[Federal Register Volume 76, Number 178 (Wednesday, September 14, 2011)]
[Notices]
[Pages 56850-56852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23378]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65283; File No. SR-NYSEAmex-2011-67]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing of 
Proposed Rule Change Relating to Fees for Trading Securities Listed on 
the Nasdaq Stock Market LLC Pursuant to Unlisted Trading Privileges

September 7, 2011.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on September 1, 2011, 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 amend its 2011 Price List (``Price List'') 
for certain fees relating to trading pursuant to unlisted trading 
privileges (``UTP'') of securities listed on the Nasdaq Stock Market 
LLC (``Nasdaq''). The proposed amendment to the Exchange's Price List 
for equities is attached hereto as Exhibit 5. The text of the proposed 
rule change is available at the Exchange, on the Exchange's Web site at 
www.nyse.com, on the Commission's Web site at http://www.sec.gov, 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List for certain fees 
relating to trading Nasdaq securities pursuant to UTP. The amended 
pricing will become operative on September 1, 2011.
    Currently, market participants, Supplemental Liquidity Providers 
(``SLPs'') and Designated Market Makers (``DMMs'') are charged a fee of 
$0.0027 per share for orders in Nasdaq securities with a share price of 
$1 or more traded pursuant to UTP that take liquidity. Under the 
proposal, there will be a fee of $0.0004 per share for orders that take 
liquidity.
    Currently, market participants and DMMs are charged a fee of 
$0.0029 per share for orders in Nasdaq securities with a share price of 
$1 or more that route to other markets when reduced fee volume 
requirements are not met. Under the proposal, there would be a fee of 
$0.0025 per share for such orders.
    Market participants, other than DMMs and SLPs, that provide 
liquidity in Nasdaq securities with a share price of $1 or more traded 
pursuant to UTP are currently paid a rebate of $0.0030 per share. Under 
the proposal, such market participants will be paid a rebate of $0.0010 
per share.
    Currently, for orders in Nasdaq securities with a share price of $1 
or more traded pursuant to UTP that provide liquidity, DMMs, as well as 
SLPs that meet their quoting requirements pursuant to Rule 107B are 
paid a rebate of $0.0031 per share, and SLPs that do not meet their 
quoting requirements are paid a rebate of $0.0030 per share for orders 
that provide liquidity. Under the proposal, the rebate will be $0.0011 
per share for orders that provide liquidity for SLPs that meet their 
quoting requirements while SLPs that provide liquidity but do not meet 
their quoting requirements will be paid a rebate of $0.0010 per share. 
The rebate will be $0.0020 per share for orders that provide liquidity 
for DMMs.
    Currently, market participants and SLPs are paid a rebate of 
$0.0036 per share for executions of displayed liquidity in Nasdaq 
securities with a share price of $1 or more when they are adding 
liquidity in orders that originally display a minimum of 2,000 shares 
with a trading price of at least $5.00 per share, as long as the order 
is not cancelled in an amount that would reduce the original displayed 
amount below 2,000 shares. Under the proposal, such market participants 
and SLPs will be paid a rebate of $0.0020 per share.
    Currently, DMMs receive a rebate of $0.0036 per share in Nasdaq 
securities with a share price of $1 or more traded pursuant to UTP for 
executions of the displayed portions of s-Quotes that provide liquidity 
and display 2,000 shares or more at the time of execution with a 
trading price of at least $5.00 per share. Under the proposal, DMMs 
will be paid a rebate of $0.0020 per share.
    In a rule filing submitted on March 29, 2011,\4\ the Exchange 
adopted a new tier with a reduced ``take'' fee of $0.0019 per share 
(compared with $0.0027 then in effect) and a reduced routing fee of 
$0.0019 per share (compared with $0.0029 then in effect) for market 
participants and DMMs that meet certain average daily executed volume 
requirements in either shares or a combination of shares and contracts 
traded on the NYSE Amex options market. Under the proposal, this tier 
and the related routing fee will be

