[Federal Register Volume 73, Number 175 (Tuesday, September 9, 2008)]
[Notices]
[Pages 52436-52438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20807]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58443; File No. SR-NYSE-2008-79]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change to Reduce the Monthly Fee for NYSE Realtime Reference
Prices
August 29, 2008.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 28, 2008, the New York Stock Exchange LLC (the ``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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons, and is approving the
proposal on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 reduce the fixed monthly fee that applies
to its ``NYSE Realtime Reference Prices'' service, a service that the
Exchange is currently providing on a pilot test basis. There is no new
rule text.
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 III 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-2007-04 (the ``NYSE Realtime Reference Prices
[[Page 52437]]
Filing''),\3\ the Exchange established a pilot program to provide a new
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 Exchange intends for the NYSE Realtime Reference Prices
service to provide a low-cost service that will make real-time prices
widely available to many millions of casual investors, to provide
vendors with a real-time substitute for delayed prices, and to relieve
vendors of all administrative burdens.
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\3\ See Securities Exchange Act Release No. 57966 (June 16,
2008), 73 FR 35182 (June 20, 2008).
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The pilot program, which is currently scheduled to terminate on
November 1, 2008, 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.\4\ NYSE Realtime
Reference Prices information includes last sale prices for all
securities that are traded on the Exchange. It includes only prices. It
does not include the size of each trade and does not include bid/asked
quotations.
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\4\ The Exchange notes that it will make 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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During the pilot program, the Exchange will not permit NYSE-Only
Vendors to provide NYSE Realtime Reference Prices in a context in which
a trading or order-routing decision can be implemented unless the NYSE-
Only Vendor also provides consolidated displays of Network A last sale
prices available in an equivalent manner, as Rule 603(c)(1) of
Regulation NMS requires.
The NYSE Realtime Reference Price pilot program features a flat,
fixed monthly vendor fee, no user-based fees, no vendor reporting
requirements, and no professional or non-professional subscriber
agreements. For the duration of the pilot program, the Exchange
established a monthly flat fee that entitles a vendor to receive access
to the NYSE Realtime Reference Prices datafeed. The vendor may use that
access to provide unlimited NYSE Realtime Reference Prices to an
unlimited number of the vendor's subscribers and customers.
The Exchange set the flat fee at $100,000 per month. The purpose of
this proposed rule change is to reduce the flat monthly fee from
$100,000 to $70,000. This fee enables vendors to make NYSE Realtime
Reference Prices available 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 believes that the existing fee 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. After consultation with some of the entities
that have shown the most interest in the service, and after a few
months of experience with the product, the Exchange believes that the
proposed reduction in NYSE Realtime Reference Prices pilot program fees
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.
In modifying the level of the NYSE Realtime Reference Prices pilot
program fee, the Exchange also took into consideration such other
factors as:
(1) The fees that Nasdaq and other markets are charging for similar
services;
(2) The contribution of market data revenues that the Exchange
believes is appropriate for entities that provide market data to large
numbers of investors, which are the entities most likely to take
advantage of the proposed fees;
(3) The contribution that revenues accruing from the proposed fees
will make to meeting the overall costs of the Exchange's operations;
(4) Projected losses to the Exchange's other sources of market data
revenues (e.g., from its share of revenues derived from Network A
nonprofessional subscriber fees) as a result of the NYSE Realtime
Reference Prices service competing with those services;
(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 an alternative to
existing Network A fees under the CTA Plan, an alternative that vendors
will purchase only if they determine that the perceived benefits
outweigh the cost.
Prior to the end of the pilot program period, the Exchange will
assess its experience with the product. It either will submit a
proposed rule change that seeks to extend or modify the pilot program
or to make it permanent, or will announce publicly that it does not
seek to extend the pilot program beyond the pilot program's termination
date.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under section 6(b)(4) 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. In
light of the Exchange's experience with the NYSE Realtime Reference
Prices pilot program and after consultation with entities participating
in the pilot program, the Exchange believes that the proposed reduction
of the NYSE Realtime Reference Prices fee is equitable.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that this proposed rule change will
impose 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 discussed the proposed rules change with entities
that are participating in the pilot program. While those entities have
not submitted formal, written comments on the proposal, the Exchange
has consulted with them regarding the NYSE Realtime Reference Prices
fee and the proposed rule change reflects their input. The Exchange has
not received any unsolicited written comments from members or other
interested parties.
