Document ID: SEC-2010-0592-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2010-04-22T04:00Z

[Federal Register: April 22, 2010 (Volume 75, Number 77)]
[Notices]               
[Page 21080-21083]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22ap10-131]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61913; File No. SR-NYSE-2010-29]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Implementing an Equity Transaction Fee Schedule for Shares Executed on 
the NYSE MatchPoint\SM\ System

April 15, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on April 12, 2010, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II and III below, which Items have been prepared by the self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 proposes an equity transaction fee schedule for shares 
executed on the NYSE MatchPointSM (``NYSE MatchPoint'' or 
``MatchPoint'') system, effective upon filing with the Securities 
Exchange Commission (the ``SEC'' or the ``Commission''), which will 
replace the current transaction fee waiver for all MatchPoint 
executions.\4\ The proposed transaction fee will include criteria that 
will permit all users a per share fee reduction for entering specified 
levels of volume in addition to a scaled fee schedule for shares 
executed on MatchPoint. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.nyse.com.
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    \4\ Currently, MatchPoint charges no transaction fees for 
MatchPoint executions. See Securities Exchange Act Release No. 61350 
(January 14, 2010), 75 FR 3767 (January 22, 2010) (SR-NYSE-2010-01); 
see also Securities Exchange Act Release No. 61520 (February 16, 
2010), 75 FR 8163, (February 23, 2010) (SR-NYSE-2010-06).
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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

[[Page 21081]]

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 those 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
    The Exchange proposes to amend the NYSE's 2010 Price List by adding 
an equity transaction fee schedule for shares executed on the NYSE 
MatchPoint system, effective upon filing with the Commission, which 
will replace the current transaction fee waiver for all MatchPoint 
executions.\5\ The proposed transaction fee will include criteria that 
will permit all users to obtain a per share fee reduction for 
MatchPoint executions by entering specified levels of volume into 
MatchPoint in addition to a scaled per share fee for shares executed on 
MatchPoint, which is described in more detail below. The proposed fee 
reduction will only apply when MatchPoint orders are executed.
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    \5\ Ibid. footnote 1.[sic]
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    Background: On January 7, 2009, the Exchange filed with the 
Securities and Exchange Commission a proposed rule change to adopt a 
temporary equity transaction fee for shares executed on the NYSE 
MatchPoint system that was effective until February 28, 2009.\6\ This 
temporary equity transaction fee was extended numerous times since the 
original filing and was scheduled to terminate on January 31, 2010.\7\ 
Each such filing was effective upon filing pursuant to Section 
19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-4.\9\
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    \6\ See Securities Exchange Act Release No. 59229 (January 12, 
2009) 74 FR 3119 (January 16, 2009) (SR-NYSE-2009-01).
    \7\ See Securities Exchange Act Release No. 59491 (March 3, 
2009) 74 FR 10107 (March 9, 2009) (SR-NYSE-2009-20); see Securities 
Exchange Act Release No. 59864 (May 5, 2009) 74 FR 22194 (May 12, 
2009) (SR-NYSE-2009-44); see Securities Exchange Act Release No. 
60278 (July 10, 2009) 74 FR 34615 (July 16, 2009) (SR-NYSE-2009-67); 
see Securities Exchange Act Release No. 60439 (August 5, 2009) 74 FR 
40270 (August 11, 2009) (SR-NYSE-2009-78) and see also Securities 
Exchange Act Release No. 60949 (November 6, 2009) 74 FR 58665 
(November 13, 2009) (SR-NYSE-2009-110).
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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    The temporary equity transaction fee was a scaled fee for 
MatchPoint users based on the average daily volume of shares executed 
during a calendar month through the MatchPoint system as follows:

------------------------------------------------------------------------
    Average daily volume of shares
               executed                               Rate
------------------------------------------------------------------------
50,000 shares or less.................  $.0015 per share.
Over 50,000 to 499,999................  .0010 per share.
500,000 and greater...................  .0005 per share.
------------------------------------------------------------------------

