Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 49511 

11 17 CFR 200.30–3(a)(12). 

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). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19354 Filed 8–20–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58362; File No. SR–CHX–

2008–13] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change Relating to 

Participant Fees and Credits 

August 14, 2008. 

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 August 

13, 2008, the Chicago Stock Exchange, 

Inc. (the ‘‘CHX’’ or the ‘‘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 prepared by the CHX. 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 

Assessments (the ‘‘Fee Schedule’’) to 

provide for trade processing fee credits 

to CHX–registered Institutional Brokers. 

The text of this proposed rule change is 

available on the Exchange’s Web site at 

http://www.chx.com/rules/ 

proposed_rules.htm and in the 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549. 

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 changes and discussed 

any comments it received regarding the 

proposal. 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 

Through this filing, the Exchange 

would amend its Fee Schedule to 

provide for a credit to institutional 

brokers relating to trade processing fees 

charged by the Exchange to its 

participants. Trade processing fees are 

fees charged by the Exchange for 

transactions that are executed and 

reported to the tape (but not reported to 

clearing) by an institutional broker in an 

away market (i.e., not the Exchange), but 

which are reported to clearing by the 

Exchange’s systems. The use of the 

Exchange’s systems to report trades to 

clearing, instead of the facility on which 

the trade was executed, is done at the 

request of the institutional broker’s 

customer to simplify the customer’s 

ability to access clearing data from a 

unified source. All clearing transactions 

reported in this manner appear in the 

Exchange’s Regional Trade Interface 

Operations (‘‘RIO’’) file along with the 

customer’s trades executed on the CHX. 

The Exchange proposes to provide to 

the originating broker a trade processing 

fee credit equal to 3% per side of the 

trade processing fees received by the 

Exchange. The Exchange further 

proposes to provide to the broker of 

credit a trade processing fee credit equal 

to 6% of the trade processing fees 

received by the Exchange for the 

portion(s) of the transaction handled by 

the broker of credit. An ‘‘originating 

broker’’ is defined as the institutional 

broker that executes a trade on an away 

market. A ‘‘broker of credit’’ is defined 

as the institutional broker that acts as 

the broker for the ultimate Exchange 

clearing participant. Prior to this filing, 

trade processing fee credits were not 

paid by the Exchange. This proposed fee 

schedule change would take effect upon 

filing. 

2. Statutory Basis 

The Exchange believes that the rule 

changes proposed in this submission are 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder that are applicable to a 

national securities exchange, and, in 

particular, with the requirements of 

Section 6(b). The proposed rule change 

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

Act in that it provides for the equitable 

allocation of reasonable dues, fees and 

other charges among its members. 

Moreover, the proposed trade 

processing fee credits will allow the 

Exchange to share trade processing fees 

with institutional brokers, similar to the 

way it currently shares transaction fees 

for CHX executions with institutional 

brokers. Prior to this filing, trade 

processing fees were not shared with 

institutional brokers. 

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 

The foregoing rule change establishes 

or changes a due, fee or other charge 

imposed by the Exchange and therefore 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 3 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder.4 At any time within 60 days 

of the filing of such 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 

purpose 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–CHX–2008–13 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CHX–2008–13. This file 

mstockstill on PROD1PC66 with NOTICES

49512 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 

5 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission considers the 60-day 

abrogation period to have commenced on August 

13, 2008, the date the Exchange filed Amendment 

No. 1. 

4Changes are marked to the rule text that appears 

in the electronic Nasdaq Manual found at http:// 

nasdaqomx.cchwallstreet.com. 

5See Securities Exchange Act Release No. 54248 

(July 31, 2006) (SR–NASDAQ–2006–019). Prior to 

the effective date of Nasdaq’s operation as an 

exchange for Nasdaq-listed securities, the rule 

governing the Nasdaq Crossing Network had been 

approved as an NASD rule (NASD Rule 4716). 

Securities Exchange Act Release No. 54101 (July 5, 

2006), 71 FR 39382 (July 12, 2006) (SR–NASD–

2005–140). 

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–CHX–2008–13 and should 

be submitted on or before September 11, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19353 Filed 8–20–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58357; File No. SR–

NASDAQ–2008–068] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change as Modified 

by Amendment No. 1 To Modify Rule 

4770 To Enhance Trading in the 

NASDAQ Crossing Network 

August 13, 2008. 

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 August 

11, 2008, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) 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 

by Nasdaq. Nasdaq has designated this 

proposal as non-controversial and 

provided the Commission with the 

notice required by Exchange Act Rule 

19b–4(f)(6)(iii). This rule proposal, 

which is effective upon filing with the 

Commission, shall become operative on 

September 1, 2008. On August 13, 2008, 

the Exchange submitted Amendment 

No. 1 to the proposed rule change.3 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 

Nasdaq is filing a rule proposal to 

modify Rule 4770 to enhance trading in 

the NASDAQ Crossing Network. Nasdaq 

proposes to implement the proposed 

rule change on September 1, 2008. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets.4

* * * * * 

4770. Nasdaq Crossing Network 

(a) Definitions. For the purposes of 

this rule the term: 

(1) ‘‘Nasdaq Reference Price Cross’’

shall mean the process for executing 

orders at a predetermined reference 

price at a randomly selected point in 

time during a five-second [one minute] 

trading window beginning at 10:45 a.m., 

12:45 p.m. and 2:45 p.m. Eastern Time 

during the regular hours session and at 

4:30 p.m. during the after hours session. 

(2) No Change. 

(3) No Change. 

(b) No Change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 

Nasdaq is filing a rule proposal to 

modify Rule 4770 to enhance trading in 

the NASDAQ Crossing Network. The 

Commission approved the Nasdaq 

Crossing Network on July 5, 2006.5 The 

Nasdaq Crossing Network provides an 

execution option to market participants 

trading in Nasdaq and other exchangelisted securities that facilitates the 

execution of trades quickly and 

anonymously. 

In order to minimize the opportunity 

for manipulation, Nasdaq executes the 

cross through an automated and random 

matching mechanism at a randomly 

selected time during the predetermined 

one-minute cross-trading window. 

Nasdaq introduced the randomization 

period in order to prevent market 

participants from entering or cancelling 

orders in the Nasdaq Crossing Network 

in an attempt to improperly influence 

the execution price of a cross. The 

randomization period was thought to 

protect both market participants and 

public investors from potential 

manipulation. 

In response to input from our 

members and other market participants, 

Nasdaq proposes to modify the 60- 

second ‘‘randomization period’’ of [sic] 

that precedes the execution of all 

crosses within the Nasdaq Crossing 

Network. Based upon changing market 

conditions, Nasdaq has now determined 

that the full benefits of the 

randomization period can be realized 

through a shorter randomization period 

of five seconds rather than 60 seconds. 

The speed of order routing and 

execution in the marketplace has 

increased substantially since the launch 

of the Nasdaq Crossing Network. As a 

result, a random period of five seconds 

is sufficient to create significant risk of 

a delayed execution outside the control 

of a market participant. In other words, 

there is little incremental benefit of a 

random period longer than five seconds. 

mstockstill on PROD1PC66 with NOTICES