Justia Agencies And Commissions Securities And Exchange Commission Joint Industry Plan; Notice of Filing and Immediate Effectiveness of Amendment No. 20 to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis, Submitted by the American Stock Exchange LLC, the Boston Stock Exchange, Inc., the Chicago Stock Exchange, Inc., the Chicago Board Options Exchange, Incorporated, the International Securities Exchange, LLC., the Financial Industry Regulatory Authority, Inc., the National Stock Exchange, Inc., The NASDAQ Stock Market LLC, the New York Stock Exchange LLC, NYSE Arca, Inc., and the NASDAQ OMX PHLX, Inc., 65417-65427 [E8-26108]

Joint Industry Plan; Notice of Filing and Immediate Effectiveness of Amendment No. 20 to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis, Submitted by the American Stock Exchange LLC, the Boston Stock Exchange, Inc., the Chicago Stock Exchange, Inc., the Chicago Board Options Exchange, Incorporated, the International Securities Exchange, LLC., the Financial Industry Regulatory Authority, Inc., the National Stock Exchange, Inc., The NASDAQ Stock Market LLC, the New York Stock Exchange LLC, NYSE Arca, Inc., and the NASDAQ OMX PHLX, Inc., 65417-65427 [E8-26108]

Download as PDF Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58863; File No. S7–24–89] Joint Industry Plan; Notice of Filing and Immediate Effectiveness of Amendment No. 20 to the Joint SelfRegulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis, Submitted by the American Stock Exchange LLC, the Boston Stock Exchange, Inc., the Chicago Stock Exchange, Inc., the Chicago Board Options Exchange, Incorporated, the International Securities Exchange, LLC., the Financial Industry Regulatory Authority, Inc., the National Stock Exchange, Inc., The NASDAQ Stock Market LLC, the New York Stock Exchange LLC, NYSE Arca, Inc., and the NASDAQ OMX PHLX, Inc. October 27, 2008. I. Introduction and Description Pursuant to Rule 608 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 notice is hereby given that on October 1, 2008, the operating committee (‘‘Operating Committee’’ or ‘‘Committee’’) 2 of the Joint SelfRegulatory Organization Plan Governing the Collection, Consolidation, and Dissemination of Quotation and Transaction Information for NasdaqListed Securities Traded on Exchanges on an Unlisted Trading Privilege Basis (‘‘Nasdaq/UTP Plan’’ or ‘‘Plan’’) filed with the Securities and Exchange Commission (‘‘Commission’’) amendments to the Plan. These amendments represent Amendment 20 to the Plan and reflect: Modifying the name of the National Association of Securities Dealers and the Philadelphia Stock Exchange; adding BATS Exchange as a new Plan Participant; modifying Exhibit 1 to reflect changes to the Plan by Regulation NMS; and making ministerial changes to the text of the Plan. Amendment 20 was unanimously 1 17 CFR 242.608. Plan Participants (collectively, ‘‘Participants’’) are: the American Stock Exchange LLC (‘‘Amex’’); the Boston Stock Exchange, Inc. (‘‘BSE’’); the Chicago Stock Exchange, Incorporated (‘‘CHX’’); the Chicago Board Options Exchange, Inc. (‘‘CBOE’’); the International Securities Exchange, LLC (‘‘ISE’’); the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’); the National Stock Exchange, Inc. (‘‘NSX’’); The NASDAQ Stock Market LLC (‘‘Nasdaq’’); NASDAQ OMX PHLX, Inc. (‘‘NASDAQ OMX PHLX’’); the New York Stock Exchange, LLC (‘‘NYSE’’) and NYSE Arca, Inc. (‘‘NYSE Arca’’). approved by the Committee on September 4, 2008.3 The Commission is publishing this notice of filing and immediate effectiveness to solicit comments from interested persons on Amendment No. 20. II. Background The Plan governs the collection, processing, and dissemination on a consolidated basis of quotation information and transaction reports in Eligible Securities 4 for each of its Participants. This consolidated information informs investors of the current quotation and recent trade prices of Nasdaq securities. It enables investors to ascertain from one data source the current prices in all the markets trading Nasdaq securities. The Plan serves as the required transaction reporting plan for its Participants, which is a prerequisite for their trading Eligible Securities.5 III. Description and Purpose of the Amendment 6 The following is a summary of the changes to the Plan prepared by the Participants: (i) Section I.A. shall be amended to add the BATS Exchange, Inc. as a new Plan Participant, to change the name of the National Association of Securities Dealers to the Financial Industry Regulatory Authority, Inc., and to change the name of the Philadelphia Stock Exchange to Nasdaq OMX PHLX, Inc. (ii) Section III shall be amended to reflect the name change from the National Association of Securities Dealers (‘‘NASD’’) to the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’). (iii) Section IV.A shall be modified to reflect the participation of Advisory Committee members and to clarify that only Participants and their representatives as well as Commission staff may participate in Executive Sessions of the Operating Committee. (iv) Section IV.C shall be modified to reflect the NASD name change to FINRA. (v) Section VI.B shall be modified to eliminate language that is no longer relevant. sroberts on PROD1PC70 with NOTICES 2 The VerDate Aug<31>2005 18:45 Oct 31, 2008 Jkt 217001 3 See letter from Bridget F. Spaulding, Chairman, OTC/UTP Operating Committee, to Florence E. Harmon, Acting Secretary, Commission, dated September 8, 2008. 4 The Plan defines ‘‘Eligible Securities’’ as any Nasdaq Global Market or Nasdaq Capital Market security, as defined in NASD Rule 4200. 5 See Securities Exchange Act Release No. 55647 (April 19, 2007) 72 FR 20891 (April 26, 2007). 6 The complete text of the Plan, as amended by Amendment No. 20, is attached as Exhibit A. PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 65417 (vi) Section VI.C shall be modified to reflect the NASD name change to FINRA. (vii) Section VIII. shall be modified to add the BATS Exchange as a new Participant, reflect the NASD name change as FINRA, and to modify the Philadelphia Stock Exchange name to Nasdaq OMX PHLX. (viii) Section IX. shall be modified to eliminate vague language regarding market access and to reflect the NASD name change to FINRA. (ix) Section X. shall be modified to clarify the language and make ministerial changes to the text. (x) Section XI.D. shall be modified to reflect the NASD name change to FINRA. (xi) Section XVIII.A shall be modified to correct a grammatical error. (xii) The signature block shall be modified to add the BATS Exchange as a new Participant, to reflect the NASD name change as FINRA, and to modify the Philadelphia Stock Exchange name to Nasdaq OMX PHLX. (xiii) Exhibit 1 shall be modified to reflect the NASD name change to FINRA and to be updated to reflect the Regulation NMS revenue formula. IV. Date of Effectiveness of the Amendment The changes set forth in Amendment No. 20 have been designated by the Participants as concerned solely with the administration of the plan or involving solely technical or ministerial matters, and thus are being put into effect upon filing with the Commission pursuant to Rules 608(b)(3)(ii) and 608(b)(3)(iii).7 At any time within 60 days of the filing of any such amendment, the Commission may summarily abrogate the amendment and require that the amendment be refiled in accordance with paragraph (a)(1) of Rule 608 under the Act 8 and reviewed in accordance with paragraph (b)(2) of Rule 608 under the Act,9 if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or the maintenance of fair and orderly markets, to remove impediments to, and perfect mechanisms of, a national market system or otherwise in furtherance of the purposes of the Act.10 V. Solicitation of Comments The Commission seeks general comments on Amendment No. 20. Interested persons are invited to submit 7 17 CFR 242.608(b)(3)(ii) and (b)(3)(iii). CFR 242.608(a)(1). 9 17 CFR 242.608(b)(2). 10 17 CFR 242.608(b)(3)(iii). 8 17 E:\FR\FM\03NON1.SGM 03NON1 65418 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices written data, views, and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Acting Secretary. Electronic Comments Exhibit A • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number S7–24–89 on the subject line. Nasdaq UTP Plan Paper Comments sroberts on PROD1PC70 with NOTICES • 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 S7–24–89. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all written statements with respect to the proposed Plan amendment that are filed with the Commission, and all written communications relating to the proposed Plan 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 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 Office of the Secretary of the Committee, currently located at NYSE Arca, Inc., 100 South Wacker Drive, Suite 1800, Chicago, IL 60606. 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 S7–24–89 and should be submitted on or before November 24, 2008. Amended and Restated Plan Amendment No. 20 The undersigned registered national securities association and national securities exchanges (collectively referred to as the ‘‘Participants’’), have jointly developed and hereby enter into this Nasdaq Unlisted Trading Privileges Plan (‘‘Nasdaq UTP Plan’’ or ‘‘Plan’’). I. Participants. The Participants include the following: A. Participants 1. American Stock Exchange LLC., 86 Trinity Place, New York, New York 10006. 2. BATS Exchange, Inc., 4151 North Mulberry Drive, Suite 275, Kansas City, Missouri 64116. 3. Boston Stock Exchange, 100 Franklin Street, Boston, Massachusetts 02110. 4. Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605. 5. Chicago Board Options Exchange, Inc., 400 South LaSalle Street, 26th Floor, Chicago, Illinois 60605. 6. International Securities Exchange, LLC., 60 Broad Street, New York, New York 10004. 7. Financial Industry Regulatory Authority, Inc., 1735 K Street, NW., Washington, DC 20006. 8. National Stock Exchange, Inc., 440 South LaSalle Street, 26th Floor, Chicago, Illinois 60605. 9. New York Stock Exchange LLC., 11 Wall Street, New York, New York 10005. 10. NYSE Arca, Inc., 100 South Wacker Drive, Suite 1800, Chicago, IL 60606. 11. NASDAQ OMX PHLX, Inc., 1900 Market Street, Philadelphia, Pennsylvania 19103. 12. The NASDAQ Stock Market LLC., 1 Liberty Plaza, 165 Broadway, New York, NY 10006. B. Additional Participants Any other national securities association or national securities exchange, in whose market Eligible Securities become traded, may become a Participant, provided that said organization executes a copy of this 11 17 VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 PO 00000 CFR 200.30–3(a)(27). Frm 00135 Fmt 4703 Sfmt 4703 Plan and pays its share of development costs as specified in section XIII. II. Purpose of Plan The purpose of this Plan is to provide for the collection, consolidation and dissemination of Quotation Information and Transaction Reports in Eligible Securities from the Participants in a manner consistent with the Exchange Act. It is expressly understood that each Participant shall be responsible for the collection of Quotation Information and Transaction Reports within its market and that nothing in this Plan shall be deemed to govern or apply to the manner in which each Participant does so. III. Definitions A. ‘‘Current’’ means, with respect to Transaction Reports or Quotation Information, such Transaction Reports or Quotation Information during the fifteen (15) minute period immediately following the initial transmission thereof by the Processor. B. ‘‘Eligible Security’’ means any Nasdaq Global Market or Nasdaq Capital Market security, as defined in NASDAQ Rule 4200. Eligible Securities under this Nasdaq UTP Plan shall not include any security that is defined as an ‘‘Eligible Security’’ within Section VII of the Consolidated Tape Association Plan. A security shall cease to be an Eligible Security for purposes of this Plan if: (i) the security does not substantially meet the requirements from time to time in effect for continued listing on Nasdaq, and thus is suspended from trading; or (ii) the security has been suspended from trading because the issuer thereof is in liquidation, bankruptcy or other similar type proceedings. The determination as to whether a security substantially meets the criteria of the definition of Eligible Security shall be made by the exchange on which such security is listed provided, however, that if such security is listed on more than one exchange, then such determination shall be made by the exchange on which the greatest number of the transactions in such security were effected during the previous twelvemonth period. C. ‘‘Commission’’ and ‘‘SEC’’ shall mean the U.S. Securities and Exchange Commission. D. ‘‘Exchange Act’’ means the Securities Exchange Act of 1934. E. ‘‘Market’’ shall mean (i) when used with respect to Quotation Information, FINRA in the case of a FINRA Participant, or the Participant on whose floor or through whose facilities the quotation was disseminated; and (ii) E:\FR\FM\03NON1.SGM 03NON1 sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices when used with respect to Transaction Reports, the Participant through whose facilities the transaction took place or is reported, or the Participant to whose facilities the order was sent for execution. F. ‘‘FINRA’’ means the Financial Industry Regulatory Authority, Inc. G. ‘‘FINRA Participant’’ means a FINRA member that is registered as a market maker or an electronic communications network or otherwise utilizes the facilities of FINRA pursuant to applicable FINRA rules. H. ‘‘Transaction Reporting System’’ means the System provided for in the Transaction Reporting Plan filed with and approved by the Commission pursuant to SEC Rule 11Aa3–1, subsequently re-designated as Rule 601 of Regulation NMS, governing the reporting of transactions in Nasdaq securities. I. ‘‘UTP Quote Data Feed’’ means the service that provides Subscribers with the National Best Bid and Offer quotations, size and market center identifier, as well as the Best Bid and Offer quotations, size and market center identifier from each individual Participant in Eligible Securities and, in the case of FINRA, the FINRA Participant(s) that constitute FINRA’s Best Bid and Offer quotations. J. ‘‘Nasdaq System’’ means the automated quotation system operated by Nasdaq. K. ‘‘UTP Trade Data Feed’’ means the service that provides Vendors and Subscribers with Transaction Reports. L. ‘‘Nasdaq Security’’ or ‘‘Nasdaqlisted Security’’ means any security listed on the Nasdaq Global Market or Nasdaq Capital Market. M. ‘‘News Service’’ means a person that receives Transaction Reports or Quotation Information provided by the Systems or provided by a Vendor, on a Current basis, in connection with such person’s business of furnishing such information to newspapers, radio and television stations and other news media, for publication at least fifteen (15) minutes following the time when the information first has been published by the Processor. N. ‘‘OTC Montage Data Feed’’ means the data stream of information that provides Vendors and Subscribers with quotations and sizes from each FINRA Participant. O. ‘‘Participant’’ means a registered national securities exchange or national securities association that is a signatory to this Plan. P. ‘‘Plan’’ means this Nasdaq UTP Plan, as from time to time amended according to its provisions, governing the collection, consolidation and VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 dissemination of Quotation Information and Transaction Reports in Eligible Securities. Q. ‘‘Processor’’ means the entity selected by the Participants to perform the processing functions set forth in the Plan. R. ‘‘Quotation Information’’ means all bids, offers, displayed quotation sizes, the market center identifiers and, in the case of FINRA, the FINRA Participant that entered the quotation, withdrawals and other information pertaining to quotations in Eligible Securities required to be collected and made available to the Processor pursuant to this Plan. S. ‘‘Regulatory Halt’’ means a trade suspension or halt called for the purpose of dissemination of material news, as described at Section X hereof or that is called for where there are regulatory problems relating to an Eligible Security that should be clarified before trading therein is permitted to continue, including a trading halt for extraordinary market activity due to system misuse or malfunction under Section X.E.1. of the Plan (‘‘Extraordinary Market Regulatory Halt’’). T. ‘‘Subscriber’’ means a person that receives Current Quotation Information or Transaction Reports provided by the Processor or provided by a Vendor, for its own use or for distribution on a nonCurrent basis, other than in connection with its activities as a Vendor. U. ‘‘Transaction Reports’’ means reports required to be collected and made available pursuant to this Plan containing the stock symbol, price, and size of the transaction executed, the Market in which the transaction was executed, and related information, including a buy/sell/cross indicator and trade modifiers, reflecting completed transactions in Eligible Securities. V. ‘‘Upon Effectiveness of the Plan’’ means July 12, 1993, the date on which the Participants commenced publication of Quotation Information and Transaction Reports on Eligible Securities as contemplated by this Plan. W. ‘‘Vendor’’ means a person that receives Current Quotation Information or Transaction Reports provided by the Processor or provided by a Vendor, in connection with such person’s business of distributing, publishing, or otherwise furnishing such information on a Current basis to Subscribers, News Services or other Vendors. IV. Administration of Plan A. Operating Committee: Composition The Plan shall be administered by the Participants through an operating PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 65419 committee (‘‘Operating Committee’’), which shall be composed of one representative designated by each Participant. Each Participant may designate an alternate representative or representatives who shall be authorized to act on behalf of the Participant in the absence of the designated representative. Within the areas of its responsibilities and authority, decisions made or actions taken by the Operating Committee, directly or by duly delegated individuals, committees as may be established from time to time, or others, shall be binding upon each Participant, without prejudice to the rights of any Participant to seek redress from the SEC pursuant to Rule 608 of Regulation NMS under the Exchange Act or in any other appropriate forum. An Electronic Communications Network, Alternative Trading System, Broker-Dealer or other securities organization (‘‘Organization’’) which is not a Participant, but has an actively pending Form 1 Application on file with the Commission to become a national securities exchange, will be permitted to appoint one representative and one alternate representative to attend regularly scheduled Operating Committee meetings in the capacity of an observer/advisor. If the Organization’s Form 1 petition is withdrawn, returned, or is otherwise not actively pending with the Commission for any reason, then the Organization will no longer be eligible to be represented in the Operating Committee meetings. The Operating Committee shall have the discretion, in limited instances, to deviate from this policy if, as indicated by majority vote, the Operating Committee agrees that circumstances so warrant. Nothing in this section or elsewhere within the Plan shall authorize any person or organization other than Participants, their representatives, and members of the Advisory Committee to participate on the Operating Committee in any manner other than as an advisor or observer. Only the Participants and their representatives as well as Commission staff may participate in Executive Sessions of the Operating Committee. B. Operating Committee: Authority The Operating Committee shall be responsible for: 1. Overseeing the consolidation of Quotation Information and Transaction Reports in Eligible Securities from the Participants for dissemination to Vendors, Subscribers, News Services and others in accordance with the provisions of the Plan; E:\FR\FM\03NON1.SGM 03NON1 65420 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices sroberts on PROD1PC70 with NOTICES 2. Periodically evaluating the Processor; 3. Setting the level of fees to be paid by Vendors, Subscribers, News Services or others for services relating to Quotation Information or Transaction Reports in Eligible Securities, and taking action in respect thereto in accordance with the provisions of the Plan; 4. Determining matters involving the interpretation of the provisions of the Plan; 5. Determining matters relating to the Plan’s provisions for cost allocation and revenue-sharing; and 6. Carrying out such other specific responsibilities as provided under the Plan. C. Operating Committee: Voting Each Participant shall have one vote on all matters considered by the Operating Committee. 