[Federal Register Volume 83, Number 110 (Thursday, June 7, 2018)]
[Notices]
[Pages 26507-26510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12193]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83359; File No. SR-NYSE-2018-22]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Content of the NYSE Best Quote & Trades Data Feed

June 1, 2018.
    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 May 18, 2018, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(``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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the content of the NYSE Best Quote & 
Trades (``NYSE BQT'') data feed. The proposed rule change is available 
on the Exchange's website 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,

[[Page 26508]]

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
    The Exchange proposes to amend the content of NYSE BQT to include 
data feeds from the Exchange's affiliate, NYSE National, Inc. (``NYSE 
National''). The Exchange recently filed a proposed rule change to 
establish NYSE National market data feeds, including NYSE National BBO 
(``NYSE National BBO'') and NYSE National Trades (``NYSE National 
Trades'') \4\ and now proposes to amend the content of the NYSE BQT 
market data feed to include NYSE National BBO and NYSE National Trades.
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    \4\ See SR-NYSENat-2018-09.
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    The NYSE BQT \5\ data feed currently provides a unified view of 
best bid and offer (``BBO'') and last sale information for the Exchange 
and its affiliates, NYSE Arca, Inc. (``NYSE Arca'') and NYSE American 
LLC (``NYSE American'') and consists of data elements from six existing 
market data feeds: NYSE Trades,\6\ NYSE BBO,\7\ NYSE Arca Trades,\8\ 
NYSE Arca BBO,\9\ NYSE American Trades \10\ and NYSE American BBO.\11\
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    \5\ See Securities Exchange Act Release No. 73553 (November 6, 
2014), 79 FR 67491 (November 13, 2014) (Notice of Amendment No. 1 
and Order Granting Accelerated Approval to a Proposed Rule Change, 
as Modified by Amendment No. 1, To Establish the NYSE Best Quote and 
Trades Data Feed).
    \6\ See Securities Exchange Act Release Nos. 59290 (Jan. 23, 
2009), 74 FR 5707 (Jan. 30, 2009) (SR-NYSE-2009-05); 59606 (Mar. 19, 
2009), 74 FR 13293 (Mar. 26, 2009) (SR-NYSE-2009-04).
    \7\ See Securities Exchange Act Release No. 62181 (May 26, 
2010), 75 FR 31488 (June 3, 2010) (SR-NYSE-2010-30).
    \8\ See Securities Exchange Act Release Nos. 59289 (Jan. 23, 
2009), 74 FR 5711 (Jan. 30, 2009) (SR-NYSEArca-2009-06); and 59598 
(Mar. 18, 2009), 74 FR 12919 (Mar. 25, 2009) (SR-NYSEArca-2009-05).
    \9\ See Securities Exchange Act Release No. 62188 (May 27, 
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23).
    \10\ See Securities Exchange Act Release No. 62187 (May 27, 
2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
    \11\ See Securities Exchange Act Release No. 62187 (May 27, 
2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
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    NYSE BBO, NYSE Arca BBO, and NYSE American BBO are existing data 
feeds that distribute on a realtime basis the same BBO information that 
NYSE, NYSE Arca, and NYSE American, respectively, report under the 
Consolidated Quotation (``CQ'') Plan for inclusion in the CQ Plan's 
consolidated quotation information data stream. NYSE Trades, NYSE Arca 
Trades, and NYSE American Trades are existing data feeds that 
distribute on a real-time basis the same last sale information that 
NYSE, NYSE Arca, and NYSE American, respectively, report under the 
Consolidated Tape Association (``CTA'') Plan for inclusion in the CTA 
Plan's consolidated data streams.
    The NYSE BQT data feed has three channels: One channel for the last 
sale data (the ``last sale channel''); another channel for the BBO data 
(the ``best quotes channel''); and a third channel for consolidated 
volume data (the ``consolidated volume channel'').
    The last sale channel provides an aggregation of the same data that 
is currently available through NYSE Trades, NYSE Arca Trades, and NYSE 
American Trades. With this proposed rule change, the last sale channel 
would also include data available through NYSE National Trades.
    The best quotes channel provides the NYSE BQT BBO, which is the 
best quote from among the NYSE BBO, NYSE Arca BBO, and NYSE MKT BBO 
based on the following criteria, in order:
     Price: The exchange with the highest bid or the lowest 
offer has overall priority;
     Size: The largest size takes precedence when multiple 
exchanges submit the same bid and/or offer price; and
     Time: The earliest time takes precedence when multiple 
exchanges submit the same bid and/or offer price with the same sizes.
    With this proposed rule change, the best quotes channel would also 
include data available through NYSE National BBO.
    For each security, the best quotes channel would only include one 
best bid and one best offer from among the four exchanges. The NYSE BQT 
BBO would be marked with a market center ID identifying the exchange 
from which the BBO originated.
    The consolidated volume channel carries consolidated volume for all 
listed equities in a manner consistent with the requirements for 
redistributing such data as set forth in the securities information 
processor plans.
    As it does today, NYSE BQT would also provide related data elements 
for NYSE National, such as trade and security status updates (e.g., 
trade corrections and trading halts).
    The Exchange believes that NYSE BQT would continue to provide high-
quality, comprehensive last sale and BBO data for the Exchange, NYSE 
Arca, NYSE American, and now, NYSE National, in a unified view and 
would respond to subscriber demand for such a product.
    With respect to cost, the Exchange will file a separate rule filing 
to amend the fees for NYSE BQT.\12\ To ensure that vendors could 
continue to compete with the Exchange by creating the same product as 
NYSE BQT and selling it to their clients, the Exchange would continue 
to charge its clients for the NYSE BQT feed an amount that represents 
the cost to a market data vendor to obtain the underlying data feeds, 
plus an access fee to perform an aggregation and consolidation function 
that the Exchange performs in creating NYSE BQT. The Exchange believes 
that a competing vendor could create and offer a product similar to the 
proposed NYSE BQT data feed at a similar cost. For these reasons, the 
Exchange continues to believe that vendors could readily offer a 
product similar to NYSE BQT on a competitive basis.
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    \12\ See SR-NYSE-2018-24.
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    The Exchange will announce the date through a market data notice 
that the amended NYSE BQT feed that includes NYSE National BBO and NYSE 
National Trades data would be available and by when a subscriber must 
subscribe to NYSE National BBO and NYSE National Trades to continue 
receiving NYSE BQT. This proposed change to NYSE BQT will not be 
operative until NYSE National has established the NYSE National BBO and 
NYSE National Trades and related fees via a proposed rule change(s) and 
NYSE National has re-launched operations.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \13\ of the Act (``Act''), in general, and furthers 
the objectives of Section 6(b)(5) \14\ 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. This proposal is in keeping with those principles in that it 
promotes increased transparency through the dissemination of the NYSE 
BQT market data feed to those interested in receiving it.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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    The NYSE BQT data feed is a product that relies on the Exchange's 
receipt of

