Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving a Proposed Rule Change Relating to Market Data Fees, 2915-2917 [2010-704]

Download as PDF Federal Register / Vol. 75, No. 11 / Tuesday, January 19, 2010 / Notices shares would pay a fee of $0.0028 when removing liquidity from the Matching System and a rebate of $0.0032 when they provided liquidity. Under this program, Participants which, on a net basis, provide Tape A and C securities would pay fees at lower volume levels but, as their monthly ADV increases, this rate structure will ultimately invert. Through this mechanism, the Exchange seeks to maximize revenue at lower volume levels while incenting all Participants to provide greater liquidity to the Matching System. Furthermore, the Exchange believes that the increased rebate will help attract additional orders to be displayed and executed on our trading facilities. The Exchange notes that a number of other exchanges have tiered fee schedules which offer different rates depending on the monthly ADV of liquidity-providing executions on their facilities, and our proposed fee structure will help us remain competitive with these entities.5 The Exchange believes that the implementation of a tiered fee schedule may incent firms to display their orders on our trading facility and increase the volume of securities traded here. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(4) of the Act 7 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members. Among other things, the change to the fee schedule would provide incentives to Participants to increase the amount of liquidity provided on our trading facilities, which may contribute to an increase in trading volume on the Exchange and in the income derived therefrom. B. Self-Regulatory Organization’s Statement on Burden on Competition jlentini on DSKJ8SOYB1PROD with NOTICES The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 5 See, e.g., Nasdaq Stock Market (‘‘Nasdaq’’) Rule 7018; National Stock Exchange (‘‘NSX’’) Fee Schedule; NYSE Arca Fee Schedule; International Securities Exchange (‘‘ISE’’) Fee Schedule (equity mid-point match orders). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). VerDate Nov<24>2008 16:28 Jan 15, 2010 Jkt 220001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change is effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act 8 and Rule 19b– 4(f)(2) thereunder.9 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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 Number SR–CHX–2010–01 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CHX–2010–01. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (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 8 15 9 17 PO 00000 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00072 Fmt 4703 Sfmt 4703 2915 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 will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–CHX–2010– 01 and should be submitted on or before February 9, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–799 Filed 1–15–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61317; File No. SR–ISE– 2009–103] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving a Proposed Rule Change Relating to Market Data Fees January 8, 2010. I. Introduction On November 25, 2009, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend its Schedule of Fees. Notice of the proposed rule change was published for comment in the Federal Register on December 1, 2009.3 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of Proposal The Exchange proposes to amend its Schedule of Fees to (1) increase the annual subscription rate for the ISE Open/Close Trade Profile, (2) adopt subscription fees for the sale of three 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 61086 (December 8, 2009), 74 FR 64783 (‘‘Notice’’). 1 15 E:\FR\FM\19JAN1.SGM 19JAN1 2916 Federal Register / Vol. 75, No. 11 / Tuesday, January 19, 2010 / Notices new market data offerings, all of which are based on the ISE Open/Close Trade Profile, and (3) increase the annual subscription and ad-hoc request rates for ISE’s Historical Options Tick Data. 1. ISE Open/Close Trade Profile ISE currently sells a market data offering comprised of the entire opening and closing trade data of ISE listed options of both customers and firms (‘‘ISE Open/Close Trade Profile’’).4 The data is compiled and formatted by ISE as an end of day file. This market data offering is currently available to both members and non-members on an annual subscription basis.5 ISE represents that it has added additional fields to this offering over the last two years and therefore, the costs of gathering and storing the data underlying the ISE Open/Close Trade Profile have increased. As a result, ISE now proposes to increase the subscription rate for both members and non-members to $750 per month, effective January 4, 2010. 2. New Open/Close Market Data Products The Exchange proposes to expand its suite of ISE Open/Close Trade Profile market data offerings with three new products. a. ISE Open/Close Trade Profile Intraday The ISE Open/Close Trade Profile Intraday offering uses the same process as that used for the ISE Open/Close Trade Profile. The ISE Open/Close Trade Profile Intraday has the same trade-related fields contained in the ISE Open/Close Trade Profile. The ISE Open/Close Trade Profile Intraday file contains data that is updated at 10minute intervals throughout the trading day. ISE proposes to charge both members and non-members $2,000 per month on an annual subscription basis. jlentini on DSKJ8SOYB1PROD with NOTICES b. Historical ISE Open/Close Trade Profile Intraday The Historical ISE Open/Close Trade Profile Intraday offering is a compilation of the ISE Open/Close Trade Profile Intraday files. ISE proposes to sell Historical ISE Open/Close Trade Profile Intraday on an ad-hoc basis. An ad-hoc request can be for any number of months, quarters or years for which the data is available. Members and nonmembers will be able to purchase this data by paying a one-time fee of $1,000 4 See Securities Exchange Act Release No. 56254 (August 15, 2007), 72 FR 47104 (August 22, 2007) (approving SR–ISE–2007–70). 