[Federal Register Volume 75, Number 181 (Monday, September 20, 2010)]
[Notices]
[Pages 57307-57309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23359]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62906; File No. SR-CTA-2010-01]


Consolidated Tape Association; Notice of Filing and Immediate 
Effectiveness of the Fourteenth Charges Amendment to the Second 
Restatement of the Consolidated Tape Association Plan

September 14, 2010.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on July 6, 2010, the Consolidated Tape Association (``CTA'') Plan 
participants (``Participants'') \3\ filed with the Securities and 
Exchange Commission (``Commission'') a proposal to amend the Second 
Restatement of the CTA Plan (the ``CTA Plan'').\4\ The proposal 
represents the fourteenth charges amendment to the CTA Plan 
(``Fourteenth Charges Amendment''), and reflects changes unanimously 
adopted by the Participants. The Fourteenth Charges Amendment proposes: 
(1) Permanent approval of fees that apply to a vendor's dissemination 
of a real-time Network B last sale price information ticker over 
broadcast, cable or satellite television; and, (2) an update of the 
automatic annual increase to the amount of the broker-dealer enterprise 
maximum monthly charge. Pursuant to Rule 608(b)(3) under Regulation 
NMS, the Participants designate the amendment as establishing or 
changing a fee or other charge collected on their behalf in connection 
with access to, or use of, the facilities contemplated by the Plans. As 
a result, the amendment becomes effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments from interested persons on the proposed Amendment.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ 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.
    \4\ See Securities Exchange Act Release No. 10787 (May 10, 
1974), 39 FR 17799 (declaring the CTA Plan effective). 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.
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I. Rule 608(a)

A. Description and Purpose of the Amendments

1. Network B Television Ticker Fees
    The amendment seeks to establish as a permanent part of the Network 
B rate schedule a tiered fee structure applicable to vendors that 
disseminate a real-time Network B ticker over broadcast, cable or 
satellite television (``Television Vendors'').
    The proposed tiered fee structure is identical to the fee structure 
that the Network B Participants have imposed on Television Vendors for 
several years as part of an extended pilot program. Currently, Network 
B had two Television Vendors. The amendment would merely codify the 
fees as a permanent part of the Network B fee schedule.
    The proposed tiered fee structure is as follows:

------------------------------------------------------------------------
                                               Monthly price per 1,000
 Number of customer households penetrated        customer households
                                                     penetrated
------------------------------------------------------------------------
1 through 5,000,000.......................  $1.50
5,000,001 through 10,000,000..............  $1.25
10,000,001 through 20,000,000.............  $1.00
20,000,001 through 40,000,000.............  $0.80
40,000,001 through 60,000,000.............  $0.60
More than 60,000,001......................  $0.50
------------------------------------------------------------------------

     The fee may be prorated where a vendor broadcasts the Network B 
ticker for only a portion of the trading day. The proration is 
determined by dividing the number of minutes that the vendor broadcasts 
the Network B ticker during the primary market's trading day into the 
total number of minutes in the primary market's trading day (excluding 
after hours' sessions). Currently, the primary market trades from 9:30 
a.m. to 4 p.m. Eastern Standard Time (or for 390 minutes) on each 
trading day. Accordingly, if a vendor only broadcasts the Network B 
ticker for two hours during the trading day, it would calculate the 
Network B fee by (A) multiplying the number of households reached by 
(the applicable monthly price divided by 1,000 households reached) and 
(B) multiplying that product by (120 minutes divided by 390 minutes).
    Where a vendor owns more than one network and broadcasts the 
Network B ticker simultaneously over more than one of its networks to a 
household, the vendor only needs to count that household once in the 
calculation of the number of households reached.
    The Network B Participants propose to quantify the number of 
households reached for billing purposes through the use of the monthly 
Nielsen Cable National Audience Demographic Report (the ``Nielsen 
Report''). For January through June of each year, the Network B 
Participants will base the bills upon the number of households reached 
as at the end of the preceding September, as published in the Nielsen 
Report. For July through December of each year, the Network B 
Participants will base the bills upon the number of households reached 
as at the end of the preceding March, as published in the Nielsen 
Report.
    Where the Nielsen Report does not provide the number of households 
reached for a vendor as at the end of March or September, the Network B 
Participants will use the most recent figure that the Nielsen Report 
has published as at the end of any of the six months preceding that 
March or September. If the Nielsen Report does not provide the number 
of households reached during that period, then the Network B 
Participants will ask the vendor to report the number of households 
that its broadcasts reach as at the end of each September and March. 
The Network B Participants reserve the right to verify the accuracy of 
the vendor's report.
    The new Network B ticker fee applies to any television broadcasts 
of the Network B ticker, whether through broadcast, cable or satellite 
television. The vendor's television ticker service may not enable the 
vendor's subscribers to customize or interrogate the ticker stream or 
to electronically capture and