[[Page 26509]]

underlying data, which is available to all market participants, before 
it can aggregate and consolidate information to create the NYSE BQT; 
this is a process that a vendor could also perform. Accordingly, the 
Exchange is not the only distributor of the NYSE BQT data feed.
    The Exchange believes that the proposed rule change is consistent 
with Rule 603 of Regulation NMS,\15\ which provides that any national 
securities exchange that distributes information with respect to 
quotations for or transactions in an NMS stck [sic] do so on terms that 
are not unreasonably discriminatory. In adopting Regulation NMS, the 
Commission granted self-regulatory organizations (``SROs'') 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.
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    \15\ 17 CFR 242.603.
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    The Exchange further notes that the existence of alternatives to 
the Exchange's product, including real-time consolidated data, free 
delayed consolidated data, and proprietary data from other sources, as 
well as the continued availability of the Exchange's separate data 
feeds, ensures that the Exchange is not unreasonably discriminatory 
because vendors and subscribers can elect these alternatives as their 
individual business cases warrant. Additionally, the Exchange has taken 
into consideration its affiliated relationship with NYSE Arca, NYSE 
American and NYSE National in its design of the NYSE BQT data feed to 
assure that similarly situated competing vendors would be able to offer 
a similar product on the same terms as the Exchange, both from the 
perspective of latency and cost.
    The Exchange believes that NYSE BQT offers an alternative to the 
use of consolidated data products and proprietary data products such as 
NASDAQ Basic and NLS Plus. NASDAQ Basic, which is offered by The NASDAQ 
Stock Market, Inc. (``NASDAQ'') provides best bid and offer and last 
sale information for all U.S. exchange-listed securities (including 
NYSE and its affiliates) based on liquidity within NASDAQ, as well as 
trades reported to the FINRA/NASDAQ Trade Reporting Facility (``TRF''), 
including NASDAQ last sale, NASDAQ BBO, NASDAQ opening and closing 
prices, and other market status information.\16\ Further, NLS Plus 
provides all trade data from NASDAQ, the FINRA/NASDAQ TRF, NASDAQ BX, 
and NASDAQ PSX, as well as consolidated volume information as part of 
each trade message.\17\
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    \16\ See NASDAQ Basic, available at http://business.nasdaq.com/intel/market-data-feeds/Equities-Market-Data/basic.
    \17\ See NLS Plus, available at http://www.nasdaqtrader.com/Trader.aspx?id=NLSplus.
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    Cboe Global Markets, Inc. (``Cboe'') also offers a market data 
product that provides a unified view of the aggregated quote and trade 
updates for all the Cboe equity exchanges.\18\ The Exchange believes 
that NYSE BQT offers a competitive alternative to the two existing 
NASDAQ products and the Cboe product.
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    \18\ See https://markets.cboe.com/us/equities/market_data_products/bats_one/. The Cboe Equities One Premium Feed 
also includes five levels of aggregate depth information for all 
four Cboe exchanges.
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    In addition, this proposal would not permit unfair discrimination 
because NYSE BQT will continue to be available to all of the Exchange's 
customers through SFTI and market data vendors on an equivalent basis. 
In addition, any customer that wished to continue to be able to 
purchase one or more of the individual underlying data feeds would be 
able to do so.

