Document ID: SEC-2008-1461-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes:National Stock Exchange, Inc.
Posted Date: 2008-10-24T04:00Z

[Federal Register: October 24, 2008 (Volume 73, Number 207)]
[Notices]               
[Page 63533-63534]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24oc08-135]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58808; File No. SR-NSX-2008-18]

 
Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend NSX Fee Schedule To Increase the Liquidity Taking Fee for 
Automatic Execution Mode Transactions

October 17, 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 October 9, 2008, National Stock Exchange, Inc. (``NSX'' 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 Exchange. The 
Commission is publishing this notice to solicit comments 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

    The Exchange is proposing to amend the NSX Fee and Rebate Schedule 
(the ``Fee Schedule'') in order to increase the fee for taking 
liquidity in Automatic Execution mode of order interaction for those 
securities trading at one dollar or more. 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 increase the 
liquidity taking fee in the Automatic Execution mode of order 
interaction (``AutoEx Mode'').\3\ In particular, this rule change 
proposes to increase the liquidity taking fee in securities trading at 
or above one dollar in AutoEx Mode from the current fee of $0.0025 to 
$0.0028 per share executed across all tapes where Liquidity Adding 
Average Daily Volume (``Liquidity Adding ADV'') equals or exceeds 
50,000 shares. As stated in explanatory endnote 3 of the Fee Schedule, 
``Liquidity Adding ADV'' means, with respect to an ETP Holder, the 
number of shares such ETP Holder has executed as a liquidity provider 
on average per trading day (excluding partial trading days and 
securities under one dollar) across all tapes on NSX for the calendar 
month in which the executions occurred. The instant rule filing 
proposes no changes to the liquidity taking fee for transactions in 
AutoEx Mode where Liquidity Adding ADV is less than 50,000 shares \4\ 
or for any securities under one dollar.\5\
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    \3\ This rule change proposes no changes to the fees and rebates 
applicable to securities executed in the Order Deliver mode of order 
interaction (``Order Delivery Mode'').
    \4\ The liquidity taking fee in AutoEx Mode where the Liquidity 
Adding ADV is less than 50,000 shares is $0.0030 per share executed 
across all tapes.
    \5\ The liquidity taking fee in AutoEx Mode for securities under 
one dollar is 0.30% of the trade value, where ``trade value'' means 
a dollar amount equal to the price per share multiplied by the 
number of shares executed.
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    The Exchange intends to make the proposed fee structure effective 
on filing of this proposed rule for trading on October 9, 2008. Because 
the instant rule filing is mid-month, Liquidity Adding ADV will be 
calculated in the month of October 2008, using two calculation periods. 
For trades executed prior to October 9, 2008, Liquidity Adding ADV will 
be calculated based on the average per trading day (excluding partial 
trading days and securities under one dollar) across all tapes on NSX 
for the period beginning October 1, 2008 and ending October 8, 2008, 
the period when the old Fee Schedule (prior to effectiveness of the 
instant modification) was in effect. For trades executed on or after 
October 9, 2008, Liquidity Adding ADV will be calculated based on the 
average per trading day (excluding partial trading days and securities 
under one dollar)

[[Page 63534]]

across all tapes on NSX for the period beginning October 9, 2008 and 
ending October 31, 2008, the period when the new Fee Schedule (after 
effectiveness of the instant modification) was in effect. Thereafter, 
Liquidity Adding ADV will be calculated based on the number of shares 
an ETP Holder has executed as a liquidity provider on average per 
trading day (excluding partial trading days and securities under one 
dollar) across all tapes on NSX for the calendar month in which the 
executions occurred. Notice will be provided to ETP Holders respecting 
the calculation of the Liquidity Adding ADV.
    For purposes of clarity, the proposed rule change proposes no 
modifications to the fees and rebates relating to any trades in Order 
Delivery Mode.
Rationale
    The Exchange has determined that these changes are necessary to 
increase the revenue of the Exchange and to adequately fund its 
regulatory and general business functions. The proposed modification is 
reasonable and equitably allocated to those ETP Holders that opt to 
take liquidity in AutoEx Mode, and is not discriminatory because ETP 
Holders are free to elect whether to send orders in all tapes through 
the AutoEx Mode as liquidity taking trades and quotes. Based upon the 
information above, the Exchange believes that the proposed rule change 
is consistent with the protection of investors and the public interest.
Notice
    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 provide a copy of the rule filing 
on the Exchange's Web site (www.nsx.com).
2. Statutory Basis
    The Exchange believes 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 fee and rebate structure is not 
discriminatory in that all ETP Holders are eligible to submit (or not 
submit) liquidity taking trades and quotes in AutoEx Mode in all tapes 
and may do so attheir 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(f)(2).
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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-2008-18 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-NSX-2008-18. 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, 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 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 available publicly. All 
submissions should refer to File Number SR-NSX-2008-18 and should be 
submitted on or before November 14, 2008.

    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,
Acting Secretary.
 [FR Doc. E8-25375 Filed 10-23-08; 8:45 am]

BILLING CODE 8011-01-P