73 FR 64 pgs. 18026-18028 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Effective Period for Rule 2.12, Regarding Third-Party Routing Services in Respect of Orders Entered into NSX BLADE
Type: NOTICEVolume: 73Number: 64Pages: 18026 - 18028
Docket number: [Release No. 34-57574; File No. SR-NSX-2008-08]
FR document: [FR Doc. E8-6776 Filed 4-1-08; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57574; File No. SR-NSX-2008-08]
Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Effective Period for Rule 2.12, Regarding Third-Party Routing Services in Respect of Orders Entered into NSX BLADE
March 27, 2008.
Pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934 ("Act")1and Rule 19b-4 thereunder,2notice is hereby given that on March 24, 2008, 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 and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a "non-controversial" proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act3and Rule 19b-4(f)(6) thereunder.4The Commission is publishing this notice to solicit comment on the proposed rule change from interested persons.
Footnotes:
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b-4(f)(6).
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange is proposing to extend the effective period for Rule 2.12, which describes the terms under which the Exchange provides routing services procured from a third party with respect to orders entered into its trading system, NSX BLADE. The Exchange is also proposing to extend the delay in effectiveness of Rule 2.11, which relates to the outbound routing function of the Exchange's affiliate, NSX Securities, LLC ("NSX Securities").
The text of the proposed rule change is available on the Exchange's Web site at http://www.nsx.com, at the principal office of the Exchange, 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 Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend Exchange Rules 2.11 and 2.12 to extend the effective period for Rule 2.12 (relating to the Exchange's use of a third party to provide outbound routing of orders from the Exchange to other trading centers ("Routing Services")) through September 30, 2008, and to delay the effectiveness of Rule 2.11 (relating to the outbound routing function of the Exchange's affiliate, NSX Securities) until October 1, 2008.
Rule 2.11 provides for certain terms and conditions under which NSX Securities, an affiliate of the Exchange, will provide Routing Services. Rule 2.11 was approved by the Commission in connection with the approval of the Exchange's new trading rules relating to NSX BLADE on August 31, 2006.5The Exchange filed and received approval for the addition of Rule 2.12, which provides for terms and conditions of the Exchange's use of a third party to provide Routing Services.6The Exchange subsequently filed to extend the effective period for Rule 2.12.7
Footnotes:
5 See Securities Exchange Act Release No. 54391, 71 FR 52836 (September 7, 2006) (SR-NSX-2006-08).
6 See Securities Exchange Act Release No. 54808 (November 21, 2006), 71 FR 69163 (November 29, 2006) (SR-NSX-2006-15)
7 See Securities Exchange Act Release Nos. 55624 (April 12, 2007), 72 FR 19732 (April 19, 2007) (SR NSX 2007-04); 56067 (July 13, 2007), 72 FR 39650 (July 19, 2007) (SR-NSX-2007-08); and 56587 (October 1, 2007), 72 FR 57087 (October 5, 2007) (SR-NSX-2007-10).
Rule 2.12 currently is effective through March 31, 2008, with Rule 2.11 becoming effective on April 1, 2008. In connection with the rule filing adding Rule 2.12,8the Exchange requested this finite period of effectiveness so that the Exchange could offer routing services through NSX BLADE while NSX Securities completed its registration process as a broker-dealer with the National Association of Securities Dealers, Inc. (and thus became available to provide routing services),9and while the Exchange evaluated its options for providing routing services to ETP Holders.
Footnotes:
8 See Securities Exchange Act Release No. 54808 (November 21, 2006), 71 FR 69163 (November 29, 2006) (SR-NSX-2006-15).
9 In January 2007, NSX Securities' application for registration as a broker-dealer was approved by theNational Association of Securities Dealers, Inc. To date, the Exchange has not used NSX Securities for routing services.
In the instant rule filing, the Exchange is proposing to extend the effectiveness of Rule 2.12 through September 30, 2008,10and to delay the effectiveness of Rule 2.11 until October 1, 2008, in order to allow the Exchange more time to evaluate its options for providing routing services to ETP Holders and make any system changes, if necessary. The ability to route orders entered into NSX BLADE to away markets for execution at the best available prices is a key feature of NSX's new system.
Footnotes:
10 The Exchange is requesting an additional six month extension as an outer time limit so as to limit the need for any further extensions.
The Exchange intends to provide routing services in accordance with Rule 2.12 until September 30, 2008, unless the Exchange, with the Commission's approval, amends Rule 2.12 before such date. During such time period, the Exchange intends to evaluate its options for providing routing services and make any necessary system changes. At the conclusion of such time period, the Exchange may decide to (i) Continue the approach provided for in Rule 2.12 on a permanent basis, and not use NSX Securities as the outbound router (by filing a proposed rule change to delete Rule 2.11 and renumbering Rule 2.12); (ii) use the Exchange's original approach of NSX Securities as an outbound router and discontinue the approach provided for in Rule 2.12 (by filing a proposed rule change to delete Rule 2.12); or (iii) file a proposed rule change to allow ETP Holders to use either NSX Securities or the approach provided for in proposed Rule 2.12 for outbound routing.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act,11in general, and Section 6(b)(5) of the Act,12in particular, which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.
Footnotes:
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition.
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
Because the foregoing rule does not (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 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, provided that the self-regulatory organization has given the Commission written notice of its intent to file 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,13the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act14and Rule 19b-4(f)(6) thereunder.15At any time within 60 days of the filing of such 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 interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Footnotes:
13 NSX fulfilled this requirement.
14 15 U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b-4(f)(6).
Under Rule 19b-4(f)(6) of the Act,16the proposal does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay, so that the proposal may take effect upon filing, which will allow Rule 2.12 to remain in effect, and the effectiveness of Rule 2.11 to continue to be delayed, without interruption. The Commission believes that the proposal raises no new issues and that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay so that the proposal may take effect upon filing.17
Footnotes:
16 Id .
17 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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-2008-08 on the subject line.
Paper Comments
• Send paper comments in triplicate to Nancy Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSX-2008-08. 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, 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 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-2008-08 and should be submitted on or before April 23, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18
Footnotes:
18 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-6776 Filed 4-1-08; 8:45 am]
BILLING CODE 8011-01-P