[Federal Register Volume 78, Number 150 (Monday, August 5, 2013)]
[Notices]
[Pages 47467-47469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18755]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70067; File No. SR-NYSEARCA-2013-74]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Modifying the 
Content of the NYSE Arca Trades Digital Media Data Feed

July 30, 2013.
    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 July 18, 2013, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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

    The Exchange proposes to revise the description of the NYSE Arca 
Trades Digital Media data feed. The text of the proposed rule change is 
available on the Exchange's Web site at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

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, Proposed Rule Change

 1. Purpose
    The Exchange proposes to revise the description of the NYSE Arca 
Trades Digital Media data feed.
    In 2009, the Securities and Exchange Commission (``Commission'') 
approved the NYSE Arca Trades data feed and certain fees for it.\4\ 
NYSE Arca Trades is a NYSE Arca-only market data feed that allows a 
vendor to redistribute on a real-time basis the same last sale 
information that the Exchange reports under the Consolidated Tape 
Association (``CTA'') Plan for inclusion in the CTA Plan's consolidated 
data streams and certain other related data elements. Specifically, 
NYSE Arca Trades includes the real-time last sale price, time, size, 
and bid/ask quotations for each security traded on the Exchange and a 
stock summary message. The stock summary message updates every minute 
and includes NYSE Arca's opening price, high price, low price, closing 
price, and cumulative volume for the security.
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    \4\ See Securities Exchange Act Release No. 59598 (Mar. 18, 
2009), 74 FR 12919 (Mar. 25, 2009) (SR-NYSEArca-2009-05).
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    In April 2013, the Exchange began offering a new version of NYSE 
Arca Trades called ``NYSE Arca Trades Digital Media,'' which was 
described as including the real-time last sale price, time, size, and 
stock summary message for each security traded on the Exchange, but not 
including access to the bid/ask quotation included with the NYSE Arca 
Trades product.\5\ At that time, the Exchange believed that it could 
efficiently remove the bid/ask information from the feed but has since 
determined that the time and resources required to do so would be 
significant and not commensurate with the need for the change. As such, 
the NYSE Arca Trades Digital Media product is offered with the bid/ask 
component included, and as such does not have different content than 
the regular NYSE Arca Trades data fee. The only difference between the 
products is the permitted distribution channels. NYSE Arca Trades 
Digital Media permits market data vendors, television broadcasters, Web 
site and mobile device service providers, and others to distribute the 
data product to their customers for viewing via television, Web site, 
and mobile devices. They are not be [sic] permitted to provide NYSE 
Arca Trades

[[Page 47468]]

Digital Media in a context in which a trading or order routing decision 
can be implemented unless CTA data is available in an equivalent 
manner, must label the products as NYSE Arca-only data, and must 
provide a hyperlinked notice similar to the one provided for CTA 
delayed data. These restrictions do not apply to the NYSE Arca Trades 
product.
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    \5\ See Securities Exchange Act Release No. 69274 (Apr. 2, 
2013), 78 FR 20986 (Apr. 8, 2013) (SR-NYSEArca-2013-30).
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    No other changes to the data components, terms, or pricing of any 
product are proposed.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \6\ of the 
Act, in general, and furthers the objectives of Section 6(b)(5) \7\ of 
the Act, in particular, in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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 it is not designed to permit unfair discrimination 
among customers, brokers, or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange offers the NYSE Arca Trades Digital Media data product 
in recognition of the demand for a more seamless and easier-to-
administer data distribution model that takes into account the expanded 
variety of media and communication devices that investors utilize 
today. As described above, the Exchange has determined that the expense 
of creating and monitoring a new feed without the bid-ask element is 
not warranted. No other aspect of the NYSE Arca Trades or NYSE Arca 
Trades Digital Media offering is being changed.
    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to consumers of such data. It was 
believed that this authority would expand the amount of data available 
to users and consumers of such data and also spur innovation and 
competition for the provision of market data. The Exchange believes 
that the data products proposed herein are precisely the sort of market 
data products that the Commission envisioned when it adopted Regulation 
NMS. The Commission concluded that Regulation NMS--by lessening 
regulation of the market in proprietary data--would itself further the 
Act's goals of facilitating efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the 
data beyond the prices, sizes, market center identifications of the 
NBBO and consolidated last sale information are not required to 
receive (and pay for) such data. The Commission also believes that 
efficiency is promoted when broker-dealers may choose to receive 
(and pay for) additional market data based on their own internal 
analysis of the need for such data.\8\
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    \8\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005) (File No. S7-10-04).

    By removing ``unnecessary regulatory restrictions'' on the ability 
of exchanges to sell their own data, Regulation NMS advanced the goals 
of the Act and the principles reflected in its legislative history.
    The Exchange further notes that the existence of alternatives to 
the Exchange's products, including real-time consolidated data, free 
delayed consolidated data, and proprietary data from other sources, 
ensures that the Exchange is not unreasonably discriminatory because 
vendors and subscribers can elect these alternatives. In addition, the 
proposal would not permit unfair discrimination because the product 
will be available to all of the Exchange's vendors and customers on an 
equivalent basis.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The market for proprietary 
data products is currently competitive and inherently contestable 
because there is fierce competition for the inputs necessary to the 
creation of proprietary data. Numerous exchanges compete with each 
other for listings, trades, and market data itself, providing virtually 
limitless opportunities for entrepreneurs who wish to produce and 
distribute their own market data. This proprietary data is produced by 
each individual exchange, as well as other entities (such as 
internalizing broker-dealers and various forms of alternative trading 
systems, including dark pools and electronic communication networks), 
in a vigorously competitive market. It is common for market 
participants to further and exploit this competition by sending their 
order flow and transaction reports to multiple markets, rather than 
providing them all to a single market.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not 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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of 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. The 
Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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 email to [email protected]. Please include 
File Number SR-NYSEARCA-2013-74 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-2013-74. This

[[Page 47469]]

file number should be included on the subject line if email 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 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 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of NYSE Arca. 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-NYSEARCA-2013-74 and should 
be submitted on or before August 26, 2013.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-18755 Filed 8-2-13; 8:45 am]
BILLING CODE 8011-01-P