[Federal Register Volume 75, Number 67 (Thursday, April 8, 2010)]
[Notices]
[Pages 17983-17985]
[FR Doc No: 2010-7975]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61826; File No. SR-ISE-2010-24]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval to a
Proposed Rule Change Relating to the Amounts That Direct Edge ECN, in
Its Capacity as an Introducing Broker for Non-ISE Members, Passes
Through to Such Non-ISE Members

April 1, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 24, 2010, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II 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,
and is approving the proposal on an accelerated basis.
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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 proposes to modify the amounts that Direct Edge ECN
(``DECN''), in its capacity as an introducing broker for non-ISE
Members, passes through to such non-ISE Members.
    The text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.ise.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, 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 these statements may be examined at
the places specified in Item III below. The self-regulatory
organization 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
    DECN, a facility of ISE, operates two trading platforms, EDGX and
EDGA.\3\ On March 24, 2010, the ISE filed for immediate effectiveness a
proposed rule change to amend Direct Edge ECN's (``DECN'') fee schedule
for ISE Members \4\ to: (i) Reflect pass through charges of other
market centers; \5\ and (ii) make typographical and clarifying
changes.\6\ The changes made pursuant

to SR-ISE-2010-23 became operative on April 1, 2010.
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    \3\ This fee filing relates to the trading facility operated by
ISE and not EDGA Exchange, Inc. and EDGX Exchange, Inc. Direct Edge
ECN LLC (EDGA and EDGX) will cease to operate in its capacity as an
electronic communications network following the commencement of
operations of EDGA Exchange, Inc. and EDGX Exchange, Inc. as
national securities exchanges.
    \4\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
    \5\ In SR-ISE-2009-57, the Exchange adopted a fee of $0.0024 per
share for securities priced at or above $1.00 which add liquidity to
LavaFlow ECN (``LavaFlow'') and are routed from either EDGX or EDGA.
Such a strategy is deemed a ROLF routing strategy, which is a
destination specific routing strategy that will first sweep the EDGA
or EDGX order book before being delivered to LavaFlow. A conforming
amendment was made to the fee schedule to yield an ``M'' flag to
account for this fee. Conversely, for liquidity that is routed
through either EDGA or EDGX and removes liquidity from LavaFlow, the
Exchange adopted a fee for ISE members of $0.0029 per share for
securities priced at or above $1.00. Such situation yields a flag of
``U.'' However, if an ISE member posts an average of 50,000 shares
or more using a ROLF routing strategy, yielding flag M, then such
ISE member's fee, when removing liquidity from LavaFlow, decreased
to $0.0022 per share and yielded flag U. See Securities Exchange Act
Release No. 60442 (August 5, 2009), 74 FR 40249 (August 11, 2009)
(SR-ISE-2009-57).
    In SR-ISE-2010-23, because the Exchange passed through to
Exchange members the actual transaction fees assessed by away
markets, the Exchange amended its fees schedule to reflect
LavaFlow's increase in fees. Effective March 1, 2010, LavaFlow
increased its fees and thresholds for meeting the above-described
tier. Members that remove liquidity from LavaFlow if the Member's
attributable MPID executes a minimum of 100,000 shares (instead of
50,000 shares) average daily volume using strategy ROLF (yielding
Flag M) are now charged $0.0023 per share (instead of $0.0022 per
share). The Exchange amended its fee schedule to pass through this
change to its members by reflecting it in footnote 6 on the fee
schedule.
    Secondly, effective April 1, 2010, the Nasdaq Stock Market
updated its transaction fee schedule to introduce a unified removal
rate ($0.0030 per share executed) for all U.S. equities, across
Tapes A, B, and C.\5\ As a result of this change, the Exchange made
a conforming change to delete footnote number 8 on the ``2'' flag
and re-number it as footnote number 7 since the Nasdaq Stock Market
no longer differentiates its removal rate across Tapes A, B, and C.
See Equity Trader Alert 2010-12 (effective April 1, 2010).
    \6\ In SR-ISE-2010-23, the Exchange made the following
typographical and clarifying changes to the fee schedule: (i) on
flag H, for EDGA, 0.001 was changed to read ``0.0010'' to conform
the numbering with the other fees on the schedule (emphasis added);
and (ii) in footnote number 6, the Exchange deleted an additional
parenthesis at the end of the phrase ``(yielding Flag U).''
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    In its capacity as a member of ISE, DECN currently serves as an
introducing broker for the non-ISE Member subscribers of DECN to access
EDGX and EDGA. DECN, as an ISE Member and introducing broker, receives
rebates and is assessed charges from DECN for transactions it executes
on EDGX or EDGA in its capacity as introducing broker for non-ISE
Members. Since the amounts of such rebates and charges were changed
pursuant to SR-ISE-2010-23, DECN wishes to make corresponding changes
to the amounts it passes through to non-ISE Member subscribers of DECN
for which it acts as introducing broker. As a result, the per share
amounts that non-ISE Member subscribers receive and are charged will be
the same as the amounts that ISE Members receive and are charged.
    ISE is seeking accelerated approval of this proposed rule change,
as well an effective date of April 1, 2010. ISE represents that this
proposal will ensure that both ISE Members and non-ISE Members (by
virtue of the pass-through described above) will in effect receive and
be charged equivalent amounts and that the imposition of such amounts
will begin on the same April 1, 2010 start date.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\7\ in general, and
furthers the objectives of Section 6(b)(4),\8\ 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. In particular, this proposal will ensure that dues,
fees and other charges imposed on ISE Members are equitably allocated
to both ISE Members and non-ISE Members (by virtue of the pass-through
described above).
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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 not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

