Self-Regulatory Organizations; NYSE Amex, Inc.; Notice of Filing of Proposed Rule Change To Establish the NYSE Amex Realtime Reference Prices Service, 67275-67278 [E9-30079]

Download as PDF Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Notices IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–30064 Filed 12–17–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments • 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 SR–NYSEAmex–2009–87 on the subject line. [Release No. 34–61144; File No. SR– NYSEAmex–2009–85] Paper Comments December 10, 2009. Self-Regulatory Organizations; NYSE Amex, Inc.; Notice of Filing of Proposed Rule Change To Establish the NYSE Amex Realtime Reference Prices Service Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on November 30, 2009, the NYSE Amex, Inc. (‘‘NYSE Amex’’ or ‘‘Exchange’’), filed with the All submissions should refer to File Securities and Exchange Commission Number SR–NYSEAmex–2009–87. This ‘‘Commission’’) the proposed rule change as described in Items I, II, and file number should be included on the subject line if e-mail is used. To help the III below, which Items have been prepared by the Exchange. The Commission process and review your Commission is publishing this notice to comments more efficiently, please use only one method. The Commission will solicit comments on the proposed rule post all comments on the Commission’s change from interested persons. Internet Web site (https://www.sec.gov/ I. Self-Regulatory Organization’s rules/sro.shtml). Copies of the Statement of the Terms of Substance of submission, all subsequent the Proposed Rule Change amendments, all written statements The Exchange proposes to establish with respect to the proposed rule the NYSE Amex Realtime Reference change that are filed with the Prices service and to establish a flat Commission, and all written monthly fee and a per-query fee for that communications relating to the service. The service allows a vendor to proposed rule change between the redistribute on a real-time basis last sale Commission and any person, other than prices of transactions that take place on those that may be withheld from the the Exchange (‘‘NYSE Amex Realtime public in accordance with the Reference Prices’’). The text of the provisions of 5 U.S.C. 552, will be proposed rule change is available at the available for inspection and copying in Exchange, the Commission’s Public the Commission’s Public Reference Reference Room, and https:// www.nyse.com. Room, 100 F Street, NE., Washington, DC 20549, on official business days II. Self-Regulatory Organization’s between the hours of 10 a.m. and 3 p.m. Statement of the Purpose of, and Copies of such filing also will be Statutory Basis for, the Proposed Rule available for inspection and copying at Change the principal office of the Exchange. All In its filing with the Commission, the comments received will be posted self-regulatory organization included without change; the Commission does statements concerning the purpose of, not edit personal identifying and basis for, the proposed rule change information from submissions. You and discussed any comments it received should submit only information that on the proposed rule change. The text you wish to make publicly available. All of those statements may be examined at submissions should refer to File Number SR–NYSEAmex–2009–87 and 28 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). should be submitted on or before 2 15 U.S.C. 78a. January 8, 2010. sroberts on DSKD5P82C1PROD with NOTICES • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. 3 17 VerDate Nov<24>2008 19:22 Dec 17, 2009 Jkt 220001 PO 00000 CFR 240.19b–4. Frm 00113 Fmt 4703 Sfmt 4703 67275 the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose a. The Service The NYSE Amex Realtime Reference Prices service will provide a low-cost service that makes real-time prices widely available to casual investors, provides vendors with a useful real-time substitute for delayed prices; and relieves vendors of administrative burdens. The product responds to the requirements for distribution of realtime last sale prices over the Internet for reference purposes, rather than as a basis for making trading decisions. The NYSE Amex Realtime Reference Prices service will allow Internet service providers, traditional market data vendors, and others (‘‘NYSE Amex-Only Vendors’’) to make available NYSE Amex Realtime Reference Prices on a real-time basis.4 The NYSE Amex Realtime Reference Price information includes last sale prices for all securities that trade on the Exchange, updated in real-time. In addition, the product also includes open, high and low prices and cumulative volume. The Exchange anticipates that it will update these data elements every second, though initially it will update them once per minute. The product does not include bid/ask quotations or the size of each trade. The Exchange will not permit NYSE Amex-Only Vendors to provide NYSE Amex Realtime Reference Prices in a context in which a trading or orderrouting decision can be implemented unless the NYSE Amex-Only Vendor also provides consolidated displays of Network A last sale prices available in an equivalent manner, as Rule 603(c)(1) of Regulation NMS requires. The service would eliminate some of the administrative burdens associated with the distribution of real-time CTA prices. The service would feature a flat, fixed monthly vendor fee, no user-based fees, no vendor reporting requirements, and no professional or non-professional subscriber agreements. 