22792 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices 

other markets.’’ The Exchange intended this to 

apply only to orders routed through CYCLE, and 

believes that the proposed language clarifies this 

intent. 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4). 

8 15 U.S.C. 78s(b)(3)(A)(ii). 

9 17 CFR 240.19b–4(f)(2). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

other non-standard routing options such 

as Directed ISO’s, Dark Scan orders, and 

orders routed through its ‘‘DART’’ 

strategy to dark liquidity venues. For 

any security priced under $1.00 that is 

routed away and executed through an 

order type or routing strategy other than 

CYCLE, the Exchange will charge the 

specified fee or provide the specified 

rebate for such execution. For instance, 

an order for a security priced below 

$1.00 that is routed and executed 

through Dark Scan would receive the 

same $0.0001 rebate as a security priced 

above $1.00. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is 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 of the Act.6

Specifically, the Exchange believes that 

the proposed rule change is consistent 

with Section 6(b)(4) of the Act,7 in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among members and other 

persons using any facility or system 

which the Exchange operates or 

controls. The Exchange notes that it 

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 

Exchange believes that its fees and 

rebates are competitive with those 

charged by other venues. Finally, the 

Exchange believes that the proposed 

rates are equitable in that they apply 

uniformly to all Members. 

(B) Self-Regulatory Organization’s 

Statement of Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes 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 solicited 

or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has been designated as a fee change 

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

Act 8 and Rule 19b–4(f)(2) thereunder,9

because it establishes or changes a due, 

fee or other charge imposed on members 

by the Exchange. Accordingly, the 

proposal is effective upon filing with 

the Commission. 

At any time within 60 days of the 

filing of the 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 proposal 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–BATS–2009–011 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 No. 

SR–BATS–2009–011. 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 changes 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 BATS. 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 No. 

SR–BATS–2009–011 and should be 

submitted on or before June 4, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–11231 Filed 5–13–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59887; File No. SR–ISE– 

2009–24] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Order 

Granting Accelerated Approval to a 

Proposed Rule Change, as Modified by 

Amendment No. 1, Relating to the 

Amounts That Direct Edge ECN, in Its 

Capacity as an Introducing Broker for 

Non-ISE Members, Passes Through to 

Such Non-ISE Members 

May 7, 2009. 

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 May 6, 

2009, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change. On May 7, 

2009, the Exchange filed Amendment 

No. 1 to the proposed rule change. The 

proposed rule change, as modified by 

Amendment No. 1, is described in Items 

I and II below, which Items have been 

prepared by ISE. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as modified by Amendment No. 1, from 

interested persons, and is approving the 

proposal on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

amounts that Direct Edge ECN 


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Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices 22793 

3References to ISE Members in this filing refer to 

DECN Subscribers who are ISE Members. 

4See SR–ISE–2009–23. 

5See Securities and Exchange Commission 

Release No. 59843 (April 29, 2009), 74 FR 21046 

(May 6, 2009) (SR–NASDAQ–2009–035). 6See Securities and Exchange Commission 

Release Nos. 59692 (April 2, 2009), 74 FR 16024 

(April 8, 2009) (SR–ISE–2009–17). 

7 15 U.S.C. 78f. 

8 15 U.S.C. 78f(b)(4). 

(‘‘DECN’’), in its capacity as an 

introducing broker for non-ISE 

Members, passes through to such nonISE 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. On 

May 1, 2009, the ISE filed for immediate 

effectiveness a proposed rule change to 

amend DECN’s fee schedule for ISE 

Members 3 to increase the per share 

rebate in securities reported to Tape A 

and Tape C from $0.0029 to $0.003 for 

orders that add liquidity on EDGX if the 

ISE Member satisfies any of the 

following three criteria on a daily basis, 

measured monthly: (i) Adding 

40,000,000 shares or more on either 

EDGX, EDGA or EDGX and EDGA 

combined; (ii) adding 20,000,000 shares 

or more on either EDGX, EDGA or EDGX 

and EDGA combined and routing 

20,000,000 shares or more through 

EDGA; or (iii) adding 10,000,000 shares 

or more of liquidity to EDGX, so long as 

added liquidity on EDGX is at least 

5,000,000 shares greater than the 

previous calendar month.4 DECN is a 

member of ISE as well as a facility of 

ISE. The rebate described above is 

referred to as a ‘‘Super Tier Rebate’’ on 

the DECN fee schedule. 