III. 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 Number SR-NYSE-2008-79 on the subject line.
[[Page 52438]]
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-2008-79. 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 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; 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-2008-79 and should be submitted on or before September 30, 2008.
IV. Commission's Findings and Order Granting Accelerated Approval of a
Proposed Rule Change
The Commission finds that the proposed rule change, to be
implemented for the remainder of the pilot period, is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\5\ In particular, it is
consistent with section 6(b)(4) of the Act,\6\ which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and issuers and other parties using its facilities, and section
6(b)(5) of the Act,\7\ which requires, among other things, that the
rules of a national securities exchange be designed to promote just and
equitable principles of trade, 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 not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\5\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\6\ 15 U.S.C. 78f(b)(4).
\7\ 15 U.S.C. 78f(b)(5).
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The Commission also finds that the proposed rule change is
consistent with the provisions of section 6(b)(8) of the Act,\8\ which
requires that the rules of an exchange not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act. Finally, the Commission finds that the proposed rule change
is consistent with Rule 603(a) of Regulation NMS,\9\ adopted under
Section 11A(c)(1) of the Act, which requires an exclusive processor
that distributes information with respect to quotations for or
transactions in an NMS stock to do so on terms that are fair and
reasonable and that are not unreasonably discriminatory.\10\
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\8\ 15 U.S.C. 78f(b)(8).
\9\ 17 CFR 242.603(a).
\10\ NYSE is an exclusive processor of its last sale data under
Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which
defines an exclusive processor as, among other things, an exchange
that distributes data on an exclusive basis on its own behalf.
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The Commission notes that the proposal reduces the flat monthly fee
for NYSE Realtime Reference Prices from $100,000 per month to $70,000
per month without reducing the amount of data received through NYSE
Realtime Reference Prices. In addition, the Commission notes that the
reduced fee will apply for the remainder of the pilot period. The
Commission approved the fee for NYSE Realtime Reference Prices for a
pilot period which runs until October 31, 2008. On June 4, 2008, the
Commission approved for public comment a draft approval order that sets
forth a market-based approach for analyzing proposals by self-
regulatory organizations to impose fees for ``non-core'' market data
products that would encompass the NYSE Realtime Reference Prices.\11\
The Commission believes that the proposal is consistent with the Act
for the reasons noted preliminarily in the Draft Approval Order.
Pending review by the Commission of comments received on the Draft
Approval Order, and final Commission action thereon, the Commission
believes that approving NYSE's proposal to reduce the monthly fee for
the remainder of the pilot period would be beneficial to investors and
in the public interest, in that it should result in increased broad
public dissemination of real-time pricing information. The broader
approach ultimately taken by the Commission with respect to non-core
market data fees will necessarily guide Commission action regarding
fees for the NYSE Realtime Reference Prices beyond the pilot period.
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\11\ See Securities Exchange Act Release No. 57917 (June 4,
2008), 73 FR 32751 (June 10, 2008) (Notice of Proposed Order
Approving Proposal by NYSE Arca, Inc. to Establish Fees for Certain
Market Data and Request for Comment) (``Draft Approval Order'').
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The Commission notes that the Exchange reconsidered the original
factors it used to establish the fee for NYSE Realtime Reference Prices
in determining the proposed reduced flat monthly fee. In addition, the
Commission notes that the Exchange's experience with NYSE Realtime
Reference Prices, consultation with entities that have shown the most
interest in NYSE Realtime Reference Prices, and price competition
provided by other market data products were considered by NYSE in
determining to reduce the flat monthly fee.
The Commission finds good cause for approving the proposed rule
change before the thirtieth day after the date of publication of notice
of filing thereof in the Federal Register. Accelerating approval of
this proposal should benefit investors by facilitating their access to
widespread, free, real-time pricing information contained in the NYSE
Realtime Reference Prices. In addition, the Commission notes that the
proposal should benefit vendors that make real-time pricing information
available by reducing their monthly fees. Therefore, the Commission
finds good cause, consistent with section 19(b)(2) of the Act,\12\ to
approve the proposed rule change on an accelerated basis only for a
pilot period to expire on October 31, 2008, while the Commission
analyzes comments on the Draft Approval Order.
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\12\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the Act,
that the proposed rule change (SR-NYSE-2008-79) is hereby approved on
an accelerated basis until October 31, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20807 Filed 9-8-08; 8:45 am]
BILLING CODE 8010-01-P