[Federal Register Volume 77, Number 241 (Friday, December 14, 2012)]
[Notices]
[Pages 74536-74538]
[FR Doc No: 2012-30166]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68391; File No. SR-NSX-2012-25]

Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Fee and Rebate Schedule

December 10, 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 December 3, 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 the
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: (1)
Modify the rebates provided to Equity Trading Permit (``ETP'') \3\
Holders that execute orders on the Exchange using Order Delivery mode
(``Order Delivery Mode''); and (2) charge a fee for each Order Delivery
Notification,\4\ which is capped on a monthly basis. 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.
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    \3\ Exchange Rule 1.5 defines the term ``ETP'' as an Equity
Trading Permit issued by the Exchange for effecting approved
securities transactions on the Exchange's Trading Facilities.
    \4\ An Order Delivery Notification refers to a message sent by
the Exchange to the Order Delivery participant communicating the
details of the full or partial quantity of an inbound contra-side
order that potentially may be matched within the System for
execution against an Order Delivery Order.
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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
    The Exchange is proposing to amend its Fee Schedule issued pursuant
to Exchange Rule 16.1(a) to: (1) Modify the rebates for orders executed
by ETP Holders using the Exchange's Order Delivery Mode; and (2) charge
a fee for each Order Delivery Notification, which is capped on a
monthly basis.
Modification of Order Delivery Rebates for Securities Priced at $1.00
or Above
    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. An ETP Holder's monthly average daily
trading volume (``ADV'') determines which rebate tier the ETP Holder
meets. The Exchange proposes to replace these tiers and the Primary and
Alternate Fee Schedules under Section II of the Fee Schedule with a
single rebate for all shares executed by ETP Holders against displayed
and undisplayed orders using the Order Delivery Mode (``Order Delivery
Participants'').\5\ The Exchange also [sic] proposes a $0.0030 per
share rebate and a 50% Market Data Rebate (``MDR'') for all
transactions executed by Order Delivery Participants in securities
priced at $1.00 or above.\6\ These rebates will replace the current 25%
MDR paid to ETP Holders that meet the ADV requirements under the fourth
tier of Section II of the Fee Schedule. The Exchange believes that
Order Delivery Participants will post additional liquidity on the
Exchange if it (i) increases the rebate to $0.0030 per share when the
Order Deliver [sic] Participant adds liquidity in a security quoted at
a price of $1.00 or greater, and (ii) provides Order Delivery
Participants with 50% of the attributable MDR received by the Exchange.
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    \5\ As a result of consolidating the Primary and Alternate Fee
Schedules, ETP Holders that are Order Delivery Participants will no
longer automatically receive the Alternate Fee Schedule upon meeting
a minimum ADV in both Auto-Ex Mode and Order Delivery Mode because a
separate Alternate Fee Schedule will not be available.
    \6\ As part of the proposed rebate consolidation, Midpoint Peg
Zero Display Reserve Orders will receive the proposed $0.0030 per
share rebate described above rather than the existing fixed rebate
of $0.0017 per executed share.
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Modification of Order Delivery Rebates for Securities Priced Below
$1.00
    The Exchange is proposing to amend Section II of the Fee Schedule
to no longer provide ETP Holders with a rebate for transactions
executed using Order Delivery Mode for securities quoted at prices less
than $1.00. The Fee Schedule currently provides ETP Holders with a
rebate of the ``[l]esser of: 0.20% of trade value and 20% of the quote
spread'' for securities quoted at prices less than $1.00.
Rationale for Revised Order Delivery Rebates
    The Exchange believes that the higher rebates \7\ will provide ETP
Holders with an incentive to post additional liquidity on the Exchange
via Order Delivery Mode. The Exchange also 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. The Exchange believes that the proposed rule change
reflects this competitive environment.
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    \7\ The Commission notes that this rule filing increases rebates
for transactions in stocks priced over $1, but actually eliminates
rebates for transactions in stocks priced under $1.
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Order Delivery Notification Fee
    The Exchange proposes to introduce an Order Delivery Notification
Fee. The Exchange proposes to charge ETP Holders $0.29 for each Order
Delivery Notification delivered to each ETP Holder for potential
execution against a posted displayed or undisplayed order. Currently,
the Exchange provides this service to ETP Holders at no charge. The
proposed Order Delivery Notification Fee will only apply to the first
1.5 million Order Delivery Notifications from [sic] a single Order
Delivery Participant in a given calendar month.
Rationale for Order Delivery Notification Fee
    The Exchange's Order Delivery Mode provides Electronic
Communication Networks (``ECNs'') with an electronic trading platform
to interact with the

