Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for Display Use of the NYSE MKT BBO and NYSE MKT Trades Market Data Products and Making Certain Technical Changes to the Fee Schedule, 51775-51780 [2013-20339]

Download as PDF Federal Register / Vol. 78, No. 162 / Wednesday, August 21, 2013 / Notices For the foregoing reasons, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act 37 and the rules and regulations thereunder applicable to a national securities exchange. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,38 that the proposed rule change (SR–NYSEArca– 2013–60) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.39 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–20336 Filed 8–20–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70212; File No. SR– NYSEMKT–2013–69] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for Display Use of the NYSE MKT BBO and NYSE MKT Trades Market Data Products and Making Certain Technical Changes to the Fee Schedule August 15, 2013. mstockstill on DSK4VPTVN1PROD with NOTICES 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 August 1, 2013, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. authority to set limits on the positions that any person may take in such futures. These limits may be directly set by the CFTC or by the markets on which such futures are traded. The Commission has no role in establishing position limits on such futures even though such limits could impact an exchange-traded product that is under the jurisdiction of the Commission. 37 15 U.S.C. 78f(b)(5). 38 15 U.S.C. 78s(b)(2). 39 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. VerDate Mar<15>2010 16:29 Aug 20, 2013 Jkt 229001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the fees for display use of the NYSE MKT BBO and NYSE MKT Trades market data products and make certain technical changes to the fee schedule. The changes will be operative on August 1, 2013. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, 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 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the fees for display use of the NYSE MKT BBO 4 and NYSE MKT Trades 5 market data products and make certain technical changes to the fee schedule. The changes will be operative on August 1, 2013. The Exchange currently charges $10 per month for professional users and $5 per month for non-professional users for 4 NYSE MKT BBO is an NYSE MKT-only market data feed that allows a vendor to redistribute on a real-time basis the same best-bid-and-offer information that the Exchange reports under the Consolidated Quotation (‘‘CQ’’) Plan for inclusion in the CQ Plan’s consolidated quotation information data stream. The data feed includes the best bids and offers for all securities that are traded on the Exchange and for which NYSE MKT reports quotes under the CQ Plan. 5 NYSE MKT Trades is an NYSE MKT-only market data feed that allows a vendor to redistribute on a real-time basis the same last sale information that the Exchange reports under the Consolidated Tape Association (‘‘CTA’’) Plan for inclusion in the CTA Plan’s consolidated data streams and certain other related data elements. Specifically, NYSE MKT Trades includes the real-time last sale price, time, size, and bid-ask quotations for each security traded on the Exchange and a stock summary message. The stock summary message updates every minute and includes NYSE MKT’s opening price, high price, low price, closing price, and cumulative volume for the security. PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 51775 display use of NYSE MKT BBO.6 Alternatively, the Exchange charges $0.005 per quote for display use of NYSE MKT BBO for non-professional users, capped at $5 per month per nonprofessional user.7 The Exchange currently charges $10 per month for professional users for display use of NYSE MKT Trades. The Exchange currently does not offer NYSE MKT Trades for non-professional users under a per-user fee structure.8 The Exchange also charges an access fee of $750 per month for NYSE MKT BBO and an access fee of $750 for NYSE MKT Trades. However, a single access fee applies for clients receiving both NYSE MKT BBO and NYSE MKT Trades. Vendors that redistribute NYSE MKT Trades data pay a redistribution fee of $750 per month. The Exchange proposes to lower the professional user fees for display use of NYSE MKT BBO from $10 per month to $1 per month, lower the nonprofessional user fees for display use of NYSE MKT BBO from $5 per month to $0.05 per month, and eliminate the per quote option for display use of NYSE MKT BBO for non-professional users. The Exchange also proposes to lower the professional user fee for display use of NYSE MKT Trades from $10 per month to $1 per month and introduce a fee for display use of NYSE MKT Trades by non-professional users of $0.05 per month. The Exchange also proposes to establish a $20,000 per month enterprise fee for an unlimited number of professional and non-professional users for NYSE MKT BBO and a $20,000 per month enterprise fee for an unlimited number of professional and nonprofessional users for NYSE MKT Trades. A single enterprise fee will apply for vendors receiving both NYSE MKT BBO and NYSE MKT Trades. As an example, under the current fee structure, if a firm had 1,500 professional users who each received 6 The Exchange applies the same criteria for qualification as a ‘‘non-professional subscriber’’ as the CTA and CQ Plan participants use. See Securities Exchange Act Release No. 62187 (May 27, 2010), 75 FR 31500, 31502 (June 3, 2010) (SR– NYSEAmex–2010–35). 7 Id. The cap is referenced in this filing, although it does not currently appear in the fee schedule. 8 See SR–NYSEAmex–2010–35, supra n.6. When NYSE MKT Trades was initially offered, the Exchange had not observed a demand for nonprofessional use because an alternative product was available. See id. The Exchange now offers two last sale market data products for distribution to nonprofessional users, NYSE MKT Trades Digital Media and NYSE MKT Realtime Reference Prices Digital Media. See Securities Exchange Act Release No. 69300 (Apr. 4, 2013), 78 FR 21469 (Apr. 10, 2013) (SR–NYSEMKT–2013–31). E:\FR\FM\21AUN1.SGM 21AUN1 51776 Federal Register / Vol. 78, No. 162 / Wednesday, August 21, 2013 / Notices NYSE MKT Trades at $10 per month and NYSE MKT BBO at $10 per month, then the firm currently pays $30,000 per month in professional user fees. Under the proposed enterprise fee, the firm will pay a flat fee of $20,000 for an unlimited number of professional and non-professional users for both products. A vendor that pays the enterprise fee would not have to report the number of such users on a monthly basis.9 However, every six months, a vendor must provide the Exchange with a count of the total number of natural person users of each product, including both professional and non-professional users. Lastly, the Exchange proposes to make certain technical corrections to clarify its fee schedule and to delete operative dates that are no longer needed. The purpose of the foregoing changes is to encourage greater use of NYSE MKT BBO and NYSE MKT Trades by making them more affordable, to compete more effectively with similar products in the marketplace, and to clarify the fee schedule. The Exchange is eliminating the per quote option for display use of NYSE MKT BBO for nonprofessional users because nonprofessional users are not electing to use it. The Exchange is not aware of any significant problems that persons affected are likely to have in complying with the proposed rule change. The Exchange further believes that the proposed rule change is consistent with the market-based approach of the Securities and Exchange Commission (‘‘Commission’’). The decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (DC Cir. 2010), upheld reliance by the Commission upon the existence of competitive market mechanisms to set reasonable and equitably allocated fees for proprietary market data: mstockstill on DSK4VPTVN1PROD with NOTICES In fact, the legislative history indicates that the Congress intended that the market system ‘evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed’ and that the SEC wield its regulatory power ‘in those situations where competition may not be sufficient,’ such as in the creation of a ‘consolidated transactional reporting system.’ 