Document ID: SEC-2007-0479-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Stock Exchange, Inc.
Posted Date: 2007-04-02T04:00Z

[Federal Register: April 2, 2007 (Volume 72, Number 62)]
[Notices]               
[Page 15745-15747]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap07-125]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55524; File No. SR-NSX-2007-03]

 
Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Fees for Transactions Executed Through NSX BLADE and ITS Plans 
Priced at Less Than $1.00 Per Share

March 26, 2007.
    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 March 2, 2007, the National Stock Exchange, Inc. (``NSX'' or 
``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 substantially prepared by the 
Exchange. NSX has filed the proposal pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \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).

---------------------------------------------------------------------------

[[Page 15746]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing changes to its fees for transactions 
priced at less than $1.00 per share that are executed through NSX 
BLADE, the Exchange's new trading platform. These changes are being 
proposed in order to comply with Rule 610(c) of Regulation NMS under 
the Act. The Exchange is also proposing corresponding changes to its 
Fee Schedule applicable to transactions under the Intermarket Trading 
System Plan and/or the Plan for the purpose of Creating and Operating 
an Intermarket Communications Linkage (``ITS Plans'') for transactions 
executed through the ITS Plans (``ITS Transactions''). The text of the 
proposed rule change is available at NSX, the Commission's Public 
Reference Room, and http://www.nsx.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, NSX 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. NSX 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
    The Exchange has created a new state of the art trading platform, 
known as NSX BLADE, which utilizes a strict price/time priority system 
as the ultimate replacement for the Exchange's legacy system, National 
Securities Trading System (``NSTS''). Pursuant to Exchange Rule 
16.1(a), the Exchange maintains a Fee Schedule that contains its 
current fees, dues and other charges applicable to transactions in NSX 
BLADE (``NSX BLADE Fee Schedule'').
    Currently, the NSX BLADE Fee Schedule provides for an execution fee 
of $0.0030 per share for removing liquidity from NSX BLADE (in other 
words, a charge for taking liquidity against an order in NSX BLADE), 
and a rebate of $0.0030 per share executed for adding liquidity into 
NSX BLADE (in other words, a rebate for the addition of liquidity to 
NSX BLADE, provided that it results in an execution through NSX BLADE). 
Thus, ETP Holders taking liquidity against an order in NSX BLADE are 
currently charged a fee of $0.0030 per share executed, and ETP Holders 
providing liquidity into NSX BLADE are currently paid a rebate of 
$0.0030 per share executed.
    Rule 610(c)(2) of Regulation NMS \5\ generally requires that the 
fees charged by a trading center for execution of an order against a 
quotation of less than $1.00 per share cannot exceed or accumulate to 
more than 0.3% of the quotation price per share. In order to comply 
with this rule, the Exchange is proposing a 0.3% per share liquidity 
taker fee and a 0.3% per share liquidity provider rebate for 
transactions that are priced at less than $1.00 per share. This fee and 
rebate structure would be in lieu of the $0.0030 per share liquidity 
taker fee and the $0.0030 liquidity provider rebate described above. In 
other words, for transactions that are priced at less than $1.00 per 
share, ETP Holders would be charged 0.3% of the price per share for 
taking liquidity against an order in NSX BLADE, and would receive a 
rebate of 0.3% of the price per share for the addition of liquidity to 
NSX BLADE, provided that it results in an execution through NSX BLADE. 
For example, if a transaction was executed on NSX BLADE for 100 shares 
at $0.50 per share, any liquidity taker fee or liquidity provider 
rebate applicable to the transaction would be equal to $0.15 ($.050 x 
0.3% x 100).
---------------------------------------------------------------------------

    \5\ 17 CFR 242.610(c)(2).
---------------------------------------------------------------------------

    In addition, changes are being proposed to the Fee Schedule for ITS 
Transactions, to provide for a corresponding 0.3% per share liquidity 
taker fee for ITS Transactions executed through NSX BLADE that are 
priced at less than $1.00 per share. ETP Holders taking liquidity from 
NSX BLADE will be charged under the NSX BLADE Fee Schedule, and 
executions on NSX BLADE through an ITS Plan will be charged under the 
Fee Schedule for ITS Transactions (although the rates of the two 
execution fees are identical). The Exchange bills non-ETP Holders using 
the facilities of the Exchange for ITS Transactions under the Fee 
Schedule for ITS Transactions.
    In connection with this rule change, language is also proposed to 
be added to the NSX BLADE Fee Schedule stating that with respect to ITS 
Transactions executed through NSX BLADE, the Exchange will pay the 
applicable liquidity provider rebate ($0.0030 per share or 0.3% per 
share, depending on the execution price) only after it receives payment 
of the liquidity taker fee applicable to the execution.
    Pursuant to NSX Rule 16.1(c), the Exchange will ``provide ETP 
Holders with notice of all relevant dues, fees, assessments and charges 
of the Exchange.'' ETP Holders and others, including self-regulatory 
organizations that are the subject of exchange-to-exchange billing, 
using the Exchange will be advised of these fees through the Exchange's 
website. In addition, ETP Holders will, simultaneously with this 
filing, be notified through the issuance of a Regulatory Circular of 
the changes to the Fee Schedules applicable to transactions through NSX 
BLADE and the ITS Plans.
    The fees have been designed in this manner in order to ensure that 
the Exchange can continue to fulfill its obligations under the Act.
2. Statutory Basis
    NSX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\6\ in general, and with Sections 
6(b)(4) of the Act,\7\ in particular, in that the proposal provides for 
the equitable allocation of reasonable dues, fees, and other charges.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in 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

    Written comments were neither solicited nor received.

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)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \9\ because it establishes or changes a due, fee, or other 
charge applicable only to a member imposed by the self-regulatory 
organization. Accordingly, the proposal is effective upon Commission 
receipt of the filing. 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

[[Page 15747]]

interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 rule-comments@sec.gov. Please include 

File Number SR-NSX-2007-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSX-2007-03. 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 the filing 
also will be available for inspection and copying at the principal 
office of NSX. 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-
2007-03 and should be submitted on or before April 23, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. E7-5988 Filed 3-30-07; 8:45 am]

BILLING CODE 8010-01-P