62910 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

3The Exchange’s two modes of order interaction 

are described in NSX Rule 11.13(b). 

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

5 15 U.S.C. 78f(b)(4). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63042; File No. SR–NSX– 

2010–13] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

the NSX Fee and Rebate Schedule 

October 5, 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 

September 30, 2010, National Stock 

Exchange, Inc. 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 the Exchange. The Commission is 

publishing this notice to solicit 

comment 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 National Stock Exchange, Inc. 

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

a rule change, operative at 

commencement of trading on October 1, 

2010, which proposes to amend the 

NSX Fee and Rebate Schedule (the ‘‘Fee 

Schedule’’) respect to rebates payable in 

the Order Delivery mode of order 

interaction. 

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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change Purpose 

With this rule change, the Exchange is 

proposing to modify the Fee Schedule to 

lower the volume threshold necessary to 

obtain the highest rebate with respect to 

displayed orders in securities priced 

one dollar and above that add liquidity 

in the Order Delivery mode of order 

interaction (‘‘Order Delivery’’).3

For displayed orders in securities 

priced one dollar and above that add 

liquidity in Order Delivery, the 

proposed rule change lowers the volume 

threshold necessary to achieve the 

highest rebate tier. Prior to the effective 

date of the proposed rule change, the 

Fee Schedule provides a rebate of 

$0.0008 per share if an ETP Holder’s 

liquidity adding average daily volume 

(as fully defined in Endnote 3 of the Fee 

Schedule, ‘‘Liquidity Adding ADV’’) is at 

least one million shares and less than 

five million shares (‘‘Tier 1’’); a rebate of 

$0.0024 per share plus 35% of 

attributable market data revenue if 

Liquidity Adding ADV is at least five 

million shares and less than 30 million 

shares (‘‘Tier 2’’); and a rebate of $0.0024 

per share plus 50% of attributable 

market data revenue if Liquidity Adding 

ADV is at least 30 million shares (‘‘Tier 

3’’). 

The proposed rule change lowers, 

from 30 to 15 million, the Tier 3 volume 

threshold necessary to obtain the 

highest rebates. Accordingly, after the 

effective date, an ETP Holder achieving 

a Liquidity Adding ADV of at least 15 

million shares will receive a rebate of 

$0.0024 per share plus 50% of 

attributable market data revenue 

regarding its displayed orders priced 

one dollar or higher that add liquidity 

in Order Delivery. 

The proposed rule change does not 

modify other rebates or fees that are 

contained in the Fee Schedule. 

Rationale 

The Exchange has determined that 

these changes are necessary to create 

further incentive for ETP Holders to 

submit increased order volumes and, 

ultimately, to increase the revenues of 

the Exchange for the purpose of 

continuing to adequately fund its 

regulatory and general business 

functions. The Exchange has further 

determined that the proposed fee 

adjustments are necessary for 

competitive reasons. The Exchange 

believes that these rebate changes will 

not impair the Exchange’s ability to 

fulfill its regulatory responsibilities. 

The proposed modifications are 

reasonable and equitably allocated to 

those ETP Holders that submit orders in 

Order Delivery, and are not 

discriminatory because qualified ETP 

Holders are free to elect whether or not 

to send such orders. 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 modifications, which are 

effective on filing of this proposed rule, 

operative for trading on October 1, 2010. 

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 website 

(http://www.nsx.com). 

Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6(b) of the 

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

the Act,5 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 rule 

change is not discriminatory in that all 

qualified ETP Holders are eligible to 

submit (or not submit) trades and quotes 

at any price in AutoEx and Order 

Delivery in all tapes, as either displayed 

or undisplayed and as liquidity adding 

or liquidity taking, and may do so at 

their discretion. 

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. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 62911 

6 15 U.S.C. 78s(b)(3)(A)(ii). 

7 17 CFR 240.19b–4. 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 62655 

(August 5, 2010), 75 FR 48731 (August 11, 2010). 

4See Letter from Howard Spindel, Senior 

Managing Director, and Cassondra E. Joseph, 

Managing Director, Integrated Management 

Solutions USA LLC, dated August 30, 2010 (‘‘IMS 

letter’’). 

5See Amendment No. 1 dated October 1, 2010 

(‘‘Amendment No. 1’’). The text of Amendment No. 

1 is available on FINRA’s Web site at http:// 

www.finra.org, at the principal office of FINRA, and 

on the Commission’s Web site, http://www.sec.gov/ 

rules/sro.shtml. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has taken 

effect upon filing pursuant to Section 

19(b)(3)(A)(ii) of the Act 6 and 

subparagraph (f)(2) of Rule 19b–4 7

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 summarily may 

temporarily suspend 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–2010–13 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 

20549–9303. 

All submissions should refer to File 

No. SR–NSX–2010–13. This file number 

should be included in the subject line 

if e-mail is used. To help the 

Commission process and review 

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 website viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street, NE., 

Washington, DC 20549. Copies of such 

filings will also 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 

available publicly. All submissions 

should refer to File Number SR–NSX– 

2010–13 and should be submitted on or 

before November 3, 2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to the 

delegated authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25622 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63044; File No. SR–FINRA– 

2010–042] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, Relating to FINRA 

Rule 4160 (Verification of Assets) 

October 5, 2010. 

I. Introduction 

On August 4, 2010, the Financial 

Industry Regulatory Authority, Inc. 

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

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change 

that provides that a member, when 

notified by FINRA, may not continue to 

custody or retain record ownership of 

assets, at a non-member financial 

institution, which, upon FINRA staff’s 

request, fails promptly to provide 

FINRA with written verification of 

assets maintained by the member at 

such financial institutions. The 

proposed rule change was published for 

comment in the Federal Register on 

August 11, 2010.3 The Commission 

received one comment on the proposed 

rule change.4 On October 1, 2010, 

FINRA responded to the comments and 

filed Amendment No. 1 to the proposed 

rule change.5 The Commission is 

publishing this notice and order to 

solicit comments on Amendment No. 1 

and to approve the proposed rule 

change, as modified by Amendment No. 

1, on an accelerated basis. 

II. Description of Proposed Rule 

Change, as Modified by Amendment 

No. 1 

FINRA has proposed to adopt FINRA 

Rule 4160 (Verification of Assets). The 

proposed rule provides that a member, 

when notified by FINRA, may not 

continue to custody or retain record 

ownership of assets, at a non-member 

financial institution, which, upon 

FINRA staff’s request, fails promptly to 

provide FINRA with written verification 

of assets maintained by the member at 

such financial institution. The proposed 

rule change also would add a 

supplementary material section to the 

new rule. 

FINRA proposes new paragraph (b) in 

its Amendment No. 1. Paragraph (b)(1) 

expressly excludes from the rule 

proprietary assets of members that are 

treated as non-allowable assets pursuant 

to Rule 15c3–1 under the Act. Paragraph 

(b)(2) provides that the rule would not 

apply in instances where FINRA 

determines that there is no other 

available independent custody or record 

ownership of the assets. Amendment 

No. 1 would also designate the original 

rule text as paragraph (a). Finally, the 

Supplementary Material remains 

unchanged by Amendment No. 1. 

The text of the proposed rule change, 

as modified by Amendment No. 1, is 

below. Proposed new language is 

underlined. 

* * * * * 

4000. FINANCIAL AND 

OPERATIONAL RULES 

4100. FINANCIAL CONDITION 

* * * * * 

4160. Verification of Assets 

(a) A member, when notified by 

FINRA, may not continue to custody or 

retain record ownership of assets, 

whether such assets are proprietary or 

mstockstill on DSKH9S0YB1PROD with NOTICES