1. The affirmative and unanimous vote of all Participants entitled to vote shall be necessary to constitute the action of the Operating Committee with respect to: a. Amendments to the Plan; b. Amendments to contracts between the Processor and Vendors, Subscribers, News Services and others receiving Quotation Information and Transaction Reports in Eligible Securities; c. Replacement of the Processor, except for termination for cause, which shall be governed by section V(B) hereof; d. Reductions in existing fees relating to Quotation Information and Transaction Reports in Eligible Securities; and e. Except as provided under section IV(C)(3) hereof, requests for system changes; and f. All other matters not specifically addressed by the Plan. 2. With respect to the establishment of new fees or increases in existing fees relating to Quotation Information and Transaction Reports in Eligible Securities, the affirmative vote of twothirds of the Participants entitled to vote shall be necessary to constitute the action of the Operating Committee. 3. The affirmative vote of a majority of the Participants entitled to vote shall be necessary to constitute the action of the Operating Committee with respect to: a. Requests for system changes reasonably related to the function of the Processor as defined under the Plan. All other requests for system changes shall be governed by section IV(C)(1)(e) hereof. b. Interpretive matters and decisions of the Operating Committee arising VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 under, or specifically required to be taken by, the provisions of the Plan as written; c. Interpretive matters arising under Rules 601 and 602 of Regulation NMS; and d. Denials of access (other than for breach of contract, which shall be handled by the Processor), 4. It is expressly agreed and understood that neither this Plan nor the Operating Committee shall have authority in any respect over any Participant’s proprietary systems. Nor shall the Plan or the Operating Committee have any authority over the collection and dissemination of quotation or transaction information in Eligible Securities in any Participant’s marketplace, or, in the case of FINRA, from FINRA Participants. D. Operating Committee: Meetings Regular meetings of the Operating Committee may be attended by each Participant’s designated representative and/or its alternate representative(s), and may be attended by one or more other representatives of the parties. Meetings shall be held at such times and locations as shall from time to time be determined by the Operating Committee. Quorum: Any action requiring a vote only can be taken at a meeting in which a quorum of all Participants is present. For actions requiring a simple majority vote of all Participants, a quorum of greater than 50% of all Participants entitled to vote must be present at the meeting before such a vote may be taken. For actions requiring a 2⁄3 majority vote of all Participants, a quorum of at least 2⁄3 of all Participants entitled to vote must be present at the meeting before such a vote may be taken. For actions requiring a unanimous vote of all Participants, a quorum of all Participants entitled to vote must be present at the meeting before such a vote may be taken. A Participant is considered present at a meeting only if a Participant’s designated representative or alternate representative(s) is either in physical attendance at the meeting or is participating by conference telephone, or other acceptable electronic means. Any action sought to be resolved at a meeting must be sent to each Participant entitled to vote on such matter at least one week prior to the meeting via electronic mail, regular U.S. or private mail, or facsimile transmission, provided however that this requirement may be waived by the vote of the percentage of the Committee required to vote on any particular matter, under section C above. PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 Any action may be taken without a meeting if a consent in writing, setting forth the action so taken, is sent to and signed by all Participant representatives entitled to vote with respect to the subject matter thereof. All the approvals evidencing the consent shall be delivered to the Chairman of the Operating Committee to be filed in the Operating Committee records. The action taken shall be effective when the minimum number of Participants entitled to vote have approved the action, unless the consent specifies a different effective date. The Chairman of the Operating Committee shall be elected annually by and from among the Participants by a majority vote of all Participants entitled to vote. The Chairman shall designate a person to act as Secretary to record the minutes of each meeting. The location of meetings shall be rotated among the locations of the principal offices of the Participants, or such other locations as may from time to time be determined by the Operating Committee. Meetings may be held by conference telephone and action may be taken without a meeting if the representatives of all Participants entitled to vote consent thereto in writing or other means the Operating Committee deems acceptable. E. Advisory Committee (a) Formation. Notwithstanding any other provision of this Plan, an Advisory Committee to the Plan shall be formed and shall function in accordance with the provisions set forth in this section. (b) Composition. Members of the Advisory Committee shall be selected for two-year terms as follows: (1) Operating Committee Selections. By affirmative vote of a majority of the Participants entitled to vote, the Operating Committee shall select at least one representative from each of the following categories to be members of the Advisory Committee: (i) A brokerdealer with a substantial retail investor customer base, (ii) a broker-dealer with a substantial institutional investor customer base, (iii) an alternative trade system, (iv) a data vendor, and (v) an investor. (2) Participant Selections. Each Participant shall have the right to select one member of the Advisory Committee. A Participant shall not select any person employed by or affiliated with any participant or its affiliates or facilities. (c) Function. Members of the Advisory Committee shall have the right to submit their views to the Operating Committee on Plan matters, prior to a decision by the Operating Committee on such matters. Such matters shall E:\FR\FM\03NON1.SGM 03NON1 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices include, but not be limited to, any new or modified product, fee, contract, or pilot program that is offered or used pursuant to the Plan. (d) Meetings and Information. Members of the Advisory Committee shall have the right to attend all meetings of the Operating Committee and to receive any information concerning Plan matters that is distributed to the Operating Committee; provided, however, that the Operating Committee may meet in executive session if, by affirmative vote of a majority of the Participants entitled to vote, the Operating Committee determines that an item of Plan business requires confidential treatment. V. Selection and Evaluation of the Processor A. Generally The Processor’s performance of its functions under the Plan shall be subject to review by the Operating Committee at least every two years, or from time to time upon the request of any two Participants but not more frequently than once each year. Based on this review, the Operating Committee may choose to make a recommendation to the Participants with respect to the continuing operation of the Processor. The Operating Committee shall notify the SEC of any recommendations the Operating Committee shall make pursuant to the Operating Committee’s review of the Processor and shall supply the Commission with a copy of any reports that may be prepared in connection therewith. B. Termination of the Processor for Cause If the Operating Committee determines that the Processor has failed to perform its functions in a reasonably acceptable manner in accordance with the provisions of the Plan or that its reimbursable expenses have become excessive and are not justified on a cost basis, the Processor may be terminated at such time as may be determined by a majority vote of the Operating Committee. sroberts on PROD1PC70 with NOTICES C. Factors To Be Considered in Termination for Cause Among the factors to be considered in evaluating whether the Processor has performed its functions in a reasonably acceptable manner in accordance with the provisions of the Plan shall be the reasonableness of its response to requests from Participants for technological changes or enhancements pursuant to section IV(C)(3) hereof. The reasonableness of the Processor’s VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 response to such requests shall be evaluated by the Operating Committee in terms of the cost to the Processor of purchasing the same service from a third party and integrating such service into the Processor’s existing systems and operations as well as the extent to which the requested change would adversely impact the then current technical (as opposed to business or competitive) operations of the Processor. D. Processor’s Right To Appeal Termination for Cause The Processor shall have the right to appeal to the SEC a determination of the Operating Committee terminating the Processor for cause and no action shall become final until the SEC has ruled on the matter and all legal appeals of right therefrom have been exhausted. E. Process for Selecting New Processor At any time following effectiveness of the Plan, but no later than upon the termination of the Processor, whether for cause pursuant to section IV(C)(1)(c) or V(B) of the Plan or upon the Processor’s resignation, the Operating Committee shall establish procedures for selecting a new Processor (the ‘‘Selection Procedures’’). The Operating Committee, as part of the process of establishing Selection Procedures, may solicit and consider the timely comment of any entity affected by the operation of this Plan. The Selection Procedures shall be established by a two-thirds majority vote of the Plan Participants, and shall set forth, at a minimum: 1. The entity that will: (a) Draft the Operating Committee’s request for proposal for bids on a new processor; (b) Assist the Operating Committee in evaluating bids for the new processor; and (c) Otherwise provide assistance and guidance to the Operating Committee in the selection process. 2. The minimum technical and operational requirements to be fulfilled by the Processor; 3. The criteria to be considered in selecting the Processor; and 4. The entities (other than Plan Participants) that are eligible to comment on the selection of the Processor. Nothing in this provision shall be interpreted as limiting Participants’ rights under section IV or section V of the Plan or other Commission order. VI. Functions of the Processor A. Generally The Processor shall collect from the Participants, and consolidate and PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 65421 disseminate to Vendors, Subscribers and News Services, Quotation Information and Transaction Reports in Eligible Securities in a manner designed to assure the prompt, accurate and reliable collection, processing and dissemination of information with respect to all Eligible Securities in a fair and non-discriminatory manner. The Processor shall commence operations upon the Processor’s notification to the Participants that it is ready and able to commence such operations. B. Collection and Consolidation of Information For as long as Nasdaq is the Processor, the Processor shall be capable of receiving Quotation Information and Transaction Reports in Eligible Securities from Participants by the Planapproved, Processor sponsored interface, and shall consolidate and disseminate such information via the UTP Quote Data Feed, the UTP Trade Data Feed, and the OTC Montage Data Feed to Vendors, Subscribers and News Services. C. Dissemination of Information The Processor shall disseminate consolidated Quotation Information and Transaction Reports in Eligible Securities via the UTP Quote Data Feed, the UTP Trade Data Feed, and the OTC Montage Data Feed to authorized Vendors, Subscribers and News Services in a fair and non-discriminatory manner. The Processor shall specifically be permitted to enter into agreements with Vendors, Subscribers and News Services for the dissemination of quotation or transaction information on Eligible Securities to foreign (non-U.S.) marketplaces or in foreign countries. The Processor shall, in such instance, disseminate consolidated quotation or transaction information on Eligible Securities from all Participants. Nothing herein shall be construed so as to prohibit or restrict in any way the right of any Participant to distribute quotation, transaction or other information with respect to Eligible Securities quoted on or traded in its marketplace to a marketplace outside the United States solely for the purpose of supporting an intermarket linkage, or to distribute information within its own marketplace concerning Eligible Securities in accordance with its own format. If a Participant requests, the Processor shall make information about Eligible Securities in the Participant’s marketplace available to a foreign marketplace on behalf of the requesting Participant, in which event the cost shall be borne by that Participant. E:\FR\FM\03NON1.SGM 03NON1 65422 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices 1. Best Bid and Offer The Processor shall disseminate on the UTP Quote Data Feed the best bid and offer information supplied by each Participant, including the FINRA Participant(s) that constitute FINRA’s single Best Bid and Offer quotations, and shall also calculate and disseminate on the UTP Quote Data Feed a national best bid and asked quotation with size based upon Quotation Information for Eligible Securities received from Participants. The Processor shall not calculate the best bid and offer for any individual Participant, including FINRA. The Participant responsible for each side of the best bid and asked quotation making up the national best bid and offer shall be identified by an appropriate symbol. If the quotations of more than one Participant shall be the same best price, the largest displayed size among those shall be deemed to be the best. If the quotations of more than one Participant are the same best price and best displayed size, the earliest among those measured by the time reported shall be deemed to be the best. A reduction of only bid size and/or ask size will not change the time priority of a Participant’s quote for the purposes of determining time reported, whereas an increase of the bid size and/or ask size will result in a new time reported. The consolidated size shall be the size of the Participant that is at the best. If the best bid/best offer results in a locked or crossed quotation, the Processor shall forward that locked or crossed quote on the appropriate output lines (i.e., a crossed quote of bid 12, ask 11.87 shall be disseminated). The Processor shall normally cease the calculation of the best bid/best offer after 6:30 p.m., Eastern Time. of all Transaction Reports in Eligible Securities received from Participants. Each transaction report shall be designated with a symbol identifying the Participant in whose Market the transaction took place. D. Closing Reports At the conclusion of each trading day, the Processor shall disseminate a ‘‘closing price’’ for each Eligible Security. Such ‘‘closing price’’ shall be the price of the last Transaction Report in such security received prior to dissemination. The Processor shall also tabulate and disseminate at the conclusion of each trading day the aggregate volume reflected by all Transaction Reports in Eligible Securities reported by the Participants. E. Statistics The Processor shall maintain quarterly, semi-annual and annual transaction and volume statistical counts. The Processor shall, at cost to the user Participant(s), make such statistics available in a form agreed upon by the Operating Committee, such as a secure Web site. VII. Administrative Functions of the Processor Subject to the general direction of the Operating Committee, the Processor shall be responsible for carrying out all administrative functions necessary to the operation and maintenance of the consolidated information collection and dissemination system provided for in this Plan, including, but not limited to, record keeping, billing, contract administration, and the preparation of financial reports. VIII. Transmission of Information to Processor by Participants sroberts on PROD1PC70 with NOTICES 2. Quotation Data Streams A. Quotation Information The Processor shall disseminate on the UTP Quote Data Feed a data stream of all Quotation Information regarding Eligible Securities received from Participants. Each quotation shall be designated with a symbol identifying the Participant from which the quotation emanates and, in the case of FINRA, the FINRA Participant(s) that constitute FINRA’s Best Bid and Offer quotations. In addition, the Processor shall separately distribute on the OTC Montage Data Feed the Quotation Information regarding Eligible Securities from all FINRA Participants from which quotations emanate. Each Participant shall, during the time it is open for trading be responsible promptly to collect and transmit to the Processor accurate Quotation Information in Eligible Securities through any means prescribed herein. Quotation Information shall include: 1. Identification of the Eligible Security, using the Nasdaq Symbol; 2. The price bid and offered, together with size; 3. The FINRA Participant along with the FINRA Participant’s market participant identification or Participant from which the quotation emanates; 4. Identification of quotations that are not firm; and 5. Through appropriate codes and messages, withdrawals and similar matters. 