[Federal Register Volume 74, Number 19 (Friday, January 30, 2009)]
[Notices]
[Pages 5711-5713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-1980]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59289; File No. SR-NYSEArca-2009-06]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change to Introduce a 
Pilot Program for NYSE Arca Trades

January 23, 2009.
    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 January 21, 2009, NYSE Arca, Inc. (``NYSE

[[Page 5712]]

Arca'' or the ``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 Arca. NYSE 
Arca has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\ 
which renders the proposal effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Arca proposes to establish a pilot program to introduce its 
NYSE Arca Trades service at no charge. NYSE Arca Trades is a new NYSE 
Arca-only market data service that allows a vendor to redistribute on a 
real-time basis the same last sale information that NYSE Arca reports 
to the Consolidated Tape Association (``CTA'') for inclusion in CTA's 
consolidated data stream and certain other related data elements 
(``NYSE Arca Last Sale Information'').

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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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
    a. The Service. The Exchange proposes to establish a pilot program 
to introduce NYSE Arca Trades, a new service pursuant to which it will 
allow vendors, broker-dealers and others (``NYSE Arca-Only Vendors'') 
to make available NYSE Arca Last Sale Information on a real-time 
basis.\4\ The Exchange will not impose any fees for the receipt and use 
of NYSE Arca Trades, whether on vendors or subscribers, during the 
pilot period.
---------------------------------------------------------------------------

    \4\ The Exchange notes that it will make the NYSE Arca Last Sale 
Information available to vendors no earlier than it makes its last 
sale information available to the processor under the CTA Plan.
---------------------------------------------------------------------------

    Contemporaneously with the proposed rule change, the Exchange 
submitted a proposed rule change that seeks to establish a $750 per 
month access fee for the receipt and redistribution of the NYSE Arca 
Trades datafeed(s) and device fees for the end-use of NYSE Arca Trades' 
NYSE Arca Last Sale Information (the ``NYSE Arca Trades Fee Filing'') 
as follows:
    i. $5 per month per display device for the receipt and use of NYSE 
Arca Last Sale Information relating to Network A and Network B Eligible 
Securities (as the CTA Plan uses those terms); and
    ii. $5 per month per display device for the receipt and use of NYSE 
Arca Last Sale Information relating to securities listed on Nasdaq.
    The Exchange would not commence to impose those fees until the 
later of Commission approval of the NYSE Arca Trades Fee Filing and the 
end of the pilot period.
    NYSE Arca Last Sale Information would include last sale information 
for all securities that are traded on the Exchange.
    The Exchange will make NYSE Arca Last Sale Information available 
through its new NYSE Arca Trades service at the same time as it 
provides last sale information to the processor under the CTA Plan. In 
addition to the information that the Exchange provides to CTA, NYSE 
Arca Last Sale Information will also include a unique sequence number 
that the Exchange assigns to each trade and that allows an investor to 
track the context of the trade through such other Exchange market data 
products as ArcaBook[supreg].
    The Exchange developed NYSE Arca Trades primarily at the request of 
traders who are very latency sensitive. The latency difference between 
accessing last sales through the NYSE Arca datafeed or through the CTA 
datafeed can be measured in tens of milliseconds. The Exchange 
anticipates that demand for the product will derive primarily from 
investors and broker-dealers who desire to use NYSE Arca Trades to 
power certain trading algorithms or smart order routers. The free 
access to NYSE Arca Trades during the pilot period will enable 
investors to determine whether NYSE Arca Trades provides value to their 
business models and will enable the Exchange to make the service 
available during the time required to obtain approval for the fees.
    b. Administrative Requirements. During the pilot period, the 
Exchange will require NYSE Arca-Only Vendors to enter into the form of 
``vendor'' agreement into which the CTA Plan requires recipients of the 
Network A last sale prices information datafeeds to enter (the 
``Network A Vendor Form''). The Network A Vendor Form will authorize 
the NYSE Arca-Only Vendor to provide the NYSE Arca Trades service to 
its subscribers and customers.
    The Network A Participants drafted the Network A Vendor Form as a 
one-size-fits-all form to capture most categories of market data 
dissemination. It is sufficiently generic to accommodate NYSE Arca 
Trades. The Network A Vendor Form has been in use in substantially the 
same form since 1990.\5\
---------------------------------------------------------------------------

    \5\ See Release Nos. 34-28407 (September 10, 1990), and 34-49185 
(February 4, 2004).
---------------------------------------------------------------------------

    Similarly, the Exchange will require professional and non-
professional subscribers to NYSE Arca Trades to undertake to comply 
with the same contract, reporting, payment, and other administrative 
requirements as to which the Network A Participants subject them in 
respect of Network A last sale information under the CTA Plan.
    c. Duration of Pilot Program. The Exchange proposes to commence the 
pilot program shortly after submitting the proposed rule change to the 
Commission. The Exchange proposes to conduct the pilot test for 90 days 
from its commencement date.
    If, at the end of the pilot period, the Commission has not yet 
acted on the NYSE Arca Trades Fee Filing, the Exchange will assess its 
experience with NYSE Arca Trades and determine whether to extend or 
modify the pilot program.
2. Statutory Basis
    The bases under the Act for the proposed rule change are the 
requirements under Section 6(b)(5) 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.
    The pilot program would benefit investors by providing a free 
alternative to the last sale price information that they receive under 
the CTA Plan.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

[[Page 5713]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants or Others

    The Exchange has discussed the pilot program with those entities 
that the Exchange believes would be the most likely to take advantage 
of the proposed NYSE Arca Last Sale Information service by becoming 
NYSE Arca-Only Vendors. While those entities have not submitted formal, 
written comments on the proposal, the Exchange has incorporated some of 
their ideas into the proposal and the proposed rule change reflects 
their input. 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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give 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. 
NYSE Arca has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \8\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \9\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. NYSE Arca requests 
that the Commission waive the 30-day operative delay. The Commission 
believes that waiving the 30-day operative delay \10\ is consistent 
with the protection of investors and the public interest because such 
waiver will allow the Exchange to immediately provide additional 
information to investors at no cost. Therefore, the Commission 
designates the proposal operative upon filing.
---------------------------------------------------------------------------

    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 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 e-mail to [email protected]. Please include 
File Number SR-NYSEArca-2009-06 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2009-06. 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, 100 F Street, 
NE., Washington, DC 20549, 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 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 publicly available. All 
submissions should refer to File Number SR-NYSEArca-2009-06 and should 
be submitted on or before February 20, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-1980 Filed 1-29-09; 8:45 am]
BILLING CODE 8011-01-P