    On January 7, 2010, the Exchange proposed a transaction fee holiday 
waiving all MatchPoint transaction fees under the temporary equity 
transaction fee schedule until January 29, 2010.\10\ The temporary 
waiver of fees was extended until March 31, 2010.\11\ Waiver of 
MatchPoint transaction fees is currently in effect and will terminate 
when this proposed rule filing is filed with the Commission. The 
Exchange believed that the temporary waiver of the transaction fee 
would induce users to enter more single-sided volume \12\ into the 
MatchPoint system. The Exchange intends that the proposed transaction 
fee schedule will be in effect upon filing with the Commission.
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    \10\ See Securities Exchange Act Release No. 61350 (January 14, 
2010), 75 FR 3767 (January 22, 2010) (SR-NYSE-2010-01).
    \11\ See Securities Exchange Act release No. 61520 (February 16, 
2010), 75 FR 8163, (February 23, 2010) (SR-NYSE-2010-06).
    \12\ Executions in the MatchPoint system occur when buy and sell 
interest in a security is entered on a matched basis (both buy and 
sell sides submitted together) or when interest submitted in the 
system by one user matches against contra side interest submitted by 
another user.
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    Proposed Transaction Fee Schedule: The Exchange proposes to re-
establish the scaled fees that were temporarily effective from January 
7, 2009 until January 7, 2010 with an additional criterion: to permit 
fee reductions for MatchPoint executions when users enter certain 
volume levels into MatchPoint matching sessions. The Exchange believes 
that the new fee schedule will continue to reward those who have been 
using the MatchPoint system for share execution, and will provide an 
additional incentive for users that can add share volume to MatchPoint 
as described below.
    ``Shares Entered'': By this filing, the Exchange proposes to 
provide an incentive for users to enter share volume into the 
MatchPoint system because by adding volume, even if such volume is 
added only to one side of the market (i.e., buy side or sell side), the 
likelihood of obtaining executions will increase. The proposed fee 
schedule rewards those users who obtain executions of their orders and 
who add volume at the specified share levels into any MatchPoint 
matching sessions (i.e., intra day and after hours sessions). However, 
no user can obtain the proposed fee reductions unless their MatchPoint 
orders execute. To be clear, the Exchange is not charging users to 
enter volume into MatchPoint. Rather, the proposed fee schedule adds a 
criterion that will permit a fee reduction for MatchPoint users who 
enter certain levels of volume when their orders execute on MatchPoint. 
As the proposed fee schedule provides, a user can have a minimum amount 
of executions that do not reach the ``shares executed'' threshold on 
MatchPoint and still obtain a fee reduction if the user ``enters'' the 
specified share levels into the MatchPoint system.
    The Exchange will calculate the proposed transaction fees based on 
whichever criterion (shares ``executed'' or ``entered'') achieves the 
lowest rate on a monthly basis. The date of effectiveness for the 
proposed fee schedule will be the date of filing. Therefore, the 
Exchange will calculate a user's transaction fees for April 2010 based 
on the threshold criteria during the trading days remaining from the 
date of effectiveness to April 30, 2010. Thereafter, the Exchange will 
calculate the transaction fees on a monthly basis.
    To be eligible for the proposed ``shares entered'' fee reduction 
schedule, shares entered into the MatchPoint system must participate in 
a matching session (i.e., intra day sessions or after hours session) 
and execute. Shares entered into MatchPoint and cancelled by the user 
before a matching session commences will not be eligible for the 
proposed fee reduction. Shares entered into MatchPoint and cancelled 
due to a system malfunction, or some other Exchange-driven event, will 
still be eligible for the proposed ``entered share'' fee reduction.
    As the chart below demonstrates, the proposed fee schedule will 
provide the following rates based on the average daily volume of shares 
executed and ``entered'' into the MatchPoint system:
    (1) 50,000 shares or less executed or 499,999 shares or less 
entered into MatchPoint that participate in a matching session will be 
charged $.0015 per share; and
    (2) Over 50,000 to 499,999 shares executed or 500,000 up to and 
including 4,999,999 shares entered into MatchPoint that participate in 
a matching session will be charged $.0010 per share; and

[[Page 21082]]

    (3) 500,000 shares and greater executed or over 5,000,000 shares 
entered into MatchPoint that participate in a matching session will be 
charged $.0005 per share.

                           Threshold Criteria
------------------------------------------------------------------------
  Average daily volume of shares executed/
              entered per month                Rate per share  executed
------------------------------------------------------------------------
50,000 shares or less executed or 499,999     $.0015 per share.
 shares or less entered.
Over 50,000 to 499,999 shares executed or     $.0010 per share.
 500,000 to 4,999,999 shares entered.
500,000 and greater shares executed or over   $.0005 per share.
 5,000,000 shares entered.
------------------------------------------------------------------------

2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Act'') 
\13\ for the proposed rule change is the requirement under Section 
6(b)(4) that an exchange have rules that provide for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and other persons using its facilities. The Exchange believes the 
proposed fee schedule is reasonable in that it carries forward a 
reduction in fees that was established in the former temporary scaled 
fee (effective January 7, 2009 until January 7, 2010) and adds another 
criterion; ``entered shares,'' which also provides a per share 
reduction in fees when orders are executed in the MatchPoint. In this 
way, a MatchPoint user will be able to obtain a reduction in 
transaction fees if the user reaches the scaled thresholds for 
executions or the scaled thresholds for shares entered. The proposed 
fee schedule is designed to make the system more competitive through 
the entering of specified share levels into the MatchPoint system. The 
proposed fee schedule, which will be effective upon filing, rewards all 
MatchPoint users who not only obtain executions but who enter certain 
levels of volume. Finally, the fees are equitable in that they are 
available to all members who access the MatchPoint system.
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    \13\ 15 U.S.C. 78a.
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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 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes or changes a due, fee, or 
other charge imposed on its members by the NYSE.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(2).
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    At any time within 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.
    The Exchange believes the proposed fee schedule is reasonable and 
provides incentives to users to reduce their MatchPoint transaction 
fees. In addition, the proposed transaction fee schedule is designed to 
make the system more competitive through the entering of specified 
share levels into the MatchPoint system. As such, the proposed 
transaction fee schedule rewards those MatchPoint users who not only 
obtain executions, but who enter certain levels of volume. Finally, the 
fees are equitable in that they are available to all members who access 
the MatchPoint system.

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-NYSE-2010-29 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-NYSE-2010-29. 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 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-NYSE-2010-29 and should be 
submitted on or before May 13, 2010.

[[Page 21083]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9273 Filed 4-21-10; 8:45 am]
BILLING CODE 8011-01-P