[Federal Register: April 2, 2007 (Volume 72, Number 62)]
[Notices]
[Page 15745-15747]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap07-125]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55524; File No. SR-NSX-2007-03]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fees for Transactions Executed Through NSX BLADE and ITS Plans
Priced at Less Than $1.00 Per Share
March 26, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 2, 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 substantially prepared by the
Exchange. NSX has 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 15746]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing changes to its fees for transactions
priced at less than $1.00 per share that are executed through NSX
BLADE, the Exchange's new trading platform. These changes are being
proposed in order to comply with Rule 610(c) of Regulation NMS under
the Act. The Exchange is also proposing corresponding changes to its
Fee Schedule applicable to transactions under the Intermarket Trading
System Plan and/or the Plan for the purpose of Creating and Operating
an Intermarket Communications Linkage (``ITS Plans'') for transactions
executed through the ITS Plans (``ITS Transactions''). The text of the
proposed rule change is available at NSX, the Commission's Public
Reference Room, and http://www.nsx.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, 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. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange has created a new state of the art trading platform,
known as NSX BLADE, which utilizes a strict price/time priority system
as the ultimate replacement for the Exchange's legacy system, National
Securities Trading System (``NSTS''). Pursuant to Exchange Rule
16.1(a), the Exchange maintains a Fee Schedule that contains its
current fees, dues and other charges applicable to transactions in NSX
BLADE (``NSX BLADE Fee Schedule'').
Currently, the NSX BLADE Fee Schedule provides for an execution fee
of $0.0030 per share for removing liquidity from NSX BLADE (in other
words, a charge for taking liquidity against an order in NSX BLADE),
and a rebate of $0.0030 per share executed for adding liquidity into
NSX BLADE (in other words, a rebate for the addition of liquidity to
NSX BLADE, provided that it results in an execution through NSX BLADE).
Thus, ETP Holders taking liquidity against an order in NSX BLADE are
currently charged a fee of $0.0030 per share executed, and ETP Holders
providing liquidity into NSX BLADE are currently paid a rebate of
$0.0030 per share executed.
Rule 610(c)(2) of Regulation NMS \5\ generally requires that the
fees charged by a trading center for execution of an order against a
quotation of less than $1.00 per share cannot exceed or accumulate to
more than 0.3% of the quotation price per share. In order to comply
with this rule, the Exchange is proposing a 0.3% per share liquidity
taker fee and a 0.3% per share liquidity provider rebate for
transactions that are priced at less than $1.00 per share. This fee and
rebate structure would be in lieu of the $0.0030 per share liquidity
taker fee and the $0.0030 liquidity provider rebate described above. In
other words, for transactions that are priced at less than $1.00 per
share, ETP Holders would be charged 0.3% of the price per share for
taking liquidity against an order in NSX BLADE, and would receive a
rebate of 0.3% of the price per share for the addition of liquidity to
NSX BLADE, provided that it results in an execution through NSX BLADE.
For example, if a transaction was executed on NSX BLADE for 100 shares
at $0.50 per share, any liquidity taker fee or liquidity provider
rebate applicable to the transaction would be equal to $0.15 ($.050 x
0.3% x 100).
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\5\ 17 CFR 242.610(c)(2).
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In addition, changes are being proposed to the Fee Schedule for ITS
Transactions, to provide for a corresponding 0.3% per share liquidity
taker fee for ITS Transactions executed through NSX BLADE that are
priced at less than $1.00 per share. ETP Holders taking liquidity from
NSX BLADE will be charged under the NSX BLADE Fee Schedule, and
executions on NSX BLADE through an ITS Plan will be charged under the
Fee Schedule for ITS Transactions (although the rates of the two
execution fees are identical). The Exchange bills non-ETP Holders using
the facilities of the Exchange for ITS Transactions under the Fee
Schedule for ITS Transactions.
In connection with this rule change, language is also proposed to
be added to the NSX BLADE Fee Schedule stating that with respect to ITS
Transactions executed through NSX BLADE, the Exchange will pay the
applicable liquidity provider rebate ($0.0030 per share or 0.3% per
share, depending on the execution price) only after it receives payment
of the liquidity taker fee applicable to the execution.
Pursuant to NSX Rule 16.1(c), the Exchange will ``provide ETP
Holders with notice of all relevant dues, fees, assessments and charges
of the Exchange.'' ETP Holders and others, including self-regulatory
organizations that are the subject of exchange-to-exchange billing,
using the Exchange will be advised of these fees through the Exchange's
website. In addition, ETP Holders will, simultaneously with this
filing, be notified through the issuance of a Regulatory Circular of
the changes to the Fee Schedules applicable to transactions through NSX
BLADE and the ITS Plans.
The fees have been designed in this manner in order to ensure that
the Exchange can continue to fulfill its obligations under the Act.
2. Statutory Basis
NSX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\6\ in general, and with Sections
6(b)(4) of the Act,\7\ in particular, in that the proposal provides for
the equitable allocation of reasonable dues, fees, and other charges.
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\6\ 15 U.S.C. 78f.
\7\ 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
result in 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
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4
thereunder \9\ because it establishes or changes a due, fee, or other
charge applicable only to a member imposed by the self-regulatory
organization. Accordingly, the proposal is effective upon Commission
receipt of the filing. 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
[[Page 15747]]
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-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-2007-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSX-2007-03. 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. Copies of the 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 SR-NSX-
2007-03 and should be submitted on or before April 23, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
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\10\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E7-5988 Filed 3-30-07; 8:45 am]
BILLING CODE 8010-01-P