9 Most professional users currently are subject to a per display device count, except for a small number of professional users that have qualified for the Exchange’s Unit-of-Count Policy. See SR– NYSEAmex–2010–35, supra n.6. That policy continues to apply to such professional users for display use only if the proposed enterprise fee does not apply. See Securities Exchange Act Release No. 69285 (April 3, 2013) 78 FR 21172 (April 9, 2013) (SR–NYSEMKT–2013–32). VerDate Mar<15>2010 16:29 Aug 20, 2013 Jkt 229001 Id. at 535 (quoting H.R. Rep. No. 94– 229 at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 323). The court agreed with the Commission’s conclusion that ‘‘Congress intended that ‘competitive forces should dictate the services and practices that constitute the U.S. national market system for trading equity securities.’ ’’ 10 As explained below in the Exchange’s Statement on Burden on Competition, the Exchange believes that there is substantial evidence of competition in the marketplace for data and that the Commission can rely upon such evidence in concluding that the fees established in this filing are the product of competition and therefore satisfy the relevant statutory standards.11 In addition, the existence of alternatives to NYSE MKT BBO and NYSE MKT Trades, including real-time consolidated data, free delayed consolidated data, and proprietary data from other sources, as described below, further ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect such alternatives. As the NetCoalition decision noted, the Commission is not required to undertake a cost-of-service or ratemaking approach, and the Exchange incorporates by reference into this proposed rule change its affiliate’s analysis of this topic in another rule filing.12 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,13 in general, and Sections 6(b)(4) and 6(b)(5) of the Act,14 in particular, in that it provides an equitable allocation of reasonable fees among its members, issuers, and other persons using its facilities and is not designed to permit unfair discrimination among customers, issuers, brokers, or dealers. The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act 15 in that it is consistent with (i) fair competition among brokers and dealers, among exchange markets, and between 10 NetCoalition, 615 F.3d at 535. 916 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the ‘‘Dodd-Frank Act’’) amended paragraph (A) of Section 19(b)(3) of the Act, 15 U.S.C. 78s(b)(3), to make clear that all exchange fees for market data may be filed by exchanges on an immediately effective basis. 12 See Securities Exchange Act Release No. 63291 (Nov. 9, 2010), 75 FR 70311 (Nov. 17, 2010) (SR– NYSEArca–2010–97). 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(4), (5). 15 15 U.S.C. 78k–1. 11 Section PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 exchange markets and markets other than exchange markets and (ii) the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Furthermore, the proposed rule change is consistent with Rule 603 of Regulation NMS,16 which provides that any national securities exchange that distributes information with respect to quotations for or transactions in an NMS stock do so on terms that are not unreasonably discriminatory. The Exchange believes that lowering the professional and non-professional user fees for NYSE MKT BBO and lowering the professional user fee for NYSE MKT Trades is reasonable because it will make the products more affordable and result in their greater availability to professional and nonprofessional users. The Exchange believes that introducing a nonprofessional fee for NYSE MKT Trades is reasonable because it provides an additional method for retail investors to access NYSE MKT last sale data and provides the same last sale data that is available to professional users, an option heretofore unavailable.17 The Exchange believes it is reasonable to eliminate the per quote option for nonprofessional users of NYSE MKT BBO because non-professional users have not elected this option. In addition, the Exchange believes that the proposed fees are reasonable when compared to fees for comparable products offered by at least one other exchange and under the CTA and CQ Plans. Specifically, The NASDAQ Stock Market LLC (‘‘NASDAQ’’) offers NASDAQ Basic, which includes best bid and offer and last sale data, for a monthly fee of $10 per professional subscriber and $0.50 per nonprofessional subscriber; alternatively, a broker-dealer may purchase an enterprise license at a rate of $100,000 per month for distribution to an unlimited number of non-professional subscribers only.18 Under the current CTA Plan, Tape B market data includes NYSE MKT and certain other exchanges’ data. Monthly fees for professional users range from $13.60– $14.60 for consolidated last sale data and $13.65–$15.60 for bid-ask data; the monthly fee for each non-professional subscriber is $1.00 for both last sale and bid-ask data.19 A monthly enterprise fee of $500,000 is available under which a 16 See 17 CFR 242.603. supra n.8. 18 See NASDAQ Rule 7047. 19 See CTA Plan dated July 25, 2012 and CQ Plan dated August 23, 2010, available at https:// cta.nyxdata.com/CTA. 17 See E:\FR\FM\21AUN1.SGM 21AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 162 / Wednesday, August 21, 2013 / Notices U.S. registered broker-dealer may distribute data to an unlimited number of its own employees and its nonprofessional subscriber brokerage account customers. Participants in the CTA and CQ Plans recently submitted an immediately effective filing with rate changes that are expected to be implemented September 1, 2013.20 The Exchange is proposing professional and non-professional user fees and enterprise fees that are substantially less than the fees currently charged by NASDAQ and currently charged and proposed for the CTA and CQ Plans. In contrast to NASDAQ and the CTA and CQ Plans, the Exchange also will permit enterprise distribution by a non-brokerdealer. The proposed enterprise fees for NYSE MKT BBO and NYSE MKT Trades also are reasonable because they could result in a fee reduction for vendors with a large number of professional and non-professional users, as described in the example above. If a vendor has a smaller number of professional users of NYSE MKT BBO and/or NYSE MKT Trades, then it may continue using the per user structure and benefit from the per user fee reductions. By reducing prices for vendors with a large number of professional and non-professional users, the Exchange believes that more vendors may choose to offer NYSE MKT BBO and NYSE MKT Trades, thereby expanding the distribution of this market data for the benefit of investors. The Exchange also believes that offering an enterprise fee will expand the range of options for offering NYSE MKT BBO and NYSE MKT Trades and will allow vendors greater choice in selecting the most appropriate level of data and fees for the professional and nonprofessional users they are servicing. The Exchange further believes that the proposed enterprise fees are reasonable because they will simplify billing for certain recipients that have large numbers of professional and nonprofessional users. Firms that pay the proposed enterprise fees will not have to report the number of users on a monthly basis as they currently do, but rather will only have to count natural person users every six months; this is a significant reduction in administrative burdens and is a significant value. The Exchange believes that it is reasonable to charge a single enterprise fee for 20 See Securities Exchange Act Release No. Release No. 70010 (July 19, 2013) (File No. SR– CTA/CQ–2013–04). Monthly fees will be $24 for professional subscribers and $1 for non-professional subscribers for Tape B last sale and bid-ask data, and the monthly enterprise fee described above will be increased to $520,000. VerDate Mar<15>2010 16:29 Aug 20, 2013 Jkt 229001 clients receiving both NYSE MKT BBO and NYSE MKT Trades because the Exchange has charged a single access fee for both products since 2010,21 and the products will continue to be offered separately for vendors and users that so choose. The Exchange believes that the proposed fees are equitable and not unfairly discriminatory because they will be charged uniformly to vendors and users that select these products. The Exchange notes that the fee structure of differentiated professional and nonprofessional fees has long been used by the Exchange for other products, by other exchanges for their products, and by the CTA and CQ Plans in order to reduce the price of data to retail investors and make it more broadly available.22 The Exchange further believes that offering NYSE MKT Trades to non-professional users with the same data available to professional users results in greater equity among data recipients. The Exchange believes that eliminating the per quote nonprofessional user fee for NYSE MKT BBO is equitable and not unfairly discriminatory because non-professional users have not elected this option and the Exchange will continue offering other methods by which nonprofessional users can access this data. Finally, the Exchange believes that it is equitable and not unfairly discriminatory to establish an enterprise fee because it reduces the Exchange’s costs and administrative burdens in tracking and auditing large numbers of users. The proposed technical corrections to the fee schedule will benefit vendors and users by making the fee schedule clearer and easier to understand. For these reasons, the Exchange believes that the proposed fees are reasonable, equitable, and not unfairly discriminatory. