[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Notices]
[Pages 68893-68894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30790]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61226; File No. SR-CTA/CQ-2009-02]


Consolidated Tape Association; Order Approving the Thirteenth 
Charges Amendment to the Second Restatement of the Consolidated Tape 
Association Plan and Seventh Charges Amendment to the Restated 
Consolidated Quotation Plan

December 22, 2009.

I. Introduction

    On October 19, 2009, the Consolidated Tape Association (``CTA'') 
Plan and Consolidated Quotation (``CQ'') Plan participants 
(``Participants'') \1\ filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') pursuant to Section 11A of the 
Securities Exchange Act of 1934 (``Act''),\2\ and Rule 608 
thereunder,\3\ proposals \4\ to amend the Second Restatement of the CTA 
Plan and Restated CQ Plan (collectively, the ``Plans'').\5\ The 
proposals would: (1) delete all program classification charges from the 
schedules of Network A and Network B computer input charges; and (2) 
replace the current combined Network A/Network B high speed line access 
charges with separate high speed line access charges for Network A and 
Network B. The proposed amendments to the Plans were published for 
comment in the Federal Register on November 19, 2009.\6\ No comment 
letters were received in response to the Notice. This order approves 
the proposed amendments to the Plans.
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    \1\ Each participant executed the proposed amendment. The 
Participants are: BATS Exchange, Inc.; Chicago Board Options 
Exchange, Inc.; Chicago Stock Exchange, Inc.; Financial Industry 
Regulatory Authority, Inc.; International Securities Exchange, LLC; 
NASDAQ OMX BX, Inc.; NASDAQ OMX PHLX, Inc.; The NASDAQ Stock Market 
LLC; National Stock Exchange, Inc.; New York Stock Exchange LLC; 
NYSE Amex LLC; and NYSE Arca, Inc.
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ On November 6, 2009, the Consolidated Tape Association sent 
a revised transmittal letter correcting the number of the proposed 
amendment (``Transmittal Letter'').
    \5\ See Securities Exchange Act Release Nos. 10787 (May 10, 
1974), 39 FR 17799 (declaring the CTA Plan effective); 15009 (July 
28, 1978), 43 FR 34851 (August 7, 1978) (temporarily authorizing the 
CQ Plan); and 16518 (January 22, 1980), 45 FR 6521 (January 28, 
1980) (permanently authorizing the CQ Plan). The most recent 
restatement of both Plans was in 1995. The CTA Plan, pursuant to 
which markets collect and disseminate last sale price information 
for non-NASDAQ listed securities, is a ``transaction reporting 
plan'' under Rule 601 under the Act, 17 CFR 242.601, and a 
``national market system plan'' under Rule 608 under the Act, 17 CFR 
242.608. The CQ Plan, pursuant to which markets collect and 
disseminate bid/ask quotation information for listed securities, is 
also a ``national market system plan'' under Rule 608 under the Act, 
17 CFR 242.608.
    \6\ See Securities Exchange Act Release No. 60985 (November 10, 
2009), 74 FR 59999 (``Notice'').
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II. Description of the Proposal

    The Plans currently divide the different means of using market data 
into eight ``program classifications.'' The program classification fees 
payable by vendors and end-users depend on the category of use the 
vendor or end-user makes of the data and whether the vendor or end-user 
is using Network A market data or Network B market data, or both. 
Through the amendments to the Plans, the Participants proposed to 
eliminate program classification charges and set separate fees for the 
receipt of Network A market data and Network B market data.
    The Participants stated that over time, new technologies and new 
and innovative ways to use market data have made it increasingly 
difficult to fit the data uses into the existing program 
classifications in a manner that is consistent and equitable for all. 
Therefore, the Participants concluded that it is more equitable to 
charge vendors and end-users for the method of access to the data and 
the quantity of usage, rather than for the specific purposes (i.e., by 
program classification) to which vendors and end-users put market data. 
The elimination of program classification charges means that vendors 
will no longer need to provide detailed explanations of how they use 
the data or to update Exhibit A to their agreements with the 
Participants each time they use data in a new way.
    Additionally, the Participants proposed to revise the access fees 
by setting separate fees for the receipt of Network A market data and 
Network B market data. Therefore, if a vendor or end-user wishes to 
receive Network A last sale prices (or quotation information), but not 
Network B last sale prices (or quotation information), the vendor or 
end-user would be allowed to pay only for Network A last sale prices, 
without also having to pay for Network B last sale prices and vice 
versa.
    In addition to establishing separate access fees for Network A and 
Network B, the Participants stated that they intend to set the new 
access fees at levels that will offset the revenues that the 
Participants anticipate losing as a result of eliminating the program 
classification fees.

III. Discussion

    After careful review, the Commission finds that the proposed 
amendments to the Plans are consistent with the Act and the rules and 
regulations thereunder.\7\ Specifically, the Commission finds that the 
amendments are consistent with Rule 608(b)(2) \8\ of the Act in that 
they are necessary for the protection of investors, the maintenance of 
fair and orderly markets, and to remove impediments to a national 
market system. The Commission believes that eliminating program 
classification charges and replacing them with separate fees for the 
receipt of Network A and Network B market data are fair and reasonable 
and provide for an equitable allocation of dues, fees, and other 
charges among vendors, data recipients and other persons using CTA 
Network A and Network B facilities. The Commission agrees that charging 
users of data based on their method of access to the data and the 
amount of data they use rather than basing charges on the way vendors 
or end users use the data should simplify the rate schedule, remove 
subjectivity from the billing process, simplify and reduce the costs of 
data administration, and give choice to data vendors and end-users who 
prefer to receive data from one network only. Further, according to the 
Participants' estimates, the vast majority of vendors and end-users 
would realize net monthly increases or decreases of less than 
$1,000.\9\ Thus, the proposed amendment is consistent with, and would 
further, one of the principal objectives for the national market system 
set forth in Section 11A(a)(1)(C)(iii) \10\ of the Act--increasing the 
availability of market information to broker-dealers and investors.
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    \7\ In approving this amendment, the Commission has considered 
the proposed amendment's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
    \8\ 17 CFR 242.608(b)(2).
    \9\ See the Transmittal Letter.
    \10\ 15 U.S.C. 78k-1(a)(1)(C)(iii).

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[[Page 68894]]

IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act,\11\ 
and the rules thereunder, that the proposed amendments to the CTA and 
CQ Plans (SR-CTA/CQ-2009-02) are approved.
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    \11\ 15 U.S.C. 78k-1.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(27).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30790 Filed 12-28-09; 8:45 am]
BILLING CODE 8011-01-P