4 The Exchange notes that it will make the NYSE Amex Realtime Reference Prices available to vendors no earlier than it makes those prices available to the processor under the CTA and Nasdaq/UTP Plans. E:\FR\FM\18DEN1.SGM 18DEN1 67276 Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Notices b. The Fees The Exchange proposes to establish a $10,000 monthly flat fee that entitles an NYSE Amex-Only Vendor to receive access to the NYSE Amex Realtime Reference Prices datafeed. For that fee, the NYSE Amex-Only Vendor may provide unlimited NYSE Amex Realtime Reference Prices to an unlimited number of the NYSE AmexOnly Vendor’s subscribers and customers. The Exchange does not propose to impose any device or enduser fee for the NYSE Amex-Only Vendors’ distribution of NYSE Amex Realtime Reference Prices. In addition, the Exchange proposes to establish as an alternative to the fixed monthly fee a fee of $.004 for each realtime reference price that a NYSE AmexOnly Vendor disseminates to its customers. The Exchange proposes to limit a NYSE Amex-Only Vendor’s exposure under this alternative fee by setting $10,000, the same amount as the proposed fixed monthly rate, as the maximum fee that an NYSE Amex-Only Vendor would have to pay for real-time reference prices that it disseminates in any calendar month pursuant to the perquery fee. In order to take advantage of the perquery fee, a NYSE Amex-Only Vendor must document in its Exhibit A that it has the ability to measure accurately the number of queries and must have the ability to report aggregate query quantities on a monthly basis. The Exchange will impose the perquery fee only on the dissemination of real-time reference prices. NYSE AmexOnly Vendors may provide delayed data services in the same manner as they do today. The per-query charge is imposed on NYSE Amex-Only Vendors, not endusers, and is payable on a monthly basis. NYSE Amex-Only Vendors may elect to disseminate NYSE Amex Realtime Reference Prices pursuant to the per-query fee rather than the fixed monthly fee. sroberts on DSKD5P82C1PROD with NOTICES c. Justification of Fees The proposed flat monthly fee and per-query fee for the NYSE Amex Realtime Reference Prices service enable Internet service providers and traditional vendors to contribute to the Exchange’s operating costs in a manner that is appropriate for the distribution of last sale price information in the form taken by the proposed service. In setting the level of the NYSE Amex Realtime Reference Prices fee, the Exchange took into consideration several factors, including: VerDate Nov<24>2008 17:33 Dec 17, 2009 Jkt 220001 (1) The fees that Nasdaq, NYSE and NYSE Arca are charging for similar services; (2) Consultation with some of the entities that the Exchange anticipates will be the most likely to take advantage of the proposed service; (3) The contribution of market data revenues that the Exchange believes is appropriate for entities that are most likely to take advantage of the proposed service; (4) The contribution that revenues accruing from the proposed fee will make to meet the overall costs of the Exchange’s operations; (5) The savings in administrative and reporting costs that the NYSE Amex Realtime Reference Prices service will provide to NYSE Amex-Only Vendors; and (6) The fact that the proposed fees provide alternatives to existing fees under the CTA and Nasdaq/UTP Plans, alternatives that vendors will purchase only if they determine that the perceived benefits outweigh the cost. The Exchange believes that the levels of the fixed monthly fee and the perquery fee are consistent with the approach set forth in the order by which the Commission approved ArcaBook fees for NYSE Arca.5 In the ArcaBook Approval Order, the Commission stated that ‘‘when possible, reliance on competitive forces is the most appropriate and effective means to assess whether the terms for the distribution of non-core data are equitable, fair and reasonable, and not unreasonably discriminatory.’’ 6 It noted that if significant competitive forces apply to a proposal, the Commission will approve it unless a substantial countervailing basis exists. NYSE Amex Realtime Reference Prices constitute ‘‘non-core data.’’ The Exchange does not require a central processor to consolidate and distribute the product to the public pursuant to joint-SRO plans. Rather, the Exchange distributes the product voluntarily. In the case of NYSE Amex Realtime Reference Prices, both of the two types of competitive forces that the Commission described in the ArcaBook Approval Order are present: The Exchange has a compelling need to attract order flow and the product competes with a number of alternative products. The Exchange must compete vigorously for order flow to maintain its share of trading volume. This requires 5 See Release [sic] No. 59039 (December 2, 2008), 73 FR 74770 (December 9, 2008) (SR–NYSEArca– 2006–21) (the ‘‘ArcaBook Approval Order’’). 6 Id. at 74771. PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 the Exchange to act reasonably in setting market data fees for non-core products such as NYSE Amex Realtime Reference Prices. The Exchange hopes that NYSE Amex Realtime Reference Prices will enable vendors to distribute NYSE Amex last sale price data widely among investors, and thereby provide a means for promoting the Exchange’s visibility in the marketplace. In addition to the need to attract order flow, the availability of alternatives to NYSE Amex Realtime Reference Prices significantly constrain the prices at which the Exchange can market NYSE Amex Realtime Reference Prices. All national securities exchanges, 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 for NYSE Amex Realtime Reference Prices. Currently, the New York Stock Exchange, NYSE Arca and the Nasdaq Stock Market offer similar services. The information available in NYSE Amex Realtime Reference is included in the CTA core data feed, which also includes the size of trades, as well as last sale information from other markets. Even though NYSE Amex Realtime Reference Prices omits size and provides prices that are not consolidated with those of other markets, investors may select it as a less expensive alternative to the