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SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-56890; File No. SR-NSX-2007-13]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY: Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Market Data and Liquidity Provider Rebate Programs for Transactions Through NSX BLADE
DOCUMENT SUMMARY: December 4, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on October 26, 2007, the 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 substantially by NSX. NSX
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act \3\ and Rule 19b4(f)(6) thereunder,\4\ which renders it effective
upon filing with the Commission. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange is proposing to amend Exchange Rule 16.2(b) and the
NSX BLADE Fee Schedule (``Schedule'') in order to implement a series of
fee changes, including changes to its tape credit programs. The text of
the proposed rule change is available at NSX, http://www.nsx.com, and the Commission's Public Reference Room.
II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSX 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. NSX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
NSX proposes a series of fee changes, including changes to its tape
credit program for ETP Holders using the Order Delivery mode of order
interaction as set forth in Exchange Rule 11.13(b)(2) (``Order
Delivery''). In general, as further described below, the Exchange
proposes to restructure its market data rebates (known as ``tape
credits'') so as to credit ETP Holders using Order Delivery for market
data revenue derived from both transactions and quotes. \5\ The
Exchange will also decrease the rate at which it rebates those ETP
Holders using Order Delivery who have executed liquidity providing
shares. Finally, the Exchange proposes that its liquidity provider
rebate be simplified for all transactions in shares executed at less than $1.00 per share to a single rate.
\5\ ETP Holders using the Automatic Execution (``AutoEx'') mode
of order interaction pursuant to Exchange Rule 11.13(b)(1) would
continue to receive a 100% pro rata allocation of market data
revenue related to transactions. ETP Holders using AutoEx will not
receive any market data revenue related to quotes. ETP Holders will
additionally receive no market data revenue credit for transactions
that utilize AutoEx and that involve those securities that have been identified by the Exchange as Designated ETF Shares.
Market Data Rebates
Exchange Rule 16.2(b) currently provides for a 100% pro rata credit
on market data revenues generated by transactions in Tape A, Tape B and
Tape C securities except for transactions executed using AutoEx and
involving certain Designated ETF Shares as set forth in Exhibit A to
the Schedule. NSX currently provides no credit on market data revenue
generated by quotes in Tape A, Tape B and Tape C securities.\6\ With
the instant proposed rule change, the Exchange proposes that Exchange
Rule 16.2(b) be amended such that the Exchange will share 50% of its
market data revenue generated by transactions and 50% of its market
data revenue generated by quotes to those ETP Holders \7\ using Order
Delivery. Thus, while the market data revenue derived from trades is
being reduced, there will be a corresponding increase in market data
revenue derived from quotes. This rebate program is consistent with
other rebate programs provided to Order Delivery firms by other self regulatory organizations.\8\
\6\ See Securities Exchange Act Release No. 56008 (July 3,
2007), 72 FR 37809 (July 11, 2007) (SRNSX200707); see also SR NSX200711 (filed October 1, 2007).
\7\ The Allocation Amendment of Regulation NMS provides that market data revenue will be received by selfregulatory
organizations such that 50% of the revenue is based on the reporting
of quotes and 50% is based on the reporting of transactions. See
Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37476 (June 29, 2005).
\8\ See Securities Exchange Act Release No. 55722 (May 8, 2007), 72 FR 27150 (May 14, 2007) (SRISE200724).
The instant proposed rule change does not affect ETP Holders using AutoEx. AutoEx ETP Holders will continue to receive a 100% pro rata credit on market data revenue generated by transactions, unless the subject of the transaction is a Designated ETF Share, but will not receive any credit on market data revenue derived from quoting. All of these market data credits will continue to be allocable to ETP Holders on a pro rata, or symbolbysymbol, basis based upon Tape A, Tape B and Tape C revenue generated by an ETP Holder's transactions or an ETP Holder's quotes on the Exchange, as applicable.
Liquidity Provider Rebates in Order Delivery Transactions
Currently, the Schedule provides that Order Delivery ETP Holders
providing liquidity on securities executed at more than $1.00 per share will receive a
[[Page 70361]]
rebate of $0.0028 per share executed. The Exchange is proposing that
the Schedule be modified so that Order Delivery ETP Holders placing
these orders will receive rebates of $0.0026 per share executed.
However, if the Order Delivery ETP Holder providing liquidity has
executed an average of 60 million shares per trading day (excluding
partial trading days) on NSX BLADE for the calendar month, the Exchange
will provide those ETP Holders with rebates of $0.0027 per share
executed. The Exchange believes that the enhanced rebate that ETP
Holders who have executed an average of 60 million shares per day on
NSX BLADE over the course of a calendar month will receive for Order
Delivery orders is appropriate in light of the significant order flow
it is likely to produce, resulting in the Exchange receiving greater
funds to permit, among other things, the Exchange to carry out its
regulatory functions. Moreover, the Exchange believes that this change
in the liquidity provider rebate is appropriate because the Order
Delivery mode of order interaction involves greater cost and regulatory burden for the Exchange.
