Document ID: SEC-2010-1549-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Stock Exchange, Inc.
Posted Date: 2010-10-13T04:00Z

[Federal Register: October 13, 2010 (Volume 75, Number 197)]
[Notices]               
[Page 62910-62911]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13oc10-117]                         

[[Page 62910]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63042; File No. SR-NSX-2010-13]

 
 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

October 5, 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 September 30, 2010, National Stock Exchange, Inc. filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change, as described in Items I and II 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 National Stock Exchange, Inc. (``NSX[supreg]'' or the 
``Exchange'') is proposing a rule change, operative at commencement of 
trading on October 1, 2010, which proposes to amend the NSX Fee and 
Rebate Schedule (the ``Fee Schedule'') respect to rebates payable in 
the Order Delivery mode of order interaction.
    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 to lower the volume threshold necessary to obtain the highest 
rebate with respect to displayed orders in securities priced one dollar 
and above that add liquidity in the Order Delivery mode of order 
interaction (``Order Delivery'').\3\
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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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    For displayed orders in securities priced one dollar and above that 
add liquidity in Order Delivery, the proposed rule change lowers the 
volume threshold necessary to achieve the highest rebate tier. Prior to 
the effective date of the proposed rule change, the Fee Schedule 
provides a rebate of $0.0008 per share if an ETP Holder's liquidity 
adding average daily volume (as fully defined in Endnote 3 of the Fee 
Schedule, ``Liquidity Adding ADV'') is at least one million shares and 
less than five million shares (``Tier 1''); a rebate of $0.0024 per 
share plus 35% of attributable market data revenue if Liquidity Adding 
ADV is at least five million shares and less than 30 million shares 
(``Tier 2''); and a rebate of $0.0024 per share plus 50% of 
attributable market data revenue if Liquidity Adding ADV is at least 30 
million shares (``Tier 3'').
    The proposed rule change lowers, from 30 to 15 million, the Tier 3 
volume threshold necessary to obtain the highest rebates. Accordingly, 
after the effective date, an ETP Holder achieving a Liquidity Adding 
ADV of at least 15 million shares will receive a rebate of $0.0024 per 
share plus 50% of attributable market data revenue regarding its 
displayed orders priced one dollar or higher that add liquidity in 
Order Delivery.
    The proposed rule change does not modify other rebates or fees that 
are contained in the Fee Schedule.
Rationale
    The Exchange has determined that these changes are necessary to 
create further incentive for ETP Holders to submit increased order 
volumes 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 adjustments are necessary for competitive reasons. The 
Exchange believes that these rebate changes will not impair the 
Exchange's ability to fulfill its regulatory responsibilities.
    The proposed modifications are reasonable and equitably allocated 
to those ETP Holders that submit orders in Order Delivery, and are not 
discriminatory because qualified 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 make the proposed modifications, which are 
effective on filing of this proposed rule, operative for trading on 
October 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 website (http://www.nsx.com).
Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\4\ in general, and 
Section 6(b)(4) of the Act,\5\ 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 qualified ETP Holders are eligible to submit (or not submit) 
trades and quotes at any price in AutoEx and Order Delivery 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 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.

[[Page 62911]]

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 \6\ and subparagraph (f)(2) of Rule 
19b-4 \7\ 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 summarily may 
temporarily suspend 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 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-2010-13 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 20549-9303.
    All submissions should refer to File No. SR-NSX-2010-13. This file 
number should be included in the subject line if e-mail is used. To 
help the Commission process and review 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 website viewing and 
printing in the Commission's Public Reference Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filings will also 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-
2010-13 and should be submitted on or before November 3, 2010.

    For the Commission by the Division of Trading and Markets, 
pursuant to the delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-25622 Filed 10-12-10; 8:45 am]
BILLING CODE 8011-01-P