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,23 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. An exchange’s ability to price its proprietary data feed products is constrained by (1) the inherent contestability of the market for proprietary data and actual competition 21 See SR–NYSEAmex–2010–35, supra n.6. 22 See, e.g., Securities Exchange Act Release No. 20002, File No. S7–433 (July 22, 1983) (establishing nonprofessional fees for CTA data); NASDAQ Rules 7023(b), 7047. 23 15 U.S.C. 78f(b)(8). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 51777 for the sale of such data, (2) the joint product nature of exchange platforms, and (3) the existence of alternatives to proprietary data. The Existence of Actual Competition. The market for proprietary data products is currently competitive and inherently contestable because there is fierce competition for the inputs necessary to the creation of proprietary data and strict pricing discipline for the proprietary products themselves. Numerous exchanges compete with each other for listings and order flow and sales of market data itself, providing virtually limitless opportunities for entrepreneurs who wish to compete in any or all of those areas, including producing and distributing their own market data. Proprietary data products are produced and distributed by each individual exchange, as well as other entities, in a vigorously competitive market. Competitive markets for listings, order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products and therefore constrain markets from overpricing proprietary market data. The U.S. Department of Justice also has acknowledged the aggressive competition among exchanges, including for the sale of proprietary market data itself. In announcing that the bid for NYSE Euronext by NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. had been abandoned, Assistant Attorney General Christine Varney stated that exchanges ‘‘compete head to head to offer real-time equity data products. These data products include the best bid and offer of every exchange and information on each equity trade, including the last sale.’’ 24 It is common for broker-dealers to further exploit this recognized competitive constraint by sending their order flow and transaction reports to multiple markets, rather than providing them all to a single market. As a 2010 Commission Concept Release noted, the ‘‘current market structure can be described as dispersed and complex’’ with ‘‘trading volume . . . dispersed among many highly automated trading centers that compete for order flow in the same stocks’’ and ‘‘trading centers offer[ing] a wide range of services that are designed to attract different types of 24 Press Release, U.S. Department of Justice, Assistant Attorney General Christine Varney Holds Conference Call Regarding NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. Abandoning Their Bid for NYSE Euronext (May 16, 2011), available at https://www.justice.gov/iso/opa/atr/ speeches/2011/at-speech-110516.html. E:\FR\FM\21AUN1.SGM 21AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES 51778 Federal Register / Vol. 78, No. 162 / Wednesday, August 21, 2013 / Notices market participants with varying trading needs.’’ 25 In addition, in the case of products that are distributed through market data vendors, the market data vendors themselves provide additional price discipline for proprietary data products because they control the primary means of access to certain end users. These vendors impose price discipline based upon their business models. For example, vendors that assess a surcharge on data they sell are able to refuse to offer proprietary products that their end users do not or will not purchase in sufficient numbers. Internet portals, such as Google, impose price discipline by providing only data that they believe will enable them to attract ‘‘eyeballs’’ that contribute to their advertising revenue. Similarly, vendors will not offer NYSE MKT BBO or NYSE MKT Trades unless those products will help them maintain current users or attract new ones. For example, a brokerdealer will not choose to offer NYSE MKT BBO or NYSE MKT Trades to its retail customers unless the broker-dealer believes that the retail customers will use and value the data and the provision of such data will help the broker-dealer maintain the customer relationship, which allows the broker-dealer to generate profits for itself. Professional users will not request NYSE MKT BBO or NYSE MKT Trades from market data vendors unless they can use the data for profit-generating purposes in their businesses. All of these operate as constraints on pricing proprietary data products. Joint Product Nature of Exchange Platform. Transaction execution and proprietary data products are complementary in that market data is both an input and a byproduct of the execution service. In fact, market data and trade executions are a paradigmatic example of joint products with joint costs. The decision whether and on which platform to post an order will depend on the attributes of the platforms where the order can be posted, including the execution fees, data quality, and price and distribution of their data products. The more trade executions a platform does, the more valuable its market data products become. The costs of producing market data include not only the costs of the data 25 Concept Release on Equity Market Structure, Securities Exchange Act Release No. 61358 (Jan. 14, 2010), 75 FR 3594 (Jan. 21, 2010) (File No. S7–02– 10). This Concept Release included data from the third quarter of 2009 showing that no market center traded more than 20% of the volume of listed stocks, further evidencing the dispersal of and competition for trading activity. Id. at 3598. VerDate Mar<15>2010 16:29 Aug 20, 2013 Jkt 229001 distribution infrastructure, but also the costs of designing, maintaining, and operating the exchange’s transaction execution platform and the cost of regulating the exchange to ensure its fair operation and maintain investor confidence. The total return that a trading platform earns reflects the revenues it receives from both products and the joint costs it incurs. Moreover, an exchange’s broker-dealer customers view the costs of transaction executions and market data as a unified cost of doing business with the exchange. Other market participants have noted that the liquidity provided by the order book, trade execution, core market data, and non-core market data are joint products of a joint platform and have common costs.26 The Exchange agrees with and adopts those discussions and the arguments therein. The Exchange also notes that the economics literature confirms that there is no way to allocate common costs between joint products that would shed any light on competitive or efficient pricing.27 Analyzing the cost of market data product production and distribution in 26 See Securities Exchange Act Release No. 62887 (Sept. 10, 2010), 75 FR 57092, 57095 (Sept. 17, 2010) (SR–Phlx–2010–121); Securities Exchange Act Release No. 62907 (Sept. 14, 2010), 75 FR 57314, 57317 (Sept. 20, 2010) (SR–NASDAQ–2010– 110); and Securities Exchange Act Release No. 62908 (Sept. 14, 2010), 75 FR 57321, 57324 (Sept. 20, 2010) (SR–NASDAQ–2010–111) (‘‘all of the exchange’s costs are incurred for the unified purposes of attracting order flow, executing and/or routing orders, and generating and selling data about market activity. The total return that an exchange earns reflects the revenues it receives from the joint products and the total costs of the joint products.’’); see also August 1, 2008 Comment Letter of Jeffrey S. Davis, Vice President and Deputy General Counsel, NASDAQ OMX Group, Inc., Statement of Janusz Ordover and Gustavo Bamberger (‘‘because market data is both an input to and a byproduct of executing trades on a particular platform, market data and trade execution services are an example of ‘joint products’ with ‘joint costs.’ ’’), attachment at pg. 4, available at www.sec.gov/comments/34-57917/ 3457917-12.pdf. 27 See generally Mark Hirschey, FUNDAMENTALS OF MANAGERIAL ECONOMICS, at 600 (2009) (‘‘It is important to note, however, that although it is possible to determine the separate marginal costs of goods produced in variable proportions, it is impossible to determine their individual average costs. This is because common costs are expenses necessary for manufacture of a joint product. Common costs of production—raw material and equipment costs, management expenses, and other overhead—cannot be allocated to each individual by-product on any economically sound basis. . . . Any allocation of common costs is wrong and arbitrary.’’). This is not new economic theory. See, e.g., F. W. Taussig, ‘‘A Contribution to the Theory of Railway Rates,’’ Quarterly Journal of Economics V(4) 438, 465 (July 1891) (‘‘Yet, surely, the division is purely arbitrary. These items of cost, in fact, are jointly incurred for both sorts of traffic; and I cannot share the hope entertained by the statistician of the Commission, Professor Henry C. Adams, that we shall ever reach a mode of apportionment that will lead to trustworthy results.’’). PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 isolation from the cost of all of the inputs supporting the creation of market data and market data products will inevitably underestimate the cost of the data and data products. Thus, because it is impossible to obtain the data inputs to create market data products without a fast, technologically robust, and wellregulated execution system, system costs and regulatory costs affect the price of both obtaining the market data itself and creating and distributing market data products. It would be equally misleading, however, to attribute all of an exchange’s costs to the market data portion of an exchange’s joint products. Rather, all of an exchange’s costs are incurred for the unified purposes of attracting order flow, executing and/or routing orders, and generating and selling data about market activity. The total return that an exchange earns reflects the revenues it receives from the joint products and the total costs of the joint products. The level of competition and contestability in the market is evident in the numerous alternative venues that compete for order flow, including 12 equities self-regulatory organization (‘‘SRO’’) markets, as well as internalizing broker-dealers (‘‘BDs’’) and various forms of alternative trading systems (‘‘ATSs’’), including dark pools and electronic communication networks (‘‘ECNs’’). Competition among trading platforms can be expected to constrain the aggregate return that each platform earns from the sale of its joint products, but different platforms may choose from a range of possible, and equally reasonable, pricing strategies as the means of recovering total costs. For example, some platforms may choose to pay rebates to attract orders, charge relatively low prices for market data products (or provide market data products free of charge), and charge relatively high prices for accessing posted liquidity. Other platforms may choose a strategy of paying lower rebates (or no rebates) to attract orders, setting relatively high prices for market data products, and setting relatively low prices for accessing posted liquidity. In this environment, there is no economic basis for regulating maximum prices for one of the joint products in an industry in which suppliers face competitive constraints with regard to the joint offering. Existence of Alternatives. The large number of SROs, BDs, and ATSs that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO, ATS, and BD is currently permitted to produce proprietary data products, and E:\FR\FM\21AUN1.SGM 21AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 162 / Wednesday, August 21, 2013 / Notices many currently do or have announced plans to do so, including but not limited to the Exchange, NYSE, NYSE Arca, NASDAQ OMX, BATS, and Direct Edge. The fact that proprietary data from ATSs, BDs, and vendors can bypass SROs is significant in two respects. First, non-SROs can compete directly with SROs for the production and sale of proprietary data products. Second, because a single order or transaction report can appear in an SRO proprietary product, a non-SRO proprietary product, or both, the amount of data available via proprietary products is greater in size than the actual number of orders and transaction reports that exist in the marketplace. Because market data users can thus find suitable substitutes for most proprietary market data products, a market that overprices its market data products stands a high risk that users may substitute another source of market data information for its own. Moreover, consolidated data provides two additional measures of pricing discipline for proprietary data products that are a subset of the consolidated data stream. First, the consolidated data is widely available in real-time at $0.50-$1 per month for non-professional users. Second, consolidated data is also available at no cost with a 15- or 20minute delay. Because consolidated data contains marketwide information, it effectively places a cap on the fees assessed for proprietary data that is simply a subset of the consolidated data (such as NYSE MKT Trades and NYSE MKT BBO). The mere availability of low-cost or free consolidated data provides a powerful form of pricing discipline for proprietary data products that contain data elements that are a subset of the consolidated data by highlighting the optional nature of proprietary products. Those competitive pressures imposed by available alternatives are clearly evident in the Exchange’s proposed pricing. As noted above, the Exchange’s proposed user and enterprise fees are substantially less than the fees charged by both NASDAQ and the CTA and CQ Plans, and the Exchange’s enterprise fee also permits distribution by a nonbroker-dealer.28 In addition to the competition and price discipline described above, the market for proprietary data products is also highly contestable because market entry is rapid and inexpensive. The history of electronic trading is replete with examples of entrants that swiftly grew into some of the largest electronic trading platforms and proprietary data producers: Archipelago, Bloomberg 28 See supra nn.18–20. VerDate Mar<15>2010 16:29 Aug 20, 2013 Jkt 229001 Tradebook, Island, RediBook, Attain, TrackECN, BATS Trading and Direct Edge. Today, BATS and Direct Edge provide certain market data at no charge on their Web sites in order to attract more order flow, and use revenue rebates from resulting additional executions to maintain low execution charges for their users.29 Further, data products are valuable to professional users only if they can be used for profit-generating purposes in their businesses and valuable to nonprofessional users only insofar as they provide information that such users expect will assist them in tracking prices and market trends and making order routing and trading decisions.30 The Exchange believes that the proposed lower user fees and the enterprise fees, which may permit wider distribution of last sale and quote information at a lower cost to vendors with a large number of professional and non-professional users, may encourage more users to demand and more vendors to choose to offer NYSE MKT BBO and NYSE MKT Trades, thereby benefitting professional and nonprofessional users, including public investors. The Exchange also believes that offering NYSE MKT Trades for nonprofessional users on a per user basis and providing the same information as is provided to professional users will create more choices for vendors that will allow them to offer products with the appropriate level of information at a range of prices, thereby encouraging wider distribution of the data. In establishing the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all users. The existence of numerous alternatives to the Exchange’s products, including real-time consolidated data, free delayed consolidated data, and proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are 29 This is simply a securities market-specific example of the well-established principle that in certain circumstances more sales at lower margins can be more profitable than fewer sales at higher margins; this example is additional evidence that market data is an inherent part of a market’s joint platform. 