CTA Plan’s consolidated last sale price services for certain purposes. (Rule 603(c) of Regulation NMS requires vendors to make the core data feeds available to customers when trading and orderrouting decisions can be implemented.) d. Administrative Requirements The Exchange proposes to require the NYSE Amex-Only Vendor to identify the NYSE Amex trade price by placing the text ‘‘NYSE Amex Data’’ in close proximity to the display of each NYSE Amex Realtime Reference Price or series of NYSE Amex Realtime Reference Prices, or by complying with such other identification requirement as to which NYSE Amex may agree. The NYSE Amex-Only Vendor may make NYSE Amex Realtime Reference Prices available without having to differentiate between professional subscribers and nonprofessional subscribers, without having to account for the extent of access to the data, and without having to report the number of users. e. Contracts NYSE Amex proposes to allow NYSE Amex-Only Vendors to provide NYSE Amex Realtime Reference Prices without requiring the end-users to enter E:\FR\FM\18DEN1.SGM 18DEN1 Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Notices sroberts on DSKD5P82C1PROD with NOTICES into contracts for the benefit of the Exchange. Instead, the Exchange proposes to require NYSE Amex-Only Vendors to provide a readily visible hyperlink that will send the end-user to a warning notice about the end-user’s receipt and use of market data. The notice would be similar to the notice that vendors provide today when providing CTA delayed data services. The Exchange will require NYSE Amex-Only Vendors to enter into the form of ‘‘vendor’’ agreement into which the CTA and CQ Plans require recipients of the Network A datafeeds to enter (the ‘‘Network A Vendor Form’’). The Network A Vendor Form will authorize the NYSE Amex-Only Vendor to provide the NYSE Amex Realtime Reference Prices service to its subscribers and customers. The Network A Participants drafted the Network A Vendor Form as a onesize-fits-all form to capture most categories of market data dissemination. It is sufficiently generic to accommodate NYSE Amex Realtime Reference Prices. The Commission has approved the Network A Vendor Form.7 The Exchange will supplement the Network A Vendor Form with an Exhibit C that will provide abovedescribed terms and conditions that are unique to the NYSE Amex Realtime Reference Prices service. The proposed Exhibit C is attached to the proposed rule change as Exhibit 5. The supplemental Exhibit C terms and conditions would govern: • The restriction against providing the service in the context of a trading or order routing service; • The replacement of end-user agreements with a hyperlink to a notice; • The substance of the notice; and • The ‘‘NYSE Amex Data’’ labeling requirement. 2. Statutory Basis The bases under the Securities Exchange Act of 1934 (the ‘‘Act’’) for the proposed rule change are the requirement under Section 6(b)(4) 8 that an exchange have rules that provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities and the requirements under Section 6(b)(5) 9 that the rules of an exchange be designed to promote just and equitable principles of trade and 7 See Securities Exchange Act Release Nos. 28407 (September 6, 1990), 55 FR 37276 (September 10, 1990) (File No. 4–281); 49185 (February 4, 2004), 69 FR 6704 (February 11, 2004) (SR–CTA/CQ– 2003–01). 8 15 U.S.C. 78f(b)(4). 9 15 U.S.C. 78f(b)(5). VerDate Nov<24>2008 17:33 Dec 17, 2009 Jkt 220001 not to permit unfair discrimination between customers, issuers, brokers or dealers. The proposed rule change would benefit investors by facilitating their prompt access to widespread, free, realtime pricing information contained in the NYSE Amex Realtime Reference Prices service. In addition, the Exchange believes that the proposed fee would allow entities that provide market data to large numbers of investors, which are the entities most likely to take advantage of the proposed service, to make an appropriate contribution towards meeting the overall costs of the Exchange’s operations. The Exchange notes that its proposed fee compares favorably with the fees that Nasdaq, NYSE and NYSE Arca are charging for similar services. Because the proposed fee is substantially lower than those of Nasdaq, NYSE and NYSE Arca, it offers any vendor that wishes to provide its customers with a single market’s data (as opposed to a more expensive consolidated data service) a less expensive alternative to Nasdaq, NYSE and NYSE Arca. B. Self-Regulatory Organization’s Statement on Burden on Competition NYSE Amex Realtime Reference Prices proposes to provide an alternative to existing fees and does not alter or rescind any existing fees. In addition, it amounts to a competitive response to the products that Nasdaq, NYSE and NYSE Arca have commenced to make available. For those reasons, the Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has discussed the proposed rules change with those entities that the Exchange believes would be the most likely to take advantage of the proposed NYSE Amex Realtime Reference Prices service by becoming NYSE Amex-Only Vendors. While those entities have not submitted formal, written comments on the proposal, the Exchange has incorporated some of their ideas into the proposal and the proposed rule change reflects their input. The Exchange has not received any unsolicited written comments from members or other interested parties. PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 67277 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: (A) By order approve the proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–NYSEAmex–2009–85 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEAmex–2009–85. 