3. Transaction Reports The Processor shall disseminate on the UTP Trade Data Feed a data stream VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 B. Transaction Reports Each Participant shall, during the time it is open for trading, be responsible promptly to collect and transmit to the Processor Transaction Reports in Eligible Securities executed in its Market by means prescribed herein. With respect to orders sent by one Participant Market to another Participant Market for execution, each Participant shall adopt procedures governing the reporting of transactions in Eligible Securities specifying that the transaction will be reported by the Participant whose member sold the security. This provision shall apply only to transactions between Plan Participants. Transaction Reports shall include: 1. Identification of the Eligible Security, using the Nasdaq Symbol; 2. The number of shares in the transaction; 3. The price at which the shares were purchased or sold; 4. The buy/sell/cross indicator; 5. The Market of execution; and, 6. Through appropriate codes and messages, late or out-of-sequence trades, corrections and similar matters. All such Transaction Reports shall be transmitted to the Processor within 90 seconds after the time of execution of the transaction. Transaction Reports transmitted beyond the 90-second period shall be designated as ‘‘late’’ by the appropriate code or message. The following types of transactions are not required to be reported to the Processor pursuant to the Plan: 1. Transactions that are part of a primary distribution by an issuer or of a registered secondary distribution or of an unregistered secondary distribution; 2. Transactions made in reliance on section 4(2) of the Securities Act of 1933; 3. Transactions in which the buyer and the seller have agreed to trade at a price unrelated to the Current Market for the security, e.g., to enable the seller to make a gift; 4. Odd-lot transactions; 5. The acquisition of securities by a broker-dealer as principal in anticipation of making an immediate exchange distribution or exchange offering on an exchange; 6. Purchases of securities pursuant to a tender offer; and 7. Purchases or sales of securities effected upon the exercise of an option pursuant to the terms thereof or the exercise of any other right to acquire securities at a pre-established consideration unrelated to the Current Market. E:\FR\FM\03NON1.SGM 03NON1 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices the Participant and other trading centers. In the case of a Participant that operates an SRO display-only quotation facility, trading centers posting quotations through such SRO displayonly quotation facility may elect to allow such access to their quotations Code Participant through the utilization of private electronic linkages between the trading A ........... American Stock Exchange LLC Z ........... BATS Exchange, Inc. center and SRO trading facilities of Plan B ........... Boston Stock Exchange, Inc. Participants and/or other trading W .......... Chicago Board Options Exchange, centers. Inc. In accordance with Regulation NMS, M .......... Chicago Stock Exchange, Inc. a Participant shall not impose, or permit I ............ International Securities Exchange, to be imposed, any fee or fees for the LLC D .......... Financial Industry Regulatory Au- execution of an order against a protected quotation of the Participant or of a thority, Inc. trading center posting quotes through a Q .......... Nasdaq Stock Market LLC Participant’s SRO display-only C .......... National Stock Exchange, Inc. N .......... New York Stock Exchange LLC quotation facility in an Eligible Security P ........... NYSE Arca, Inc. or against any other quotation displayed X ........... Nasdaq OMX PHLX, Inc. by the Participant in an Eligible Security that is the Participant’s displayed best D. Whenever a Participant determines bid or offer for that Eligible Security, that a level of trading activity or other where such fee or fees exceed the limits unusual market conditions prevent it provided for in Rule 610(c) of from collecting and transmitting Regulation NMS. As required under Quotation Information or Transaction Regulation NMS, the terms of access to Reports to the Processor, or where a a Participant’s quotations or of a trading trading halt or suspension in an Eligible center posting quotes through a Security is in effect in its Market, the Participant’s SRO display-only Participant shall promptly notify the quotation facility in an Eligible Security Processor of such condition or event may not be unfairly discriminatory so as and shall resume collecting and to prevent or inhibit any person from transmitting Quotation Information and obtaining efficient access to such Transaction Reports to it as soon as the displayed quotations through a member condition or event is terminated. In the of the Participant or a subscriber of a event of a system malfunction resulting trading center. in the inability of a Participant or its If quotations in an Eligible Security members to transmit Quotation are displayed by a Participant that Information or Transaction Reports to operates an SRO trading facility (or are the Processor, the Participant shall displayed by a trading center that posts promptly notify the Processor of such quotations through an SRO display-only event or condition. Upon receiving such quotation facility) that complies with notification, the Processor shall take the fair and efficient access appropriate action, including either requirements of Regulation NMS (an closing the quotation or purging the ‘‘NMS Compliant Facility’’), including system of the affected quotations. prior to the compliance date of such access requirements, that Participant (or IX. Market Access trading center posting quotes through an Pursuant to the requirements of Rule SRO display-only quotation facility) 610 of Regulation NMS, a Participant shall no longer be required to permit that operates an SRO trading facility each FINRA market participant to have shall provide for fair and efficient order direct telephone access to the specialist, execution access to quotations in each trading post, market maker and Eligible Security displayed through its supervisory center in such Eligible trading facility. In the case of a Security that trades on that NMS Participant that operates an SRO Compliant Facility. For quotations in display-only quotation facility, trading Eligible Securities that are displayed by centers posting quotations through such a Participant that operates an SRO SRO display-only quotation facility trading facility that is not an NMS must provide for fair and efficient order Compliant Facility, such telephone execution access to quotations in each access requirement will continue to be Eligible Security displayed through the applicable to the Participant. SRO display-only quotation facility. A Participant that operates an SRO trading X. Regulatory Halts facility may elect to allow such access A. Whenever, in the exercise of its to its quotations through the utilization regulatory functions, the Listing Market of private electronic linkages between for an Eligible Security determines that sroberts on PROD1PC70 with NOTICES C. Symbols for Market Identification for Quotation Information and Transaction Reports The following symbols shall be used to denote the marketplaces: VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 65423 a Regulatory Halt is appropriate pursuant to section III.S, the Listing Market will notify all other Participants pursuant to section X.E and all other Participants shall also halt or suspend trading in that security until notified that the halt or suspension is no longer in effect. The Listing Market shall immediately notify the Processor of such Regulatory Halt as well as provide notice that a Regulatory Halt has been lifted. The Processor, in turn, shall disseminate to Participants notice of the Regulatory Halt (as well as notice of the lifting of a Regulatory Halt) through the UTP Quote Data Feed. This notice shall serve as official notice of a Regulatory Halt for purposes of the Plan only, and shall not substitute or otherwise supplant notice that a Participant may recognize or require under its own rules. Nothing in this provision shall be read so as to supplant or be inconsistent with a Participant’s own rules on trade halts, which rules apply to the Participant’s own members. The Processor will reject any quotation information or transaction reports received from any Participant on an Eligible Security that has a Regulatory Halt in effect. B. Whenever the Listing Market determines that an adequate publication or dissemination of information has occurred so as to permit the termination of the Regulatory Halt then in effect, the Listing Market shall promptly notify the Processor and each of the other Participants that conducts trading in such security pursuant to Section X.F. Except in extraordinary circumstances, adequate publication or dissemination shall be presumed by the Listing Market to have occurred upon the expiration of one hour after initial publication in a national news dissemination service of the information that gave rise to the Regulatory Halt. C. Except in the case of a Regulatory Halt, the Processor shall not cease the dissemination of quotation or transaction information regarding any Eligible Security. In particular, it shall not cease dissemination of such information because of a delayed opening, imbalance of orders or other market-related problems involving such security. During a Regulatory Halt, the Processor shall collect and disseminate Transaction Information but shall cease collection and dissemination of all Quotation Information. D. For purposes of this section X, ‘‘Listing Market’’ for an Eligible Security means the Participant’s Market on which the Eligible Security is listed. If an Eligible Security is dually listed, Listing Market shall mean the Participant’s Market on which the Eligible Security is listed that also has E:\FR\FM\03NON1.SGM 03NON1 sroberts on PROD1PC70 with NOTICES 65424 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices the highest number of the average of the reported transactions and reported share volume for the preceding 12-month period. The Listing Market for duallylisted Eligible Securities shall be determined at the beginning of each calendar quarter. E. For purposes of coordinating trading halts in Eligible Securities, all Participants are required to utilize the national market system communication media (‘‘Hoot-n-Holler’’) to provide realtime information to all Participants. Each Participant shall be required to continuously monitor the Hoot-n-Holler system during market hours, and the failure of a Participant to do so at any time shall not prevent the Listing Market from initiating a Regulatory Halt in accordance with the procedures specified herein. 1. The following procedures shall be followed when one or more Participants experiences extraordinary market activity in an Eligible Security that is believed to be caused by the misuse or malfunction of systems operated by or linked to one or more Participants. a. The Participant(s) experiencing the extraordinary market activity or any Participant that becomes aware of extraordinary market activity will immediately use best efforts to notify all Participants of the extraordinary market activity utilizing the Hoot-n-Holler system. b. The Listing Market will use best efforts to determine whether there is material news regarding the Eligible Security. If the Listing Market determines that there is non-disclosed material news, it will immediately call a Regulatory Halt pursuant to section X.E.2. c. Each Participant(s) will use best efforts to determine whether one of its systems, or the system of a direct or indirect participant in its market, is responsible for the extraordinary market activity. d. If a Participant determines the potential source of extraordinary market activity pursuant to section X.1.c., the Participant will use best efforts to determine whether removing the quotations of one or more direct or indirect market participants or barring one or more direct or indirect market participants from entering orders will resolve the extraordinary market activity. Accordingly, the Participant will prevent the quotations from one or more direct or indirect market participants in the affected Eligible Securities from being transmitted to the Processor. e. If the procedures described in section X.E.1.a.–d. do not rectify the situation, the Participant(s) VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 experiencing extraordinary market activity will cease transmitting all quotations in the affected Eligible Securities to the Processor. f. If the procedures described in section X.E.1.a–e. do not rectify the situation within five minutes of the first notification through the Hoot-n-Holler system, or if Participants agree to call a halt sooner through unanimous approval among those Participants actively trading impacted Eligible Securities, the Listing Market may determine based on the facts and circumstances, including available input from Participants, to declare an Extraordinary Market Regulatory Halt in the affected Eligible Securities. Simultaneously with the notification of the Processor to suspend the dissemination of quotations across all Participants, the Listing Market must notify all Participants of the trading halt utilizing the Hoot-n-Holler system. g. Absent any evidence of system misuse or malfunction, best efforts will be used to ensure that trading is not halted across all Participants. 2. If the Listing Market declares a Regulatory Halt in circumstances other than pursuant to section X.E.1.f., the Listing Market must, simultaneously with the notification of the Processor to suspend the dissemination of quotations across all Participants, notify all Participants of the trading halt utilizing the Hoot-n-Holler system. F. If the Listing Market declares a Regulatory Halt, trading will resume according to the following procedures: 1. Within 15 minutes of the declaration of the halt, all Participants will make best efforts to indicate via the Hoot-n-Holler their intentions with respect to canceling or modifying transactions. 2. All Participants will disseminate to their members information regarding the canceled or modified transactions as promptly as possible, and in any event prior to the resumption of trading. 3. After all Participants have met the requirements of section X.F.1–2, the Listing Market will notify the Participants utilizing the Hoot-n-Holler and the Processor when trading may resume. Upon receiving this information, Participants may commence trading pursuant to section X.A. XI. Hours of Operation A. Quotation Information may be entered by Participants as to all Eligible Securities in which they make a market between 9:30 a.m. and 4 p.m. Eastern Time (’’ET’’) on all days the Processor is in operation. Transaction Reports shall be entered between 9:30 a.m. and PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 4:01:30 p.m. ET by Participants as to all Eligible Securities in which they execute transactions between 9:30 a.m. and 4 p.m. ET on all days the Processor is in operation. B. Participants that execute transactions in Eligible Securities outside the hours of 9:30 a.m. ET and 4 p.m., ET, shall report such transactions as follows: (i) Transactions in Eligible Securities executed between 4 a.m. and 9:29:59 a.m. ET and between 4:00:01 and 8 p.m. ET, shall be designated as ‘‘.T’’ trades to denote their execution outside normal market hours; (ii) Transactions in Eligible Securities executed after 8 p.m. and before 12 a.m. (midnight) shall be reported to the Processor between the hours of 4 a.m. and 8 p.m. ET on the next business day (T+1), and shall be designated ‘‘as/of’’ trades to denote their execution on a prior day, and be accompanied by the time of execution; (iii) Transactions in Eligible Securities executed between 12 a.m. (midnight) and 4 a.m. ET shall be transmitted to the Processor between 4 a.m. and 9:30 a.m. ET, on trade date, shall be designated as ‘‘.T’’ trades to denote their execution outside normal market hours, and shall be accompanied by the time of execution; (iv) Transactions reported pursuant to this provision of the Plan shall be included in the calculation of total trade volume for purposes of determining net distributable operating revenue, but shall not be included in the calculation of the daily high, low, or last sale. C. Late trades shall be reported in accordance with the rules of the Participant in whose Market the transaction occurred and can be reported between the hours of 4 a.m. and 8 p.m. D. The Processor shall collect, process and disseminate Quotation Information in Eligible Securities at other times between 4 a.m. and 9:30 a.m. ET, and after 4 p.m. ET, when any Participant or FINRA Participant is open for trading, until 8 p.m. ET (the ‘‘Additional Period’’); provided, however, that the national best bid and offer quotation will not be disseminated before 4 a.m. or after 8 p.m. ET. Participants that enter Quotation Information or submit Transaction Reports to the Processor during the Additional Period shall do so for all Eligible Securities in which they enter quotations. XII. Undertaking by All Participants The filing with and approval by the Commission of this Plan shall obligate each Participant to enforce compliance by its members with the provisions E:\FR\FM\03NON1.SGM 03NON1 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices thereof. In all other respects not inconsistent herewith, the rules of each Participant shall apply to the actions of its members in effecting, reporting, honoring and settling transactions executed through its facilities, and the entry, maintenance and firmness of quotations to ensure that such occurs in a manner consistent with just and equitable principles of trade. XIII. Financial Matters A. Development Costs Any Participant becoming a signatory to this Plan after June 26, 1990, shall, as a condition to becoming a Participant, pay to the other Plan Participants a proportionate share of the aggregate development costs previously paid by Plan Participants to the Processor, which aggregate development costs totaled $439,530, with the result that each Participant’s share of all development costs is the same. Each Participant shall bear the cost of implementation of any technical enhancements to the Nasdaq system made at its request and solely for its use, subject to reapportionment should any other Participant subsequently make use of the enhancement, or the development thereof. B. Cost Allocation and Revenue Sharing The provisions governing cost allocation and revenue sharing among the Participants are set forth in Exhibit 1 to the Plan. sroberts on PROD1PC70 with NOTICES C. Maintenance of Financial Records The Processor shall maintain records of revenues generated and development and operating expenditures incurred in connection with the Plan. In addition, the Processor shall provide the Participants with: (a) A statement of financial and operational condition on a quarterly basis; and (b) an audited statement of financial and operational condition on an annual basis. XIV. Indemnification Each Participant agrees, severally and not jointly, to indemnify and hold harmless each other Participant, Nasdaq, and each of its directors, officers, employees and agents (including the