30 Rule 603(c) of Regulation NMS requires vendors to make the consolidated core data feeds available to customers when trading and orderrouting decisions can be implemented. See 17 CFR 242.603(c). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 51779 unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or subscriber would achieve through the purchase. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 31 of the Act and subparagraph (f)(2) of Rule 19b–4 32 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend 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. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 33 of the Act to determine whether the proposed rule change should be approved or 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 email to rule-comments@ sec.gov. Please include File Number SR– NYSEMKT–2013–69 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. 31 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 33 15 U.S.C. 78s(b)(2)(B). 32 17 E:\FR\FM\21AUN1.SGM 21AUN1 51780 Federal Register / Vol. 78, No. 162 / Wednesday, August 21, 2013 / Notices All submissions should refer to File Number SR–NYSEMKT–2013–69. This file number should be included on the subject line if email 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 Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will 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 Number SR– NYSEMKT–2013–69 and should be submitted on or before September 11, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.34 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–20339 Filed 8–20–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70217; File No. SR–NYSE– 2013–07] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Designation of Longer Period for Commission Action on Proceedings To Determine Whether To Disapprove Proposed Rule Change Amending NYSE Rules 451 and 465, and the Related Provisions of Section 402.10 of the NYSE Listed Company Manual, Which Provide a Schedule for the Reimbursement of Expenses by Issuers to NYSE Member Organizations for the Processing of Proxy Materials and Other Issuer Communications Provided to Investors Holding Securities in Street Name and To Establish a Five-Year Fee for the Development of an Enhanced Brokers Internet Platform August 15, 2013. On February 1, 2013, New York Stock Exchange (‘‘NYSE’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend NYSE Rules 451 and 465, and the related provisions of Section 402.10 of the NYSE Listed Company Manual, which provide a schedule for the reimbursement of expenses by issuers to NYSE member organizations for the processing of proxy materials and other issuer communications provided to investors holding securities in street name and to establish a five-year fee for the development of an enhanced brokers internet platform. The proposed rule change was published for comment in the Federal Register on February 22, 2013.3 In response, the Commission received twenty-four comment letters on the proposal.4 On April 3, 2013, the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 68936 (February 15, 2013), 78 FR 12381. 4 See letters to Elizabeth M. Murphy, Secretary, Commission from: Charles V. Rossi, President, The Securities Transfer Association, dated February 20, 2013 and March 4, 2013; Karen V. Danielson, President, Shareholder Services Association, dated March 4, 2013; Jeanne M. Shafer, dated March 6, 2013; David W. Lovatt, dated March 6, 2013; Stephen Norman, Chair, The Independent Steering Committee of Broadridge, dated March 7, 2013; Jeffrey D. Morgan, President & CEO, National Investor Relations Institute, dated March 7, 2013; Kenneth Bertsch, President and CEO, Society of Corporate Secretaries & Governance Professionals, dated March 7, 2013; Niels Holch, Executive Director, Shareholder Communications Coalition, dated March 12, 2013; Geoffrey M. Dugan, General Counsel, iStar Financial Inc., dated March 13, 2013; mstockstill on DSK4VPTVN1PROD with NOTICES 2 17 34 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:29 Aug 20, 2013 Jkt 229001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 Commission subsequently extended the time period in which to either approve the proposed rule change, or to institute proceedings to determine whether to disapprove the proposed rule change, to May 23, 2013.5 The Commission thereafter received four more comment letters and a response to comments from NYSE.6 On May 23, 2013, the Commission initiated proceedings to determine whether to disapprove the proposed rule change and solicited additional comments.7 The Commission thereafter received fourteen comment letters on the proposal and a response to the Order Instituting Proceedings from NYSE.8 Paul E. Martin, Chief Financial Officer, Perficient, Inc., dated March 13, 2013; John Harrington, President, Harrington Investments, Inc., dated March 14, 2013; James McRitchie, Shareowner, Corporate Governance, dated March 14, 2013; Clare A. Kretzman, General Counsel, Gartner, Inc., dated March 15, 2013; Tom Quaadman, Vice President, Center for Capital Markets Competitiveness, dated March 15, 2013; Dennis E. Nixon, President, International Bancshares Corporation, dated March 15, 2013; Argus I. Cunningham, Chief Executive Officer, Sharegate Inc., dated March 15, 2013; Laura Berry, Executive Director, Interfaith Center on Corporate Responsibility, dated March 15, 2013; Dorothy M. Donohue, Deputy General Counsel— Securities Regulation, Investment Company Institute, dated March 15, 2013; Charles V. Callan, Senior Vice President—Regulatory Affairs, Broadridge Financial Solutions, Inc., dated March 15, 2013; Brad Philips, Treasurer, Darling International Inc., dated March 15, 2013; John Endean, President, American Business Conference, dated March 18, 2013; Tom Price, Managing Director, The Securities Industry and Financial Markets Association, dated March 18, 2013; and Michael S. O’Brien, Vice President—Corporate Governance Officer, BNY Mellon, dated March 28, 2013. 5 See Securities Exchange Act Release No. 69286 (April 3, 2013), 78 FR 21481 (April 10, 2013). 6 See letters to Elizabeth M. Murphy, Secretary, Commission from: Jeff Mahoney, General Counsel, Council of Institutional Investors, dated April 5, 2013; Paul Torre, Executive Vice President, AST Fund Solutions, LLC, dated May 16, 2013; and John M. Payne, Chief Executive Officer, Zumbox, Inc., dated May 20, 2013; see also letter to the Honorable Mary Jo White, Chair, Commission from Dieter Waizenegger, Executive Director, CtW Investment Group, dated May 17, 2013. See also response letter from Janet McGinnis, EVP & Corporate Secretary, NYSE Euronext, to Elizabeth M. Murphy, Secretary, Commission, dated May 17, 2013. 7 See Securities Exchange Act Release No. 69622 (May 23, 2013), 78 FR 32510 (May 30, 2013) (‘‘Order Instituting Proceedings’’). 8 See letters to Elizabeth M. Murphy, Secretary, Commission from: Katie J. Sevcik, Legal and Regulatory Committee Chair, Shareholder Services Association, dated June 12, 2013; Paul Torre, Executive Vice President, AST Fund Solutions, LLC, dated June 18, 2013; Loren Hanson, Assistant Secretary/Assistant Treasurer, Otter Tail Corporation, dated June 17, 2013; Michael J. Hogan, Chief Executive Officer, FOLIOfn Investments, Inc., dated June 18, 2013; Harold Westervelt, President, INVeSHARE, dated June 18, 2013; Dieter Waizenegger, Executive Director, Investment Group, dated June 20, 2013; Dorothy M. Donohue, Deputy General Counsel—Securities Regulation, Investment Company Institute, dated June 20, 2013; Lisa Lindsley, Director, Capital Strategies Program, The American Federation of State, County and E:\FR\FM\21AUN1.SGM 21AUN1

