Document ID: SEC-2009-0731-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fee and Rebate Schedule Issued Pursuant to Exchange Rule 16.1(c) in Order to Include Securities Priced at Less Than One Dollar in the Calculation of Volume Thresholds Used To Determine Rebates Payable for Displayed Order Liquidity
Posted Date: 2009-06-02T04:00Z

[Federal Register: June 2, 2009 (Volume 74, Number 104)]
[Notices]               
[Page 26453-26454]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn09-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59974; File No. SR-NSX-2009-03]

 
Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Fee and Rebate Schedule Issued Pursuant to Exchange Rule 
16.1(c) in Order to Include Securities Priced at Less Than One Dollar 
in the Calculation of Volume Thresholds Used To Determine Rebates 
Payable for Displayed Order Liquidity Adding Tape A and C Securities 
Executed at One Dollar or Above

May 26, 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 15, 2009, 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 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

    The Exchange is proposing to amend the Fee and Rebate Schedule (the 
``Fee Schedule'') issued pursuant to Exchange Rule 16.1(c) in order to 
include securities priced at less than one dollar in the calculation of 
volume thresholds used to determine rebates payable for displayed order 
liquidity adding Tape A and C securities executed at one dollar or 
above.
    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's calculation of ``Liquidity Adding Average Daily Volume'' 
(``Liquidity Adding ADV'') used to determine rebates payable for 
displayed orders of Tape A and C securities in the Automatic Execution 
Mode of order interaction (``AutoEx'') \3\ (the ``AutoEx Displayed 
Order Liquidity Adding Tape A/C Rebate'') so as to include securities 
priced under one dollar for purposes of determining whether a volume 
tier has been achieved.
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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 AutoEx Displayed Order Liquidity Adding Tape A/C Rebate is 
currently $0.0026, $0.0027 or $0.0028 per share where an ETP Holder 
achieves Liquidity Adding ADV \4\ of less than 25 million, less than 40 
million and 40 million or more, respectively. Currently, securities 
priced under one dollar are excluded from the calculation of 
``Liquidity Adding ADV''. The Proposed Rule Change would modify the 
definition of ``Liquidity Adding ADV'' with respect only to the tiers 
used in calculation of the AutoEx Displayed Order Liquidity Adding Tape 
A/C Rebate so as to include securities under one dollar in the 
calculation of whether the above referenced tiers are achieved. The 
Proposed Rule Change would not modify other calculations of average 
daily volume in the Fee Schedule.
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    \4\ As set forth in the Explanatory Endnotes to the Fee 
Schedule, prior to implementation of the instant rule change, 
``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 (or partial month, as applicable) in which the 
executions occurred''. The proposed rule change would modify the 
foregoing definition by adding the following statement: 
``Notwithstanding the foregoing, for purposes of determining whether 
the volume tier thresholds are achieved in AutoEx with respect to 
rebates applicable to displayed orders that add liquidity for Tape A 
and C securities, securities priced under one dollar will be 
included''.
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Rationale
    The Exchange has determined that these changes are necessary to 
increase the volume of Displayed Orders of sub-dollar Tape A and C 
securities in

[[Page 26454]]

AutoEx for the purpose of increasing the revenue of the Exchange and 
adequately funding its regulatory and general business functions. The 
proposed modifications are reasonable and equitably allocated to those 
ETP Holders that opt to provide Tape A and C Displayed Orders in 
AutoEx, and are not discriminatory because 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 utilize the proposed calculation effective 
upon filing of this proposed rule as it performs the calculations to 
determine the May, 2009 AutoEx Displayed Order Liquidity Adding Tape A/
C Rebates.\5\ 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).
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    \5\ The Exchange has determined that its application of the 
proposed modification of the calculation of average daily volume as 
it applies to the entire current calendar month could only benefit 
ETP Holders by serving to increase the amount of their AutoEx 
Displayed Order Liquidity Adding Tape A/C Rebate for such month. In 
addition, the Exchange has determined that such application will not 
adversely impact the general operating revenues of the Exchange.
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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 fee and rebate structure is not 
discriminatory in that all ETP Holders are eligible to submit (or not 
submit) liquidity adding trades and quotes, and may do so at their 
discretion in the daily volumes they choose during the course of the 
measurement period.
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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 [sic].
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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-2009-03 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-2009-03. 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, 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-
2009-03 and should be submitted on or before June 23, 2009.

    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. E9-12713 Filed 6-1-09; 8:45 am]

BILLING CODE 8010-01-P