Operating Committee and its employees and agents) from and against any and all loss, liability, claim, damage and expense whatsoever incurred or threatened against such persons as a result of any Transaction Reports, Quotation Information or other information reported to the Processor by such Participant and disseminated by the Processor to Vendors. This indemnity agreement shall be in addition to any liability that the VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 indemnifying Participant may otherwise have. Promptly after receipt by an indemnified Participant of notice of the commencement of any action, such indemnified Participant will, if a claim in respect thereof is to be made against an indemnifying Participant, notify the indemnifying Participant in writing of the commencement thereof; but the omission to so notify the indemnifying Participant will not relieve the indemnifying Participant from any liability which it may have to any indemnified Participant. In case any such action is brought against any indemnified Participant and it promptly notifies an indemnifying Participant of the commencement thereof, the indemnifying Participant will be entitled to participate in, and, to the extent that it may wish, jointly with any other indemnifying Participant similarly notified, to assume and control the defense thereof with counsel chosen by it. After notice from the indemnifying Participant of its election to assume the defense thereof, the indemnifying Participant will not be liable to such indemnified Participant for any legal or other expenses subsequently incurred by such indemnified Participant in connection with the defense thereof but the indemnified Participant may, at its own expense, participate in such defense by counsel chosen by it without, however, impairing the indemnifying Participant’s control of the defense. The indemnifying Participant may negotiate a compromise or settlement of any such action, provided that such compromise or settlement does not require a contribution by the indemnified Participant. XV. Withdrawal Any Participant may withdraw from the Plan at any time on not less than 30 days prior written notice to each of the other Participants. Any Participant withdrawing from the Plan shall remain liable for, and shall pay upon demand, any fees for equipment or services being provided to such Participant pursuant to the contract executed by it or an agreement or schedule of fees covering such then in effect. A withdrawing Participant shall also remain liable for its proportionate share, without any right of recovery, of administrative and operating expenses, including start-up costs and other sums for which it may be responsible pursuant to section XIV hereof. Except as aforesaid, a withdrawing Participant shall have no further obligation under the Plan or to any of the other Participants with respect to the period PO 00000 Frm 00142 Fmt 4703 Sfmt 4703 65425 following the effectiveness of its withdrawal. XVI. Modifications to Plan The Plan may be modified from time to time when authorized by the agreement of all of the Participants, subject to the approval of the SEC or which otherwise becomes effective pursuant to section 11A of the Act and Rule 608 of Regulation NMS. XVII. Applicability of Securities Exchange Act of 1934 The rights and obligations of the Participants and of Vendors, News Services, Subscribers and other persons contracting with Participant in respect of the matters covered by the Plan shall at all times be subject to any applicable provisions of the Act, as amended, and any rules and regulations promulgated thereunder. XVIII. Operational Issues A. Each Participant shall be responsible for collecting and validating quotes and last sale reports within its own system prior to transmitting this data to the Processor. B. Each Participant may utilize a dedicated Participant line into the Processor to transmit trade and quote information in Eligible Securities to the Processor. The Processor shall accept from Exchange Participants input for only those issues that are deemed Eligible Securities. C. The Processor shall consolidate trade and quote information from each Participant and disseminate this information on the Processor’s existing vendor lines. D. The Processor shall perform gross validation processing for quotes and last sale messages in addition to the collection and dissemination functions, as follows: 1. Basic Message Validation (a) The Processor may validate format for each type of message, and reject nonconforming messages. (b) Input must be for an Eligible Security. 2. Logging Function—The Processor shall return all Participant input messages that do not pass the validation checks (described above) to the inputting Participant, on the entering Participant line, with an appropriate reject notation. For all accepted Participant input messages (i.e., those that pass the validation check), the information shall be retained in the Processor system. XIX. Headings The section and other headings contained in this Plan are for reference E:\FR\FM\03NON1.SGM 03NON1 65426 Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices purposes only and shall not be deemed to be a part of this Plan or to affect the meaning or interpretation of any provisions of this Plan. sroberts on PROD1PC70 with NOTICES XX. Counterparts This Plan may be executed by the Participants in any number of counterparts, no one of which need contain the signature of all Participants. As many such counterparts as shall together contain all such signatures shall constitute one and the same instrument. XXI. Depth of Book Display The Operating Committee has determined that the entity that succeeds Nasdaq as the Processor should have the ability to collect, consolidate, and disseminate quotations at multiple price levels beyond the best bid and best offer from any Participant that voluntarily chooses to submit such quotations while determining that no Participant shall be required to submit such information. The Operating Committee has further determined that the costs of developing, collecting, processing, and disseminating such depth of book data shall be borne exclusively by those Participants that choose to submit this information to the Processor, by whatever allocation those Participants may choose among themselves. The Operating Committee has determined further that the primary purpose of the Processor is the collection, processing and dissemination of best bid, best offer and last sale information (‘‘core data’’), and as such, the Participants will adopt procedures to ensure that such functionality in no way hinders the collecting, processing and dissemination of this core data. Therefore, implementing the depth of book display functionality will require a plan amendment that addresses all pertinent issues, including: (1) Procedures for ensuring that the fully-loaded cost of the collection, processing, and dissemination of depthof-book information will be tracked and invoiced directly to those Plan Participants that voluntarily choose to send that data, voluntarily, to the Processor allocating in whatever manner those Participants might agree; and (2) Necessary safeguards the Processor will take to ensure that its processing of depth-of-book data will not impede or hamper, in any way, its core Processor functionality of collecting, consolidating, and disseminating National Best Bid and Offer data, exchange best bid and offer data, and consolidated last sale data. Upon approval of a Plan amendment implementing depth of book display, VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 this article of the Plan shall be automatically deleted. In witness whereof, this Plan has been executed as of the ll day of ll, 200l, by each of the Signatories hereto. American Stock Exchange LLC By: llllllllllllllll Boston Stock Exchange, Inc. By: llllllllllllllll Chicago Board Options Exchange, LLC By: llllllllllllllll International Securities Exchange, Inc. By: llllllllllllllll FINRA By: llllllllllllllll National Stock Exchange, Inc. By: llllllllllllllll New York Stock Exchange LLC By: llllllllllllllll NYSE ARCA, Inc. By: llllllllllllllll NASDAQ OMX PHLX, Inc. By: llllllllllllllll Bats Exchange, Inc. By: llllllllllllllll Chicago Stock Exchange, Inc. By: llllllllllllllll The Nasdaq Stock Market LLC By: llllllllllllllll Exhibit 1 1. Each Participant eligible to receive revenue under the Plan will receive an annual payment for each calendar year that is equal to the sum of the Participant’s Trading Shares and Quoting Shares, as defined below, in each Eligible Security for the calendar year. In the event that total net distributable operating income (as defined below) is negative, each Participant eligible to receive revenue under the Plan will receive an annual bill for each calendar year to be determined according to the same formula (described in this paragraph) for determining annual payments to eligible Participants. Unless otherwise stated in this agreement, a year shall run from January 1 to December 31 and quarters shall end on March 31, June 30, September 30, and December 31. Processor shall endeavor to provide Participants with written estimates of each Participant’s percentage of total volume within five business days of month end. 2. Security Income Allocation. The Security Income Allocation for an Eligible Security shall be determined by multiplying (i) the ‘‘net distributable operating income’’ of this Nasdaq UTP Plan for the calendar year by (ii) the Volume Percentage for such Eligible Security (the ‘‘initial allocation’’), and then adding or subtracting any amounts PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 specified in the reallocation set forth below. The Volume Percentage for an Eligible Security shall be determined by dividing (A) the square root of the dollar volume of transaction reports disseminated by the Processor in such Eligible Security during the calendar year by (B) the sum of the square roots of the dollar volume of transaction reports disseminated by the Processor in each Eligible Security during the calendar year. If the initial allocation of net distributable operating income in accordance with the Volume Percentage of an Eligible Security equals an amount greater than $4.00 multiplied by the total number of qualified transaction reports in such Eligible Security during the calendar year, the excess amount shall be subtracted from the initial allocation for such Eligible Security and reallocated among all Eligible Securities in direct proportion to the dollar volume of transaction reports disseminated by the Processor in Eligible Securities during the calendar year. A transaction report with a dollar volume of $5000 or more shall constitute one qualified transaction report. A transaction report with a dollar volume of less than $5000 shall constitute a fraction of a qualified transaction report that equals the dollar volume of the transaction report divided by $5000. 3. Trading Share. The Trading Share of a Participant in an Eligible Security shall be determined by multiplying (i) an amount equal to fifty percent of the Security Income Allocation for the Eligible Security by (ii) the Participant’s Trade Rating in the Eligible Security. A Participant’s Trade Rating in an Eligible Security shall be determined by taking the average of (A) the Participant’s percentage of the total dollar volume of transaction reports disseminated by the Processor in the Eligible Security during the calendar year, and (B) the Participant’s percentage of the total number of qualified transaction reports disseminated by the Processor in the Eligible Security during the calendar year. 4. Quoting Share. The Quoting Share of a Participant in an Eligible Security shall be determined by multiplying (A) an amount equal to fifty percent of the Security Income Allocation for the Eligible Security by (B) the Participant’s Quote Rating in the Eligible Security. A Participant’s Quote Rating in an Eligible Security shall be determined by dividing (A) the sum of the Quote Credits earned by the Participant in such Eligible Security during the calendar year by (B) the sum of the Quote Credits earned by all Participants in such Eligible Security during the E:\FR\FM\03NON1.SGM 03NON1 sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 73, No. 213 / Monday, November 3, 2008 / Notices calendar year. A Participant shall earn one Quote Credit for each second of time (with a minimum of one full second) multiplied by dollar value of size that an automated best bid (offer) transmitted by the Participant to the Processor during regular trading hours is equal to the price of the national best bid (offer) in the Eligible Security and does not lock or cross a previously displayed automated quotation. An automated bid (offer) shall have the meaning specified in Rule 600 of Regulation NMS of the Act for an ‘‘automated quotation.’’ The dollar value of size of a quote shall be determined by multiplying the price of a quote by its size. 5. For purposes of this Exhibit 1, net distributable operating income for any particular calendar year shall be calculated by adding all revenues from the UTP Quote Data Feed, the UTP Trade Data Feed, and the OTC Montage Data Feed including revenues from the dissemination of information respecting Eligible Securities to foreign marketplaces (collectively, ‘‘the Data Feeds’’), and subtracting from such revenues the costs incurred by the Processor, set forth below, in collecting, consolidating, validating, generating, and disseminating the Data Feeds. These costs include, but are not limited to, the following: a. The Processor costs directly attributable to creating OTC Montage Data Feed, including: 1. Cost of collecting Participant quotes into the Processor’s quote engine; 2. Cost of processing quotes and creating OTC Montage Data Feed messages within the Processor’s quote engine; 3. Cost of the Processor’s communication management subsystem that distributes OTC Montage Data Feed to the market data vendor network for further distribution. b. The costs directly attributable to creating the UTP Quote Data Feed, including: 1. The costs of collecting each Participant’s best bid, best offer, and aggregate volume into the Processor’s quote engine and, in the case of FINRA, the costs of identifying the FINRA Participant(s) that constitute FINRA’s Best Bid and Offer quotations; 2. Cost of calculating the national best bid and offer price within the Processor’s quote engine; 3. Cost of creating the UTP Quote Data Feed message within the Processor’s quote engine; 4. Cost of the Processor’s communication management subsystem that distributes the UTP Quote Data VerDate Aug<31>2005 16:58 Oct 31, 2008 Jkt 217001 Feed to the market data vendors’ networks for further distribution. c. The costs directly attributable to creating the UTP Trade Data Feed, including: 1. The costs of collecting each Participant’s last sale and volume amount into the Processor’s quote engine; 2. Cost of determining the appropriate last sale price and volume amount within the Processor’s trade engine; 3. Cost of utilizing the Processor’s trade engine to distribute the UTP Trade Data Feed for distribution to the market data vendors; 4. Cost of the Processor’s communication management subsystem that distributes the UTP Trade Data Feed to the marker data vendors’ networks for further distribution. d. The additional costs that are shared across all Data Feeds, including: 1. Telecommunication Operations costs of supporting the Participant lines into the Processor’s facilities; 2. Telecommunications Operations costs of supporting the external market data vendor network; 3. Data Products account management and auditing function with the market data vendors; 4. Market Operations costs to support symbol maintenance, and other data integrity issues; 5. Overhead costs, including management support of the Processor, Human Resources, Finance, Legal, and Administrative Services; and 6. Costs of establishing and supporting the Security Income Allocation System. e. Processor costs excluded from the calculation of net distributable operating income include trade execution costs for transactions executed using a Nasdaq service and trade report collection costs reported through a Nasdaq service, as such services are market functions for which Participants electing to use such services pay market rate. f. For the purposes of this provision, the following definitions shall apply: 1. ‘‘Quote Engine’’ shall mean the Nasdaq’s NT or Tandem system that is operated by Nasdaq to collect quotation information for Eligible Securities; 2. ‘‘Trade Engine’’ shall mean the Nasdaq Tandem system that is operated by Nasdaq for the purpose of collecting last sale information in Eligible Securities. 6. At the time a Participant implements a Processor-approved electronic interface with the Processor, the Participant will become eligible to receive revenue. 7. Processor shall endeavor to provide Participants with written estimates of PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 65427 each Participant’s quarterly net distributable operating income within 45 calendar days of the end of the quarter, and estimated quarterly payments or billings shall be made on the basis of such estimates. All quarterly payments or billings shall be made to each eligible Participant within 45 days following the end of each calendar quarter in which the Participant is eligible to receive revenue, provided that each quarterly payment or billing shall be reconciled against a Participant’s cumulative year-to-date payment or billing received to date and adjusted accordingly, and further provided that the total of such estimated payments or billings shall be reconciled at the end of each calendar year and, if necessary, adjusted by March 31st of the following year. Interest shall be included in quarterly payments and in adjusted payments made on March 31st of the following year. Such interest shall accrue monthly during the period in which revenue was earned and not yet paid and will be based on the 90-day Treasury bill rate in effect at the end of the quarter in which the payment is made. Monthly interest shall start accruing 45 days following the month in which it is earned and accrue until the date on which the payment is made. In conjunction with calculating estimated quarterly and reconciled annual payments under this Exhibit 1, the Processor shall submit to the Participants a quarterly itemized statement setting forth the basis upon which net operating income was calculated, including a quarterly itemized statement of the Processor costs set forth in Paragraph 3 of this Exhibit. Such Processor costs and Plan revenues shall be adjusted annually based solely on the Processor’s quarterly itemized statement audited pursuant to Processor’s annual audit. Processor shall pay or bill Participants for the audit adjustments within thirty days of completion of the annual audit. By majority vote of the Operating Committee, the Processor shall engage an independent auditor to audit the Processor’s costs or other calculation(s), the cost of which audit shall be shared equally by all Participants. The Processor agrees to cooperate fully in providing the information necessary to complete such audit. [FR Doc. E8–26108 Filed 10–31–08; 8:45 am] BILLING CODE 8011–01–P E:\FR\FM\03NON1.SGM 03NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 213 (Monday, November 3, 2008)]
[Notices]
[Pages 65417-65427]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26108]