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 subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for E:\FR\FM\18DEN1.SGM 18DEN1 67278 Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Notices inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEAmex–2009–85 and should be submitted on or before January 8, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–30079 Filed 12–17–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; The Options Clearing Corporation; Order Granting Approval of Accelerated Delivery of Supplement to the Options Disclosure Document Reflecting Certain Changes to Disclosure Regarding Dividend Index Options December 10, 2009. March 26, 2009, The Options Clearing Corporation (‘‘OCC’’) submitted to the Securities and Exchange Commission (‘‘Commission’’), pursuant to Rule 9b–1 under the Securities Exchange Act of 1934 (‘‘Act’’),1 five preliminary copies of a supplement to its options disclosure document (‘‘ODD’’) reflecting certain changes to disclosure regarding options on dividend indexes.2 On November 10, 2009, the OCC submitted to the Commission five definitive copies of the supplement.3 The ODD currently contains general disclosures on the characteristics and risks of trading standardized options. Recently, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) amended its rules to permit the listing and trading of options that overlie the S&P 500 Dividend Index.4 The proposed supplement amends the ODD to accommodate this change by providing sroberts on DSKD5P82C1PROD with NOTICES 10 17 CFR 200.30–3(a)(12). 1 17 CFR 240.9b–1. 2 See letter from Jean M. Cawley, Senior Vice President and Deputy General Counsel, OCC, to Sharon Lawson, Senior Special Counsel, Division of Trading and Markets (‘‘Division’’), Commission, dated March 26, 2009. 3 See letter from Jean M. Cawley, Senior Vice President and Deputy General Counsel, OCC, to Sharon Lawson, Senior Special Counsel, Division, Commission, dated November 9, 2009. 4 See Securities Exchange Act Release No. 61136 (December 10, 2009) (SR–CBOE–2009–022). VerDate Nov<24>2008 17:33 Dec 17, 2009 Jkt 220001 disclosure regarding dividend index options.5 Specifically, the proposed supplement to the ODD adds new disclosure regarding the characteristics of dividend index options. Further, the proposed supplement to the ODD adds new disclosure regarding the special risks of these options. The proposed supplement to the ODD also adds new disclosure stating that the options markets may use other methods than those specified in the ODD to set exercise prices. The proposed supplement is intended to be read in conjunction with the more general ODD, which, as described above, discusses the characteristics and risks of options generally.6 Rule 9b–1(b)(2)(i) under the Act 7 provides that an options market must file five copies of an amendment or supplement to the ODD with the Commission at least 30 days prior to the date definitive copies are furnished to customers, unless the Commission determines otherwise, having due regard to the adequacy of information disclosed and the public interest and protection of investors.8 In addition, five copies of the definitive ODD, as amended or supplemented, must be filed with the Commission not later than the date the amendment or supplement, or the amended options disclosure document is furnished to customers. The Commission has reviewed the proposed supplement and finds, having due regard to the adequacy of information disclosed and the public interest and protection of investors, that the proposed supplement may be furnished to customers as of the date of this order. It is therefore ordered, pursuant to Rule 9b–1 under the Act,9 that definitive copies of the proposed supplement to the ODD (SR–ODD– 2009–01), reflecting changes to disclosures regarding certain options on 5 The proposed November 2009 Supplement to the ODD supersedes and replaces the September 2008 supplement and amends the May 2007 and June 2008 supplement. 6 The Commission notes that the options markets must continue to ensure that the ODD is in compliance with the requirements of Rule 9b– 1(b)(2)(i) under the Act, 17 CFR 240.9b–1(b)(2)(i), including when future changes regarding dividend index options are made. Any future changes to the rules of the options markets concerning dividend index options would need to be submitted to the Commission under Section 19(b) of the Act. 15 U.S.C. 78s(b). 7 17 CFR 240.9b–1(b)(2)(i). 8 This provision permits the Commission to shorten or lengthen the period of time which must elapse before definitive copies may be furnished to customers. 9 17 CFR 240.9b–1. 10 17 CBR 200.30–3(a)(39). PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 dividend indexes, as well as the other changes noted above, may be furnished to customers as of the date of this order. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–30081 Filed 12–17–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61154; File No. SR–ISE– 2009–105] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Registered Representative Fee and an Options Regulatory Fee December 11, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 9, 2009, the International Securities Exchange, LLC (the ‘‘Exchange’’ or ‘‘ISE’’) filed with the Securities and Exchange Commission the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend its Schedule of Fees to eliminate registered representative fees and institute a new transaction-based ‘‘Options Regulatory Fee.’’ The text of the proposed rule change is available on the Exchange’s Web site (https://www.ise.com), at the Commission’s Web site at (https:// www.sec.gov) at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received 1 15 2 17 E:\FR\FM\18DEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 18DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 242 (Friday, December 18, 2009)]
[Notices]
[Pages 67275-67278]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30079]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61144; File No. SR-NYSEAmex-2009-85]