Agencies

[Federal Register Volume 78, Number 162 (Wednesday, August 21, 2013)]
[Notices]
[Pages 51775-51780]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20339]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70212; File No. SR-NYSEMKT-2013-69]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending the Fees for 
Display Use of the NYSE MKT BBO and NYSE MKT Trades Market Data 
Products and Making Certain Technical Changes to the Fee Schedule

August 15, 2013.
    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 August 1, 2013, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') filed with the Securities and Exchange Commission (the 
``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.
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    \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 amend the fees for display use of the NYSE 
MKT BBO and NYSE MKT Trades market data products and make certain 
technical changes to the fee schedule. The changes will be operative on 
August 1, 2013. The text of the proposed rule change is available on 
the Exchange's Web site at www.nyse.com, 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the fees for display use of the NYSE 
MKT BBO \4\ and NYSE MKT Trades \5\ market data products and make 
certain technical changes to the fee schedule. The changes will be 
operative on August 1, 2013.
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    \4\ NYSE MKT BBO is an NYSE MKT-only market data feed that 
allows a vendor to redistribute on a real-time basis the same best-
bid-and-offer information that the Exchange reports under the 
Consolidated Quotation (``CQ'') Plan for inclusion in the CQ Plan's 
consolidated quotation information data stream. The data feed 
includes the best bids and offers for all securities that are traded 
on the Exchange and for which NYSE MKT reports quotes under the CQ 
Plan.
    \5\ NYSE MKT Trades is an NYSE MKT-only market data feed that 
allows a vendor to redistribute on a real-time basis the same last 
sale information that the Exchange reports under the Consolidated 
Tape Association (``CTA'') Plan for inclusion in the CTA Plan's 
consolidated data streams and certain other related data elements. 
Specifically, NYSE MKT Trades includes the real-time last sale 
price, time, size, and bid-ask quotations for each security traded 
on the Exchange and a stock summary message. The stock summary 
message updates every minute and includes NYSE MKT's opening price, 
high price, low price, closing price, and cumulative volume for the 
security.
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    The Exchange currently charges $10 per month for professional users 
and $5 per month for non-professional users for display use of NYSE MKT 
BBO.\6\ Alternatively, the Exchange charges $0.005 per quote for 
display use of NYSE MKT BBO for non-professional users, capped at $5 
per month per non-professional user.\7\ The Exchange currently charges 
$10 per month for professional users for display use of NYSE MKT 
Trades. The Exchange currently does not offer NYSE MKT Trades for non-
professional users under a per-user fee structure.\8\
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    \6\ The Exchange applies the same criteria for qualification as 
a ``non-professional subscriber'' as the CTA and CQ Plan 
participants use. See Securities Exchange Act Release No. 62187 (May 
27, 2010), 75 FR 31500, 31502 (June 3, 2010) (SR-NYSEAmex-2010-35).
    \7\ Id. The cap is referenced in this filing, although it does 
not currently appear in the fee schedule.
    \8\ See SR-NYSEAmex-2010-35, supra n.6. When NYSE MKT Trades was 
initially offered, the Exchange had not observed a demand for non-
professional use because an alternative product was available. See 
id. The Exchange now offers two last sale market data products for 
distribution to non-professional users, NYSE MKT Trades Digital 
Media and NYSE MKT Realtime Reference Prices Digital Media. See 
Securities Exchange Act Release No. 69300 (Apr. 4, 2013), 78 FR 
21469 (Apr. 10, 2013) (SR-NYSEMKT-2013-31).
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    The Exchange also charges an access fee of $750 per month for NYSE 
MKT BBO and an access fee of $750 for NYSE MKT Trades. However, a 
single access fee applies for clients receiving both NYSE MKT BBO and 
NYSE MKT Trades.
    Vendors that redistribute NYSE MKT Trades data pay a redistribution 
fee of $750 per month.
    The Exchange proposes to lower the professional user fees for 
display use of NYSE MKT BBO from $10 per month to $1 per month, lower 
the non-professional user fees for display use of NYSE MKT BBO from $5 
per month to $0.05 per month, and eliminate the per quote option for 
display use of NYSE MKT BBO for non-professional users. The Exchange 
also proposes to lower the professional user fee for display use of 
NYSE MKT Trades from $10 per month to $1 per month and introduce a fee 
for display use of NYSE MKT Trades by non-professional users of $0.05 
per month.
    The Exchange also proposes to establish a $20,000 per month 
enterprise fee for an unlimited number of professional and non-
professional users for NYSE MKT BBO and a $20,000 per month enterprise 
fee for an unlimited number of professional and non-professional users 
for NYSE MKT Trades. A single enterprise fee will apply for vendors 
receiving both NYSE MKT BBO and NYSE MKT Trades.
    As an example, under the current fee structure, if a firm had 1,500 
professional users who each received

[[Page 51776]]

NYSE MKT Trades at $10 per month and NYSE MKT BBO at $10 per month, 
then the firm currently pays $30,000 per month in professional user 
fees. Under the proposed enterprise fee, the firm will pay a flat fee 
of $20,000 for an unlimited number of professional and non-professional 
users for both products.
    A vendor that pays the enterprise fee would not have to report the 
number of such users on a monthly basis.\9\ However, every six months, 
a vendor must provide the Exchange with a count of the total number of 
natural person users of each product, including both professional and 
non-professional users.
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    \9\ Most professional users currently are subject to a per 
display device count, except for a small number of professional 
users that have qualified for the Exchange's Unit-of-Count Policy. 
See SR-NYSEAmex-2010-35, supra n.6. That policy continues to apply 
to such professional users for display use only if the proposed 
enterprise fee does not apply. See Securities Exchange Act Release 
No. 69285 (April 3, 2013) 78 FR 21172 (April 9, 2013) (SR-NYSEMKT-
2013-32).
---------------------------------------------------------------------------