[[Page 65417]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58863; File No. S7-24-89]


Joint Industry Plan; Notice of Filing and Immediate Effectiveness 
of Amendment No. 20 to the Joint Self-Regulatory Organization Plan 
Governing the Collection, Consolidation and Dissemination of Quotation 
and Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privileges Basis, Submitted by the 
American Stock Exchange LLC, the Boston Stock Exchange, Inc., the 
Chicago Stock Exchange, Inc., the Chicago Board Options Exchange, 
Incorporated, the International Securities Exchange, LLC., the 
Financial Industry Regulatory Authority, Inc., the National Stock 
Exchange, Inc., The NASDAQ Stock Market LLC, the New York Stock 
Exchange LLC, NYSE Arca, Inc., and the NASDAQ OMX PHLX, Inc.

October 27, 2008.

I. Introduction and Description

    Pursuant to Rule 608 of the Securities Exchange Act of 1934 (the 
``Act'') \1\ notice is hereby given that on October 1, 2008, the 
operating committee (``Operating Committee'' or ``Committee'') \2\ of 
the Joint Self-Regulatory Organization Plan Governing the Collection, 
Consolidation, and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges on an 
Unlisted Trading Privilege Basis (``Nasdaq/UTP Plan'' or ``Plan'') 
filed with the Securities and Exchange Commission (``Commission'') 
amendments to the Plan. These amendments represent Amendment 20 to the 
Plan and reflect: Modifying the name of the National Association of 
Securities Dealers and the Philadelphia Stock Exchange; adding BATS 
Exchange as a new Plan Participant; modifying Exhibit 1 to reflect 
changes to the Plan by Regulation NMS; and making ministerial changes 
to the text of the Plan. Amendment 20 was unanimously approved by the 
Committee on September 4, 2008.\3\ The Commission is publishing this 
notice of filing and immediate effectiveness to solicit comments from 
interested persons on Amendment No. 20.
---------------------------------------------------------------------------

    \1\ 17 CFR 242.608.
    \2\ The Plan Participants (collectively, ``Participants'') are: 
the American Stock Exchange LLC (``Amex''); the Boston Stock 
Exchange, Inc. (``BSE''); the Chicago Stock Exchange, Incorporated 
(``CHX''); the Chicago Board Options Exchange, Inc. (``CBOE''); the 
International Securities Exchange, LLC (``ISE''); the Financial 
Industry Regulatory Authority, Inc. (``FINRA''); the National Stock 
Exchange, Inc. (``NSX''); The NASDAQ Stock Market LLC (``Nasdaq''); 
NASDAQ OMX PHLX, Inc. (``NASDAQ OMX PHLX''); the New York Stock 
Exchange, LLC (``NYSE'') and NYSE Arca, Inc. (``NYSE Arca'').
    \3\ See letter from Bridget F. Spaulding, Chairman, OTC/UTP 
Operating Committee, to Florence E. Harmon, Acting Secretary, 
Commission, dated September 8, 2008.
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II. Background

    The Plan governs the collection, processing, and dissemination on a 
consolidated basis of quotation information and transaction reports in 
Eligible Securities \4\ for each of its Participants. This consolidated 
information informs investors of the current quotation and recent trade 
prices of Nasdaq securities. It enables investors to ascertain from one 
data source the current prices in all the markets trading Nasdaq 
securities. The Plan serves as the required transaction reporting plan 
for its Participants, which is a prerequisite for their trading 
Eligible Securities.\5\
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    \4\ The Plan defines ``Eligible Securities'' as any Nasdaq 
Global Market or Nasdaq Capital Market security, as defined in NASD 
Rule 4200.
    \5\ See Securities Exchange Act Release No. 55647 (April 19, 
2007) 72 FR 20891 (April 26, 2007).
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III. Description and Purpose of the Amendment ⁶
---------------------------------------------------------------------------

    \6\ The complete text of the Plan, as amended by Amendment No. 
20, is attached as Exhibit A.
---------------------------------------------------------------------------

    The following is a summary of the changes to the Plan prepared by 
the Participants:
    (i) Section I.A. shall be amended to add the BATS Exchange, Inc. as 
a new Plan Participant, to change the name of the National Association 
of Securities Dealers to the Financial Industry Regulatory Authority, 
Inc., and to change the name of the Philadelphia Stock Exchange to 
Nasdaq OMX PHLX, Inc.
    (ii) Section III shall be amended to reflect the name change from 
the National Association of Securities Dealers (``NASD'') to the 
Financial Industry Regulatory Authority, Inc. (``FINRA'').
    (iii) Section IV.A shall be modified to reflect the participation 
of Advisory Committee members and to clarify that only Participants and 
their representatives as well as Commission staff may participate in 
Executive Sessions of the Operating Committee.
    (iv) Section IV.C shall be modified to reflect the NASD name change 
to FINRA.
    (v) Section VI.B shall be modified to eliminate language that is no 
longer relevant.
    (vi) Section VI.C shall be modified to reflect the NASD name change 
to FINRA.
    (vii) Section VIII. shall be modified to add the BATS Exchange as a 
new Participant, reflect the NASD name change as FINRA, and to modify 
the Philadelphia Stock Exchange name to Nasdaq OMX PHLX.
    (viii) Section IX. shall be modified to eliminate vague language 
regarding market access and to reflect the NASD name change to FINRA.
    (ix) Section X. shall be modified to clarify the language and make 
ministerial changes to the text.
    (x) Section XI.D. shall be modified to reflect the NASD name change 
to FINRA.
    (xi) Section XVIII.A shall be modified to correct a grammatical 
error.
    (xii) The signature block shall be modified to add the BATS 
Exchange as a new Participant, to reflect the NASD name change as 
FINRA, and to modify the Philadelphia Stock Exchange name to Nasdaq OMX 
PHLX.
    (xiii) Exhibit 1 shall be modified to reflect the NASD name change 
to FINRA and to be updated to reflect the Regulation NMS revenue 
formula.

IV. Date of Effectiveness of the Amendment

    The changes set forth in Amendment No. 20 have been designated by 
the Participants as concerned solely with the administration of the 
plan or involving solely technical or ministerial matters, and thus are 
being put into effect upon filing with the Commission pursuant to Rules 
608(b)(3)(ii) and 608(b)(3)(iii).\7\ At any time within 60 days of the 
filing of any such amendment, the Commission may summarily abrogate the 
amendment and require that the amendment be refiled in accordance with 
paragraph (a)(1) of Rule 608 under the Act \8\ and reviewed in 
accordance with paragraph (b)(2) of Rule 608 under the Act,\9\ if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or the 
maintenance of fair and orderly markets, to remove impediments to, and 
perfect mechanisms of, a national market system or otherwise in 
furtherance of the purposes of the Act.\10\
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    \7\ 17 CFR 242.608(b)(3)(ii) and (b)(3)(iii).
    \8\ 17 CFR 242.608(a)(1).
    \9\ 17 CFR 242.608(b)(2).
    \10\ 17 CFR 242.608(b)(3)(iii).
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V. Solicitation of Comments

    The Commission seeks general comments on Amendment No. 20. 
Interested persons are invited to submit

[[Page 65418]]

written data, views, and arguments concerning the foregoing, including 
whether the proposal is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number S7-24-89 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 S7-24-89. 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 (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all written statements with respect to the 
proposed Plan amendment that are filed with the Commission, and all 
written communications relating to the proposed Plan 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 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 Office of the Secretary of the Committee, currently 
located at NYSE Arca, Inc., 100 South Wacker Drive, Suite 1800, 
Chicago, IL 60606. 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 S7-24-
89 and should be submitted on or before November 24, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(27).
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Florence E. Harmon,
Acting Secretary.

Exhibit A

Nasdaq UTP Plan

Amended and Restated Plan

Amendment No. 20

    The undersigned registered national securities association and 
national securities exchanges (collectively referred to as the 
``Participants''), have jointly developed and hereby enter into this 
Nasdaq Unlisted Trading Privileges Plan (``Nasdaq UTP Plan'' or 
``Plan'').

I. Participants.

    The Participants include the following:

A. Participants

    1. American Stock Exchange LLC., 86 Trinity Place, New York, New 
York 10006.
    2. BATS Exchange, Inc., 4151 North Mulberry Drive, Suite 275, 
Kansas City, Missouri 64116.
    3. Boston Stock Exchange, 100 Franklin Street, Boston, 
Massachusetts 02110.
    4. Chicago Stock Exchange, 440 South LaSalle Street, Chicago, 
Illinois 60605.
    5. Chicago Board Options Exchange, Inc., 400 South LaSalle Street, 
26th Floor, Chicago, Illinois 60605.
    6. International Securities Exchange, LLC., 60 Broad Street, New 
York, New York 10004.
    7. Financial Industry Regulatory Authority, Inc., 1735 K Street, 
NW., Washington, DC 20006.
    8. National Stock Exchange, Inc., 440 South LaSalle Street, 26th 
Floor, Chicago, Illinois 60605.
    9. New York Stock Exchange LLC., 11 Wall Street, New York, New York 
10005.
    10. NYSE Arca, Inc., 100 South Wacker Drive, Suite 1800, Chicago, 
IL 60606.
    11. NASDAQ OMX PHLX, Inc., 1900 Market Street, Philadelphia, 
Pennsylvania 19103.
    12. The NASDAQ Stock Market LLC., 1 Liberty Plaza, 165 Broadway, 
New York, NY 10006.