Self-Regulatory Organizations; NYSE Amex, Inc.; Notice of Filing
of Proposed Rule Change To Establish the NYSE Amex Realtime Reference
Prices Service

December 10, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on November 30, 2009, the NYSE Amex, Inc. (``NYSE Amex'' or
``Exchange''), filed with the Securities and Exchange Commission
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to establish the NYSE Amex Realtime Reference
Prices service and to establish a flat monthly fee and a per-query fee
for that service. The service allows a vendor to redistribute on a
real-time basis last sale prices of transactions that take place on the
Exchange (``NYSE Amex Realtime Reference Prices''). The text of the
proposed rule change is available at the Exchange, the Commission's
Public Reference Room, and https://www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
a. The Service
The NYSE Amex Realtime Reference Prices service will provide a low-
cost service that makes real-time prices widely available to casual
investors, provides vendors with a useful real-time substitute for
delayed prices; and relieves vendors of administrative burdens. The
product responds to the requirements for distribution of real-time last
sale prices over the Internet for reference purposes, rather than as a
basis for making trading decisions.
The NYSE Amex Realtime Reference Prices service will allow Internet
service providers, traditional market data vendors, and others (``NYSE
Amex-Only Vendors'') to make available NYSE Amex Realtime Reference
Prices on a real-time basis.\4\ The NYSE Amex Realtime Reference Price
information includes last sale prices for all securities that trade on
the Exchange, updated in real-time. In addition, the product also
includes open, high and low prices and cumulative volume. The Exchange
anticipates that it will update these data elements every second,
though initially it will update them once per minute. The product does
not include bid/ask quotations or the size of each trade.
---------------------------------------------------------------------------