5 The current subscription rate for both members and non-members is $600 per month. VerDate Nov<24>2008 16:28 Jan 15, 2010 Jkt 220001 per month, $2,000 per quarter or $8,000 per year.6 c. ISE Open/Close Trade Profile and ISE Open/Close Trade Profile Intraday As noted above, the Exchange already sells the ISE Open/Close Trade Profile end of day data. To incentivize current subscribers of ISE Open/Close Trade Profile to also subscribe to the ISE Open/Close Trade Profile Intraday offering, the Exchange proposes to offer a discounted subscription rate. Subscribers to both the ISE Open/Close Trade Profile and the ISE Open/Close Trade Profile Intraday will pay an annual subscription rate of $2,500 per month. All of the ISE Open/Close Trade Profile market data offerings, including the new products proposed by the Exchange, are compiled and formatted by ISE and sold as a zipped file. 3. Historical Options Tick Data ISE currently creates market data that consists of options quotes and orders that are generated by its members and all trades that are executed on the Exchange. ISE also produces a Best Bid/ Offer, or BBO, with the aggregate size from all outstanding quotes and orders at the top price level, or the ‘‘top of the book.’’ This data is formatted according to Options Price Reporting Authority (‘‘OPRA’’) specification and sent to OPRA for redistribution. OPRA processes ISE data along with the same data sets from the other six options exchanges and creates a National BBO, or ‘‘NBBO,’’ from all seven options exchanges. ISE also captures the OPRA tick data 7 and makes it available as an ‘‘end of day’’ file 8 or as a ‘‘historical’’ file 9 for ISE members and non-ISE members alike. ISE has data available from June 2005 through the present month. ISE currently charges all subscribers of 6 For example, a subscriber that wants to purchase data for August 2009 would pay $1,000; a subscriber that wants to purchase data for July, August and September of 2009 would pay $2,000; a subscriber that wants to purchase data for all twelve months of 2009 would pay $8,000. 7 The Exchange collects this data throughout each trading day and at the end of each trading day, the Exchange compresses the data and uploads it onto a server. Once the data is loaded onto the server, it is then made available to subscribers. 8 An end of day file refers to OPRA tick data for a trading day that is distributed prior to the opening of the next trading day. An end of day file is made available to subscribers as soon as practicable at the end of each trading day on an on-going basis pursuant to an annual subscription or through an ad-hoc request. 9 An end of day file that is distributed after the start of the next trading day is called a historical file. A historical file is available to customers for a pre-determined date range by ad-hoc requests only. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 Historical Options Tick Data $1,500 per month per firm on an annual subscription basis. For ad-hoc requests, ISE charges $85 per day, with a minimum order size of $1,000 plus a processing fee to pay for hard drives and shipping. ISE also currently charges a processing fee of $499 per order for up to 400 Giga Bytes (GB). An order that exceeds 400 GB is currently charged an additional $399 for up to another 400 GB.10 The Exchange now proposes to increase the annual subscription rate to $2,000 per month per firm. For ad-hoc requests, the Exchange proposes to increase the rate to $120 per day. The minimum order size of $1,000 will remain unchanged as will the processing fees of $499 and $399. As the size of the data has increased since the Exchange first introduced this product, the Exchange is also increasing the size allowance for ad-hoc requests from 400 Giga Bytes to 1.5 Terabytes (TB). Pursuant to this proposed rule change, for ad-hoc requests, the Exchange will charge a processing fee of $499 per order for up to 1.5 TB. An order that exceeds 1.5 TB will be charged an additional $399 for up to another 1.5 TB. These fee changes will be made effective by the Exchange on January 4, 2010. The Exchange’s market research indicates that OPRA tick data is primarily used by market participants in the financial services industry for backtesting trading models, post-trade analysis, compliance purposes and analyzing time and sales information. This market data offering provides both ISE members and non-members with a choice to subscribe to a service that provides a daily file on an on-going basis (end of day file), or simply request data on an ad-hoc basis for a predetermined date range (historical file). III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.11 In particular, the 10 See Securities Exchange Act Release Nos. 53212 (February 2, 2006), 71 FR 6803 (February 9, 2006) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Establishing Fees for Historical Options Tick Market Data) (SR–ISE– 2006–07); and 53390 (February 28, 2006), 71 FR 11457 (March 7, 2006) (Order Granting Accelerated Approval of a Proposed Rule Change Establishing Fees for Historical Options Tick Market Data for Non-Members) (SR–ISE–2006–08). 