[Federal Register Volume 74, Number 242 (Friday, December 18, 2009)]
[Notices]
[Pages 67287-67290]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30080]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61145; File No. SR-NYSE-2009-120]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Relating to Changes in NYSE 
Realtime Reference Prices Service

December 10, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on November 27, 2009, the New York Stock Exchange LLC 
(``NYSE'' 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 
Exchange.

[[Page 67288]]

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\ 15 U.S.C. 78a.
    \3\ 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

    NYSE proposes (1) To add data elements to its ``NYSE Realtime 
Reference Prices'' service, (2) to reduce the fixed monthly fee that 
applies to that service and (3) to add a usage-based fee alternative 
for that service. The text of the proposed rule change is available at 
the Exchange, the Commission's Public Reference Room, and http://www.nyse.com.



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 IV 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-NYSE-2009-42 (the ``NYSE Realtime Reference Prices 
Filing''),\4\ the Exchange established a fixed monthly fee for its 
NYSE-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. The NYSE Realtime Reference Prices service provides a low-
cost service that makes real-time prices widely available to many 
millions of casual investors, provides vendors with a real-time 
substitute for delayed prices, and relieves vendors of all 
administrative burdens.
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    \4\ See Securities Exchange Act Release No. 34-60004 (May 29, 
2009), 74 FR 26905 (June 4, 2009) (File No. SR-NYSE-2009-42) (the 
``Approval Order'').
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    The service allows Internet service providers, traditional market 
data vendors, and others (``NYSE-Only Vendors'') to make available NYSE 
Realtime Reference Prices on a real-time basis.\5\ NYSE Realtime 
Reference Prices information includes last sale prices for all 
securities that are traded on the Exchange.
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    \5\ The Exchange notes that it makes the NYSE 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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    The Exchange proposes to make the following changes to the service 
and its fees:
a. Data Elements
    Currently, the NYSE Realtime Reference Price Service includes only 
prices. It does not include the size of each trade and does not include 
bid/asked quotations. For each security, the Exchange is proposing to 
add the following data elements to the service:
     High price.
     Low price.
     Cumulative volume.
    The Exchange anticipates that it will update these data elements 
every second, though initially it will update them once per minute. A 
security's high (low) price will reflect the highest (lowest) price at 
which the security has traded on the Exchange during the trading 
session through the point in time at which it is disseminated. Further, 
the cumulative volume will reflect a security's aggregate volume during 
a trading session through the point in time at which it is last 
disseminated. The Exchange believes that adding these data elements 
will make the product more attractive to the customers of NYSE-Only 
Vendors.
b. Reduction in the Fixed Monthly Fee
    The NYSE Realtime Reference Price service features a flat, fixed 
monthly vendor fee of $70,000 and no user-based fees. For that fee, the 
NYSE-Only Vendor may provide unlimited NYSE Realtime Reference Prices 
to an unlimited number of the NYSE-Only Vendor's subscribers and 
customers 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.
    The Exchange has now had experience with the product and has 
received feedback from its customers. As a result of the comments of 
the Exchange's customers, the response to the product from the vendors 
most likely to subscribe to the product, and the past year's market 
corrections, the Exchange is now proposing to reduce the fixed monthly 
fee to $60,000. In addition, in combination with the proposed usage-
based fee and the proposed addition of new data elements to the 
product, the Exchange hopes that the fee reduction will allow the 
Exchange to broaden the universe of vendors that will find the product 
appropriate for their business models.
    The Exchange believes that the proposed reduced fee will enable 
Internet service providers and traditional vendors that have large 
numbers of casual investors as subscribers and customers to contribute 
to the Exchange's operating costs in a manner that is appropriate for 
their means of distribution. The Exchange further believes that the 
proposed reduction in the fixed monthly fee for the NYSE Realtime 
Reference Prices service will make the product more attractive to 
vendors. An increase in the number of vendors that determine to provide 
free access to NYSE Realtime Reference prices to their Internet users 
would benefit the investment community. The fee reduction will also 
respond to the price competition provided by alternative exchanges, 
ECNs and the market for delayed data. In addition, it will better 
reflect the perceived value of the NYSE product and provide a more 
equitable allocation of the Exchange's overall costs to users of its 
facilities.
c. Usage-Based Fee
    The Exchange proposes to establish as an alternative to the fixed 
monthly fee a fee of $.004 for each real-time reference price that a 
NYSE-Only Vendor disseminates to its customers. The Exchange proposes 
to limit a NYSE-Only Vendor's exposure under this alternative fee by 
setting $60,000, the same amount as the proposed fixed monthly rate, as 
the maximum fee that an NYSE-Only Vendor would have to pay for real-
time reference prices that it disseminates in any calendar month 
pursuant to the per-query fee.
    In order to take advantage of the per-query fee, a NYSE-Only Vendor 
must document in its Exhibit A that it has the ability to measure 
accurately the number of queries and must have the ability to report 
aggregate query quantities on a monthly basis.
    The Exchange will impose the per-query fee only on the 
dissemination of real-time reference prices. NYSE-Only Vendors may 
provide delayed data services in the same manner as they do today.
    The per-query charge is imposed on NYSE-Only Vendors, not end-
users, and is payable on a monthly basis. Because it represents a new 
and additional alternative to the monthly fixed fee, NYSE-Only Vendors 
may elect to disseminate NYSE Realtime Reference