National Market System. ECNs can use Order Delivery Mode to fulfill
certain regulatory obligations such as qualifying as an ECN Display
Alternative \8\ or publishing quotations in the consolidated quotation
system when the five (5) percent order display requirement is
triggered.\9\ Order Delivery Mode provides ECNs with the ability to (i)
Publish quotations into the consolidated quotation system, (ii) receive
``protected quotation'' status under Rule 611 of Regulation NMS,\10\
(iii) receive an Order Delivery Notification when there is a potential
match against a published quotation, and (iv) distribute attributed
quotations through the Exchange's Depth-of Book market data product.
Order Delivery Mode is a unique market structure that costs more to
operate and regulate than if the Exchange offered only automatic
executions. Instead of moving to a less expensive market model and
technology, the Exchange maintains this high cost structure to foster
competition between markets, to encourage the display of limit orders
by alternative trading systems, and to provide ECNs with a mechanism to
grow within the National Market System. However, maintaining the Order
Delivery program inhibits the Exchange's ability to gain additional
liquidity through automatic executions.
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    \8\ 17 CFR 242.602(b)(5)(i).
    \9\ 17 CFR 242.301(b)(3)(B).
    \10\ 17 CFR 611.
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    The Exchange's Order Delivery Mode currently provides ECN's with
``free advertising'' through attributed quotations, which facilitates
an increasing rate of executions away from the Exchange. Over the past
several months, the overall messaging activity for Order Delivery
Participants has increased rapidly without a corresponding increase in
executions or an increase in net transaction revenue. During the month
of November 2012, Order Delivery Mode accounted for approximate [sic]
seventy-four (74) percent of the Exchange's overall messaging activity
with one Order Delivery Participant accounting for approximately fifty-
five (55) percent of that activity, while only accounting for nine (9)
percent of the Exchange's overall trading volume. The disproportionate
trade-to-quote ratio in Order Delivery Mode is a result of ECNs
successfully leveraging the Exchange's infrastructure to develop their
businesses away from the Exchange, even as the majority of the
Exchange's operational costs are fixed. Consequently, the Exchange
strongly believes that continuing to rely on transaction-based revenues
to support Order Delivery Mode is not feasible. The Exchange believes
that it is reasonable to charge for the services provided to Order
Delivery Participants, and recover the development and ongoing
operational costs, excluding the costs of regulation, of Order Delivery
Mode. The Exchange will evaluate on a quarterly basis the level of
quotations, Order Delivery Notifications and executions as a percentage
of overall operations in order to ensure that the Order Delivery
Notification Fee is reasonable, equitable and not unfairly
discriminatory among ETP Holders.
Operative Date and Notice
    The Exchange will make the proposed modifications, which are
effective on filing of this proposed rule, operative as of commencement
of trading on December 3, 2012.\11\ 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 an Information 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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    \11\ While the Exchange proposes to amend the date of its Fee
Schedule to December 1, 2012, it will not implement the proposed fee
changes until Monday, December 3, 2012, the first day of trading.
The Exchange proposes to amend the Fee Schedule's date to December 1
as it contains non-transaction based fees that are charged on a
monthly basis.
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2. Statutory Basis
    The Exchange believes that the proposed changes to Section II of
the Fee Schedule are consistent with the provisions of Section 6(b) of
the Securities Exchange Act of 1934 \12\ (the ``Act''), in general, and
Section 6(b)(4) of the Act,\13\ in particular in that they are 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 [sic]
and quotes, and may do so at their discretion in the daily volumes they
choose during the course of the billing period. 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.
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 its Order Delivery Mode.
Lastly, the Exchange believes offering different rebates for executions
in securities with prices quoted above and below $1.00 is reasonable
because it is designed to encourage ETP Holders to improve liquidity in
securities with quoted prices at or above $1.00.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed Order Delivery Notification
Fee is consistent with the provisions of Section 6(b) of the Act,\14\
in general, and Section 6(b)(4) of the Act,\15\ 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. As stated above, Order Delivery
Participants utilize a substantial portion of the Exchange's
infrastructure, operational and processing resources. The Order
Delivery Notification Fee is a mechanism under which the Exchange can
recoup the costs associated with Order Delivery Mode, as it did by
capturing the difference between the rebate provided to the Order
Delivery Participant and the fee charged to the liquidity taker. The
Exchange believes that is [sic] fair and equitable to charge a [sic]
Order Delivery Participant a fee which covers the proportionate cost of
a unique technology that offers Order Delivery Mode. The Order Delivery
Notification Fee is reasonable since it will only recoup the costs
associated with Order Delivery Mode. The Exchange will evaluate the
Order Delivery Notification Fee on a quarterly basis to ensure that it
remains reasonable and equitable among all ETP Holders. In addition,
the Exchange proposes to cap the Order Delivery Notification Fee to the
first 1.5 million Order Delivery Notifications transmitted to each
Order Delivery Participant.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4).
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    The Exchange also believes the Order Delivery Notification Fee and
cap is a reasonable means for the Exchange to recover the development
costs of Order Delivery Mode, as well as the ongoing operating costs.
During the month of November 2012, Order Delivery Mode accounted for
approximate [sic] seventy-four (74) percent of the Exchange's overall
messaging activity with one Order Delivery Participant accounting for
approximately fifty-five (55) percent of that activity, while only
accounting for nine (9) percent of the Exchange's overall trading
volume. The disproportionate trade-to-quote ratio in