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

    In accordance with Section 6(b)(8) of the Act,\19\ 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 Exchange believes that the proposed rule 
change will enhance competition because it would enable the Exchange to 
include NYSE National BBO and NYSE National Trades as part of NYSE BQT, 
thereby enabling it to better compete with market data products offered 
by NASDAQ and Cboe.\20\ As noted above, the Exchange already offers 
NYSE BQT and this proposed rule change simply amends the content of the 
current market data product to include data elements from two 
additional data feeds from the Exchange's affiliate, NYSE National. 
Although the Exchange, NYSE Arca, NYSE American and NYSE National are 
the exclusive distributors of the eight BBO and Trades feeds from which 
certain data elements are taken to create NYSE BQT, the Exchange would 
not be the exclusive distributor of the aggregated and consolidated 
information that would compose the amended NYSE BQT data feed. Vendors 
would be able, if they chose, to create a data feed with the same 
information as NYSE BQT and distribute it to their clients on a level-
playing field with respect to latency and cost as compared to the 
Exchange's product.
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    \19\ 15 U.S.C. 78f(b)(8).
    \20\ See supra notes 16-18.
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    With respect to latency, the Exchange, NYSE Arca, NYSE American and 
NYSE National are located in the same data center in Mahwah, New 
Jersey. The system creating and supporting the NYSE BQT data feed would 
need to obtain the eight underlying data feeds from the four exchanges 
before it could aggregate and consolidate information to create NYSE 
BQT and then distribute it to end users. Likewise, a competing market 
data vendor co-located at the Exchange's Mahwah, New Jersey facility 
could perform the aggregation and consolidation function in the Mahwah 
facility and redistribute a competing product from that location to 
similarly situated customers on a level-playing field with respect to 
the speed that the Exchange could create and redistribute the NYSE BQT 
data feed.
    The Exchange believes that NYSE BQT will continue to promote 
competition among exchanges by offering an alternative to NASDAQ Basic, 
NLS Plus and Cboe Equites One Feed.\21\ For these reasons, the Exchange 
believes that NYSE BQT will continue to promote, rather than 
unnecessarily or inappropriately burden, competition for market data 
products that are offered in the capacity as a vendor and are not core 
exchange market data products.
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    \21\ See supra notes 16-18.
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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 proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) 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 \22\ and Rule 19b-4(f)(6) thereunder.\23\
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    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.

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[[Page 26510]]

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \24\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \25\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposed rule change may become operative upon filing. The Exchange 
states that waiver of the operative delay would be consistent with the 
protection of investors and the public interest because it will allow 
the Exchange to provide an amended NYSE BQT market data feed that will 
include the NYSE National Market Data Feeds immediately upon launch of 
NYSE National, which the Exchange states is intended in May 2018, and 
will further allow the Exchange to compete directly with the similar 
NASDAQ and Cboe market data products on a timely basis. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposal as operative upon filing.\26\
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    \24\ 17 CFR 240.19b-4(f)(6).
    \25\ 17 CFR 240.19b-4(f)(6)(iii).
    \26\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or 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 email to [email protected]. Please include 
File Number SR-NYSE-2018-22 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2018-22. This 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 website (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 website 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 the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2018-22, and should be submitted on 
or before June 28, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-12193 Filed 6-6-18; 8:45 am]
 BILLING CODE 8011-01-P