[[Page 67289]]

Prices pursuant to the per-query fee rather than the fixed monthly fee.
d. Justification of Fees
    The NYSE Realtime Reference Prices service enables Internet service 
providers and traditional vendors that have large numbers of casual 
investors as subscribers and customers to contribute to the Exchange's 
operating costs in a manner that is appropriate for their means of 
distribution. Reducing the flat monthly fee and adding a per-query 
payment option will reduce the costs of the service to those Internet 
service providers and traditional vendors. For the reasons explained 
above, the Exchange believes that this will enable NYSE Realtime 
Reference Prices vendors to make a more appropriate contribution to the 
Exchange's operating costs.
    In re-setting the level of the NYSE Realtime Reference Prices flat 
monthly fee and in establishing the per-query fee, the Exchange took 
into consideration several factors, including:
    (1) The fees that Nasdaq and NYSE Arca are charging for similar 
services and that NYSE Amex has proposed to charge;
    (2) Consultation with some of the entities that currently receive 
the service or that the Exchange anticipates may commence to take 
advantage of the service;
    (3) The contribution of market data revenues that the Exchange 
believes is appropriate for entities that are most likely to take 
advantage of the proposed service;
    (4) The contribution that revenues accruing from the proposed fees 
will make to meet the overall costs of the Exchange's operations;
    (5) The savings in administrative and reporting costs that the NYSE 
Realtime Reference Prices service will provide to NYSE-Only Vendors; 
and
    (6) The fact that the proposed fees provide even more attractive 
alternatives to existing fees under the CTA Plan than the current flat 
fee, alternatives that vendors will purchase only if they determine 
that the perceived benefits outweigh the cost.
    The Exchange believes that the levels of the fixed monthly fee and 
the per-query fee are consistent with the approach set forth in the 
order by which the Commission approved ArcaBook fees for NYSE Arca.\6\ 
In the ArcaBook Approval Order, the Commission stated that ``when 
possible, reliance on competitive forces is the most appropriate and 
effective means to assess whether the terms for the distribution of 
non-core data are equitable, fair and reasonable, and not unreasonably 
discriminatory.'' \7\ It noted that if significant competitive forces 
apply to a proposal, the Commission will approve it unless a 
substantial countervailing basis exists.
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    \6\ See Release [sic] No. 59039 (December 2, 2008), 73 FR 74770 
(December 9, 2008) (SR-NYSEArca-2006-21) (the ``ArcaBook Approval 
Order'').
    \7\ Id. at 74771.
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    NYSE Realtime Reference Prices constitute ``non-core data.'' The 
Exchange does not require a central processor to consolidate and 
distribute the product to the public pursuant to joint-SRO plans. 
Rather, the Exchange distributes the product voluntarily.
    In the case of NYSE Realtime Reference Prices, both of the two 
types of competitive forces that the Commission described in the 
ArcaBook Approval Order are present: The Exchange has a compelling need 
to attract order flow and the product competes with a number of 
alternative products.
    The Exchange must compete vigorously for order flow to maintain its 
share of trading volume. This requires the Exchange to act reasonably 
in setting market data fees for non-core products such as NYSE Realtime 
Reference Prices. The Exchange hopes that NYSE Realtime Reference 
Prices will enable vendors to distribute NYSE last sale price data 
widely among investors, and thereby provide a means for promoting the 
Exchange's visibility in the marketplace.
    In addition to the need to attract order flow, the availability of 
alternatives to NYSE Realtime Reference Prices significantly constrain 