[[Page 56851]]

eliminated for all Nasdaq securities traded pursuant to UTP.
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    \4\ See Securities Exchange Act Release No. 64195 (April 5, 
2011), 75 FR 20428 (April 12, 2011) (SR-NYSEAmex-2011-21).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Securities Exchange Act of 1934 
(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 its facilities. The Exchange believes 
that the proposal does not constitute an inequitable allocation of 
fees, as all similarly situated member organizations will be charged 
the same amount and access to the Exchange's market is offered on fair 
and non-discriminatory terms.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    With respect to the reduction of fees for taking liquidity, the 
Exchange believes that the reduction of fees will attract more volume 
to the Exchange from participants that are seeking to lower their 
overall transaction costs and thereby will result in a more competitive 
market in the trading of Nasdaq securities pursuant to UTP. 
Additionally, the approach for lowering fees for taking liquidity was 
previously adopted by NASDAQ OMX BX, Inc. in 2009 in Tape A and C 
securities, lowering the fee for taking liquidity from $0.0014 per 
share to a rebate of $0.0006 per share.\7\ The Exchange further 
believes that lowering the rebate for DMMs, SLPs, and market 
participants is appropriate in light of the reduction of fees for 
taking liquidity.
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    \7\ See Securities Exchange Act Release No. 59682 (Apr. 1, 
2009), 74 FR 16015 (Apr. 8, 2009) (SR-NASDAQ OMX BX-2009-018).
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    With respect to lowering the fee for routing to other markets to 
$0.0025, the Exchange notes that the practice of offering routing fees 
at a discount to the fees of taking liquidity at most other markets has 
been previously adopted by other markets, including BATS BYX with its 
CYCLE routing fee of $0.0028 per share.\8\
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    \8\ See BATS BYX Exchange Fee Schedule, available at http://batstrading.com/resources/regulation/rule_book/BYX_Fee_Schedule.pdf.
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    With respect to the reduction in rebates to market participants, 
SLPs, and DMMs for providing liquidity in 2,000 or more share orders 
for securities priced at $5 or more, the Exchange believes that the 
proposed rebates are fair given that the Exchange is reducing the fee 
for taking liquidity. The Exchange believes the fee change will attract 
more liquidity, lower transaction costs, and improve overall trading.
    The Exchange believes that maintaining a tier that allows market 
participants, SLPs, and DMMs to qualify for a reduced fee for taking 
liquidity will no longer be necessary as the fee for taking liquidity 
was greatly reduced.
    With respect to the higher rebate of $0.0020 per share for DMMs 
providing liquidity compared with the rebate of $0.0011 per share for 
SLPs providing liquidity in stocks in which they meet their quoting 
requirements, the Exchange notes that the approach of paying DMMs a 
higher rebate than SLPs has been previously adopted by the New York 
Stock Exchange LLC (``NYSE'') with NYSE DMMs receiving rebates of up to 
$0.0035 per share compared with NYSE SLPs receiving rebates of up to 
$0.0022 per share.\9\ The Exchange believes that the proposed rebates 
are fair given the greater DMM obligations compared to SLP obligations.
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    \9\ See Securities Exchange Act Release Nos. 58921 (November 7, 
2008), 73 FR 68478 (November 18, 2008) (SR-NYSE-2008-111) (notice of 
filing and immediate effectiveness of proposed rule change to 
establish system of rebates for Designated Market Makers); 63642 
(January 4, 2011), 76 FR 1653 (January 11, 2011) (SR-NYSE-2010-87) 
(notice of filing and immediate effectiveness of proposed rule 
change to amend the Exchange Price List).
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges and with 
alternative trading systems that have been exempted from compliance 
with the statutory standards applicable to exchanges. The Exchange 
believes that the proposed rule change reflects this competitive 
environment because it will broaden the conditions under which 
customers may qualify for higher liquidity provider credits.

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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes or changes a due, fee, or 
other charge imposed on its members by the Exchange. 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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 [email protected]. Please include 
File Number SR-NYSEAmex-2011-67 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-2011-67. 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

[[Page 56852]]

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 publicly available. All 
submissions should refer to File Number SR-NYSEAmex-2011-67 and should 
be submitted on or before October 5, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23378 Filed 9-13-11; 8:45 am]
BILLING CODE 8011-01-P