11 In approving this proposed rule change, the Commission has considered the proposed rule’s E:\FR\FM\19JAN1.SGM 19JAN1 Federal Register / Vol. 75, No. 11 / Tuesday, January 19, 2010 / Notices jlentini on DSKJ8SOYB1PROD with NOTICES Commission finds that the proposed rule change is consistent with the requirements of Section 6(b)(4) of the Act,12 which requires that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using its facilities. The Commission also believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,13 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission further believes that the proposed rule change is consistent with Section 6(b)(8) of the Act 14 in that it does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Because ISE’s instant proposal relates to the distribution of non-core data, the Commission will apply the marketbased approach set forth in the Commission’s approval of a NYSE Arca market data proposal.15 The Commission believes that ISE was subject to significant competitive forces in setting the terms of its proposal, including the level of fees.16 Specifically, the Exchange has a compelling need to attract order flow to maintain its share of trading volume, imposing pressure on the Exchange to act reasonably in establishing fees for these data offerings.17 Further, ISE is impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 12 15 U.S.C. 78f(b)(4). 13 15 U.S.C. 78f(b)(5). 14 15 U.S.C. 78f(b)(8). 15 See Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770 (December 9, 2008) (SR–NYSEArca–2006–21). 16 The Commission has previously made a finding that the options industry is subject to significant competitive forces. See Securities Exchange Act Release No. 59949 (May 20, 2009), 74 FR 25593 (May 28, 2009) (SR–ISE–2009–97) (order approving ISE’s proposal to establish fees for a real-time depth of market data offering). 17 ISE states that it has a compelling need to attract order flow from market participants in order to maintain its share of trading volume. ISE further states that this compelling need to attract order flow imposes significant pressure on ISE to act reasonably in setting the fees for its market data VerDate Nov<24>2008 16:28 Jan 15, 2010 Jkt 220001 constrained in pricing these data offerings because of the availability of alternatives to purchasing ISE’s market data products.18 Finally, the Commission does not believe that a substantial countervailing basis exists to support a finding that the proposed fees fail to meet the requirements of the Act or the rules thereunder. The Commission did not receive any comments on the terms of the proposal. Further, the fees charged will be the same for all market participants, and therefore do not unreasonably discriminate among market participants. In addition, ISE represents that it has enhanced its Open/Close Trade Profile and Historical Options Ticket Data offerings, and that the increase ‘‘is nominal in light of the increased costs borne by the Exchange for the enhancements.’’ 19 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–ISE–2009– 103), be and hereby is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–704 Filed 1–15–10; 8:45 am] BILLING CODE 8011–01–P offerings, particularly given that the market participants that will pay such fees often will be the same market participants from whom ISE must attract order flow. These market participants include broker-dealers that control the handling of a large volume of customer and proprietary order flow. ISE states that, given the portability of order flow from one exchange to another, any exchange that sought to charge unreasonably high market data fees would risk alienating many of the same customers on whose orders it depends for competitive survival. See Notice, supra note 3, at 64785. 18 For example, the Exchange represents that all of the information available in the Historical Options Tick Data product is available from the core data feed offered by the Options Price Reporting Authority. Further, the Exchange represents that CBOE is a potential competitor because it also sells an Open/Close market data product. See Notice, supra note 3, at 64785. 19 See Notice, supra note 3, at 64784. 20 17 CFR 200.30–3(a)(12). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 2917 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61314; File No. SR– NASDAQ–2009–112] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend NASDAQ Rules 1140 and 3080 to Reflect Changes to a Corresponding FINRA Rule January 7, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 30, 2009, The NASDAQ Stock Market LLC (the ‘‘Exchange’’ or ‘‘NASDAQ’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as constituting a noncontroversial rule change under Rule 19b–4(f)(6) under the Act,3 which renders the proposal effective upon filing with the Commission. 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 the Substance of the Proposed Rule Change The Exchange is filing this proposed rule change to amend NASDAQ Rules 1140 and 3080 to reflect recent changes to a corresponding rule of the Financial Industry Regulatory Authority (‘‘FINRA’’). The Exchange will implement the proposed rule change thirty days after the date of the filing. The text of the proposed rule change is available at https:// nasdaqomx.cchwallstreet.com, at the Exchange’s principal office, on the Commission’s Web site at https:// www.sec.gov, 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 Exchange 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 these statements may be examined at the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\19JAN1.SGM 19JAN1