[[Page 57308]]

store the last sale price information included in the stream. The 
vendor must provide the same ticker to each of its subscribers.
    The Network B real-time television ticker charges and related 
measuring metric and guidelines apply in a manner that is substantially 
similar to those in effect for Network A Television Vendors. (Network A 
charges $2.00 per 1000 households reached. The Network A Participants 
impose a monthly cap on the fees. The monthly cap is currently 
$164,000, but the Network B Participants anticipate that the Network A 
Participants will soon propose an amendment that would reduce the 
Network A monthly cap to $125,000.)
    The Exchange has discussed the real-time Network B television 
ticker product with both of the two current Television Vendors. They 
have provided positive feedback to the Exchange, noting that the 
product is appealing to them.
    The Network B Participants believe that Television Vendors 
contribute to the widespread distribution of real-time market data 
around the world, making it possible for individuals to view real-time 
Network B prices throughout the trading day through television. They 
believe that the proposed charges would continue to impose fair and 
reasonable amounts on Television Vendors for that service.
2. Elimination of Broker-Dealer Enterprise Monthly Maximum Charge
    In addition to adding the Network B Television Ticker Charges to 
Schedule A-3 to the CTA Plan, the Network B Participants have also 
determined to revise Schedule A-3 by amending Footnote 11, the CTA 
Plan's annual adjustment of the Network B broker-dealer enterprise 
maximum monthly fee.
    Footnote 11 provides that an entity that is registered as a broker/
dealer under the Securities Exchange Act of 1934 is not required to pay 
more than $500,000 for any month (the ``Maximum Monthly Amount'') for 
the aggregate amount of: (a) Network B display-device charges for 
devices that its officers, partners and employees use; plus (b) Network 
B display-device and per-quote packet charges payable in respect of 
services that it provides to nonprofessional subscribers that are 
brokerage account customers of the broker/dealer.
    The footnote then provides that the Maximum Monthly Amount will 
increase each calendar year by an amount equal to the percentage 
increase in the annual composite share volume for the preceding 
calendar year, subject to a maximum annual increase of five percent 
(the ``Annual Adjustment''). The footnote provides that the annual 
increases will commence with calendar year 2001.
    The Network B Participants have had no reason to apply the Annual 
Adjustment for the past several years because no broker/dealers are 
currently subject to the Network B Maximum Monthly Amount. However, 
they anticipate that at least one broker/dealer will become subject to 
the Network B Maximum Monthly Amount during 2010. They believe that the 
stated pre-Annual Adjustment Monthly Maximum Amount (i.e., $500,000) is 
the appropriate amount to charge such broker/dealers during calendar 
months falling in 2010.
    For that reason, the Network B Participants propose to amend the 
Annual Adjustment in Footnote 11 to provide that Network B shall apply 
the Annual Adjustment commencing with calendar year 2011, rather than 
2001. Because Network B will not apply Annual Adjustments for calendar 
years 2001 through 2010, this amounts to a decrease in the Maximum 
Monthly Amount.
    The text of the proposed Amendment is available on the CTA's Web 
site (http://www.nysedata.com/cta), at the principal office of the CTA, 
and at the Commission's Public Reference Room.