    Lastly, the Exchange proposes to make certain technical corrections 
to clarify its fee schedule and to delete operative dates that are no 
longer needed.
    The purpose of the foregoing changes is to encourage greater use of 
NYSE MKT BBO and NYSE MKT Trades by making them more affordable, to 
compete more effectively with similar products in the marketplace, and 
to clarify the fee schedule. The Exchange is eliminating the per quote 
option for display use of NYSE MKT BBO for non-professional users 
because non-professional users are not electing to use it. The Exchange 
is not aware of any significant problems that persons affected are 
likely to have in complying with the proposed rule change.
    The Exchange further believes that the proposed rule change is 
consistent with the market-based approach of the Securities and 
Exchange Commission (``Commission''). The decision of the United States 
Court of Appeals for the District of Columbia Circuit in NetCoalition 
v. SEC, 615 F.3d 525 (DC Cir. 2010), upheld reliance by the Commission 
upon the existence of competitive market mechanisms to set reasonable 
and equitably allocated fees for proprietary market data:

    In fact, the legislative history indicates that the Congress 
intended that the market system `evolve through the interplay of 
competitive forces as unnecessary regulatory restrictions are 
removed' and that the SEC wield its regulatory power `in those 
situations where competition may not be sufficient,' such as in the 
creation of a `consolidated transactional reporting system.'

    Id. at 535 (quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted 
in 1975 U.S.C.C.A.N. 323). The court agreed with the Commission's 
conclusion that ``Congress intended that `competitive forces should 
dictate the services and practices that constitute the U.S. national 
market system for trading equity securities.' '' \10\
---------------------------------------------------------------------------

    \10\ NetCoalition, 615 F.3d at 535.
---------------------------------------------------------------------------

    As explained below in the Exchange's Statement on Burden on 
Competition, the Exchange believes that there is substantial evidence 
of competition in the marketplace for data and that the Commission can 
rely upon such evidence in concluding that the fees established in this 
filing are the product of competition and therefore satisfy the 
relevant statutory standards.\11\ In addition, the existence of 
alternatives to NYSE MKT BBO and NYSE MKT Trades, including real-time 
consolidated data, free delayed consolidated data, and proprietary data 
from other sources, as described below, further ensures that the 
Exchange cannot set unreasonable fees, or fees that are unreasonably 
discriminatory, when vendors and subscribers can elect such 
alternatives.
---------------------------------------------------------------------------

    \11\ Section 916 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010 (the ``Dodd-Frank Act'') amended 
paragraph (A) of Section 19(b)(3) of the Act, 15 U.S.C. 78s(b)(3), 
to make clear that all exchange fees for market data may be filed by 
exchanges on an immediately effective basis.
---------------------------------------------------------------------------

    As the NetCoalition decision noted, the Commission is not required 
to undertake a cost-of-service or ratemaking approach, and the Exchange 
incorporates by reference into this proposed rule change its 
affiliate's analysis of this topic in another rule filing.\12\
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No. 63291 (Nov. 9, 
2010), 75 FR 70311 (Nov. 17, 2010) (SR-NYSEArca-2010-97).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\13\ in general, and 
Sections 6(b)(4) and 6(b)(5) of the Act,\14\ in particular, in that it 
provides an equitable allocation of reasonable fees among its members, 
issuers, and other persons using its facilities and is not designed to 
permit unfair discrimination among customers, issuers, brokers, or 
dealers. The Exchange also believes that the proposed rule change is 
consistent with Section 11(A) of the Act \15\ in that it is consistent 
with (i) fair competition among brokers and dealers, among exchange 
markets, and between exchange markets and markets other than exchange 
markets and (ii) the availability to brokers, dealers, and investors of 
information with respect to quotations for and transactions in 
securities. Furthermore, the proposed rule change is consistent with 
Rule 603 of Regulation NMS,\16\ which provides that any national 
securities exchange that distributes information with respect to 
quotations for or transactions in an NMS stock do so on terms that are 
not unreasonably discriminatory.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4), (5).
    \15\ 15 U.S.C. 78k-1.
    \16\ See 17 CFR 242.603.
---------------------------------------------------------------------------

    The Exchange believes that lowering the professional and non-
professional user fees for NYSE MKT BBO and lowering the professional 
user fee for NYSE MKT Trades is reasonable because it will make the 
products more affordable and result in their greater availability to 
professional and non-professional users. The Exchange believes that 
introducing a non-professional fee for NYSE MKT Trades is reasonable 
because it provides an additional method for retail investors to access 
NYSE MKT last sale data and provides the same last sale data that is 
available to professional users, an option heretofore unavailable.\17\ 
The Exchange believes it is reasonable to eliminate the per quote 
option for non-professional users of NYSE MKT BBO because non-
professional users have not elected this option.
---------------------------------------------------------------------------

    \17\ See supra n.8.
---------------------------------------------------------------------------

    In addition, the Exchange believes that the proposed fees are 
reasonable when compared to fees for comparable products offered by at 
least one other exchange and under the CTA and CQ Plans. Specifically, 
The NASDAQ Stock Market LLC (``NASDAQ'') offers NASDAQ Basic, which 
includes best bid and offer and last sale data, for a monthly fee of 
$10 per professional subscriber and $0.50 per non-professional 
subscriber; alternatively, a broker-dealer may purchase an enterprise 
license at a rate of $100,000 per month for distribution to an 
unlimited number of non-professional subscribers only.\18\ Under the 
current CTA Plan, Tape B market data includes NYSE MKT and certain 
other exchanges' data. Monthly fees for professional users range from 
$13.60-$14.60 for consolidated last sale data and $13.65-$15.60 for 
bid-ask data; the monthly fee for each non-professional subscriber is 
$1.00 for both last sale and bid-ask data.\19\ A monthly enterprise fee 
of $500,000 is available under which a

[[Page 51777]]

U.S. registered broker-dealer may distribute data to an unlimited 
number of its own employees and its nonprofessional subscriber 
brokerage account customers. Participants in the CTA and CQ Plans 
recently submitted an immediately effective filing with rate changes 
that are expected to be implemented September 1, 2013.\20\ The Exchange 
is proposing professional and non-professional user fees and enterprise 
fees that are substantially less than the fees currently charged by 
NASDAQ and currently charged and proposed for the CTA and CQ Plans. In 
contrast to NASDAQ and the CTA and CQ Plans, the Exchange also will 
permit enterprise distribution by a non-broker-dealer.
---------------------------------------------------------------------------

