[Federal Register Volume 69, Number 114 (Tuesday, June 15, 2004)]
[Notices]
[Pages 33437-33438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13356]



[[Page 33437]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49804; File No. SR-NYSE-2004-25]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Relating to the Listed Company Fee Exclusion for NYSEnet \SM\ Data

    June 3, 2004.
    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 May 12, 2004, the New York Stock Exchange, Inc. (``NYSE'' 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 NYSE. On June 1, 2004, the 
NYSE amended the proposed rule change.\3\ The NYSE has designated the 
proposed rule change as ``non-controversial'' under Section 19(b)(3)(A) 
of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which renders the 
proposed rule change effective upon filing with 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\ See letter from Darla C. Stuckey, Corporate Secretary, NYSE, 
to Nancy J. Sanow, Assistant Director, Division of Market 
Regulation, Commission, dated May 28, 2004 (``Amendment No. 1''). In 
Amendment No. 1, the Exchange restated the proposed rule change in 
its entirety.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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

    The Exchange seeks to improve an information service that it 
provides to its listed companies (``NYSEnet'') by adding certain Broker 
Volume\SM\, Liquidity Quote\SM\ and OpenBook\SM\ information to the 
service.

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 NYSE 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 NYSE 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
    NYSEnet is a web-based information service that the Exchange makes 
available to NYSE-listed companies. It delivers to a listed company 
information regarding the performance of the company's stock, including 
market data and real-time quotes relating to that stock, 
characteristics of the order flow for the stock, global share ownership 
information, and the like.
    The Exchange believes that NYSEnet provides a valuable service to 
its listed companies. According to the Exchange, NYSEnet provides NYSE-
listed companies with insight into market behavior that enables the 
companies to make decisions related to equity and capital, up-to-the-
minute information regarding stock trading and market conditions, the 
ability to analyze reports on the performance of the stock of the 
company relative to its peers, information and analysis that facilitate 
the companies' ability to build a targeted investor relations strategy, 
and tools that enable the companies to manage strategically their 
investor relations and corporate events.
    To make the service even more attractive to listed companies, the 
Exchange does not charge its listed companies for receipt of NYSEnet. 
Insofar as NYSEnet includes fee-liable market data, such as 
consolidated prices and quotes in the company's stock that the markets 
make available jointly pursuant to the CTA Plan and the CQ Plan, NYSE 
pays the applicable fees to the Consolidated Tape Association, an 
association comprised of all the registered securities exchanges and 
the NASD (``CTA''), on behalf of its listed companies.
    The Exchange has now determined to enhance the NYSEnet service by 
adding to the information that NYSEnet makes available to a NYSE-listed 
company Broker Volume, Liquidity Quote and OpenBook information 
relating to the company's stock.
    The Exchange's Broker Volume service provides subscribers with 
Exchange-prepared reports of broker share volume information. The 
Exchange is proposing to have the NYSEnet service provide a listed 
company with reports of broker share volume only in the listed 
company's stock.
    The Exchange's Liquidity Quote service provides subscribers with 
depth-of-market information, including aggregated Exchange trading 
interest at a specific price interval below the best bid or above the 
best offer. The Exchange is proposing to have the NYSEnet service 
provide a listed company with Liquidity Quote information relating only 
to the company's stock.
    The Exchange's OpenBook service provides subscribers with 
information regarding limit orders that Exchange specialists have 
received at prices at or below the best bid or at or above the best 
offer. The Exchange is proposing to have the NYSEnet service provide a 
listed company with OpenBook information relating only to limit orders 
for the company's stock.
    After it has added Broker Volume, Liquidity Quote and OpenBook 
information to NYSEnet, the Exchange wishes to continue to provide the 
NYSEnet service to its listed companies without charge. The Commission 
has approved fees that the Exchange charges for the receipt of Broker 
Volume, Liquidity Quote and OpenBook services (``Exchange Fees'').\6\ 
As it does for other fee-liable information that the Exchange provides 
to listed companies through NYSEnet, the Exchange wishes to pay the 
applicable Exchange Fees on behalf of its listed companies.
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    \6\ For Broker Volume, see Securities Exchange Act Release Nos. 
46847 (November 19, 2002); 67 FR 70799 (November 26, 2002) (SR-NYSE-
2002-61) and 48060 (June 19, 2003); 68 FR 37889 (June 25, 2003) (SR-
NYSE-2003-11); for Liquidity Quote, see Securities Exchange Act 
Release No. 47614 (April 2, 2003); 68 FR 17140 (April 8, 2003) (SR-
NYSE-2002-55); for OpenBook, see Securities Exchange Act Release No. 
44318 (December 7, 2001); 66 FR 64895 (December 14, 2001) (SR-NYSE-
2001-42).
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    Because the Exchange Fees for these services are imposed by and 
paid to the Exchange itself,\7\ the Exchange's actual payment of those 
fees would mean that one department at the Exchange (Corporate Listings 
and Compliance) would merely be paying another department at the 
Exchange (Market Data) for a listed company's receipt of information 
through NYSEnet. As a consequence, the Exchange would deem that the 
fees have been paid on behalf of the listed companies for their receipt 
of listed company-related Broker Volume, Liquidity Quote and OpenBook 
information through the NYSEnet service.
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    \7\ This contrasts with the circumstances under which NYSE pays 
the fees for the provision to listed companies of real-time quote 
and last sale information, where the fees are ultimately paid not to 
the Exchange itself but to the CTA.
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    By relieving its listed companies from the obligation to pay those 
fees for the

[[Page 33438]]

company-related information that they receive through NYSEnet, the 
Exchange believes that it would be enhancing the value of the service 
that it provides to its listed companies. In light of the listing fees 
that those companies pay to the Exchange, the Exchange believes that it 
would be reasonable for the Exchange to bear the fees involved, as it 
does in the case of the CTA fees described above.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act,\8\ in general, and furthers the objectives 
of Section 6(b)(4),\9\ in particular, in that Section 6(b)(4) requires 
that the exchange's rules provide for the equitable allocation of 
reasonable dues, fees and other charges among its members and issuers 
and other persons using its facilities.
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    \8\ 15 U.S.C. 78(f).
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed fee change would not impose 
any burden on competition that is not necessary or appropriate in the 
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 regarding the proposed rule change. The Exchange has not 
received any unsolicited written comments from members or other 
interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing 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 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 \10\ 
and Rule 19b-4(f)(6) thereunder.\11\ 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.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). The Commission notes that the 
Exchange provided 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 filing 
of the proposed rule change.
    \12\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change, as 
amended, under Section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on June 1, 2004, the date on which 
the NYSE filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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    The Exchange has requested that the Commission waive the 30-day 
operative delay to allow the Exchange to distribute the expanded 
NYSEnet information to listed companies as soon as possible. The 
Exchange represents that the proposed rule change does not 
significantly affect the protection of investors or the public interest 
and does not impose any significant burden on competition. The Exchange 
notes that the proposed rule change merely notes that specified 
services are being provided to listed companies for no additional fee 
beyond those that they already pay in annual listing fees to the 
Exchange.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to provide NYSE-listed companies 
with the expanded NYSEnet information and thereby enhance the value of 
services that the NYSE provides to its listed companies.\13\
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    \13\ For the purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rules 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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-NYSE-2004-25 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-NYSE-2004-25. 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
NYSE. 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-
NYSE-2004-25 and should be submitted on or before July 6, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-13356 Filed 6-14-04; 8:45 am]
BILLING CODE 8010-01-P