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SECURITIES AND EXCHANGE COMMISSION

Securities and Exchange Commission

DOCUMENT ID: [Release No. 34-58112; File No. SR-NSX-2008-11]

NOTICE: NOTICES

ACTION: Self-Regulatory Organizations; Proposed Rule Changes:

SUBJECT CATEGORY: Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment Nos. 1, 2, and 3 Thereto Relating to the Termination of the Intermarket Trading System Plan and to a Technical Change to Rule 8.15

DOCUMENT SUMMARY: July 7, 2008

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b4 thereunder,\2\ notice is hereby given that on June 19, 2008, the National Stock Exchange (``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 substantially prepared by the Exchange. On June 27, 2008, the Exchange filed Amendment Nos. 1 and 2 to the proposal. On July 2, 2008, the Exchange filed Amendment No. 3 to the proposal. The Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the Act and Rule 19b 4(f)(6) thereunder, which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

Due to the termination of the Intermarket Trading System (``ITS'') Plan, the Exchange is proposing to eliminate all references to the ITS Plan in its Rules and Fee Schedules, and to otherwise make technical and conforming changes related to the termination of ITS, as well as a minor technical change to Rule 8.15 (``Imposition of Fines for Minor Violation(s) of Rules'').

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. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

Chapter XIV (``Intermarket Trading System Plan'') of the NSX Rules provides the rules relating to the ITS Plan under which the Exchange conducted intermarket trading in exchangelisted equity securities with those market centers that were linked under the ITS Plan.\3\ In connection with the implementation of Regulation NMS,\4\ the ITS Plan was officially eliminated.\5\ Because elimination of ITS has rendered Chapter XIV obsolete, the Exchange now proposes to eliminate Chapter XIV, the Fee Schedule for ITS Transactions, and all other references to Chapter XIV and the ITS Plan in the NSX Rules.
\3\ See Securities Exchange Act Release No. 19456 (January 27, 1983), 48 FR 4938 (February 3, 1983)(File No. 4208).
\4\ 17 CFR 242.600 et al.
\5\ See Securities Exchange Act Release No. 55397 (March 5, 2007), 72 FR 11066 (March 12, 2007)(File No. 4208).

In addition, the Exchange proposes to make a technical and conforming change to Interpretation .01 to Rule 8.15, which has been renumbered due to the deletion of ITS related provisions. The Exchange also proposes that the Rule cited in this Interpretation be changed from Rule 11.9(c) to Rule 11.8(a)(1). This change is required as Rule 11.9(c), relating to the Exchange's legacy trading system, has been functionally replaced by Rule 11.8(a)(1) relating to the Exchange's new trading system, NSX BLADE.\6\
\6\ See Securities Exchange Act Release No. 54391 (August 31, 2006), 71 FR 52836 (September 7, 2006) (SRNSX200608).

Finally, the Exchange proposes to amend NSX Rule 11.3(a)(ii) to allow
[[Page 40412]]
subpenny bids, offers, orders and indications of interest (hereinafter ``orders'') in all securities where such orders are priced less than $1.00 per share. Due to programming issues relating to ITS, the rule previously only permitted subpenny price increments for securities priced below $1.00 per share that were listed on the Nasdaq Stock Market. Now that the ITS Plan has terminated, and consistent with Regulation NMS, the Exchange proposes to allow subpenny increments for all securities traded on the Exchange for orders priced less than $1.00 per share, regardless of the listing exchange.\7\
\7\ 17 CFR 242.612.

2. Statutory Basis

The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act \8\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, 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.
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

No written comments were either solicited or received by the Exchange.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and Rule 19b4(f)(6) thereunder.\11\ Because the foregoing proposed rule change does not:
\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b4(f)(6).
(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, it has become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b4(f)(6) thereunder.\13\ As required under Rule 19b 4(f)(6)(iii) under the Act,\14\ the Exchange provided the Commission with written notice of its 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 the filing of the proposed rule change.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b4(f)(6).

\14\ 17 CFR 240.19b4(f)(6)(iii).

A proposed rule change filed under 19b4(f)(6) normally may not become operative prior to 30 days after the date of filing.\15\ However, Rule 19b4(f)(6)(iii) \16\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30day operative delay and render the proposed rule change operative immediately. The Commission believes that waiving the 30day operative delay is consistent with the protection of investors and the public interest. Waiver of the 30day operative delay would enable the Exchange to: eliminate all references to the ITS Plan in its Rules and Fee Schedules and to otherwise make technical and conforming changes required as a result of the termination of the ITS Plan as quickly as possible and eliminate any potential confusion. The waiver would also allow subpenny bids, offers, orders in all securities where such orders are priced less than $1.00 per share, which would enable investors to expand their trading options. Accordingly, the Commission designates the proposal to be operative upon filing with the Commission.\17\
\15\ Id.
\16\ Id.
\17\ For purposes of waiving the operative date of this proposal only, the Commission has considered the impact of the proposed rule on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

At any time within 60 days of the filing of the 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.