Agencies

[Federal Register Volume 75, Number 11 (Tuesday, January 19, 2010)]
[Notices]
[Pages 2915-2917]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-704]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61317; File No. SR-ISE-2009-103]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Order Approving a Proposed Rule Change Relating to Market Data 
Fees

January 8, 2010.

I. Introduction

    On November 25, 2009, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its Schedule of Fees. 
Notice of the proposed rule change was published for comment in the 
Federal Register on December 1, 2009.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 61086 (December 8, 
2009), 74 FR 64783 (``Notice'').
---------------------------------------------------------------------------

II. Description of Proposal

    The Exchange proposes to amend its Schedule of Fees to (1) increase 
the annual subscription rate for the ISE Open/Close Trade Profile, (2) 
adopt subscription fees for the sale of three

[[Page 2916]]

new market data offerings, all of which are based on the ISE Open/Close 
Trade Profile, and (3) increase the annual subscription and ad-hoc 
request rates for ISE's Historical Options Tick Data.

1. ISE Open/Close Trade Profile

    ISE currently sells a market data offering comprised of the entire 
opening and closing trade data of ISE listed options of both customers 
and firms (``ISE Open/Close Trade Profile'').\4\ The data is compiled 
and formatted by ISE as an end of day file. This market data offering 
is currently available to both members and non-members on an annual 
subscription basis.\5\ ISE represents that it has added additional 
fields to this offering over the last two years and therefore, the 
costs of gathering and storing the data underlying the ISE Open/Close 
Trade Profile have increased. As a result, ISE now proposes to increase 
the subscription rate for both members and non-members to $750 per 
month, effective January 4, 2010.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 56254 (August 15, 
2007), 72 FR 47104 (August 22, 2007) (approving SR-ISE-2007-70).
    \5\ The current subscription rate for both members and non-
members is $600 per month.
---------------------------------------------------------------------------

2. New Open/Close Market Data Products

    The Exchange proposes to expand its suite of ISE Open/Close Trade 
Profile market data offerings with three new products.
a. ISE Open/Close Trade Profile Intraday
    The ISE Open/Close Trade Profile Intraday offering uses the same 
process as that used for the ISE Open/Close Trade Profile. The ISE 
Open/Close Trade Profile Intraday has the same trade-related fields 
contained in the ISE Open/Close Trade Profile. The ISE Open/Close Trade 
Profile Intraday file contains data that is updated at 10-minute 
intervals throughout the trading day. ISE proposes to charge both 
members and non-members $2,000 per month on an annual subscription 
basis.
b. Historical ISE Open/Close Trade Profile Intraday
    The Historical ISE Open/Close Trade Profile Intraday offering is a 
compilation of the ISE Open/Close Trade Profile Intraday files. ISE 
proposes to sell Historical ISE Open/Close Trade Profile Intraday on an 
ad-hoc basis. An ad-hoc request can be for any number of months, 
quarters or years for which the data is available. Members and non-
members will be able to purchase this data by paying a one-time fee of 
$1,000 per month, $2,000 per quarter or $8,000 per year.\6\
---------------------------------------------------------------------------