\4\ The Exchange notes that it will make the NYSE Amex Realtime
Reference Prices available to vendors no earlier than it makes those
prices available to the processor under the CTA and Nasdaq/UTP
Plans.
---------------------------------------------------------------------------

The Exchange will not permit NYSE Amex-Only Vendors to provide NYSE
Amex Realtime Reference Prices in a context in which a trading or
order-routing decision can be implemented unless the NYSE Amex-Only
Vendor also provides consolidated displays of Network A last sale
prices available in an equivalent manner, as Rule 603(c)(1) of
Regulation NMS requires.
The service would eliminate some of the administrative burdens
associated with the distribution of real-time CTA prices. The service
would feature a flat, fixed monthly vendor fee, no user-based fees, no
vendor reporting requirements, and no professional or non-professional
subscriber agreements.

[[Page 67276]]

b. The Fees
The Exchange proposes to establish a $10,000 monthly flat fee that
entitles an NYSE Amex-Only Vendor to receive access to the NYSE Amex
Realtime Reference Prices datafeed. For that fee, the NYSE Amex-Only
Vendor may provide unlimited NYSE Amex Realtime Reference Prices to an
unlimited number of the NYSE Amex-Only Vendor's subscribers and
customers. The Exchange does not propose to impose any device or end-
user fee for the NYSE Amex-Only Vendors' distribution of NYSE Amex
Realtime Reference Prices.
In addition, the Exchange proposes to establish as an alternative
to the fixed monthly fee a fee of $.004 for each real-time reference
price that a NYSE Amex-Only Vendor disseminates to its customers. The
Exchange proposes to limit a NYSE Amex-Only Vendor's exposure under
this alternative fee by setting $10,000, the same amount as the
proposed fixed monthly rate, as the maximum fee that an NYSE Amex-Only
Vendor would have to pay for real-time reference prices that it
disseminates in any calendar month pursuant to the per-query fee.
In order to take advantage of the per-query fee, a NYSE Amex-Only
Vendor must document in its Exhibit A that it has the ability to
measure accurately the number of queries and must have the ability to
report aggregate query quantities on a monthly basis.
The Exchange will impose the per-query fee only on the
dissemination of real-time reference prices. NYSE Amex-Only Vendors may
provide delayed data services in the same manner as they do today.
The per-query charge is imposed on NYSE Amex-Only Vendors, not end-
users, and is payable on a monthly basis. NYSE Amex-Only Vendors may
elect to disseminate NYSE Amex Realtime Reference Prices pursuant to
the per-query fee rather than the fixed monthly fee.
c. Justification of Fees
The proposed flat monthly fee and per-query fee for the NYSE Amex
Realtime Reference Prices service enable Internet service providers and
traditional vendors to contribute to the Exchange's operating costs in
a manner that is appropriate for the distribution of last sale price
information in the form taken by the proposed service.
In setting the level of the NYSE Amex Realtime Reference Prices
fee, the Exchange took into consideration several factors, including:
(1) The fees that Nasdaq, NYSE and NYSE Arca are charging for
similar services;
(2) Consultation with some of the entities that the Exchange
anticipates will be the most likely to take advantage of the proposed
service;
(3) The contribution of market data revenues that the Exchange
believes is appropriate for entities that are most likely to take
advantage of the proposed service;
(4) The contribution that revenues accruing from the proposed fee
will make to meet the overall costs of the Exchange's operations;
(5) The savings in administrative and reporting costs that the NYSE
Amex Realtime Reference Prices service will provide to NYSE Amex-Only
Vendors; and
(6) The fact that the proposed fees provide alternatives to
existing fees under the CTA and Nasdaq/UTP Plans, alternatives that
vendors will purchase only if they determine that the perceived
benefits outweigh the cost.
The Exchange believes that the levels of the fixed monthly fee and
the per-query fee are consistent with the approach set forth in the
order by which the Commission approved ArcaBook fees for NYSE Arca.\5\
In the ArcaBook Approval Order, the Commission stated that ``when
possible, reliance on competitive forces is the most appropriate and
effective means to assess whether the terms for the distribution of
non-core data are equitable, fair and reasonable, and not unreasonably
discriminatory.'' \6\ It noted that if significant competitive forces
apply to a proposal, the Commission will approve it unless a
substantial countervailing basis exists.
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\5\ See Release [sic] No. 59039 (December 2, 2008), 73 FR 74770
(December 9, 2008) (SR-NYSEArca-2006-21) (the ``ArcaBook Approval
Order'').
\6\ Id. at 74771.
---------------------------------------------------------------------------

