[Federal Register Volume 77, Number 224 (Tuesday, November 20, 2012)]
[Notices]
[Pages 69711-69712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28146]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68228; File No. SR-NSX-2012-21]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Fee and Rebate Schedule
November 14, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is
hereby given that on November 6, 2012, National Stock Exchange, Inc.
(``NSX[supreg]'' or ``Exchange'') filed with the Securities and
Exchange Commission (``SEC'' or ``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 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 Exchange is proposing to amend its Fee and Rebate Schedule (the
``Fee Schedule'') issued pursuant to Exchange Rule 16.1(a) to modify
the rebates for certain orders executed in the Exchange's Order
Delivery and Automated Response (``Order Delivery'') mode. The text of
the proposed rule change is available on the Exchange's Web site at
www.nsx.com, at the Exchange's principal office, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend Section II of its Fee Schedule
to modify the rebates for orders executed in the Exchange's Order
Delivery mode in securities with quoted prices of at least one dollar.
Under Section II of the Fee Schedule, the Exchange offers ETP Holders
both a Primary and Alternate Fee Schedule with four (4) tiers of
progressively greater rebates.\3\ An ETP Holder's monthly average daily
trading volume (``ADV'') determines which rebate tier the ETP Holder
meets. The
[[Page 69712]]
Exchange proposes to modify the tiers under Section II of the Fee
Schedule for Order Delivery participants as follows:
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\3\ ETP Holders that are Order Delivery participants
automatically receive the Alternate Fee Schedule upon meeting the
minimum ADV threshold of 1,500,000 in Order Delivery Mode and
10,000,000 shares in Automatic Execution Mode. Under the Alternate
Fee Schedule, ETP Holders will receive up to an additional $0.0003
liquidity adding rebate over the tiered rebates contained in the
Primary Fee Schedule when the tier requirements are met.
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Tier 1--unchanged.
Tier 2--unchanged.
Tier 3--ADV range would change from 14.0 and < 16.0
million to 14.0 and < 15.0 million. Rebate amount is unchanged.
Tier 4--ADV range would change from 16.0 million and above
to 15.0 million and above. Rebate amount is unchanged.
The Exchange believes improving rebates is a reasonable method to
incentivize ETP Holders that use Order Delivery to submit greater order
volumes to the Exchange, which would result in increased revenues to
the Exchange. Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting, its fees and rebates to remain
competitive with other exchanges. The Exchange believes that the
proposed rule change reflects this competitive environment.
Operative Date and Notice
The Exchange currently intends to make the proposed modifications,
which are effective on filing of this proposed rule, operative as of
commencement of trading on November 6, 2012.\4\ 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 Web
site (www.nsx.com).
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\4\ Because the proposed changes are effective November 6, 2012,
trading activity occurring from November 1, 2012 through November 5,
2012 will be billed under the then existing Fee Schedule when ETP
Holders are invoiced at month end.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) of the Securities Exchange Act of
1934 \5\ (the ``Act''), 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 rebate structure under Section II of the Fee Schedule is not
discriminatory in that all ETP Holders are eligible to submit (or not
submit) liquidity adding trades and quotes, and may do so at their
discretion in the daily volumes they choose during the course of the
measurement period. The volume adjustments are reasonable methods to
incentivize the submission of such orders. All similarly situated ETP
Holders are subject to the same fee structure, and access to the
Exchange is offered on terms that are not unfairly-discriminatory.
Volume-based rebates and discounts have been widely adopted in the
equities markets, and are equitable because they are open to all ETP
Holders on an equal basis and provide rebates that are reasonably
related to the value of an exchange's market quality associated with
the requirements for the favorable pricing tier.
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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 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
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 Exchange Act \7\ and subparagraph (f)(2)
of Rule 19b-4 \8\ 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 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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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 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 email to [email protected]. Please
include File Number SR-NSX-2012-21 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-NSX-2012-21. 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 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
10:00 a.m. and 3:00 p.m. Copies of the 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-NSX-2012-21 and should be
submitted on or before December 11, 2012.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-28146 Filed 11-19-12; 8:45 am]
BILLING CODE 8011-01-P