    \6\ For example, a subscriber that wants to purchase data for 
August 2009 would pay $1,000; a subscriber that wants to purchase 
data for July, August and September of 2009 would pay $2,000; a 
subscriber that wants to purchase data for all twelve months of 2009 
would pay $8,000.
---------------------------------------------------------------------------

c. ISE Open/Close Trade Profile and ISE Open/Close Trade Profile 
Intraday
    As noted above, the Exchange already sells the ISE Open/Close Trade 
Profile end of day data. To incentivize current subscribers of ISE 
Open/Close Trade Profile to also subscribe to the ISE Open/Close Trade 
Profile Intraday offering, the Exchange proposes to offer a discounted 
subscription rate. Subscribers to both the ISE Open/Close Trade Profile 
and the ISE Open/Close Trade Profile Intraday will pay an annual 
subscription rate of $2,500 per month.
    All of the ISE Open/Close Trade Profile market data offerings, 
including the new products proposed by the Exchange, are compiled and 
formatted by ISE and sold as a zipped file.

3. Historical Options Tick Data

    ISE currently creates market data that consists of options quotes 
and orders that are generated by its members and all trades that are 
executed on the Exchange. ISE also produces a Best Bid/Offer, or BBO, 
with the aggregate size from all outstanding quotes and orders at the 
top price level, or the ``top of the book.'' This data is formatted 
according to Options Price Reporting Authority (``OPRA'') specification 
and sent to OPRA for redistribution. OPRA processes ISE data along with 
the same data sets from the other six options exchanges and creates a 
National BBO, or ``NBBO,'' from all seven options exchanges.
    ISE also captures the OPRA tick data \7\ and makes it available as 
an ``end of day'' file \8\ or as a ``historical'' file \9\ for ISE 
members and non-ISE members alike. ISE has data available from June 
2005 through the present month. ISE currently charges all subscribers 
of Historical Options Tick Data $1,500 per month per firm on an annual 
subscription basis. For ad-hoc requests, ISE charges $85 per day, with 
a minimum order size of $1,000 plus a processing fee to pay for hard 
drives and shipping. ISE also currently charges a processing fee of 
$499 per order for up to 400 Giga Bytes (GB). An order that exceeds 400 
GB is currently charged an additional $399 for up to another 400 
GB.\10\
---------------------------------------------------------------------------

    \7\ The Exchange collects this data throughout each trading day 
and at the end of each trading day, the Exchange compresses the data 
and uploads it onto a server. Once the data is loaded onto the 
server, it is then made available to subscribers.
    \8\ An end of day file refers to OPRA tick data for a trading 
day that is distributed prior to the opening of the next trading 
day. An end of day file is made available to subscribers as soon as 
practicable at the end of each trading day on an on-going basis 
pursuant to an annual subscription or through an ad-hoc request.
    \9\ An end of day file that is distributed after the start of 
the next trading day is called a historical file. A historical file 
is available to customers for a pre-determined date range by ad-hoc 
requests only.
    \10\ See Securities Exchange Act Release Nos. 53212 (February 2, 
2006), 71 FR 6803 (February 9, 2006) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change Establishing Fees for 
Historical Options Tick Market Data) (SR-ISE-2006-07); and 53390 
(February 28, 2006), 71 FR 11457 (March 7, 2006) (Order Granting 
Accelerated Approval of a Proposed Rule Change Establishing Fees for 
Historical Options Tick Market Data for Non-Members) (SR-ISE-2006-
08).
---------------------------------------------------------------------------

