[Federal Register Volume 74, Number 106 (Thursday, June 4, 2009)]
[Notices]
[Pages 26901-26902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13039]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60002; File No. SR-NYSEArca-2009-32]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving 
the Proposed Rule Change Implementing NYSE Arca Realtime Reference 
Prices Service on a Permanent Basis

May 29, 2009.

I. Introduction

    On April 15, 2009, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to establish the NYSE Arca Realtime Reference 
Prices service on a permanent basis and to establish a flat monthly fee 
for that service. The proposed rule change was published for comment in 
the Federal Register on April 24, 2009.\3\ The Commission received no 
comment letters on the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59790 (April 20, 
2009), 74 FR 18758.
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II. Description of the Proposal

    The Exchange proposes to establish the NYSE Arca Realtime Reference 
Prices service on a permanent basis and to establish a flat monthly fee 
for that service. The Exchange currently provides this service pursuant 
to a pilot program.\4\ The service 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''). The Exchange 
has found that the pilot program provides a low-cost service that makes 
real-time prices widely available to casual investors, provides vendors 
with a useful real-time substitute for delayed prices, and relieves 
vendors of administrative burdens. The product is intended to be used 
for reference purposes, rather than as a basis for making trading 
decisions.
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    \4\ See Securities Exchange Act Release No. 58444 (August 29, 
2008), 73 FR 51872 (September 5, 2008) (SR-NYSEArca-2008-96). The 
Commission has approved three extensions of the end date for the 
pilot program, which expires on June 30, 2009. See Securities 
Exchange Act Release Nos. 58895 (October 31, 2008), 73 FR 66956 
(November 12, 2008) (SR-NYSEArca-2008-122); 59184 (December 30, 
2008), 74 FR 755 (January 7, 2009) (SR-NYSEArca-2008-143); and 59662 
(March 31, 2009), 74 FR 15571 (April 6, 2009) (SR-NYSEArca-2009-25).
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The Service

    The NYSE Arca Realtime Reference Prices service allows internet 
service providers, traditional market data vendors, and others 
(collectively, ``NYSE Arca-Only Vendors'') to make available NYSE Arca 
Realtime Reference Prices on a real-time basis.\5\ The NYSE Arca 
Realtime Reference Price information includes last sale prices for all 
securities that trade on the Exchange. The product includes only 
prices, and does not include the size of each trade or bid/asked 
quotations.
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    \5\ 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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    As with the pilot program, under the permanent service the Exchange 
will not permit NYSE Arca-Only Vendors to provide NYSE Arca Realtime 
Reference Prices in a context in which a trading or order-routing 
decision can be implemented unless the NYSE Arca-Only Vendor also 
provides consolidated displays of Network A last sale prices available 
in an equivalent manner, as required by Rule 603(c)(1) of Regulation 
NMS.
    Also, as with the pilot program, the permanent service is intended 
to eliminate certain administrative burdens associated with the 
distribution of real-time CTA prices. Specifically, the permanent 
service would feature the same flat, fixed monthly vendor fee, no user-
based fees, no vendor reporting requirements, and no professional or 
non-professional subscriber agreements.

The Fee

    The Exchange proposes to retain the current $30,000 monthly flat 
access fee for the NYSE Arca Realtime Reference Prices service. For 
that fee, the NYSE Arca-Only Vendor may provide unlimited NYSE Arca 
Realtime Reference Prices to an unlimited number of the NYSE Arca-Only 
Vendor's subscribers and customers. The pilot program does not impose 
any device or end-user fee for the NYSE Arca-Only Vendors' distribution 
of NYSE Arca Realtime Reference Prices and the Exchange is not 
proposing to add any new fees for the permanent service.
    As with the pilot program, the Exchange proposes to require the 
NYSE Arca-Only Vendor to identify the NYSE Arca trade price by placing 
the text ``NYSE Arca Data'' in close proximity to the display of each 
NYSE Arca Realtime Reference Price or series of NYSE Arca Realtime 
Reference Prices, or by complying with such other identification 
requirement as to which NYSE Arca may agree. The NYSE Arca-Only Vendor 
may make NYSE Arca Realtime Reference Prices available without having 
to differentiate between professional subscribers and nonprofessional 
subscribers, without having to account for the extent of access to the 
data, and without having to report the number of users.

Contracts

    As with the pilot program, NYSE Arca proposes to allow NYSE Arca-
Only Vendors to provide NYSE Arca Realtime Reference Prices without 
requiring the end-users to enter into contracts for the benefit of the 
Exchange. Instead, the Exchange proposes to require NYSE Arca-Only 
Vendors to provide a readily visible hyperlink that will send the end-
user to a warning notice about the end-user's receipt and use of market 
data. The notice would be similar to the notice that vendors provide 
today when providing CTA delayed data services.
    The Exchange will require NYSE Arca-Only Vendors to enter into the 
form of ``vendor'' agreement into which the CTA and CQ Plans require 
recipients of the Network A 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 Realtime Reference Prices service to 
its subscribers and customers. The Exchange will supplement the Network 
A Vendor Form with an Exhibit C that will provide terms and conditions 
that are unique to the NYSE Arca Realtime Reference Prices service.

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities

[[Page 26902]]

exchange.\6\ In particular, it is consistent with Section 6(b)(4) of 
the Act,\7\ 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,\8\ 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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    \6\ 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).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 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,\9\ 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,\10\ 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.\11\
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    \9\ 15 U.S.C. 78f(b)(8).
    \10\ 17 CFR 242.603(a).
    \11\ NYSE Arca is an exclusive processor of the NYSE Arca 
Realtime Reference Prices service 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 information 
with respect to quotations or transactions on an exclusive basis on 
its own behalf.
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    This proposal would make permanent the NYSE Arca Realtime Reference 
Prices service and make permanent the $30,000 flat monthly fee for that 
service.\12\ The Commission has reviewed the proposal using the 
approach set forth in the NYSE Arca Order for non-core market data 
fees.\13\ There are a variety of alternative sources of information 
that impose significant competitive pressures on NYSE Arca in setting 
the terms for distributing the NYSE Arca Realtime Reference Prices 
service. The Commission believes that the availability of those 
alternatives, as well as NYSE Arca's compelling need to attract order 
flow, imposed significant competitive pressure on NYSE Arca to act 
equitably, fairly, and reasonably in setting the terms of its proposal.
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    \12\ See supra note 4.
    \13\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21) (``NYSE 
Arca Order''). In the NYSE Arca Order, the Commission describes the 
competitive factors that apply to non-core market data products. The 
Commission hereby incorporates by reference the data and analysis 
from the NYSE Arca Order into this order.
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    Because NYSE Arca was subject to significant competitive forces in 
setting the terms of the proposal, the Commission will approve the 
proposal in the absence of a substantial countervailing basis to find 
that its terms nevertheless fail to meet an applicable requirement of 
the Act or the rules thereunder. An analysis of the proposal does not 
provide such a basis.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-NYSEArca-2009-32), be, and 
it hereby is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).
    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13039 Filed 6-3-09; 8:45 am]
BILLING CODE 8010-01-P