In an effort to increase volume on 

EDGA, DECN currently offers volume 

discounts for ISE Members who route 

20,000,000 shares or more on a daily 

basis, measured monthly, to Nasdaq 

through EDGA using order types that are 

solely eligible for routing to Nasdaq. 

Prior to SR–ISE–2009–23, orders were 

charged at $0.0025 per share with 

respect to EDGA routed volume. ISE 

Members routing 30,000,000 shares per 

day were charged $0.0024 per share 

with respect to EDGA routed volume. 

Recently, Nasdaq has amended its 

pricing by increasing its fee for orders 

that remove liquidity by $0.0004.5

Accordingly, in SR–ISE–2009–23, the 

Exchange amended the DECN volume 

discounts that apply to ISE Members by 

increasing each volume discount fee by 

$0.0004, which changed the fee to 

$0.0029 per share and $0.0028 per 

share, respectively. 

On April 1, 2009, the Exchange 

amended the DECN fee schedule to 

reduce the rebate from $0.0035 per 

share to $0.003 per share for orders that 

add liquidity on EDGX in securities 

priced at or above $1.00 that are 

reported to Tape B by ISE Members.6 In 

connection with this amendment, a 

portion of the corresponding footnote on 

the DECN fee schedule should have 

been deleted, but such deletion was 

overlooked at the time of the filing. The 

relevant portion of the footnote states 

‘‘In the event that Direct Edge offers a 

rebate higher than $0.0029 per share for 

subscribers who do not meet the criteria 

for the Super Tier, then those who meet 

the aforementioned criteria will receive 

the higher rebate.’’ In SR–ISE–2009–23, 

the Exchange deleted this language as 

Direct Edge is no longer offering this 

incentive. 

In SR–ISE–2009–23, the Exchange 

also made certain clarifying changes to 

DECN’s fee schedule. DECN’s fee 

schedule includes a description of 

liquidity flags and associated fees. Flag 

D is appended to orders that are routed 

to and executed on the New York Stock 

Exchange (‘‘NYSE’’). Such orders are 

charged a fee on the NYSE because the 

order is removing liquidity. The fee 

assessed to this order is then passed 

back to the ISE Member that originated 

the order. In SR–ISE–2009–23, the 

Exchange amended the description of 

Flag D to include, not just orders that 

are routed to NYSE, but also orders that 

are re-routed to NYSE. Meaning, the 

order that originates at DECN may get 

routed to another market center for 

execution, but that market center may 

re-route the order to NYSE, where the 

order ultimately receives an execution 

that results in a removal of liquidity. In 

this circumstance, the fee assessed to 

the order will still be passed back to the 

ISE Member that originated the order as 

if such order was originally routed to 

NYSE. 

Finally, in SR–ISE–2009–23, the 

Exchange deleted a portion of a footnote 

on DECN’s fee schedule that provides 

for a lower charge to ISE Members 

whose orders in securities that are 

reported to Tape A and Tape C first get 

routed to Nasdaq Stock Market 

(‘‘Nasdaq’’) and then get re-routed by 

Nasdaq. In this circumstance, the ISE 

Member would be charged a fee of 

$0.0026 per share for removing liquidity 

in Tape A and Tape C securities 

regardless of where the order ultimately 

gets executed and regardless of what the 

executing market center charges Nasdaq. 

Whereas, orders that get routed to any 

other market center and then re-routed 

by that market center get charged a fee 

of $0.003 per share when the order 

removes liquidity. In SR–ISE–2009–23, 

the Exchange proposed to delete the 

portion of the footnote that provides for 

this exception because Nasdaq has 

raised their fee to $0.003 per share for 

all orders that get routed to Nasdaq and 

then re-routed by Nasdaq. 