NYSE Amex Realtime Reference Prices constitute ``non-core data.''
The Exchange does not require a central processor to consolidate and
distribute the product to the public pursuant to joint-SRO plans.
Rather, the Exchange distributes the product voluntarily.
In the case of NYSE Amex Realtime Reference Prices, both of the two
types of competitive forces that the Commission described in the
ArcaBook Approval Order are present: The Exchange has a compelling need
to attract order flow and the product competes with a number of
alternative products.
The Exchange must compete vigorously for order flow to maintain its
share of trading volume. This requires the Exchange to act reasonably
in setting market data fees for non-core products such as NYSE Amex
Realtime Reference Prices. The Exchange hopes that NYSE Amex Realtime
Reference Prices will enable vendors to distribute NYSE Amex last sale
price data widely among investors, and thereby provide a means for
promoting the Exchange's visibility in the marketplace.
In addition to the need to attract order flow, the availability of
alternatives to NYSE Amex Realtime Reference Prices significantly
constrain the prices at which the Exchange can market NYSE Amex
Realtime Reference Prices. All national securities exchanges, 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 for NYSE Amex Realtime Reference Prices. Currently, the New
York Stock Exchange, NYSE Arca and the Nasdaq Stock Market offer
similar services.
The information available in NYSE Amex Realtime Reference is
included in the CTA core data feed, which also includes the size of
trades, as well as last sale information from other markets. Even
though NYSE Amex Realtime Reference Prices omits size and provides
prices that are not consolidated with those of other markets, investors
may select it as a less expensive alternative to the CTA Plan's
consolidated last sale price services for certain purposes. (Rule
603(c) of Regulation NMS requires vendors to make the core data feeds
available to customers when trading and order-routing decisions can be
implemented.)
d. Administrative Requirements
The Exchange proposes to require the NYSE Amex-Only Vendor to
identify the NYSE Amex trade price by placing the text ``NYSE Amex
Data'' in close proximity to the display of each NYSE Amex Realtime
Reference Price or series of NYSE Amex Realtime Reference Prices, or by
complying with such other identification requirement as to which NYSE
Amex may agree.
The NYSE Amex-Only Vendor may make NYSE Amex Realtime Reference
Prices available without having to differentiate between professional
subscribers and nonprofessional subscribers, without having to account
for the extent of access to the data, and without having to report the
number of users.
e. Contracts
NYSE Amex proposes to allow NYSE Amex-Only Vendors to provide NYSE
Amex Realtime Reference Prices without requiring the end-users to enter