    The Exchange now proposes to increase the annual subscription rate 
to $2,000 per month per firm. For ad-hoc requests, the Exchange 
proposes to increase the rate to $120 per day. The minimum order size 
of $1,000 will remain unchanged as will the processing fees of $499 and 
$399. As the size of the data has increased since the Exchange first 
introduced this product, the Exchange is also increasing the size 
allowance for ad-hoc requests from 400 Giga Bytes to 1.5 Terabytes 
(TB). Pursuant to this proposed rule change, for ad-hoc requests, the 
Exchange will charge a processing fee of $499 per order for up to 1.5 
TB. An order that exceeds 1.5 TB will be charged an additional $399 for 
up to another 1.5 TB. These fee changes will be made effective by the 
Exchange on January 4, 2010.
    The Exchange's market research indicates that OPRA tick data is 
primarily used by market participants in the financial services 
industry for back-testing trading models, post-trade analysis, 
compliance purposes and analyzing time and sales information. This 
market data offering provides both ISE members and non-members with a 
choice to subscribe to a service that provides a daily file on an on-
going basis (end of day file), or simply request data on an ad-hoc 
basis for a pre-determined date range (historical file).

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities 
exchange.\11\ In particular, the

[[Page 2917]]

Commission finds that the proposed rule change is consistent with the 
requirements of Section 6(b)(4) of the Act,\12\ which requires that the 
rules of a national securities exchange provide for the equitable 
allocation of reasonable dues, fees and other charges among members and 
issuers and other persons using its facilities. The Commission also 
believes that the proposed rule change is consistent with Section 
6(b)(5) of the Act,\13\ which requires, among other things, that the 
rules of an exchange be designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest; and not be designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers. The Commission further believes that the proposed rule change 
is consistent with Section 6(b)(8) of the Act \14\ in that it does not 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \11\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(4).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Because ISE's instant proposal relates to the distribution of non-
core data, the Commission will apply the market-based approach set 
forth in the Commission's approval of a NYSE Arca market data 
proposal.\15\ The Commission believes that ISE was subject to 
significant competitive forces in setting the terms of its proposal, 
including the level of fees.\16\ Specifically, the Exchange has a 
compelling need to attract order flow to maintain its share of trading 
volume, imposing pressure on the Exchange to act reasonably in 
establishing fees for these data offerings.\17\ Further, ISE is 
constrained in pricing these data offerings because of the availability 
of alternatives to purchasing ISE's market data products.\18\ Finally, 
the Commission does not believe that a substantial countervailing basis 
exists to support a finding that the proposed fees fail to meet the 
requirements of the Act or the rules thereunder. The Commission did not 
receive any comments on the terms of the proposal. Further, the fees 
charged will be the same for all market participants, and therefore do 
not unreasonably discriminate among market participants. In addition, 
ISE represents that it has enhanced its Open/Close Trade Profile and 
Historical Options Ticket Data offerings, and that the increase ``is 
nominal in light of the increased costs borne by the Exchange for the 
enhancements.'' \19\
---------------------------------------------------------------------------

    \15\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
    \16\ The Commission has previously made a finding that the 
options industry is subject to significant competitive forces. See 
Securities Exchange Act Release No. 59949 (May 20, 2009), 74 FR 
25593 (May 28, 2009) (SR-ISE-2009-97) (order approving ISE's 
proposal to establish fees for a real-time depth of market data 
offering).
    \17\ ISE states that it has a compelling need to attract order 
flow from market participants in order to maintain its share of 
trading volume. ISE further states that this compelling need to 
attract order flow imposes significant pressure on ISE to act 
reasonably in setting the fees for its market data offerings, 
particularly given that the market participants that will pay such 
fees often will be the same market participants from whom ISE must 
attract order flow. These market participants include broker-dealers 
that control the handling of a large volume of customer and 
proprietary order flow. ISE states that, given the portability of 
order flow from one exchange to another, any exchange that sought to 
charge unreasonably high market data fees would risk alienating many 
of the same customers on whose orders it depends for competitive 
survival. See Notice, supra note 3, at 64785.
    \18\ For example, the Exchange represents that all of the 
information available in the Historical Options Tick Data product is 
available from the core data feed offered by the Options Price 
Reporting Authority. Further, the Exchange represents that CBOE is a 
potential competitor because it also sells an Open/Close market data 
product. See Notice, supra note 3, at 64785.
    \19\ See Notice, supra note 3, at 64784.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-ISE-2009-103), be and hereby is 
approved.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-704 Filed 1-15-10; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.