4),9 in particular, as 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. 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. The 

Exchange believes that the proposed 

amendment to the Ultra-Tier rebate is 

equitable in that it applies uniformly to 

all Members and provides a higher 

rebate for higher volume thresholds, 

resulting from lower administrative 

costs. Finally, the Exchange believes 

that the proposed rates further the 

objectives of Regulation NMS by 

promoting competition and granting fair 

and equal access to all exchange 

participants. 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. 

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 10 and Rule 19b–4(f)(2) 11

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–2010–37 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–2010–37. 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,12 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 Web site viewing and 

printing 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–2010–37 and should be 

submitted on or before June 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11397 Filed 5–12–10; 8:45 am] 

BILLING CODE 8011–01–P 


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