[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