[[Page 67277]]

into contracts for the benefit of the Exchange.
Instead, the Exchange proposes to require NYSE Amex-Only Vendors to
provide a readily visible hyperlink that will send the end-user to a
warning notice about the end-user's receipt and use of market data. The
notice would be similar to the notice that vendors provide today when
providing CTA delayed data services.
The Exchange will require NYSE Amex-Only Vendors to enter into the
form of ``vendor'' agreement into which the CTA and CQ Plans require
recipients of the Network A datafeeds to enter (the ``Network A Vendor
Form''). The Network A Vendor Form will authorize the NYSE Amex-Only
Vendor to provide the NYSE Amex Realtime Reference Prices service to
its subscribers and customers.
The Network A Participants drafted the Network A Vendor Form as a
one-size-fits-all form to capture most categories of market data
dissemination. It is sufficiently generic to accommodate NYSE Amex
Realtime Reference Prices. The Commission has approved the Network A
Vendor Form.\7\
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\7\ See Securities Exchange Act Release Nos. 28407 (September 6,
1990), 55 FR 37276 (September 10, 1990) (File No. 4-281); 49185
(February 4, 2004), 69 FR 6704 (February 11, 2004) (SR-CTA/CQ-2003-
01).
---------------------------------------------------------------------------

The Exchange will supplement the Network A Vendor Form with an
Exhibit C that will provide above-described terms and conditions that
are unique to the NYSE Amex Realtime Reference Prices service. The
proposed Exhibit C is attached to the proposed rule change as Exhibit
5. The supplemental Exhibit C terms and conditions would govern:
The restriction against providing the service in the
context of a trading or order routing service;
The replacement of end-user agreements with a hyperlink to
a notice;
The substance of the notice; and
The ``NYSE Amex Data'' labeling requirement.
2. Statutory Basis
The bases under the Securities Exchange Act of 1934 (the ``Act'')
for the proposed rule change are the requirement under Section 6(b)(4)
\8\ that an exchange have rules that provide for the equitable
allocation of reasonable dues, fees and other charges among its members
and other persons using its facilities and the requirements under
Section 6(b)(5) \9\ that the rules of an exchange be designed to
promote just and equitable principles of trade and not to permit unfair
discrimination between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The proposed rule change would benefit investors by facilitating
their prompt access to widespread, free, real-time pricing information
contained in the NYSE Amex Realtime Reference Prices service. In
addition, the Exchange believes that the proposed fee would allow
entities that provide market data to large numbers of investors, which
are the entities most likely to take advantage of the proposed service,
to make an appropriate contribution towards meeting the overall costs
of the Exchange's operations.
The Exchange notes that its proposed fee compares favorably with
the fees that Nasdaq, NYSE and NYSE Arca are charging for similar
services. Because the proposed fee is substantially lower than those of
Nasdaq, NYSE and NYSE Arca, it offers any vendor that wishes to provide
its customers with a single market's data (as opposed to a more
expensive consolidated data service) a less expensive alternative to
Nasdaq, NYSE and NYSE Arca.

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

NYSE Amex Realtime Reference Prices proposes to provide an
alternative to existing fees and does not alter or rescind any existing
fees. In addition, it amounts to a competitive response to the products
that Nasdaq, NYSE and NYSE Arca have commenced to make available. For
those reasons, the Exchange does not believe that the proposed rule
change will result in any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

The Exchange has discussed the proposed rules change with those
entities that the Exchange believes would be the most likely to take
advantage of the proposed NYSE Amex Realtime Reference Prices service
by becoming NYSE Amex-Only Vendors. While those entities have not
submitted formal, written comments on the proposal, the Exchange has
incorporated some of their ideas into the proposal and the proposed
rule change reflects their input. The Exchange has not received any
unsolicited written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-NYSEAmex-2009-85 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2009-85. 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 subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of such
filing also will be available for

[[Page 67278]]

inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEAmex-2009-85 and should
be submitted on or before January 8, 2010.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30079 Filed 12-17-09; 8:45 am]
BILLING CODE 8011-01-P

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