Order Delivery Mode is a result of ECNs successfully leveraging the
Exchange's infrastructure to develop their businesses away from the
Exchange, even as the majority of the Exchange's operational costs are
fixed. While the Exchange could modify its transaction-based fee
structure to charge Order Delivery participants a fee for posting Order
Delivery liquidity, the Exchange believes that utilizing an [sic]
capped Order Delivery Fee structure provides Order Delivery
participants a greater incentive to post liquidity on the Exchange.
Consequently, the Exchange strongly believes that continuing to rely on
transaction-based revenues to support Order Delivery Mode is not
feasible. The Exchange believes that it is reasonable to charge for the
services provided to Order Delivery Participants, and recover the
development and ongoing operational costs, excluding the costs of
regulation, of Order Delivery Mode. The Exchange will evaluate on a
quarterly basis the level of quotations, Order Delivery notifications
and executions as a percentage of overall operations in order to ensure
that the Order Delivery Notification Fee is reasonable, equitable and
not unfairly discriminatory among ETP Holders.
    Moreover, the Exchange believes that the proposed Order Delivery
Notification Fee and cap is consistent with the provisions of Section
6(b)(5) of the Act,\16\ in that the proposed fee is not unfairly
discriminatory amongst Order Delivery Participants. Order Delivery
Participants are eligible to submit (or not submit) liquidity adding
quotes, and may do so at their discretion in the daily volumes they
choose during any given trading day. As stated earlier, Order Delivery
Mode currently accounts for approximately 74% of the Exchange's overall
incoming messaging activity. Due to the low level of executions
resulting from the quotation activity, the Exchange does not believe
that a transaction-based fee is a reasonable means for the Exchange to
recover the development and the ongoing operational costs of the Order
Delivery program. The Exchange does not believe that the Order Delivery
Fee is unfairly discriminatory since it directly correlates to the
amount of Exchange infrastructure, operations and processing required
to maintain the Order Delivery program. The Exchange will evaluate the
Order Delivery Notification Fee on a quarterly basis to ensure that
changes in Order Delivery activity or volume compared to the Exchange's
other operations which causes the fee to become unfair or
discriminatory among Order Delivery Participants.
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    \16\ 15 U.S.C. 78f(b)(5).
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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 \17\ and subparagraph
(f)(2) of Rule 19b-4.\18\ 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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    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 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_ADDRESS>Please include
File Number SR-NSX-2012-25 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-2012-25. 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 on official business
days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for inspection and copying at the
principal offices 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-2012-25, and should be submitted on or before
January 4, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30166 Filed 12-13-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: May 14, 2008 (Volume 73, Number 94)]
[Notices]
[Page 27817-27818]
[DOCID:fr14my08-54]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 1