B. Additional Participants

    Any other national securities association or national securities 
exchange, in whose market Eligible Securities become traded, may become 
a Participant, provided that said organization executes a copy of this 
Plan and pays its share of development costs as specified in section 
XIII.

II. Purpose of Plan

    The purpose of this Plan is to provide for the collection, 
consolidation and dissemination of Quotation Information and 
Transaction Reports in Eligible Securities from the Participants in a 
manner consistent with the Exchange Act.
    It is expressly understood that each Participant shall be 
responsible for the collection of Quotation Information and Transaction 
Reports within its market and that nothing in this Plan shall be deemed 
to govern or apply to the manner in which each Participant does so.

III. Definitions

    A. ``Current'' means, with respect to Transaction Reports or 
Quotation Information, such Transaction Reports or Quotation 
Information during the fifteen (15) minute period immediately following 
the initial transmission thereof by the Processor.
    B. ``Eligible Security'' means any Nasdaq Global Market or Nasdaq 
Capital Market security, as defined in NASDAQ Rule 4200. Eligible 
Securities under this Nasdaq UTP Plan shall not include any security 
that is defined as an ``Eligible Security'' within Section VII of the 
Consolidated Tape Association Plan.
    A security shall cease to be an Eligible Security for purposes of 
this Plan if: (i) the security does not substantially meet the 
requirements from time to time in effect for continued listing on 
Nasdaq, and thus is suspended from trading; or (ii) the security has 
been suspended from trading because the issuer thereof is in 
liquidation, bankruptcy or other similar type proceedings. The 
determination as to whether a security substantially meets the criteria 
of the definition of Eligible Security shall be made by the exchange on 
which such security is listed provided, however, that if such security 
is listed on more than one exchange, then such determination shall be 
made by the exchange on which the greatest number of the transactions 
in such security were effected during the previous twelve-month period.
    C. ``Commission'' and ``SEC'' shall mean the U.S. Securities and 
Exchange Commission.
    D. ``Exchange Act'' means the Securities Exchange Act of 1934.
    E. ``Market'' shall mean (i) when used with respect to Quotation 
Information, FINRA in the case of a FINRA Participant, or the 
Participant on whose floor or through whose facilities the quotation 
was disseminated; and (ii)

[[Page 65419]]

when used with respect to Transaction Reports, the Participant through 
whose facilities the transaction took place or is reported, or the 
Participant to whose facilities the order was sent for execution.
    F. ``FINRA'' means the Financial Industry Regulatory Authority, 
Inc.
    G. ``FINRA Participant'' means a FINRA member that is registered as 
a market maker or an electronic communications network or otherwise 
utilizes the facilities of FINRA pursuant to applicable FINRA rules.
    H. ``Transaction Reporting System'' means the System provided for 
in the Transaction Reporting Plan filed with and approved by the 
Commission pursuant to SEC Rule 11Aa3-1, subsequently re-designated as 
Rule 601 of Regulation NMS, governing the reporting of transactions in 
Nasdaq securities.
    I. ``UTP Quote Data Feed'' means the service that provides 
Subscribers with the National Best Bid and Offer quotations, size and 
market center identifier, as well as the Best Bid and Offer quotations, 
size and market center identifier from each individual Participant in 
Eligible Securities and, in the case of FINRA, the FINRA Participant(s) 
that constitute FINRA's Best Bid and Offer quotations.
    J. ``Nasdaq System'' means the automated quotation system operated 
by Nasdaq.
    K. ``UTP Trade Data Feed'' means the service that provides Vendors 
and Subscribers with Transaction Reports.
    L. ``Nasdaq Security'' or ``Nasdaq-listed Security'' means any 
security listed on the Nasdaq Global Market or Nasdaq Capital Market.
    M. ``News Service'' means a person that receives Transaction 
Reports or Quotation Information provided by the Systems or provided by 
a Vendor, on a Current basis, in connection with such person's business 
of furnishing such information to newspapers, radio and television 
stations and other news media, for publication at least fifteen (15) 
minutes following the time when the information first has been 
published by the Processor.
    N. ``OTC Montage Data Feed'' means the data stream of information 
that provides Vendors and Subscribers with quotations and sizes from 
each FINRA Participant.
    O. ``Participant'' means a registered national securities exchange 
or national securities association that is a signatory to this Plan.
    P. ``Plan'' means this Nasdaq UTP Plan, as from time to time 
amended according to its provisions, governing the collection, 
consolidation and dissemination of Quotation Information and 
Transaction Reports in Eligible Securities.
    Q. ``Processor'' means the entity selected by the Participants to 
perform the processing functions set forth in the Plan.
    R. ``Quotation Information'' means all bids, offers, displayed 
quotation sizes, the market center identifiers and, in the case of 
FINRA, the FINRA Participant that entered the quotation, withdrawals 
and other information pertaining to quotations in Eligible Securities 
required to be collected and made available to the Processor pursuant 
to this Plan.
    S. ``Regulatory Halt'' means a trade suspension or halt called for 
the purpose of dissemination of material news, as described at Section 
X hereof or that is called for where there are regulatory problems 
relating to an Eligible Security that should be clarified before 
trading therein is permitted to continue, including a trading halt for 
extraordinary market activity due to system misuse or malfunction under 
Section X.E.1. of the Plan (``Extraordinary Market Regulatory Halt'').
    T. ``Subscriber'' means a person that receives Current Quotation 
Information or Transaction Reports provided by the Processor or 
provided by a Vendor, for its own use or for distribution on a non-
Current basis, other than in connection with its activities as a 
Vendor.
    U. ``Transaction Reports'' means reports required to be collected 
and made available pursuant to this Plan containing the stock symbol, 
price, and size of the transaction executed, the Market in which the 
transaction was executed, and related information, including a buy/
sell/cross indicator and trade modifiers, reflecting completed 
transactions in Eligible Securities.
    V. ``Upon Effectiveness of the Plan'' means July 12, 1993, the date 
on which the Participants commenced publication of Quotation 
Information and Transaction Reports on Eligible Securities as 
contemplated by this Plan.
    W. ``Vendor'' means a person that receives Current Quotation 
Information or Transaction Reports provided by the Processor or 
provided by a Vendor, in connection with such person's business of 
distributing, publishing, or otherwise furnishing such information on a 
Current basis to Subscribers, News Services or other Vendors.

IV. Administration of Plan

A. Operating Committee: Composition

    The Plan shall be administered by the Participants through an 
operating committee (``Operating Committee''), which shall be composed 
of one representative designated by each Participant. Each Participant 
may designate an alternate representative or representatives who shall 
be authorized to act on behalf of the Participant in the absence of the 
designated representative. Within the areas of its responsibilities and 
authority, decisions made or actions taken by the Operating Committee, 
directly or by duly delegated individuals, committees as may be 
established from time to time, or others, shall be binding upon each 
Participant, without prejudice to the rights of any Participant to seek 
redress from the SEC pursuant to Rule 608 of Regulation NMS under the 
Exchange Act or in any other appropriate forum.
    An Electronic Communications Network, Alternative Trading System, 
Broker-Dealer or other securities organization (``Organization'') which 
is not a Participant, but has an actively pending Form 1 Application on 
file with the Commission to become a national securities exchange, will 
be permitted to appoint one representative and one alternate 
representative to attend regularly scheduled Operating Committee 
meetings in the capacity of an observer/advisor. If the Organization's 
Form 1 petition is withdrawn, returned, or is otherwise not actively 
pending with the Commission for any reason, then the Organization will 
no longer be eligible to be represented in the Operating Committee 
meetings. The Operating Committee shall have the discretion, in limited 
instances, to deviate from this policy if, as indicated by majority 
vote, the Operating Committee agrees that circumstances so warrant.
    Nothing in this section or elsewhere within the Plan shall 
authorize any person or organization other than Participants, their 
representatives, and members of the Advisory Committee to participate 
on the Operating Committee in any manner other than as an advisor or 
observer. Only the Participants and their representatives as well as 
Commission staff may participate in Executive Sessions of the Operating 
Committee.

B. Operating Committee: Authority

    The Operating Committee shall be responsible for:
    1. Overseeing the consolidation of Quotation Information and 
Transaction Reports in Eligible Securities from the Participants for 
dissemination to Vendors, Subscribers, News Services and others in 
accordance with the provisions of the Plan;

[[Page 65420]]

    2. Periodically evaluating the Processor;
    3. Setting the level of fees to be paid by Vendors, Subscribers, 
News Services or others for services relating to Quotation Information 
or Transaction Reports in Eligible Securities, and taking action in 
respect thereto in accordance with the provisions of the Plan;
    4. Determining matters involving the interpretation of the 
provisions of the Plan;
    5. Determining matters relating to the Plan's provisions for cost 
allocation and revenue-sharing; and
    6. Carrying out such other specific responsibilities as provided 
under the Plan.

C. Operating Committee: Voting

    Each Participant shall have one vote on all matters considered by 
the Operating Committee.
    1. The affirmative and unanimous vote of all Participants entitled 
to vote shall be necessary to constitute the action of the Operating 
Committee with respect to:
    a. Amendments to the Plan;
    b. Amendments to contracts between the Processor and Vendors, 
Subscribers, News Services and others receiving Quotation Information 
and Transaction Reports in Eligible Securities;
    c. Replacement of the Processor, except for termination for cause, 
which shall be governed by section V(B) hereof;
    d. Reductions in existing fees relating to Quotation Information 
and Transaction Reports in Eligible Securities; and
    e. Except as provided under section IV(C)(3) hereof, requests for 
system changes; and
    f. All other matters not specifically addressed by the Plan.
    2. With respect to the establishment of new fees or increases in 
existing fees relating to Quotation Information and Transaction Reports 
in Eligible Securities, the affirmative vote of two-thirds of the 
Participants entitled to vote shall be necessary to constitute the 
action of the Operating Committee.
    3. The affirmative vote of a majority of the Participants entitled 
to vote shall be necessary to constitute the action of the Operating 
Committee with respect to:
    a. Requests for system changes reasonably related to the function 
of the Processor as defined under the Plan. All other requests for 
system changes shall be governed by section IV(C)(1)(e) hereof.
    b. Interpretive matters and decisions of the Operating Committee 
arising under, or specifically required to be taken by, the provisions 
of the Plan as written;
    c. Interpretive matters arising under Rules 601 and 602 of 
Regulation NMS; and
    d. Denials of access (other than for breach of contract, which 
shall be handled by the Processor),
    4. It is expressly agreed and understood that neither this Plan nor 
the Operating Committee shall have authority in any respect over any 
Participant's proprietary systems. Nor shall the Plan or the Operating 
Committee have any authority over the collection and dissemination of 
quotation or transaction information in Eligible Securities in any 
Participant's marketplace, or, in the case of FINRA, from FINRA 
Participants.

D. Operating Committee: Meetings

    Regular meetings of the Operating Committee may be attended by each 
Participant's designated representative and/or its alternate 
representative(s), and may be attended by one or more other 
representatives of the parties. Meetings shall be held at such times 
and locations as shall from time to time be determined by the Operating 
Committee.
    Quorum: Any action requiring a vote only can be taken at a meeting 
in which a quorum of all Participants is present. For actions requiring 
a simple majority vote of all Participants, a quorum of greater than 
50% of all Participants entitled to vote must be present at the meeting 
before such a vote may be taken. For actions requiring a \2/3\ majority 
vote of all Participants, a quorum of at least \2/3\ of all 
Participants entitled to vote must be present at the meeting before 
such a vote may be taken. For actions requiring a unanimous vote of all 
Participants, a quorum of all Participants entitled to vote must be 
present at the meeting before such a vote may be taken.
    A Participant is considered present at a meeting only if a 
Participant's designated representative or alternate representative(s) 
is either in physical attendance at the meeting or is participating by 
conference telephone, or other acceptable electronic means.
    Any action sought to be resolved at a meeting must be sent to each 
Participant entitled to vote on such matter at least one week prior to 
the meeting via electronic mail, regular U.S. or private mail, or 
facsimile transmission, provided however that this requirement may be 
waived by the vote of the percentage of the Committee required to vote 
on any particular matter, under section C above.
    Any action may be taken without a meeting if a consent in writing, 
setting forth the action so taken, is sent to and signed by all 
Participant representatives entitled to vote with respect to the 
subject matter thereof. All the approvals evidencing the consent shall 
be delivered to the Chairman of the Operating Committee to be filed in 
the Operating Committee records. The action taken shall be effective 
when the minimum number of Participants entitled to vote have approved 
the action, unless the consent specifies a different effective date.
    The Chairman of the Operating Committee shall be elected annually 
by and from among the Participants by a majority vote of all 
Participants entitled to vote. The Chairman shall designate a person to 
act as Secretary to record the minutes of each meeting. The location of 
meetings shall be rotated among the locations of the principal offices 
of the Participants, or such other locations as may from time to time 
be determined by the Operating Committee. Meetings may be held by 
conference telephone and action may be taken without a meeting if the 
representatives of all Participants entitled to vote consent thereto in 
writing or other means the Operating Committee deems acceptable.

E. Advisory Committee

    (a) Formation. Notwithstanding any other provision of this Plan, an 
Advisory Committee to the Plan shall be formed and shall function in 
accordance with the provisions set forth in this section.
    (b) Composition. Members of the Advisory Committee shall be 
selected for two-year terms as follows:
    (1) Operating Committee Selections. By affirmative vote of a 
majority of the Participants entitled to vote, the Operating Committee 
shall select at least one representative from each of the following 
categories to be members of the Advisory Committee: (i) A broker-dealer 
with a substantial retail investor customer base, (ii) a broker-dealer 
with a substantial institutional investor customer base, (iii) an 
alternative trade system, (iv) a data vendor, and (v) an investor.
    (2) Participant Selections. Each Participant shall have the right 
to select one member of the Advisory Committee. A Participant shall not 
select any person employed by or affiliated with any participant or its 
affiliates or facilities.
    (c) Function. Members of the Advisory Committee shall have the 
right to submit their views to the Operating Committee on Plan matters, 
prior to a decision by the Operating Committee on such matters. Such 
matters shall

[[Page 65421]]

include, but not be limited to, any new or modified product, fee, 
contract, or pilot program that is offered or used pursuant to the 
Plan.
    (d) Meetings and Information. Members of the Advisory Committee 
shall have the right to attend all meetings of the Operating Committee 
and to receive any information concerning Plan matters that is 
distributed to the Operating Committee; provided, however, that the 
Operating Committee may meet in executive session if, by affirmative 
vote of a majority of the Participants entitled to vote, the Operating 
Committee determines that an item of Plan business requires 
confidential treatment.