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 rulecomments@sec.gov. Please include File Number SRNSX200811 on the subject line.
    Paper Comments
  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 205491090. All submissions should refer to File Number SRNSX200811. 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 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 the filing also will be available for inspection and copying at the principal office of 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 SRNSX 200811 and should be submitted on or before August 4, 2008.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\18\
    \18\ 17 CFR 200.303(a)(12).
    Florence E. Harmon,
    Acting Secretary.
    [FR Doc. E815887 Filed 71108; 8:45 am]
    BILLING CODE 801001P

    SUMMARY: National Stock Exchange, Inc.,


    DOCUMENT BODY 2: July 7, 2008

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b4 thereunder,\2\ notice is hereby given that on June 19, 2008, the National Stock Exchange (``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 substantially prepared by the Exchange. On June 27, 2008, the Exchange filed Amendment Nos. 1 and 2 to the proposal. On July 2, 2008, the Exchange filed Amendment No. 3 to the proposal. The Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the Act and Rule 19b 4(f)(6) thereunder, which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.
    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b4.
    I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    Due to the termination of the Intermarket Trading System (``ITS'') Plan, the Exchange is proposing to eliminate all references to the ITS Plan in its Rules and Fee Schedules, and to otherwise make technical and conforming changes related to the termination of ITS, as well as a minor technical change to Rule 8.15 (``Imposition of Fines for Minor Violation(s) of Rules'').

    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. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    1. Purpose

    Chapter XIV (``Intermarket Trading System Plan'') of the NSX Rules provides the rules relating to the ITS Plan under which the Exchange conducted intermarket trading in exchangelisted equity securities with those market centers that were linked under the ITS Plan.\3\ In connection with the implementation of Regulation NMS,\4\ the ITS Plan was officially eliminated.\5\ Because elimination of ITS has rendered Chapter XIV obsolete, the Exchange now proposes to eliminate Chapter XIV, the Fee Schedule for ITS Transactions, and all other references to Chapter XIV and the ITS Plan in the NSX Rules.
    \3\ See Securities Exchange Act Release No. 19456 (January 27, 1983), 48 FR 4938 (February 3, 1983)(File No. 4208).
    \4\ 17 CFR 242.600 et al.
    \5\ See Securities Exchange Act Release No. 55397 (March 5, 2007), 72 FR 11066 (March 12, 2007)(File No. 4208).

    In addition, the Exchange proposes to make a technical and conforming change to Interpretation .01 to Rule 8.15, which has been renumbered due to the deletion of ITS related provisions. The Exchange also proposes that the Rule cited in this Interpretation be changed from Rule 11.9(c) to Rule 11.8(a)(1). This change is required as Rule 11.9(c), relating to the Exchange's legacy trading system, has been functionally replaced by Rule 11.8(a)(1) relating to the Exchange's new trading system, NSX BLADE.\6\
    \6\ See Securities Exchange Act Release No. 54391 (August 31, 2006), 71 FR 52836 (September 7, 2006) (SRNSX200608).

    Finally, the Exchange proposes to amend NSX Rule 11.3(a)(ii) to allow
    [[Page 40412]]
    subpenny bids, offers, orders and indications of interest (hereinafter ``orders'') in all securities where such orders are priced less than $1.00 per share. Due to programming issues relating to ITS, the rule previously only permitted subpenny price increments for securities priced below $1.00 per share that were listed on the Nasdaq Stock Market. Now that the ITS Plan has terminated, and consistent with Regulation NMS, the Exchange proposes to allow subpenny increments for all securities traded on the Exchange for orders priced less than $1.00 per share, regardless of the listing exchange.\7\
    \7\ 17 CFR 242.612.

    2. Statutory Basis

    The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act \8\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, 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.
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received by the Exchange.
    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and Rule 19b4(f)(6) thereunder.\11\ Because the foregoing proposed rule change does not:
    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b4(f)(6).
    (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, it has become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b4(f)(6) thereunder.\13\ As required under Rule 19b 4(f)(6)(iii) under the Act,\14\ the Exchange provided the Commission with written notice of its 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 the filing of the proposed rule change.
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b4(f)(6).

    \14\ 17 CFR 240.19b4(f)(6)(iii).

    A proposed rule change filed under 19b4(f)(6) normally may not become operative prior to 30 days after the date of filing.\15\ However, Rule 19b4(f)(6)(iii) \16\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30day operative delay and render the proposed rule change operative immediately. The Commission believes that waiving the 30day operative delay is consistent with the protection of investors and the public interest. Waiver of the 30day operative delay would enable the Exchange to: eliminate all references to the ITS Plan in its Rules and Fee Schedules and to otherwise make technical and conforming changes required as a result of the termination of the ITS Plan as quickly as possible and eliminate any potential confusion. The waiver would also allow subpenny bids, offers, orders in all securities where such orders are priced less than $1.00 per share, which would enable investors to expand their trading options. Accordingly, the Commission designates the proposal to be operative upon filing with the Commission.\17\
    \15\ Id.
    \16\ Id.
    \17\ For purposes of waiving the operative date of this proposal only, the Commission has considered the impact of the proposed rule on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

    At any time within 60 days of the filing of the 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.

    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 rulecomments@sec.gov. Please include File Number SRNSX200811 on the subject line.
    Paper Comments
  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 205491090. All submissions should refer to File Number SRNSX200811. 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 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 the filing also will be available for inspection and copying at the principal office of 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 SRNSX 200811 and should be submitted on or before August 4, 2008.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\18\
    \18\ 17 CFR 200.303(a)(12).
    Florence E. Harmon,
    Acting Secretary.
    [FR Doc. E815887 Filed 71108; 8:45 am]
    BILLING CODE 801001P


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