Document ID: SEC-2010-1083-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2010-07-19T04:00Z

[Federal Register: July 19, 2010 (Volume 75, Number 137)]
[Notices]               
[Page 41912-41913]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19jy10-125]                         

[[Page 41912]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62488; File No. SR-NYSEAmex-2010-69]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Establishing a 
Fee and Credit Structure for Trading Nasdaq-Listed Securities on the 
Exchange Pursuant to Unlisted Trading Privileges and Implementing a New 
Fee for Crossing Session II for Both Listed and Traded Securities

July 13, 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 July 12, 2010, NYSE Amex LLC (``NYSE Amex'' 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 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 proposes to (i) establish a fee and credit structure 
for trading Nasdaq-listed securities on the Exchange pursuant to a 
grant of unlisted trading privileges (``Nasdaq Securities'') and (ii) 
implement a new fee for Crossing Session II for both listed and traded 
securities. The text of the proposed rule change is available at the 
Exchange's principal office, the Commission's Public Reference Room, on 
the Commission's Web site at http://www.sec.gov, and at http://
www.nyse.com.

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 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 (i) establish a fee and credit structure 
for trading Nasdaq Securities and (ii) implement a new fee for Crossing 
Session II for both listed and traded securities.
a. Background
    In a related filing, the Exchange has proposed to trade Nasdaq 
Securities as a pilot program on NYSE Amex Equities, using the same 
market structure, systems and facilities it uses to trade its listed 
securities in accordance with the same trading rules, subject to a few 
differences. The Exchange has proposed that the Nasdaq Security pilot 
program commence on July 13, 2010.\3\
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    \3\ See Securities Exchange Act Release No. 61890 (April 12, 
2010), 75 FR 20401 (April 19, 2010) (SR-NYSEAmex-2010-31).
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b. Proposed Fees and Rebates for Trading Nasdaq Securities
    As with listed securities, the principal categories of market 
participants for trading Nasdaq Securities will include: Members and 
member organizations, customers, Floor brokers, Designated Market 
Makers (``DMMs'') and Supplemental Liquidity Providers (``SLPs''). 
Thus, the Exchange's proposed fee and credit structure for trading 
Nasdaq Securities is very similar to that for its listed securities.
    The principle [sic] difference between the pricing for Exchange-
listed securities and Nasdaq Securities is that, because there will not 
be an opening or closing auction for Nasdaq Securities on the Exchange, 
there are no limit or market ``At the Close'' (``MOC/LOC''), ``At the 
Opening'' (``OPG''), or ``Closing Offset'' (``CO'') orders and thus no 
differentiated pricing for such transactions.
    The Exchange notes that the initial pricing proposed herein is 
subject to review and may be changed.
i. Fees for Taking Liquidity
    For transactions in Nasdaq Securities with a share price of at 
least $1.00, the Exchange proposes a fee of $0.0021 per share for 
taking liquidity from the Exchange; however, for Floor broker 
discretionary e-quotes and verbal agency interest the Exchange proposes 
to charge $0.0005 per share. For transactions in Nasdaq Securities with 
a price of less than $1.00, the Exchange proposes a fee of .20% of the 
total dollar value of the transaction for all market participants.
ii. Routing Fees
    The Exchange proposes a single set of routing fees for Nasdaq 
Securities across all market participants. For transactions in Nasdaq 
Securities with a share price of at least $1.00, the Exchange proposes 
a routing fee of $0.0029 per share, and for transactions in Nasdaq 
Securities with a price of less than $1.00, the Exchange proposes a 
routing fee equal to .29% of the total dollar value of the transaction.
iii. Customer, Floor Broker, Member and Member Organization Credits \4\
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    \4\ As with its listed securities, the Exchange proposes 
different credits for DMMs and SLPs trading Nasdaq Securities.
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    For customers, Floor brokers, members and member organizations, the 
Exchange proposes to pay a credit of $0.0019 per share when adding 
liquidity, including displayed and non-displayed orders, in Nasdaq 
Securities with a trading price of at least $1.00 per share. When 
adding liquidity in Nasdaq Securities with a trading price below $1.00, 
the Exchange is proposing to not pay any credit; Floor brokers, 
however, would be paid a credit of .10% of the total dollar value of 
the transaction.
    Floor broker agency cross trades (i.e. a trade where a member has 
customer orders to buy and sell an equivalent amount of the same 
security) and agency transactions between Floor brokers in the Crowd 
will not be charged any fees.
iv. DMM Credits
    Because DMMs have special obligations as market makers, the 
Exchange proposes different credits for DMM transactions in Nasdaq 
Securities.\5\ For DMM transactions adding liquidity in Nasdaq 
Securities with a price of at least $1.00 per share, the Exchange 
proposes to pay a credit of $0.0021 per share. For DMM transactions 
adding liquidity in Nasdaq Securities with a trading price below $1.00, 
the Exchange proposes to pay a credit of .20% of the total dollar value 
of the transaction.
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    \5\ Text in this sentence as set forth in the Exchange's Form 
19b-4 and Exhibit 1 thereto has been deleted at the request of the 
Exchange. See e-mail from Jason Harman, Consultant, NYSE Amex, to 
Nathan Saunders, Special Counsel, Division of Trading and Markets, 
Commission, dated July 12, 2010.
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v. SLP Credits
    The Exchange proposes different credits for SLP transactions in 
Nasdaq Securities contingent upon SLPs meeting their quoting 
requirements in

