Document ID: SEC-2010-0214-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Stock Exchange, Inc.
Posted Date: 2010-02-09T05:00Z

[Federal Register: February 9, 2010 (Volume 75, Number 26)]
[Notices]               
[Page 6423-6424]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09fe10-108]                         

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-61474; File No. SR-NSX-2010-01]

 
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 To Increase the Rebate for 
Liquidity Adding Displayed Orders of Securities Priced Under One Dollar 
in the Auto Execution Mode of Order Interaction to 0.25% of Trade Value

February 2, 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 January 29, 2010, National Stock Exchange, Inc. 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 Exchange. The Commission is publishing this notice 
to solicit comment on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    National Stock Exchange, Inc. (``NSX[supreg]'' or ``Exchange'') is 
proposing a rule change, operative at commencement of trading on 
February 1, 2010, which proposes to amend the NSX Fee and Rebate 
Schedule (the ``Fee Schedule'') to increase the rebate for liquidity 
adding displayed orders of securities priced under one dollar in the 
Auto Execution mode of order interaction (``AutoEx'') \3\ to 0.25% of 
trade value.
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    \3\ The Exchange's two modes of order interaction are described 
in NSX Rule 11.13(b).
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    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

1. Purpose
    With this rule change, the Exchange is proposing to modify the Fee 
Schedule to increase the rebate for liquidity adding displayed orders 
of securities priced under one dollar in AutoEx to 0.25% of trade 
value.
    The current Fee Schedule provides a rebate in AutoEx of 0.10% of 
trade value (except for Zero Display Orders \4\) with respect to 
transactions in securities priced under one dollar. The term ``trade 
value'' means a dollar amount equal to the price per share multiplied 
by the number of shares executed.\5\ The instant rule filing proposes 
to increase such rebate from 0.10% of trade value to 0.25% of trade 
value. Zero Display Orders remain excluded from this rebate program. 
The proposed rule change would not modify other rebates or fees that 
are included in the Fee Schedule.
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    \4\ ``Zero Display Orders'' as used herein and in the Fee 
Schedule means ``Zero Display Reserve Orders'' as specified in NSX 
Rule 11.11(c)(2)(A).
    \5\ See Explanatory Endnote (6) to the Fee Schedule.
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Rationale
    The Exchange has determined that this change is necessary to create 
further incentive for ETP Holders to submit increased volumes of 
liquidity providing displayed orders of sub-dollar securities in AutoEx 
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 adjustment is necessary for competitive reasons. The 
Exchange believes that this rebate change will not impair its ability 
to carry out its regulatory responsibilities.
    The proposed modifications are reasonable and equitably allocated 
to those ETP Holders that opt to provide liquidity adding displayed 
orders of securities priced under one dollar in AutoEx, and is not 
discriminatory because ETP Holders are free to elect whether or not to 
send liquidity adding displayed orders for sub-dollar securities in 
AutoEx. In addition, the proposed modification will tend to further 
incentivize ETP Holders to submit displayed orders over Zero

[[Page 6424]]

Display Orders in AutoEx. 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 
February 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 Web site (http://
www.nsx.com).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\6\ in general, and 
Section 6(b)(4) of the Act,\7\ 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 ETP Holders are eligible to submit (or not submit) trades and 
quotes at any price in AutoEx in all tapes, as either displayed or 
undisplayed, and as liquidity adding or liquidity taking, and may do so 
at their discretion.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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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.

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 \8\ and subparagraph (f)(2) of Rule 
19b-4 \9\ 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 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4.
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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-2010-01 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-NSX-2010-01. 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 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 will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-
2010-01 and should be submitted on or before March 2, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2740 Filed 2-8-10; 8:45 am]
BILLING CODE 8011-01-P