Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Alternext US LLC Amending Rule 300.10T-NYSE Alternext Equities To Provide a Grace Period Under That Rule for Member Organizations That Have Applied for a Trading License To Comply With Certain Exchange Rules, 12921 [Z9-4678]
Download as PDF
<![CDATA[
12921
Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Notices
TABLE 1
[Reported Share Volume in U.S.-Listed Equities during January 2009 (%)]
Trading venue
All stocks
NASDAQ ......................................................................................................................................
All Non-Exchange ........................................................................................................................
NYSE Arca ...................................................................................................................................
NYSE ...........................................................................................................................................
BATS ............................................................................................................................................
International Stock Exchange ......................................................................................................
National Stock Exchange ............................................................................................................
Chicago Stock Exchange ............................................................................................................
CBOE Stock Exchange ...............................................................................................................
NYSE Alternext ............................................................................................................................
NASDAQ OMX BX ......................................................................................................................
PWALKER on PROD1PC71 with NOTICES
The market share percentages in Table
1 strongly indicate that NYSE Arca must
compete vigorously for order flow to
maintain its share of trading volume.
The need to attract order flow imposes
significant pressure on NYSE Arca to act
reasonably in setting its fees for NYSE
Arca market data, particularly given that
the market participants that must pay
such fees often will be the same market
participants from whom NYSE Arca
must attract order flow. These market
participants particularly include the
large broker-dealer firms that control the
handling of a large volume of customer
and proprietary order flow. Given the
portability of order flow from one
trading venue to another, any exchange
that sought to charge unreasonably high
data fees would risk alienating many of
the same customers on whose orders it
depends for competitive survival.
Moreover, distributing data widely
among investors, and thereby promoting
familiarity with the exchange and its
services, is an important exchange
strategy for attracting order flow.20
In addition to the need to attract order
flow, the availability of alternatives to
NYSE Arca Trades significantly affect
the terms on which NYSE Arca can
distribute this market data.21 In setting
20 See NYSE Arca Order at 74784 nn. 218–219
and accompanying text (noting exchange strategy of
offering data for free as a means to gain visibility
in the marketplace).
21 See Richard Posner, Economic Analysis of Law
§ 9.1 (5th ed. 1998) (discussing the theory of
monopolies and pricing). See also U.S. Dep’t of
Justice & Fed’l Trade Comm’n, Horizontal Merger
Guidelines § 1.11 (1992), as revised (1997)
(explaining the importance of alternatives to the
presence of competition and the definition of
markets and market power). Courts frequently refer
to the Department of Justice and Federal Trade
Commission merger guidelines to define product
markets and evaluate market power. See, e.g., FTC
v. Whole Foods Market, Inc., 502 F. Supp. 2d 1
(D.D.C. 2007); FTC v. Arch Coal, Inc., 329 F. Supp.
2d 109 (D.D.C. 2004). In considering antitrust
issues, courts have recognized the value of
competition in producing lower prices. See, e.g.,
Leegin Creative Leather Products v. PSKS, Inc., 127
S. Ct. 2705 (2007); Atlanta Richfield Co. v. United
VerDate Nov<24>2008
01:23 Mar 25, 2009
Jkt 217001
the fees for its NYSE Arca Trades, the
Exchange must consider the extent to
which market participants would
choose one or more alternatives instead
of purchasing the Exchange’s data.22 Of
course, the most basic source of
information generally available at an
exchange is the complete record of an
exchange’s transactions that is provided
in the core data feeds.23 In this respect,
the core data feeds that include an
exchange’s own transaction information
are a significant alternative to the
exchange’s market data product.24
The various self-regulatory
organizations, the several Trade
Reporting Facilities of FINRA, and ECNs
that produce proprietary data, as well as
the core data feed, are all sources of
competition in non-core data products.
As Table 1 illustrates, share volume in
U.S.-listed equities is widely dispersed
among trading venues, and these venues
are able to offer competitive data
products as alternatives to NYSE Arca
Trades. The Commission believes that
the availability of those alternatives, as
well as the NYSE Arca’s compelling
need to attract order flow, imposed
significant competitive pressure on the
NYSE Arca to act equitably, fairly, and
reasonably in setting the terms of its
proposal.
Because NYSE Arca was subject to
significant competitive forces in setting
the terms of the proposal, the
Commission will approve the proposal
in the absence of a substantial
countervailing basis to find that its
terms nevertheless fail to meet an
applicable requirement of the Act or the
rules thereunder. An analysis of the
proposal does not provide such a basis.
States Petroleum Co., 495 U.S. 328 (1990);
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574 (1986); State Oil Co. v. Khan, 522 U.S.
3 (1997); Northern Pacific Raliway Co. v. U.S., 356
U.S. 1 (1958).
22 See NYSE Arca Order at 74783.
23 Id.
24 Id.
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
NYSE-listed
27.1
26.7
17.9
14.8
10.7
1.3
0.6
0.4
0.2
0.1
0.0
NASDAQlisted
20.5
26.2
15.7
26.2
9.0
1.4
0.7
0.4
0.0
0.0
0.0
39.9
31.0
15.8
0.0
10.8
1.4
0.7
0.3
0.1
0.0
0.0
No comments were submitted on this
proposal, and the Commission notes
that the proposal does not unreasonably
discriminate among types of users.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,25 that the
proposed rule change (SR–NYSEArca–
2009–05), be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–6465 Filed 3–24–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59468; File No. SR–
NYSEALTR–2009–16]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Alternext US LLC Amending Rule
300.10T—NYSE Alternext Equities To
Provide a Grace Period Under That
Rule for Member Organizations That
Have Applied for a Trading License To
Comply With Certain Exchange Rules
Correction
In notice document E9–4678
beginning on page 9651 in the issue of
Thursday, March 5, 2009, make the
following correction:
On page 9654, in the first column, in
the first paragraph, in the second line
from the bottom, ‘‘March 25, 2009’’
should read ‘‘March 26, 2009’’.
[FR Doc. Z9–4678 Filed 3–25–09; 8:45 am]
BILLING CODE 1505–01–D
25 15
26 17
E:\FR\FM\25MRN1.SGM
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
25MRN1
]]>Agencies
[Federal Register Volume 74, Number 56 (Wednesday, March 25, 2009)]
[Notices]
[Page 12921]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: Z9-4678]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59468; File No. SR-NYSEALTR-2009-16]
Self[dash]Regulatory Organizations; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change by NYSE Alternext US
LLC Amending Rule 300.10T--NYSE Alternext Equities To Provide a Grace
Period Under That Rule for Member Organizations That Have Applied for a
Trading License To Comply With Certain Exchange Rules
Correction
In notice document E9-4678 beginning on page 9651 in the issue of
Thursday, March 5, 2009, make the following correction:
On page 9654, in the first column, in the first paragraph, in the
second line from the bottom, ``March 25, 2009'' should read ``March 26,
2009''.
[FR Doc. Z9-4678 Filed 3-25-09; 8:45 am]
BILLING CODE 1505-01-D