May 9, 2008.
    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

    Docket Numbers: RP95-408-070.
    Applicants: Columbia Gas Transmission Corporation.
    Description: Report of Columbia Gas Transmission Corporation.
    Filed Date: 05/07/2008.
    Accession Number: 20080507-5061.
    Comment Date: 5 p.m. Eastern Time on Monday, May 19, 2008.

    Docket Numbers: RP96-320-089.
    Applicants: Gulf South Pipeline Company, LP.
    Description: Gulf South Pipeline Company, LP submits capacity
release agreements containing negotiated rate provisions executed by
Gulf South and the following replacement shippers, Total Gas & Power
North America Inc et al.
    Filed Date: 05/07/2008.
    Accession Number: 20080508-0207.
    Comment Date: 5 p.m. Eastern Time on Monday, May 19, 2008.

    Docket Numbers: RP08-309-001.
    Applicants: Northern Border Pipeline Company.
    Description: Northern Border Pipeline Company submits Substitute
Fifth Revised Sheet 271 to become effective May 5, 2008 in compliance
with the Letter Order dated May 2, 2008.
    Filed Date: 05/07/2008.
    Accession Number: 20080508-0208.
    Comment Date: 5 p.m. Eastern Time on Monday, May 19, 2008.

    Docket Numbers: RP99-106-014.
    Applicants: TransColorado Gas Transmission Company LLC.
    Description: TransColorado Gas Transmission Company LLC submits its
Annual Revenue Sharing Report in compliance with the April 24, 2002
Commission Order.
    Filed Date: 05/07/2008.
    Accession Number: 20080508-0206.
    Comment Date: 5 p.m. Eastern Time on Monday, May 19, 2008.

    Docket Numbers: RP08-368-000.
    Applicants: MarkWest New Mexico, L.L.C.
    Description: MarkWest New Mexico, LLC submits Original Sheet 160 et
al. to its FERC Gas Tariff, First Revised Volume 1, to be effective 6/
1/08.
    Filed Date: 05/02/2008.
    Accession Number: 20080508-0217.
    Comment Date: 5 p.m. Eastern Time on Wednesday, May 14, 2008.

    Docket Numbers: RP08-369-000.
    Applicants: Chandeleur Pipe Line Company.
    Description: Request for Waiver of Chandeleur Pipe Line Company.
    Filed Date: 05/08/2008.
    Accession Number: 20080508-5089.
    Comment Date: 5 p.m. Eastern Time on Tuesday, May 20, 2008.

    Docket Numbers: RP08-370-000.
    Applicants: Sabine Pipe Line LLC.
    Description: Request for Waiver of Sabine Pipe Line LLC.
    Filed Date: 05/08/2008.
    Accession Number: 20080508-5090.
    Comment Date: 5 p.m. Eastern Time on Tuesday, May 20, 2008.

    Any person desiring to intervene or to protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214) on or before 5 p.m. Eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. Protests

will be considered by the Commission in determining the appropriate
action to be taken, but will not serve to make protestants parties to
the proceeding. Anyone filing a motion to intervene or protest must
serve a copy of that document on the Applicant. In reference to filings
initiating a new proceeding, interventions or protests submitted on or
before the comment deadline need not be served on persons other than
the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://
www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St., NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive e-mail notification
when a document is added to a subscribed dockets(s). For assistance
with any FERC Online service, please e-mail<EMAIL_ADDRESS>
or call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

Nathaniel J. Davis, Sr.,
Deputy Secretary.
 [FR Doc. E8-10767 Filed 5-13-08; 8:45 am]

BILLING CODE 6717-01-P