V. Selection and Evaluation of the Processor

A. Generally

    The Processor's performance of its functions under the Plan shall 
be subject to review by the Operating Committee at least every two 
years, or from time to time upon the request of any two Participants 
but not more frequently than once each year. Based on this review, the 
Operating Committee may choose to make a recommendation to the 
Participants with respect to the continuing operation of the Processor. 
The Operating Committee shall notify the SEC of any recommendations the 
Operating Committee shall make pursuant to the Operating Committee's 
review of the Processor and shall supply the Commission with a copy of 
any reports that may be prepared in connection therewith.

B. Termination of the Processor for Cause

    If the Operating Committee determines that the Processor has failed 
to perform its functions in a reasonably acceptable manner in 
accordance with the provisions of the Plan or that its reimbursable 
expenses have become excessive and are not justified on a cost basis, 
the Processor may be terminated at such time as may be determined by a 
majority vote of the Operating Committee.

C. Factors To Be Considered in Termination for Cause

    Among the factors to be considered in evaluating whether the 
Processor has performed its functions in a reasonably acceptable manner 
in accordance with the provisions of the Plan shall be the 
reasonableness of its response to requests from Participants for 
technological changes or enhancements pursuant to section IV(C)(3) 
hereof. The reasonableness of the Processor's response to such requests 
shall be evaluated by the Operating Committee in terms of the cost to 
the Processor of purchasing the same service from a third party and 
integrating such service into the Processor's existing systems and 
operations as well as the extent to which the requested change would 
adversely impact the then current technical (as opposed to business or 
competitive) operations of the Processor.

D. Processor's Right To Appeal Termination for Cause

    The Processor shall have the right to appeal to the SEC a 
determination of the Operating Committee terminating the Processor for 
cause and no action shall become final until the SEC has ruled on the 
matter and all legal appeals of right therefrom have been exhausted.

E. Process for Selecting New Processor

    At any time following effectiveness of the Plan, but no later than 
upon the termination of the Processor, whether for cause pursuant to 
section IV(C)(1)(c) or V(B) of the Plan or upon the Processor's 
resignation, the Operating Committee shall establish procedures for 
selecting a new Processor (the ``Selection Procedures''). The Operating 
Committee, as part of the process of establishing Selection Procedures, 
may solicit and consider the timely comment of any entity affected by 
the operation of this Plan. The Selection Procedures shall be 
established by a two-thirds majority vote of the Plan Participants, and 
shall set forth, at a minimum:
    1. The entity that will:
    (a) Draft the Operating Committee's request for proposal for bids 
on a new processor;
    (b) Assist the Operating Committee in evaluating bids for the new 
processor; and
    (c) Otherwise provide assistance and guidance to the Operating 
Committee in the selection process.
    2. The minimum technical and operational requirements to be 
fulfilled by the Processor;
    3. The criteria to be considered in selecting the Processor; and
    4. The entities (other than Plan Participants) that are eligible to 
comment on the selection of the Processor.
    Nothing in this provision shall be interpreted as limiting 
Participants' rights under section IV or section V of the Plan or other 
Commission order.

VI. Functions of the Processor

A. Generally

    The Processor shall collect from the Participants, and consolidate 
and disseminate to Vendors, Subscribers and News Services, Quotation 
Information and Transaction Reports in Eligible Securities in a manner 
designed to assure the prompt, accurate and reliable collection, 
processing and dissemination of information with respect to all 
Eligible Securities in a fair and non-discriminatory manner. The 
Processor shall commence operations upon the Processor's notification 
to the Participants that it is ready and able to commence such 
operations.

B. Collection and Consolidation of Information

    For as long as Nasdaq is the Processor, the Processor shall be 
capable of receiving Quotation Information and Transaction Reports in 
Eligible Securities from Participants by the Plan-approved, Processor 
sponsored interface, and shall consolidate and disseminate such 
information via the UTP Quote Data Feed, the UTP Trade Data Feed, and 
the OTC Montage Data Feed to Vendors, Subscribers and News Services.

C. Dissemination of Information

    The Processor shall disseminate consolidated Quotation Information 
and Transaction Reports in Eligible Securities via the UTP Quote Data 
Feed, the UTP Trade Data Feed, and the OTC Montage Data Feed to 
authorized Vendors, Subscribers and News Services in a fair and non-
discriminatory manner. The Processor shall specifically be permitted to 
enter into agreements with Vendors, Subscribers and News Services for 
the dissemination of quotation or transaction information on Eligible 
Securities to foreign (non-U.S.) marketplaces or in foreign countries.
    The Processor shall, in such instance, disseminate consolidated 
quotation or transaction information on Eligible Securities from all 
Participants. Nothing herein shall be construed so as to prohibit or 
restrict in any way the right of any Participant to distribute 
quotation, transaction or other information with respect to Eligible 
Securities quoted on or traded in its marketplace to a marketplace 
outside the United States solely for the purpose of supporting an 
intermarket linkage, or to distribute information within its own 
marketplace concerning Eligible Securities in accordance with its own 
format. If a Participant requests, the Processor shall make information 
about Eligible Securities in the Participant's marketplace available to 
a foreign marketplace on behalf of the requesting Participant, in which 
event the cost shall be borne by that Participant.

[[Page 65422]]

1. Best Bid and Offer
    The Processor shall disseminate on the UTP Quote Data Feed the best 
bid and offer information supplied by each Participant, including the 
FINRA Participant(s) that constitute FINRA's single Best Bid and Offer 
quotations, and shall also calculate and disseminate on the UTP Quote 
Data Feed a national best bid and asked quotation with size based upon 
Quotation Information for Eligible Securities received from 
Participants. The Processor shall not calculate the best bid and offer 
for any individual Participant, including FINRA.
    The Participant responsible for each side of the best bid and asked 
quotation making up the national best bid and offer shall be identified 
by an appropriate symbol. If the quotations of more than one 
Participant shall be the same best price, the largest displayed size 
among those shall be deemed to be the best. If the quotations of more 
than one Participant are the same best price and best displayed size, 
the earliest among those measured by the time reported shall be deemed 
to be the best. A reduction of only bid size and/or ask size will not 
change the time priority of a Participant's quote for the purposes of 
determining time reported, whereas an increase of the bid size and/or 
ask size will result in a new time reported. The consolidated size 
shall be the size of the Participant that is at the best.
    If the best bid/best offer results in a locked or crossed 
quotation, the Processor shall forward that locked or crossed quote on 
the appropriate output lines (i.e., a crossed quote of bid 12, ask 
11.87 shall be disseminated). The Processor shall normally cease the 
calculation of the best bid/best offer after 6:30 p.m., Eastern Time.
2. Quotation Data Streams
    The Processor shall disseminate on the UTP Quote Data Feed a data 
stream of all Quotation Information regarding Eligible Securities 
received from Participants. Each quotation shall be designated with a 
symbol identifying the Participant from which the quotation emanates 
and, in the case of FINRA, the FINRA Participant(s) that constitute 
FINRA's Best Bid and Offer quotations. In addition, the Processor shall 
separately distribute on the OTC Montage Data Feed the Quotation 
Information regarding Eligible Securities from all FINRA Participants 
from which quotations emanate.
3. Transaction Reports
    The Processor shall disseminate on the UTP Trade Data Feed a data 
stream of all Transaction Reports in Eligible Securities received from 
Participants. Each transaction report shall be designated with a symbol 
identifying the Participant in whose Market the transaction took place.

D. Closing Reports

    At the conclusion of each trading day, the Processor shall 
disseminate a ``closing price'' for each Eligible Security. Such 
``closing price'' shall be the price of the last Transaction Report in 
such security received prior to dissemination. The Processor shall also 
tabulate and disseminate at the conclusion of each trading day the 
aggregate volume reflected by all Transaction Reports in Eligible 
Securities reported by the Participants.

E. Statistics

    The Processor shall maintain quarterly, semi-annual and annual 
transaction and volume statistical counts. The Processor shall, at cost 
to the user Participant(s), make such statistics available in a form 
agreed upon by the Operating Committee, such as a secure Web site.

VII. Administrative Functions of the Processor

    Subject to the general direction of the Operating Committee, the 
Processor shall be responsible for carrying out all administrative 
functions necessary to the operation and maintenance of the 
consolidated information collection and dissemination system provided 
for in this Plan, including, but not limited to, record keeping, 
billing, contract administration, and the preparation of financial 
reports.

VIII. Transmission of Information to Processor by Participants

A. Quotation Information

    Each Participant shall, during the time it is open for trading be 
responsible promptly to collect and transmit to the Processor accurate 
Quotation Information in Eligible Securities through any means 
prescribed herein.
    Quotation Information shall include:
    1. Identification of the Eligible Security, using the Nasdaq 
Symbol;
    2. The price bid and offered, together with size;
    3. The FINRA Participant along with the FINRA Participant's market 
participant identification or Participant from which the quotation 
emanates;
    4. Identification of quotations that are not firm; and
    5. Through appropriate codes and messages, withdrawals and similar 
matters.

B. Transaction Reports

    Each Participant shall, during the time it is open for trading, be 
responsible promptly to collect and transmit to the Processor 
Transaction Reports in Eligible Securities executed in its Market by 
means prescribed herein. With respect to orders sent by one Participant 
Market to another Participant Market for execution, each Participant 
shall adopt procedures governing the reporting of transactions in 
Eligible Securities specifying that the transaction will be reported by 
the Participant whose member sold the security. This provision shall 
apply only to transactions between Plan Participants.
    Transaction Reports shall include:
    1. Identification of the Eligible Security, using the Nasdaq 
Symbol;
    2. The number of shares in the transaction;
    3. The price at which the shares were purchased or sold;
    4. The buy/sell/cross indicator;
    5. The Market of execution; and,
    6. Through appropriate codes and messages, late or out-of-sequence 
trades, corrections and similar matters.
    All such Transaction Reports shall be transmitted to the Processor 
within 90 seconds after the time of execution of the transaction. 
Transaction Reports transmitted beyond the 90-second period shall be 
designated as ``late'' by the appropriate code or message.
    The following types of transactions are not required to be reported 
to the Processor pursuant to the Plan:
    1. Transactions that are part of a primary distribution by an 
issuer or of a registered secondary distribution or of an unregistered 
secondary distribution;
    2. Transactions made in reliance on section 4(2) of the Securities 
Act of 1933;
    3. Transactions in which the buyer and the seller have agreed to 
trade at a price unrelated to the Current Market for the security, 
e.g., to enable the seller to make a gift;
    4. Odd-lot transactions;
    5. The acquisition of securities by a broker-dealer as principal in 
anticipation of making an immediate exchange distribution or exchange 
offering on an exchange;
    6. Purchases of securities pursuant to a tender offer; and
    7. Purchases or sales of securities effected upon the exercise of 
an option pursuant to the terms thereof or the exercise of any other 
right to acquire securities at a pre-established consideration 
unrelated to the Current Market.

[[Page 65423]]

C. Symbols for Market Identification for Quotation Information and 
Transaction Reports

    The following symbols shall be used to denote the marketplaces:

------------------------------------------------------------------------
                  Code                             Participant
------------------------------------------------------------------------
A......................................  American Stock Exchange LLC
Z......................................  BATS Exchange, Inc.
B......................................  Boston Stock Exchange, Inc.
W......................................  Chicago Board Options Exchange,
                                          Inc.
M......................................  Chicago Stock Exchange, Inc.
I......................................   International Securities
                                          Exchange, LLC
D......................................   Financial Industry Regulatory
                                          Authority, Inc.
Q......................................   Nasdaq Stock Market LLC
C......................................   National Stock Exchange, Inc.
N......................................   New York Stock Exchange LLC
P......................................   NYSE Arca, Inc.
X......................................   Nasdaq OMX PHLX, Inc.
------------------------------------------------------------------------

    D. Whenever a Participant determines that a level of trading 
activity or other unusual market conditions prevent it from collecting 
and transmitting Quotation Information or Transaction Reports to the 
Processor, or where a trading halt or suspension in an Eligible 
Security is in effect in its Market, the Participant shall promptly 
notify the Processor of such condition or event and shall resume 
collecting and transmitting Quotation Information and Transaction 
Reports to it as soon as the condition or event is terminated. In the 
event of a system malfunction resulting in the inability of a 
Participant or its members to transmit Quotation Information or 
Transaction Reports to the Processor, the Participant shall promptly 
notify the Processor of such event or condition. Upon receiving such 
notification, the Processor shall take appropriate action, including 
either closing the quotation or purging the system of the affected 
quotations.

IX. Market Access

    Pursuant to the requirements of Rule 610 of Regulation NMS, a 
Participant that operates an SRO trading facility shall provide for 
fair and efficient order execution access to quotations in each 
Eligible Security displayed through its trading facility. In the case 
of a Participant that operates an SRO display-only quotation facility, 
trading centers posting quotations through such SRO display-only 
quotation facility must provide for fair and efficient order execution 
access to quotations in each Eligible Security displayed through the 
SRO display-only quotation facility. A Participant that operates an SRO 
trading facility may elect to allow such access to its quotations 
through the utilization of private electronic linkages between the 
Participant and other trading centers. In the case of a Participant 
that operates an SRO display-only quotation facility, trading centers 
posting quotations through such SRO display-only quotation facility may 
elect to allow such access to their quotations through the utilization 
of private electronic linkages between the trading center and SRO 
trading facilities of Plan Participants and/or other trading centers.
    In accordance with Regulation NMS, a Participant shall not impose, 
or permit to be imposed, any fee or fees for the execution of an order 
against a protected quotation of the Participant or of a trading center 
posting quotes through a Participant's SRO display-only quotation 
facility in an Eligible Security or against any other quotation 
displayed by the Participant in an Eligible Security that is the 
Participant's displayed best bid or offer for that Eligible Security, 
where such fee or fees exceed the limits provided for in Rule 610(c) of 
Regulation NMS. As required under Regulation NMS, the terms of access 
to a Participant's quotations or of a trading center posting quotes 
through a Participant's SRO display-only quotation facility in an 
Eligible Security may not be unfairly discriminatory so as to prevent 
or inhibit any person from obtaining efficient access to such displayed 
quotations through a member of the Participant or a subscriber of a 
trading center.
    If quotations in an Eligible Security are displayed by a 
Participant that operates an SRO trading facility (or are displayed by 
a trading center that posts quotations through an SRO display-only 
quotation facility) that complies with the fair and efficient access 
requirements of Regulation NMS (an ``NMS Compliant Facility''), 
including prior to the compliance date of such access requirements, 
that Participant (or trading center posting quotes through an SRO 
display-only quotation facility) shall no longer be required to permit 
each FINRA market participant to have direct telephone access to the 
specialist, trading post, market maker and supervisory center in such 
Eligible Security that trades on that NMS Compliant Facility. For 
quotations in Eligible Securities that are displayed by a Participant 
that operates an SRO trading facility that is not an NMS Compliant 
Facility, such telephone access requirement will continue to be 
applicable to the Participant.