the prices at which the Exchange can market NYSE Realtime Reference 
Prices. All national securities exchanges, the several Trade Reporting 
Facilities of FINRA, and ECNs that produce proprietary data, as well as 
the core data feed, are all sources of competition for NYSE Realtime 
Reference Prices. Currently, NYSE Arca and Nasdaq offer similar 
services. (In addition, the Exchange anticipates that NYSE Amex will 
soon file for approval of a counterpart product.)
    The information available in NYSE Realtime Reference is included in 
the CTA core data feed, which also includes the size of trades, as well 
as last sale information from other markets. Even though NYSE Realtime 
Reference Prices omits size and provides prices that are not 
consolidated with those of other markets, investors may select it as a 
less expensive alternative to the CTA Plan's consolidated last sale 
price services for certain purposes. (Rule 603(c) of Regulation NMS 
requires vendors to make the core data feeds available to customers 
when trading and order-routing decisions can be implemented.)
e. Amendment to Exhibit C
    In providing NYSE Realtime Reference Prices, the Exchange 
supplements the standard Network A Vendor Form with an Exhibit C that 
provides certain terms and conditions that are unique to the NYSE 
Realtime Reference Prices service, such as the replacement of end-user 
agreements with a hyperlink to a notice and a labeling requirement. One 
of those supplemental conditions provides that the NYSE-Only Vendor 
will only distribute last sale prices as part of the service. Because 
this filing proposes to expand the permissible universe of data 
elements that a NYSE-Only Vendor may disseminate, the Exchange proposes 
to amend the Exhibit C. The proposed revised version of Exhibit C is 
attached to the proposed rule change as Exhibit 4 and Exhibit 5. 
Exhibit 4 is marked to show the proposed changes to the current version 
of Exhibit C. Exhibit 5 is a clean, unmarked version.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Act'') 
for the proposed rule change is the requirement under Section 6(b)(4) 
\8\ 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) \9\ 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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    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change would benefit investors by facilitating 
their prompt access to widespread, free, real-time pricing information 
contained in the NYSE Realtime Reference Prices service. In addition, 
the Exchange believes (1) that the proposed fee reduction would allow 
entities that provide market data to large numbers of investors to make 
an appropriate contribution towards meeting the overall costs of the 
Exchange's operations and (2) that the proposed per-query fee would 
provide pricing flexibility to entities that determine to provide the 
NYSE Realtime Reference Prices service.

[[Page 67290]]

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

    NYSE Realtime Reference Prices proposes to reduce an existing fee 
of the Exchange (the flat monthly fee) and to provide an alternative 
(the per-query fee) to the existing fee. It would not raise or rescind 
any existing fees. It amounts to a competitive response to the products 
that Nasdaq and NYSE Arca make available and that NYSE Amex has 
proposed to make available. For those reasons, 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.

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. 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 the 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 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-NYSE-2009-120 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2009-120. 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 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 
available publicly. All submissions should refer to File Number SR-
NYSE-2009-120 and should be submitted on or before January 8, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30080 Filed 12-17-09; 8:45 am]
BILLING CODE 8011-01-P