[Federal Register Volume 71, Number 239 (Wednesday, December 13, 2006)]
[Notices]
[Pages 74975-74977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21157]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54890; File No. SR-Phlx-2006-59]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change and Amendments No. 1 and 2 
Thereto Relating to an Amendment to a Philadelphia Board of Trade 
Market Data Distribution Network Fee

December 7, 2006.
    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 September 26, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Phlx. The Phlx 
filed Amendment No. 1 to the proposed rule change on November 1, 
2006.\3\ The Phlx filed Amendment No. 2 to the proposed rule change on 
December 6, 2006.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaces and supersedes the original filing 
in its entirety.
    \4\ Amendment No. 2 clarified that the chart in this filing 
reflects Phlx's proposed change to thefee per snapshot request; the 
current fee per snapshot request is $0.00025; and the 15% 
Administrative Fee is a credit to vendors which provide market data 
to 200,000 or more Devices in any month.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to change a fee assessed by the Exchange's wholly 
owned subsidiary, the Philadelphia Board of Trade (``PBOT''), on market 
data vendors for certain index values that subscribers receive over 
PBOT's Market Data Distribution Network (``MDDN''). The text of the 
proposed rule change is available on Phlx's Web site at http://www.phlx.com, at Phlx's principal office, 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 Phlx 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 Phlx 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
    The purpose of the proposed rule change is to amend one of the fees 
charged by the PBOT for certain market data disseminated over the 
MDDN.\5\ The Phlx has licensed the current and closing index values 
underlying most of the Phlx's proprietary indexes to PBOT for the 
purpose of selling, reproducing, and distributing the index values over 
PBOT's MDDN. On each trading day, the Exchange or its third party 
designee objectively calculates and makes available to PBOT a real-time 
index value every 15 seconds and a closing index value at the end of 
the day. By agreement with PBOT, data vendors make the market data 
widely available to subscribers.\6\
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    \5\ The MDDN is an internet protocol multicast network developed 
by PBOT and SAVVIS Communications.
    \6\ Approximately 65 vendors, including for example Bloomberg 
L.P., Telekurs Financial Information Ltd. and Thomson Financial, 
have already entered into such market data agreements wtih PBOT. The 
PBOT has contracted with one or more major Market Data Vendors to 
receive real-time market data and will not offer snapshot or delayed 
data. The fees described in this proposed rule change cover values 
of all the indexes disseminated over the MDDN.
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    On May 11, 2006, the Commission approved the Exchange's proposal to

[[Page 74976]]

allow PBOT to charge subscriber fees to vendors of market data for all 
the values of Phlx's proprietary indexes disseminated by PBOT's 
MDDN.\7\ The subscriber fees are set out in agreements that PBOT 
executes with various market data vendors for the right to receive, 
store, and retransmit the current and closing index values transmitted 
over the MDDN. The fees approved by the Commission in its May 11, 2006 
approval order included a $.00025 per request fee for ``snapshot 
data,'' which is essentially market data that is refreshed no more 
frequently than once every 60 seconds. The Exchange is now proposing to 
increase that fee to $.0025 per request for snapshot data.
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    \7\ See Securities Exchange Act Release No. 53790 (May 11, 
2006), 71 FR 28738 (May 17, 2006) (approving SR-Phlx-2006-04). There 
are no other fees being changed by this proposed rule change.
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    The MDDN fees, including the fee that would be amended by this 
proposal, are summarized in table format below:
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    \8\ The current fee is $0.00025.
    \9\ All market data vendors which provide market data to 200,000 
or more Devices in any month qualify for a 15% Administrative Fee 
credit for that month, to be deducted from the monthly Subscriber 
Fees that they collect and are obligated to pay PBOT under the 
Vendor/Subvendor Agreement.

------------------------------------------------------------------------
                                  Real-time continuous
        Fee  (per month)               market data         Delayed only
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Per Device/User ID/ID Terminal.  $1.00 per Device*.....  None.
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        Fee (per month)          Snapshot Market Data..  Delayed Only.
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                                  $0.0025 per snapshot
                                      request * \8\
                                 OR....................  None.
                                 $1,500 per month for
                                  unlimited snapshot
                                  requests*.
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* Vendors which provide market data to 200,000 or more Devices in any
  month qualify for a 15% Administrative Fee credit for that month.\9\

2. Statutory Basis
    The Exchange believes that its amended proposal is consistent with 
Section 6(b) of the Act \10\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \11\ in particular, in that it is 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, providing a fee structure for market data recipients 
which is reasonable.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that its proposal furthers the 
objectives of Section 6(b)(4) of the Act \12\ in particular, in that it 
is an equitable allocation of reasonable fees among persons using its 
facilities. The Exchange believes that PBOT's proposed fee increase is 
reasonable and equitable, as it reflects a more accurate valuation of 
the value of snapshot data to investors than the original snapshot data 
fee did. Phlx also believes that the fee increase to be charged by PBOT 
is consistent with the requirements of Commission Rule 603 
(Distribution, consolidation, and display of information with respect 
to quotations for and transactions in NMS stocks),\13\ in that it is 
fair and reasonable and not unreasonably discriminatory.
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    \12\ 15 U.S.C. 78f(b)(4).
    \13\ 17 CFR 242.603.
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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

    No written comments were either solicited or received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the amended 
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 No. SR-Phlx-2006-59 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2006-59. 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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Phlx. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You

[[Page 74977]]

should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-Phlx-2006-59 
and should be submitted on or before January 3, 2007.

    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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-21157 Filed 12-12-06; 8:45 am]
BILLING CODE 8011-01-P