B. Additional Information Required by Rule 608(a)

1. Governing or Constituent Documents
    Not applicable.
2. Implementation of the Amendment
    Over several years, the Network B Participants have conducted a 
pilot program that permits vendors to disseminate a Network B last sale 
price information ticker by means of broadcast, cable and/or satellite 
television. The Network B Participants now propose to convert the real-
time Network B ticker initiative from a pilot program to a permanent 
part of the Network B rate schedule. The proposed permanent tiered fee 
structure is identical to the fee structure that has applied during the 
pilot program.
    In addition, by eliminating the Annual Adjustment, the Network B 
Participants propose to amend the Maximum Monthly Amount payable by a 
broker/dealer in the form of (i) Network B display-device charges and 
(ii) Network B display charges and per-quote packet charges provided to 
nonprofessional subscribers that are brokerage account customers of the 
broker/dealer.
    Because the amendment establishes or amends fees collected on the 
Network B Participants' behalf in connection with access to, or use of, 
the facilities contemplated by the CTA Plan, the amendment becomes 
effective upon filing with the Commission.
    As a result, the amendment will ``be implemented'' immediately. The 
new Network B permanent fees will supersede and replace the pilot 
program. As additional vendors undertake to transmit the Network B 
ticker over television, they will be subject to the new fee in 
accordance with the guidelines set forth in this proposed amendment to 
the CTA Plan.
    The elimination of the Annual Adjustment will have no current 
impact, as no broker/dealer currently qualifies for the Maximum Monthly 
Amount.
3. Development and Implementation Phases
    See Item I(B)(2) above.
4. Analysis of Impact on Competition
    The amendment will impose no burden on competition.
5. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan
    The Participants have no written understandings or agreements 
relating to interpretation of the CTA Plan as a result of the 
amendment.
6. Approval by Sponsors in Accordance with Plan
    Under Section IV(b) of the CTA Plan, each CTA Plan Participant must 
execute a written amendment to the CTA Plan before the amendment can 
become effective. The amendment is so executed.
7. Description of Operation of Facility Contemplated by the Proposed 
Amendment
    Not applicable.
8. Terms and Conditions of Access
    Not applicable.
9. Method of Determination and Imposition, and Amount of, Fees and 
Charges
    In determining the amount of the real-time Network B television 
tiered fee structure, the Network B Participants have carried over the 
same fee that has applied during the real-time Network B television 
ticker pilot program.
    The Network B Participants established the pilot program fees 
through a process of discussion and negotiation with the first 
participants in

[[Page 57309]]

the pilot program. Currently, two Television Vendors participate in the 
program. In the view of the Network B Participants, using the number of 
households reached as the billing metric for the dissemination of last 
sale price information through television is a reasonable counterpart 
to metrics used in other contexts, such as counting devices, subscriber 
entitlements or quote packets. The billing metric is the same as 
television advertisers use, a fact that serves to discipline accuracy 
of the households-reached count (since the television networks have 
incentives to maximize the number of households reached while the 
advertisers have incentives to minimize the number).
    The Network B Participants believe that the level of the fee is 
fair and reasonable and allows the television vendors to contribute an 
appropriate amount for the market data services that they provide. It 
constitutes a reasonable allocation of the costs of running the 
securities markets that the Network B Participants operate to the 
purveyors of the Television Vendors.
10. Method of Frequency of Processor Evaluation
    Not applicable.
11. Dispute Resolution
    Not applicable.

II. Rule 601(a)

A. Reporting Requirements

    Not applicable.

B. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    The new fee will permit vendors to disseminate a ticker stream of 
Network B last sale price information to viewers of broadcast, cable or 
satellite television.

C. Manner of Consolidation

    Not applicable.

D. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

E. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

F. Terms of Access to Transaction Reports

    The Network B Participants will require vendors of Network B ticker 
television services to enter into the standard form of vendor 
agreement. It is the same form into which the CTA Plan Participants 
require all vendors to enter.

G. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed 
Fourteenth Charges Amendment to the CTA Plan 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-CTA-2010-01 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-CTA-2010-01. 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 Amendment that is filed with the 
Commission, and all written communications relating to the Amendment 
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 Web site viewing and printing 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 the Amendments also will be available for inspection and 
copying at the principal office of the CTA. All comment received will 
be posted without change; the Commission does not edit personal 
identifying information from ubmissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CTA-2010-01 and should be submitted on 
or before October 12, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(27).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-23359 Filed 9-17-10; 8:45 am]
BILLING CODE 8010-01-P