In its capacity as a member of ISE, 

DECN currently serves as an introducing 

broker for the non-ISE Member 

subscribers of DECN to access EDGX 

and EDGA. DECN, as an ISE Member 

and introducing broker, receives rebates 

from DECN for transactions it executes 

on EDGX or EDGA in its capacity as 

introducing broker for non-ISE 

Members. Since the amounts of such 

rebates were changed pursuant to SR– 

ISE–2009–23, DECN wishes to make 

corresponding changes to the amounts it 

passes through to non-ISE Member 

subscribers of DECN for which it acts as 

introducing broker. As a result, the per 

share amounts that non-ISE Member 

subscribers receive will be the same as 

the amounts that ISE Members receive. 

ISE is seeking accelerated approval of 

this proposed rule change, as well as a 

retroactive effective date of May 1, 2009. 

ISE represents that this proposal will 

ensure that both ISE Members and nonISE Members (by virtue of the passthrough described above) will in effect 

receive equivalent amounts and that the 

imposition of such amounts will begin 

on the same May 1, 2009 start date. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,7

in general, and furthers the objectives of 

Section 6(b)(4),8 in particular, in that it 

is designed to provide for the equitable 

allocation of reasonable dues, fees and 


pwalker on PROD1PC71 with NOTICES
22794 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices 

9 In approving this proposal, the Commission has 

considered its impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

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

11See Securities Exchange Act Release No. 34– 

59888 (May 7, 2009) (notice of filing and immediate 

effectiveness of File No. SR–ISE–2009–23) (the 

‘‘Member Fee Filing’’). 

12See note 11, supra. 

13 15 U.S.C. 78s(b)(2). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

other charges among its members and 

other persons using its facilities. In 

particular, this proposal will ensure that 

both ISE Members and non-ISE 

Members (by virtue of the pass-through 

described above) will receive equivalent 

rebates. 

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. 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–ISE–2009–24 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–2009–24. 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 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–2009–24 and should be 

submitted by June 4, 2009. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

The Commission finds that the 

proposed rule change, as amended, is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.9 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(4),10 of the Act, which requires that 

the rules of a national securities 

exchange provide for the equitable 

allocation of reasonable dues, fees and 

other charges among members and 

issuers and other persons using any 

facilities. 

ISE recently amended DECN’s fee 

schedule to increase the Super Tier 

Rebate in securities reported to Tape A 

and Tape C and revise other rebates and 

fees.11 DECN receives rebates and 

charges fees for transactions it executes 

on EGDX or EDGA in its capacity as an 

introducing broker for its non-ISE 

member subscribers. 

The current proposal, which will 

apply retroactively to May 1, 2009, will 

allow DECN to pass through the revised 

rebates and fees to the non-ISE member 

subscribers for which it acts as an 

introducing broker. The Commission 

finds that the proposal is consistent 

with the Act because it will provide 

rebates and charge fees to non-ISE 

member subscribers that are equivalent 

to those established for ISE member 

subscribers in the Member Fee Filing.12

ISE has requested that the 

Commission find good cause for 

approving the proposed rule change 

prior to the thirtieth day after 

publication of notice in the Federal 

Register. As discussed above, the 

proposal will allow DECN to pass 

through to non-ISE member subscribers 

the revised rebate and fees established 

for ISE member subscribers in the 

Member Fee Filing, resulting in 

equivalent rebates and fees for ISE 

member and non-member subscribers. 

In addition, because the proposal will 

apply the revised rebates and fees 

retroactively to May 1, 2009, the revised 

rebates and fees will have the same 

effective date, thereby promoting 

consistency in the DECN’s fee schedule. 

Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Act for approving the proposed 

rule change prior to the thirtieth day 

after the date of publication of notice 

thereof in the Federal Register. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change, as amended (SR– 

ISE–2009–24) be, and hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–11229 Filed 5–13–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59875; File No. SR– 

NASDAQ–2009–043] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify DOT, 

SCAN and STGY Routing Strategies To 

Incorporate an Optional Pre-Routing 

Display Period 

May 6, 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 April 30, 

2009, 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 the proposed rule change 

as constituting a non-controversial rule 

change under Rule 19b–4(f)(6) under the 


pwalker on PROD1PC71 with NOTICES