Liquidity Provider Rebates for Trades Executed at Less Than $1.00 per Share
The Exchange currently provides all ETP Holders who provide liquidity with rebates for transactions executed at less than $1.00 per share (``subdollar trades'') which mirror the rebates provided for orders executed at $1.00 or more per share. Thus, the Exchange currently provides different levels of liquidityproviding rebates for subdollar trades depending on the circumstances. With the instant proposed rule change, the Exchange is proposing to simplify this arrangement by providing all ETP Holders providing liquidity with a rebate equal to 0.1% of the price per share, multiplied by the number of shares, for all subdollar trades. This rate will apply regardless of the symbols executed or the mode of order interaction selected by the ETP Holder.
The Exchange has determined that these changes to the Schedule and tape credits are necessary for competitive reasons, particularly in light of the fact that other markets have similar provisions in their market data revenue rebate programs.\9\ Further, the Exchange believes that these fee changes will not impair its ability to carry out its regulatory responsibilities.
\9\ Id.
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.'' Accordingly, ETP Holders will, simultaneously with this filing, be notified through the issuance of a Regulatory Circular of the changes to Rule 16.2(b) and the NSX BLADE Fee Schedule. 2. Statutory Basis
NSX believes that the proposed rule change is consistent with the
provisions of Section 6(b) of the Act,\10\ in general, and with Section
6(b)(4) of the Act,\11\ in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees and other charges.
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory Organization's Statement on Burden on Competition
NSX does not believe that the proposed rule change will impose any inappropriate burden on competition.
C. SelfRegulatory 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
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and
Rule 19b4(f)(6) thereunder.\13\ 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.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b4(f)(6).
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
Paper Comments
All submissions should refer to File Number SRNSX200713. This file number should be included on the subject line if email 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 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 NSX. 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 SRNSX 200713 and should be submitted on or before January 2, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
\14\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E723919 Filed 121007; 8:45 am]
BILLING CODE 801101P
SUMMARY: National Stock Exchange, Inc.,
DOCUMENT BODY 2: December 4, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on October 26, 2007, the 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 substantially by NSX. NSX
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act \3\ and Rule 19b4(f)(6) thereunder,\4\ which renders it effective
upon filing with the Commission. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange is proposing to amend Exchange Rule 16.2(b) and the
NSX BLADE Fee Schedule (``Schedule'') in order to implement a series of
fee changes, including changes to its tape credit programs. The text of
the proposed rule change is available at NSX, http://www.nsx.com, and the Commission's Public Reference Room.
II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSX 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. NSX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
NSX proposes a series of fee changes, including changes to its tape
credit program for ETP Holders using the Order Delivery mode of order
interaction as set forth in Exchange Rule 11.13(b)(2) (``Order
Delivery''). In general, as further described below, the Exchange
proposes to restructure its market data rebates (known as ``tape
credits'') so as to credit ETP Holders using Order Delivery for market
data revenue derived from both transactions and quotes. \5\ The
Exchange will also decrease the rate at which it rebates those ETP
Holders using Order Delivery who have executed liquidity providing
shares. Finally, the Exchange proposes that its liquidity provider
rebate be simplified for all transactions in shares executed at less than $1.00 per share to a single rate.
\5\ ETP Holders using the Automatic Execution (``AutoEx'') mode
of order interaction pursuant to Exchange Rule 11.13(b)(1) would
continue to receive a 100% pro rata allocation of market data
revenue related to transactions. ETP Holders using AutoEx will not
receive any market data revenue related to quotes. ETP Holders will
additionally receive no market data revenue credit for transactions
that utilize AutoEx and that involve those securities that have been identified by the Exchange as Designated ETF Shares.
Market Data Rebates
Exchange Rule 16.2(b) currently provides for a 100% pro rata credit
on market data revenues generated by transactions in Tape A, Tape B and
Tape C securities except for transactions executed using AutoEx and
involving certain Designated ETF Shares as set forth in Exhibit A to
the Schedule. NSX currently provides no credit on market data revenue
generated by quotes in Tape A, Tape B and Tape C securities.\6\ With
the instant proposed rule change, the Exchange proposes that Exchange
Rule 16.2(b) be amended such that the Exchange will share 50% of its
market data revenue generated by transactions and 50% of its market
data revenue generated by quotes to those ETP Holders \7\ using Order
Delivery. Thus, while the market data revenue derived from trades is
being reduced, there will be a corresponding increase in market data
revenue derived from quotes. This rebate program is consistent with
other rebate programs provided to Order Delivery firms by other self regulatory organizations.\8\
\6\ See Securities Exchange Act Release No. 56008 (July 3,
2007), 72 FR 37809 (July 11, 2007) (SRNSX200707); see also SR NSX200711 (filed October 1, 2007).