III. 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_ADDRESS>Please include
File Number SR-ISE-2010-24 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-ISE-2010-24. 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,\9\ 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the ISE. 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-ISE-2010-24 and should be
submitted on or before April 29, 2010.
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    \9\ The text of the proposed rule change is available on ISE's
Web site at http://www.ise.com, on the Commission's Web site at
http://www.sec.gov, at ISE, and at the Commission's Public Reference
Room.
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IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\10\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) \11\ of the Act, which requires that
the rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees, and other charges among members
and issuers and other persons using its facilities.
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    \10\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(4).
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    As described more fully above, ISE recently amended DECN's fee
schedule for ISE Members pursuant to SR-ISE-2010-23 (the ``Member Fee
Filing''). The fee changes made pursuant to the Member Fee Filing
became operative on April 1, 2010. DECN receives rebates and is charged
fees for transactions it executes on EGDX or EDGA in its capacity as an
introducing broker for its non-ISE member subscribers. The current
proposal, which will apply retroactively to April 1, 2010, will allow
DECN to pass through the revised rebates and fees to the non-ISE member
subscribers for which it acts an introducing broker. The Commission
finds that the proposal is consistent with the Act because it will
provide rebates and charge fees to non-ISE member subscribers that are
equivalent to those established for ISE member subscribers in the
Member Fee Filing.\12\
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    \12\ Id.
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    ISE has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after publication
of notice of filing thereof in the Federal Register. As discussed
above, the proposal will allow DECN to pass through to non-ISE member
subscribers the revised rebate and fees established for ISE member
subscribers in the Member Fee Filing, resulting in

equivalent rebates and fees for ISE member and non-member subscribers.
In addition, because the proposal will apply the revised rebates and
fees retroactively to April 1, 2010, the revised rebates and fees will
have the same effective date, thereby promoting consistency in the
DECN's fee schedule. Accordingly, the Commission finds good cause,
pursuant to Section 19(b)(2) of the Act, for approving the proposed
rule change prior to the thirtieth day after the date of publication of
notice of filing thereof in the Federal Register.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\13\ that the proposed rule change (SR-ISE-2010-24) be, and hereby
is, approved on an accelerated basis.
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    \13\ 15 U.S.C. 78s(b)(2).
    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7975 Filed 4-7-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 157 (Monday, August 15, 2011)]
[Notices]
[Pages 50515-50516]
[FR Doc No: 2011-20693]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65071; File No. SR-FINRA-2011-038]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the Effective Date of the Trading Pause
Pilot

August 9, 2011.
    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 August 5, 2011, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by 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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 6121 (Trading Halts Due to
Extraordinary Market Volatility) to extend the effective date of the
pilot, which is currently scheduled to expire on August 11, 2011, until
January 31, 2012.
    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    FINRA proposes to amend FINRA Rule 6121.01 to extend the effective
date of the pilot by which such rule operates, which is currently
scheduled to expire on August 11, 2011, until January 31, 2012.
    FINRA Rule 6121.01 provides that if a primary listing market has
issued an individual stock trading pause under its rules, FINRA will
halt trading otherwise than on an exchange in that security until
trading has resumed on the primary listing market. The pilot was
developed and implemented as a market-wide initiative by FINRA and
other self-regulatory organizations (``SROs'') in consultation with
Commission staff, and is currently applicable to the S&P 500[supreg]
Index,\4\ the Russell 1000[supreg] Index and a pilot list of Exchange
Traded Products.\5\ Beginning August 8, 2011, the pilot will cover all
NMS stocks covered by the trading pause pilot rules of a primary
listing market.\6\
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    \4\ See Securities Exchange Act Release No. 62251 (June 10,
2010), 75 FR 34183 (June 16, 2010) (Order Approving File No. SR-
FINRA-2010-025).
    \5\ See Securities Exchange Act Release No. 62883 (September 10,
2010), 75 FR 56608 (September 16, 2010) (Order Approving File No.
SR-FINRA-2010-033).
    \6\ See Securities Exchange Act Release No. 64735 (June 24,
2011), 76 FR 38243 (June 29, 2011) (Order Approving File No. SR-
FINRA-2011-023).
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    The extension proposed herein would allow the pilot to continue to
operate without interruption while FINRA and the other SROs further
assess the effect of the pilot on the marketplace and whether other
initiatives should be adopted in lieu of the current pilot.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\7\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change meets
these requirements in that it promotes uniformity across markets
concerning decisions to pause trading in a security when there are
significant price movements.
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    \7\ 15 U.S.C. 78o-3(b)(6).
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    Additionally, extension of the pilot to January 31, 2012 would
allow the pilot to continue to operate without

interruption while FINRA and the other SROs further assess the effect
of the pilot on the marketplace and whether other initiatives should be
adopted in lieu of the current pilot.

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA 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

    FINRA has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires FINRA to give the Commission written notice of FINRA's
intent to file the proposed rule change along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. FINRA
has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \13\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has asked the
Commission to waive the 30-day operative delay so that the proposal may
become operative immediately upon filing.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
it will allow the pilot program to continue uninterrupted, thereby
avoiding the investor confusion that could result from a temporary
interruption in the pilot program. For this reason, the Commission
designates the proposed rule change as operative upon filing.\14\
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    \14\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the 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.

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_ADDRESS>Please include
File No. SR-FINRA-2011-038 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 No. SR-FINRA-2011-038. 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 website 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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. 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 No. SR-FINRA-2011-038 and should be
submitted on or before September 6, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20693 Filed 8-12-11; 8:45 am]
BILLING CODE 8011-01-P