X. Regulatory Halts

    A. Whenever, in the exercise of its regulatory functions, the 
Listing Market for an Eligible Security determines that a Regulatory 
Halt is appropriate pursuant to section III.S, the Listing Market will 
notify all other Participants pursuant to section X.E and all other 
Participants shall also halt or suspend trading in that security until 
notified that the halt or suspension is no longer in effect. The 
Listing Market shall immediately notify the Processor of such 
Regulatory Halt as well as provide notice that a Regulatory Halt has 
been lifted. The Processor, in turn, shall disseminate to Participants 
notice of the Regulatory Halt (as well as notice of the lifting of a 
Regulatory Halt) through the UTP Quote Data Feed. This notice shall 
serve as official notice of a Regulatory Halt for purposes of the Plan 
only, and shall not substitute or otherwise supplant notice that a 
Participant may recognize or require under its own rules. Nothing in 
this provision shall be read so as to supplant or be inconsistent with 
a Participant's own rules on trade halts, which rules apply to the 
Participant's own members. The Processor will reject any quotation 
information or transaction reports received from any Participant on an 
Eligible Security that has a Regulatory Halt in effect.
    B. Whenever the Listing Market determines that an adequate 
publication or dissemination of information has occurred so as to 
permit the termination of the Regulatory Halt then in effect, the 
Listing Market shall promptly notify the Processor and each of the 
other Participants that conducts trading in such security pursuant to 
Section X.F. Except in extraordinary circumstances, adequate 
publication or dissemination shall be presumed by the Listing Market to 
have occurred upon the expiration of one hour after initial publication 
in a national news dissemination service of the information that gave 
rise to the Regulatory Halt.
    C. Except in the case of a Regulatory Halt, the Processor shall not 
cease the dissemination of quotation or transaction information 
regarding any Eligible Security. In particular, it shall not cease 
dissemination of such information because of a delayed opening, 
imbalance of orders or other market-related problems involving such 
security. During a Regulatory Halt, the Processor shall collect and 
disseminate Transaction Information but shall cease collection and 
dissemination of all Quotation Information.
    D. For purposes of this section X, ``Listing Market'' for an 
Eligible Security means the Participant's Market on which the Eligible 
Security is listed. If an Eligible Security is dually listed, Listing 
Market shall mean the Participant's Market on which the Eligible 
Security is listed that also has

[[Page 65424]]

the highest number of the average of the reported transactions and 
reported share volume for the preceding 12-month period. The Listing 
Market for dually-listed Eligible Securities shall be determined at the 
beginning of each calendar quarter.
    E. For purposes of coordinating trading halts in Eligible 
Securities, all Participants are required to utilize the national 
market system communication media (``Hoot-n-Holler'') to provide real-
time information to all Participants. Each Participant shall be 
required to continuously monitor the Hoot-n-Holler system during market 
hours, and the failure of a Participant to do so at any time shall not 
prevent the Listing Market from initiating a Regulatory Halt in 
accordance with the procedures specified herein.
    1. The following procedures shall be followed when one or more 
Participants experiences extraordinary market activity in an Eligible 
Security that is believed to be caused by the misuse or malfunction of 
systems operated by or linked to one or more Participants.
    a. The Participant(s) experiencing the extraordinary market 
activity or any Participant that becomes aware of extraordinary market 
activity will immediately use best efforts to notify all Participants 
of the extraordinary market activity utilizing the Hoot-n-Holler 
system.
    b. The Listing Market will use best efforts to determine whether 
there is material news regarding the Eligible Security. If the Listing 
Market determines that there is non-disclosed material news, it will 
immediately call a Regulatory Halt pursuant to section X.E.2.
    c. Each Participant(s) will use best efforts to determine whether 
one of its systems, or the system of a direct or indirect participant 
in its market, is responsible for the extraordinary market activity.
    d. If a Participant determines the potential source of 
extraordinary market activity pursuant to section X.1.c., the 
Participant will use best efforts to determine whether removing the 
quotations of one or more direct or indirect market participants or 
barring one or more direct or indirect market participants from 
entering orders will resolve the extraordinary market activity. 
Accordingly, the Participant will prevent the quotations from one or 
more direct or indirect market participants in the affected Eligible 
Securities from being transmitted to the Processor.
    e. If the procedures described in section X.E.1.a.-d. do not 
rectify the situation, the Participant(s) experiencing extraordinary 
market activity will cease transmitting all quotations in the affected 
Eligible Securities to the Processor.
    f. If the procedures described in section X.E.1.a-e. do not rectify 
the situation within five minutes of the first notification through the 
Hoot-n-Holler system, or if Participants agree to call a halt sooner 
through unanimous approval among those Participants actively trading 
impacted Eligible Securities, the Listing Market may determine based on 
the facts and circumstances, including available input from 
Participants, to declare an Extraordinary Market Regulatory Halt in the 
affected Eligible Securities. Simultaneously with the notification of 
the Processor to suspend the dissemination of quotations across all 
Participants, the Listing Market must notify all Participants of the 
trading halt utilizing the Hoot-n-Holler system.
    g. Absent any evidence of system misuse or malfunction, best 
efforts will be used to ensure that trading is not halted across all 
Participants.
    2. If the Listing Market declares a Regulatory Halt in 
circumstances other than pursuant to section X.E.1.f., the Listing 
Market must, simultaneously with the notification of the Processor to 
suspend the dissemination of quotations across all Participants, notify 
all Participants of the trading halt utilizing the Hoot-n-Holler 
system.
    F. If the Listing Market declares a Regulatory Halt, trading will 
resume according to the following procedures:
    1. Within 15 minutes of the declaration of the halt, all 
Participants will make best efforts to indicate via the Hoot-n-Holler 
their intentions with respect to canceling or modifying transactions.
    2. All Participants will disseminate to their members information 
regarding the canceled or modified transactions as promptly as 
possible, and in any event prior to the resumption of trading.
    3. After all Participants have met the requirements of section 
X.F.1-2, the Listing Market will notify the Participants utilizing the 
Hoot-n-Holler and the Processor when trading may resume. Upon receiving 
this information, Participants may commence trading pursuant to section 
X.A.

XI. Hours of Operation

    A. Quotation Information may be entered by Participants as to all 
Eligible Securities in which they make a market between 9:30 a.m. and 4 
p.m. Eastern Time (''ET'') on all days the Processor is in operation. 
Transaction Reports shall be entered between 9:30 a.m. and 4:01:30 p.m. 
ET by Participants as to all Eligible Securities in which they execute 
transactions between 9:30 a.m. and 4 p.m. ET on all days the Processor 
is in operation.
    B. Participants that execute transactions in Eligible Securities 
outside the hours of 9:30 a.m. ET and 4 p.m., ET, shall report such 
transactions as follows:
    (i) Transactions in Eligible Securities executed between 4 a.m. and 
9:29:59 a.m. ET and between 4:00:01 and 8 p.m. ET, shall be designated 
as ``.T'' trades to denote their execution outside normal market hours;
    (ii) Transactions in Eligible Securities executed after 8 p.m. and 
before 12 a.m. (midnight) shall be reported to the Processor between 
the hours of 4 a.m. and 8 p.m. ET on the next business day (T+1), and 
shall be designated ``as/of'' trades to denote their execution on a 
prior day, and be accompanied by the time of execution;
    (iii) Transactions in Eligible Securities executed between 12 a.m. 
(midnight) and 4 a.m. ET shall be transmitted to the Processor between 
4 a.m. and 9:30 a.m. ET, on trade date, shall be designated as ``.T'' 
trades to denote their execution outside normal market hours, and shall 
be accompanied by the time of execution;
    (iv) Transactions reported pursuant to this provision of the Plan 
shall be included in the calculation of total trade volume for purposes 
of determining net distributable operating revenue, but shall not be 
included in the calculation of the daily high, low, or last sale.
    C. Late trades shall be reported in accordance with the rules of 
the Participant in whose Market the transaction occurred and can be 
reported between the hours of 4 a.m. and 8 p.m.
    D. The Processor shall collect, process and disseminate Quotation 
Information in Eligible Securities at other times between 4 a.m. and 
9:30 a.m. ET, and after 4 p.m. ET, when any Participant or FINRA 
Participant is open for trading, until 8 p.m. ET (the ``Additional 
Period''); provided, however, that the national best bid and offer 
quotation will not be disseminated before 4 a.m. or after 8 p.m. ET. 
Participants that enter Quotation Information or submit Transaction 
Reports to the Processor during the Additional Period shall do so for 
all Eligible Securities in which they enter quotations.

XII. Undertaking by All Participants

    The filing with and approval by the Commission of this Plan shall 
obligate each Participant to enforce compliance by its members with the 
provisions

[[Page 65425]]

thereof. In all other respects not inconsistent herewith, the rules of 
each Participant shall apply to the actions of its members in 
effecting, reporting, honoring and settling transactions executed 
through its facilities, and the entry, maintenance and firmness of 
quotations to ensure that such occurs in a manner consistent with just 
and equitable principles of trade.

XIII. Financial Matters

A. Development Costs

    Any Participant becoming a signatory to this Plan after June 26, 
1990, shall, as a condition to becoming a Participant, pay to the other 
Plan Participants a proportionate share of the aggregate development 
costs previously paid by Plan Participants to the Processor, which 
aggregate development costs totaled $439,530, with the result that each 
Participant's share of all development costs is the same.
    Each Participant shall bear the cost of implementation of any 
technical enhancements to the Nasdaq system made at its request and 
solely for its use, subject to reapportionment should any other 
Participant subsequently make use of the enhancement, or the 
development thereof.

B. Cost Allocation and Revenue Sharing

    The provisions governing cost allocation and revenue sharing among 
the Participants are set forth in Exhibit 1 to the Plan.

C. Maintenance of Financial Records

    The Processor shall maintain records of revenues generated and 
development and operating expenditures incurred in connection with the 
Plan. In addition, the Processor shall provide the Participants with: 
(a) A statement of financial and operational condition on a quarterly 
basis; and (b) an audited statement of financial and operational 
condition on an annual basis.

XIV. Indemnification

    Each Participant agrees, severally and not jointly, to indemnify 
and hold harmless each other Participant, Nasdaq, and each of its 
directors, officers, employees and agents (including the Operating 
Committee and its employees and agents) from and against any and all 
loss, liability, claim, damage and expense whatsoever incurred or 
threatened against such persons as a result of any Transaction Reports, 
Quotation Information or other information reported to the Processor by 
such Participant and disseminated by the Processor to Vendors. This 
indemnity agreement shall be in addition to any liability that the 
indemnifying Participant may otherwise have.
    Promptly after receipt by an indemnified Participant of notice of 
the commencement of any action, such indemnified Participant will, if a 
claim in respect thereof is to be made against an indemnifying 
Participant, notify the indemnifying Participant in writing of the 
commencement thereof; but the omission to so notify the indemnifying 
Participant will not relieve the indemnifying Participant from any 
liability which it may have to any indemnified Participant. In case any 
such action is brought against any indemnified Participant and it 
promptly notifies an indemnifying Participant of the commencement 
thereof, the indemnifying Participant will be entitled to participate 
in, and, to the extent that it may wish, jointly with any other 
indemnifying Participant similarly notified, to assume and control the 
defense thereof with counsel chosen by it. After notice from the 
indemnifying Participant of its election to assume the defense thereof, 
the indemnifying Participant will not be liable to such indemnified 
Participant for any legal or other expenses subsequently incurred by 
such indemnified Participant in connection with the defense thereof but 
the indemnified Participant may, at its own expense, participate in 
such defense by counsel chosen by it without, however, impairing the 
indemnifying Participant's control of the defense. The indemnifying 
Participant may negotiate a compromise or settlement of any such 
action, provided that such compromise or settlement does not require a 
contribution by the indemnified Participant.

XV. Withdrawal

    Any Participant may withdraw from the Plan at any time on not less 
than 30 days prior written notice to each of the other Participants. 
Any Participant withdrawing from the Plan shall remain liable for, and 
shall pay upon demand, any fees for equipment or services being 
provided to such Participant pursuant to the contract executed by it or 
an agreement or schedule of fees covering such then in effect.
    A withdrawing Participant shall also remain liable for its 
proportionate share, without any right of recovery, of administrative 
and operating expenses, including start-up costs and other sums for 
which it may be responsible pursuant to section XIV hereof. Except as 
aforesaid, a withdrawing Participant shall have no further obligation 
under the Plan or to any of the other Participants with respect to the 
period following the effectiveness of its withdrawal.

XVI. Modifications to Plan

    The Plan may be modified from time to time when authorized by the 
agreement of all of the Participants, subject to the approval of the 
SEC or which otherwise becomes effective pursuant to section 11A of the 
Act and Rule 608 of Regulation NMS.

XVII. Applicability of Securities Exchange Act of 1934

    The rights and obligations of the Participants and of Vendors, News 
Services, Subscribers and other persons contracting with Participant in 
respect of the matters covered by the Plan shall at all times be 
subject to any applicable provisions of the Act, as amended, and any 
rules and regulations promulgated thereunder.

XVIII. Operational Issues

    A. Each Participant shall be responsible for collecting and 
validating quotes and last sale reports within its own system prior to 
transmitting this data to the Processor.
    B. Each Participant may utilize a dedicated Participant line into 
the Processor to transmit trade and quote information in Eligible 
Securities to the Processor. The Processor shall accept from Exchange 
Participants input for only those issues that are deemed Eligible 
Securities.
    C. The Processor shall co

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