\7\ The Allocation Amendment of Regulation NMS provides that market data revenue will be received by selfregulatory
organizations such that 50% of the revenue is based on the reporting
of quotes and 50% is based on the reporting of transactions. See
Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37476 (June 29, 2005).
\8\ See Securities Exchange Act Release No. 55722 (May 8, 2007), 72 FR 27150 (May 14, 2007) (SRISE200724).
The instant proposed rule change does not affect ETP Holders using AutoEx. AutoEx ETP Holders will continue to receive a 100% pro rata credit on market data revenue generated by transactions, unless the subject of the transaction is a Designated ETF Share, but will not receive any credit on market data revenue derived from quoting. All of these market data credits will continue to be allocable to ETP Holders on a pro rata, or symbolbysymbol, basis based upon Tape A, Tape B and Tape C revenue generated by an ETP Holder's transactions or an ETP Holder's quotes on the Exchange, as applicable.
Liquidity Provider Rebates in Order Delivery Transactions
Currently, the Schedule provides that Order Delivery ETP Holders
providing liquidity on securities executed at more than $1.00 per share will receive a
[[Page 70361]]
rebate of $0.0028 per share executed. The Exchange is proposing that
the Schedule be modified so that Order Delivery ETP Holders placing
these orders will receive rebates of $0.0026 per share executed.
However, if the Order Delivery ETP Holder providing liquidity has
executed an average of 60 million shares per trading day (excluding
partial trading days) on NSX BLADE for the calendar month, the Exchange
will provide those ETP Holders with rebates of $0.0027 per share
executed. The Exchange believes that the enhanced rebate that ETP
Holders who have executed an average of 60 million shares per day on
NSX BLADE over the course of a calendar month will receive for Order
Delivery orders is appropriate in light of the significant order flow
it is likely to produce, resulting in the Exchange receiving greater
funds to permit, among other things, the Exchange to carry out its
regulatory functions. Moreover, the Exchange believes that this change
in the liquidity provider rebate is appropriate because the Order
Delivery mode of order interaction involves greater cost and regulatory burden for the Exchange.
Liquidity Provider Rebates for Trades Executed at Less Than $1.00 per Share
The Exchange currently provides all ETP Holders who provide liquidity with rebates for transactions executed at less than $1.00 per share (``subdollar trades'') which mirror the rebates provided for orders executed at $1.00 or more per share. Thus, the Exchange currently provides different levels of liquidityproviding rebates for subdollar trades depending on the circumstances. With the instant proposed rule change, the Exchange is proposing to simplify this arrangement by providing all ETP Holders providing liquidity with a rebate equal to 0.1% of the price per share, multiplied by the number of shares, for all subdollar trades. This rate will apply regardless of the symbols executed or the mode of order interaction selected by the ETP Holder.
The Exchange has determined that these changes to the Schedule and tape credits are necessary for competitive reasons, particularly in light of the fact that other markets have similar provisions in their market data revenue rebate programs.\9\ Further, the Exchange believes that these fee changes will not impair its ability to carry out its regulatory responsibilities.
\9\ Id.
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.'' Accordingly, ETP Holders will, simultaneously with this filing, be notified through the issuance of a Regulatory Circular of the changes to Rule 16.2(b) and the NSX BLADE Fee Schedule. 2. Statutory Basis
NSX believes that the proposed rule change is consistent with the
provisions of Section 6(b) of the Act,\10\ in general, and with Section
6(b)(4) of the Act,\11\ in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees and other charges.
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory Organization's Statement on Burden on Competition
NSX does not believe that the proposed rule change will impose any inappropriate burden on competition.
C. SelfRegulatory 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
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and
Rule 19b4(f)(6) thereunder.\13\ 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.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b4(f)(6).
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
Paper Comments
All submissions should refer to File Number SRNSX200713. This file number should be included on the subject line if email 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 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 NSX. 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 SRNSX 200713 and should be submitted on or before January 2, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
\14\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E723919 Filed 121007; 8:45 am]
BILLING CODE 801101P
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14 CFR Part 39 40 CFR Part 52 14 CFR Part 71 33 CFR Part 165 50 CFR Part 679 47 CFR Part 73 26 CFR Part 1 40 CFR Part 180 33 CFR Part 117 50 CFR Part 17 44 CFR Part 67 50 CFR Part 648 14 CFR Part 97 40 CFR Part 63 33 CFR Part 100 50 CFR Part 622 50 CFR Part 660 26 CFR Part 301 44 CFR Part 65 39 CFR Part 111 40 CFR Part 300 6 CFR Part 5 40 CFR Part 271 47 CFR Part 64 40 CFR Parts 52 and 81 50 CFR Part 665 10 CFR Part 50 44 CFR Part 64 49 CFR Part 571 39 CFR Part 3020