[Federal Register Volume 73, Number 219 (Wednesday, November 12, 2008)]
[Notices]
[Pages 66956-66958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26627]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58895; File No. SR-NYSEArca-2008-122]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change To 
Extend the Pilot Program for NYSE Arca Realtime Reference Prices 
Service

October 31, 2008.
    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 October 31, 2008, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca''), 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 
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 extend the expiration date of its pilot 
program for the NYSE Arca Realtime Reference

[[Page 66957]]

Prices service until December 31, 2008. There is no new rule text.

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 those statements may be examined at 
the places specified in Item III 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
    In File No. SR-NYSEArca-2008-96, the Exchange established a pilot 
program that allows the Exchange to test the viability of a new NYSE 
Arca-only market data service that allows a vendor to redistribute on a 
real-time basis last sale prices of transactions that take place on the 
Exchange (``NYSE Arca Realtime Reference Prices'') and to establish a 
flat monthly fee for that service. The Commission approved that pilot 
program on August 29, 2008.\3\
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    \3\ See Securities Exchange Act Release No. 58444 (August 29, 
2008), 73 FR 51872 (September 5, 2008) (SR-NYSEArca-2008-96).
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    The Exchange intends for the NYSE Arca Realtime Reference Prices 
service to accomplish three goals:
    1. To provide a low-cost service that will make real-time prices 
widely available to millions of casual investors;
    2. To provide vendors with a real-time substitute for delayed 
prices; and
    3. To relieve vendors of administrative burdens.
This pilot program is similar to pilot programs that the Nasdaq Stock 
Market, Inc. (``Nasdaq''),\4\ and the New York Stock Exchange, LLC 
(``NYSE''),\5\ have established.
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    \4\ See Securities Exchange Act Release Nos. 57965 (June 16, 
2008), 73 FR 35178 (June 20, 2008) (SR-NASDAQ-2006-060); 57973 (June 
16, 2008), 73 FR 35430 (June 23, 2008) (SR-NASDAQ-2008-050).
    \5\ See Securities Exchange Act Release No. 57966 (June 16, 
2008), 73 FR 35182 (June 20, 2008) (SR-NYSE-2007-04).
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    The pilot program allows internet service providers, traditional 
market data vendors, and others (``NYSE Arca-Only Vendors'') to make 
available NYSE Arca Realtime Reference Prices on a real-time basis.\6\ 
The NYSE Arca Realtime Reference Price information includes last sale 
prices for all securities that trade on the Exchange. It includes only 
prices, and not the size of each trade and not bid/asked quotations.
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    \6\ The Exchange notes that it will make the NYSE Arca Realtime 
Reference Prices available to vendors no earlier than it makes those 
prices available to the processor under the CTA Plan.
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    It features a flat, fixed monthly vendor fee, no user-based fees, 
no vendor reporting requirements, and no professional or non-
professional subscriber agreements.
    The Exchange established November 1, 2008, as the end date for the 
pilot program. The Exchange now seeks to extend that end date to 
December 31, 2008. Prior to the end of the pilot period, the Exchange 
will assess its experience with the product and either will submit a 
proposed rule change that seeks to extend or modify the pilot program 
or to make it permanent, or it will announce publicly that it does not 
seek to extend the pilot program beyond the program's termination date.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \7\ that an exchange have rules that 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members and other persons using its facilities and 
the requirements under Section 6(b)(5) \8\ that the rules of an 
exchange be designed to promote just and equitable principles of trade 
and not to permit unfair discrimination between customers, issuers, 
brokers or dealers.
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    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the pilot program benefits investors by 
facilitating their prompt access to widespread, free, real-time pricing 
information contained in the NYSE Arca Realtime Reference Prices 
service. Extending the pilot program will extend those benefits while 
the Exchange assesses the service.

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

    The Exchange does not believe that this 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

    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 protected]. Please include 
File Number SR-NYSEArca-2008-122 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-122. 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 the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. 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-NYSEArca-2008-122 and should be submitted on or before 
December 1, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of a 
Proposed Rule Change

    The Commission finds that the proposed rule change, to extend the 
pilot program for two months, is

[[Page 66958]]

consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\9\ 
In particular, it is consistent with section 6(b)(4) of the Act,\10\ 
which requires that the rules of a national securities exchange provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other parties using its 
facilities, and section 6(b)(5) of the Act,\11\ which requires, among 
other things, that the rules of a national securities 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, and not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
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    \9\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposed rule change is 
consistent with the provisions of section 6(b)(8) of the Act,\12\ which 
requires that the rules of an exchange not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. Finally, the Commission finds that the proposed rule change 
is consistent with Rule 603(a) of Regulation NMS,\13\ adopted under 
section 11A(c)(1) of the Act, which requires an exclusive processor 
that distributes information with respect to quotations for or 
transactions in an NMS stock to do so on terms that are fair and 
reasonable and that are not unreasonably discriminatory.\14\
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    \12\ 15 U.S.C. 78f(b)(8).
    \13\ 17 CFR 242.603(a).
    \14\ NYSE Arca is an exclusive processor of its last sale data 
under Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which 
defines an exclusive processor as, among other things, an exchange 
that distributes data on an exclusive basis on its own behalf.
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    The Commission approved the fee for NYSE Arca Realtime Reference 
Prices for a pilot period which runs until October 31, 2008.\15\ The 
Commission notes that the Exchange proposes to extend the pilot program 
for two months. The Exchange proposes no other changes to the existing 
pilot program.
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    \15\ See supra note 3.
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    On June 4, 2008, the Commission approved for public comment a draft 
approval order that sets forth a market-based approach for analyzing 
proposals by self-regulatory organizations to impose fees for ``non-
core'' market data products that would encompass the NYSE Arca Realtime 
Reference Prices.\16\ The Commission believes that the proposal is 
consistent with the Act for the reasons noted preliminarily in the 
Draft Approval Order. Pending review by the Commission of comments 
received on the Draft Approval Order, and final Commission action 
thereon, the Commission believes that approving NYSE Arca's proposal to 
extend the pilot program that imposes a fee for NYSE Arca Realtime 
Reference Prices for two months would be beneficial to investors and in 
the public interest, in that it should result in increased broad public 
dissemination of real-time pricing information. The broader approach 
ultimately taken by the Commission with respect to non-core market data 
fees will necessarily guide Commission action regarding fees for the 
NYSE Arca Realtime Reference Prices beyond the pilot period.
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    \16\ See Securities Exchange Act Release No. 57917 (June 4, 
2008), 73 FR 32751 (June 10, 2008) (Notice of Proposed Order 
Approving Proposal by NYSE Arca, Inc. to Establish Fees for Certain 
Market Data and Request for Comment) (``Draft Approval Order'').
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    The Commission finds good cause for approving the proposed rule 
change before the thirtieth day after the date of publication of notice 
of filing thereof in the Federal Register. Accelerating approval of 
this proposal should benefit investors by facilitating their access to 
widespread, free, real-time pricing information contained in the NYSE 
Arca Realtime Reference Prices. Therefore, the Commission finds good 
cause, consistent with Section 19(b)(2) of the Act,\17\ to approve the 
proposed rule change on an accelerated basis to extend the operation of 
the pilot until December 31, 2008, while the Commission analyzes 
comments on the Draft Approval Order.
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    \17\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSEArca-2008-122) is hereby approved 
on an accelerated basis until December 31, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-26627 Filed 11-10-08; 8:45 am]
BILLING CODE 8011-01-P