[[Page 41913]]

accordance with Rule 107B--NYSE Amex Equities.\6\ For SLP transactions 
adding liquidity in Nasdaq Securities with a price of at least $1.00 
per share, the Exchange proposes to pay a credit of $0.0021 per share 
if the SLP meets its quoting requirements and $0.0019 per share if the 
SLP does not meet its quoting requirements. For SLP transactions adding 
liquidity in Nasdaq Securities with a trading price below $1.00, the 
Exchange is proposing to not pay any credit regardless of whether or 
not the SLP meets its quoting requirements.
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    \6\ Text in this sentence as set forth in the Exchange's Form 
19b-4 and Exhibit 1 thereto has been deleted at the request of the 
Exchange. See id.
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vi. Odd-Lot Transactions
    The Exchange proposes that the fees for odd-lot transactions in 
Nasdaq Securities are as follows: $0.0021 per share for stocks priced 
above $1.00, and 0.20% of the total dollar value of the transaction for 
stocks priced below $1.00. The Exchange further proposes that DMMs 
receive a credit for adding liquidity in odd-lots, including the odd-
lot portions of partial round-lots, of $0.0011 per share, regardless of 
price.\7\
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    \7\ The Exchange has filed and expects to receive approval of a 
rule filing to incorporate the receipt and execution of odd-lot 
interest into the round lot market and to decommission the use of 
the odd-lot system (``trading-in-shares''). See Securities Exchange 
Act Release No. 62169 (May 25, 2010), 75 FR 31494 (June 3, 2010) 
(SR-NYSEAmex-2010-43). Nasdaq Securities will trade in accordance 
with these rule changes and the pricing for odd-lots will be the 
same as for round-lots once they are approved.
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c. Proposed Fee for Transactions in Crossing Session II
    Currently, there is no charge for executions of basket trades in 
Crossing Session II. The Exchange proposes to implement a fee of 
$0.0001 per share charged to both sides of a basket trade executed in 
Crossing Session II. This fee would apply to executions involving both 
listed and traded securities, including Nasdaq Securities. The fee 
would be subject to a $50,000 cap per month per member organization for 
(i) NYSE Amex Equities listed securities, and separately (ii) NYSE Amex 
traded securities.
    Finally, the Exchange proposes that the fees and credits described 
herein be made effective as of the same date the Exchange's pilot 
program for trading Nasdaq Securities is made effective.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the provisions of Section 6 \8\ of the Act,\9\ in general, and 
Section 6(b)(4), \10\ in particular, in that they are designed to 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members and other persons using its facilities. The 
Exchange believes that the proposal does not constitute an inequitable 
allocation of dues, fees or other charges, as all similarly situated 
Exchange participants will be subject to the same fee structure.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78a, et seq.
    \10\ 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 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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the NYSE Amex.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the 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.

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 e-mail to rule-comments@sec.gov. Please include File 
Number SR-NYSEAmex-2010-69 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-NYSEAmex-2010-69. 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 such 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-
NYSEAmex-2010-69 and should be submitted on or before August 9, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17491 Filed 7-16-10; 8:45 am]
BILLING CODE 8011-01-P