Document ID: SEC-2008-1154-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Stock Exchange, Inc.
Posted Date: 2008-08-19T04:00Z

[Federal Register: August 19, 2008 (Volume 73, Number 161)]
[Notices]               
[Page 48414-48416]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19au08-77]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58342; File No. SR-NSX-2008-14]

 
Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend the NSX BLADESM Fee Schedule To Reduce Routing Fees

August 11, 2008.
    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 August 8, 2008, the National Stock Exchange, Inc. (the 
``Exchange'' or the ``NSX'') 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 NSX filed the proposal pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).

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[[Page 48415]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend the NSX BLADESM Fee 
and Rebate Schedule (the ``Fee Schedule'') issued pursuant to Exchange 
Rule 16.1(c) in order to modify the fees associated with routing 
transactions to away market centers.
    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 modify certain 
fees with respect to outbound routing. Specifically, with respect to 
securities traded at one dollar or more, the instant filing proposes 
reducing the per share executed routing fee across all tapes from 
$0.0040 to $0.0029. With respect to securities traded at less than one 
dollar, the instant filing proposes reducing the per share executed 
routing fee across all tapes from $0.0040 to 0.3 percent (0.3%) of the 
trade value. As with the fees and rebates currently applicable to 
trades of securities under one dollar, ``trade value'' means a dollar 
amount equal to the price per share multiplied by the number of shares 
executed.
    In addition, the Exchange is proposing in the instant rule filing 
to eliminate the reference to the term ``NSX BLADESM'' in 
the Fee Schedule.
Rationale
    The Exchange has determined that this change is necessary for 
competitive reasons. Under the current Fee Schedule, the charge for 
routed executions at the Exchange is $0.0040 per share, which is higher 
than the routing fee currently charged by other exchanges and ECN 
alternatives. Consequently, many ETP Holders do not send orders to the 
Exchange that are ``routable'' in order to avoid the current NSX 
routing charge. The instant proposal seeks to offer competitive routing 
fees in order to attract more routable orders. The Exchange is able to 
reduce this routing fee as a result of the activation of NSX 
Securities, LLC as the Exchange's outbound router. In addition, the 
proposed rule change is intended to increase the amount of order flow 
on the Exchange, regardless of whether a given trade in fact executes 
at an away exchange or other market center.
    NSX notes that it operates in a highly competitive market in which 
market participants can readily direct order flow to competing venues 
if they deem fee levels at a particular venue to be more attractive. 
Accordingly, the proposed modification attempts to keep the fees 
reflected in the Fee Schedule competitive with fees charged by other 
venues and to continue to be reasonable and equitably allocated to 
those ETP Holders that opt to route 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.
    In addition, the Exchange proposes to delete the term ``NSX 
BLADESM'' in the Fee Schedule in order to eliminate 
potential confusion. NSX currently has only one trading platform and 
therefore does not need to distinguish between NSX BLADE and any other 
platform. For purposes of clarity, the instant rule filing therefore 
proposes to delete reference to ``NSX BLADESM'' and to 
rename the fee schedule referenced in Rule 16.1(c) as simply the ``Fee 
and Rebate Schedule.''
Operative Date and Notice
    The Exchange intends to make the proposed fee structure for routed 
trades operative on August 8, 2008. 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 that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\5\ in general, and 
Section 6(b)(4) of the Act,\6\ 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 routing fees are not discriminatory in 
that all ETP Holders are eligible to submit (or not submit) trades for 
routing and may do so at their discretion.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 \7\ and subparagraph (f)(2) of Rule 
19b-4 thereunder,\8\ because, as provided in (f)(2), it ``changes a 
due, fee or other charge imposed by the Exchange 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 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-2008-14 on the subject line.

[[Page 48416]]

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-2008-14. 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 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 publicly available. All 
submissions should refer to File Number SR-NSX-2008-14 and should be 
submitted on or before September 9, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-19114 Filed 8-18-08; 8:45 am]

BILLING CODE 8010-01-P