    \18\ See NASDAQ Rule 7047.
    \19\ See CTA Plan dated July 25, 2012 and CQ Plan dated August 
23, 2010, available at https://cta.nyxdata.com/CTA.
    \20\ See Securities Exchange Act Release No. Release No. 70010 
(July 19, 2013) (File No. SR-CTA/CQ-2013-04). Monthly fees will be 
$24 for professional subscribers and $1 for non-professional 
subscribers for Tape B last sale and bid-ask data, and the monthly 
enterprise fee described above will be increased to $520,000.
---------------------------------------------------------------------------

    The proposed enterprise fees for NYSE MKT BBO and NYSE MKT Trades 
also are reasonable because they could result in a fee reduction for 
vendors with a large number of professional and non-professional users, 
as described in the example above. If a vendor has a smaller number of 
professional users of NYSE MKT BBO and/or NYSE MKT Trades, then it may 
continue using the per user structure and benefit from the per user fee 
reductions. By reducing prices for vendors with a large number of 
professional and non-professional users, the Exchange believes that 
more vendors may choose to offer NYSE MKT BBO and NYSE MKT Trades, 
thereby expanding the distribution of this market data for the benefit 
of investors. The Exchange also believes that offering an enterprise 
fee will expand the range of options for offering NYSE MKT BBO and NYSE 
MKT Trades and will allow vendors greater choice in selecting the most 
appropriate level of data and fees for the professional and non-
professional users they are servicing.
    The Exchange further believes that the proposed enterprise fees are 
reasonable because they will simplify billing for certain recipients 
that have large numbers of professional and non-professional users. 
Firms that pay the proposed enterprise fees will not have to report the 
number of users on a monthly basis as they currently do, but rather 
will only have to count natural person users every six months; this is 
a significant reduction in administrative burdens and is a significant 
value. The Exchange believes that it is reasonable to charge a single 
enterprise fee for clients receiving both NYSE MKT BBO and NYSE MKT 
Trades because the Exchange has charged a single access fee for both 
products since 2010,\21\ and the products will continue to be offered 
separately for vendors and users that so choose.
---------------------------------------------------------------------------

    \21\ See SR-NYSEAmex-2010-35, supra n.6.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fees are equitable and not 
unfairly discriminatory because they will be charged uniformly to 
vendors and users that select these products. The Exchange notes that 
the fee structure of differentiated professional and non-professional 
fees has long been used by the Exchange for other products, by other 
exchanges for their products, and by the CTA and CQ Plans in order to 
reduce the price of data to retail investors and make it more broadly 
available.\22\ The Exchange further believes that offering NYSE MKT 
Trades to non-professional users with the same data available to 
professional users results in greater equity among data recipients. The 
Exchange believes that eliminating the per quote non-professional user 
fee for NYSE MKT BBO is equitable and not unfairly discriminatory 
because non-professional users have not elected this option and the 
Exchange will continue offering other methods by which non-professional 
users can access this data. Finally, the Exchange believes that it is 
equitable and not unfairly discriminatory to establish an enterprise 
fee because it reduces the Exchange's costs and administrative burdens 
in tracking and auditing large numbers of users.
---------------------------------------------------------------------------

    \22\ See, e.g., Securities Exchange Act Release No. 20002, File 
No. S7-433 (July 22, 1983) (establishing nonprofessional fees for 
CTA data); NASDAQ Rules 7023(b), 7047.
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    The proposed technical corrections to the fee schedule will benefit 
vendors and users by making the fee schedule clearer and easier to 
understand.
    For these reasons, the Exchange believes that the proposed fees are 
reasonable, equitable, and not unfairly discriminatory.

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

    In accordance with Section 6(b)(8) of the Act,\23\ 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. An exchange's ability to price its proprietary 
data feed products is constrained by (1) the inherent contestability of 
the market for proprietary data and actual competition for the sale of 
such data, (2) the joint product nature of exchange platforms, and (3) 
the existence of alternatives to proprietary data.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Existence of Actual Competition. The market for proprietary 
data products is currently competitive and inherently contestable 
because there is fierce competition for the inputs necessary to the 
creation of proprietary data and strict pricing discipline for the 
proprietary products themselves. Numerous exchanges compete with each 
other for listings and order flow and sales of market data itself, 
providing virtually limitless opportunities for entrepreneurs who wish 
to compete in any or all of those areas, including producing and 
distributing their own market data. Proprietary data products are 
produced and distributed by each individual exchange, as well as other 
entities, in a vigorously competitive market.
    Competitive markets for listings, order flow, executions, and 
transaction reports provide pricing discipline for the inputs of 
proprietary data products and therefore constrain markets from 
overpricing proprietary market data. The U.S. Department of Justice 
also has acknowledged the aggressive competition among exchanges, 
including for the sale of proprietary market data itself. In announcing 
that the bid for NYSE Euronext by NASDAQ OMX Group Inc. and 
IntercontinentalExchange Inc. had been abandoned, Assistant Attorney 
General Christine Varney stated that exchanges ``compete head to head 
to offer real-time equity data products. These data products include 
the best bid and offer of every exchange and information on each equity 
trade, including the last sale.'' \24\
---------------------------------------------------------------------------

    \24\ Press Release, U.S. Department of Justice, Assistant 
Attorney General Christine Varney Holds Conference Call Regarding 
NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. Abandoning 
Their Bid for NYSE Euronext (May 16, 2011), available at https://www.justice.gov/iso/opa/atr/speeches/2011/at-speech-110516.html.
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    It is common for broker-dealers to further exploit this recognized 
competitive constraint by sending their order flow and transaction 
reports to multiple markets, rather than providing them all to a single 
market. As a 2010 Commission Concept Release noted, the ``current 
market structure can be described as dispersed and complex'' with 
``trading volume . . . dispersed among many highly automated trading 
centers that compete for order flow in the same stocks'' and ``trading 
centers offer[ing] a wide range of services that are designed to 
attract different types of

[[Page 51778]]

market participants with varying trading needs.'' \25\
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    \25\ Concept Release on Equity Market Structure, Securities 
Exchange Act Release No. 61358 (Jan. 14, 2010), 75 FR 3594 (Jan. 21, 
2010) (File No. S7-02-10). This Concept Release included data from 
the third quarter of 2009 showing that no market center traded more 
than 20% of the volume of listed stocks, further evidencing the 
dispersal of and competition for trading activity. Id. at 3598.
---------------------------------------------------------------------------

    In addition, in the case of products that are distributed through 
market data vendors, the market data vendors themselves provide 
additional price discipline for proprietary data products because they 
control the primary means of access to certain end users. These vendors 
impose price discipline based upon their business models. For example, 
vendors that assess a surcharge on data they sell are able to refuse to 
offer proprietary products that their end users do not or will not 
purchase in sufficient numbers. Internet portals, such as Google, 
impose price discipline by providing only data that they believe will 
enable them to attract ``eyeballs'' that contribute to their 
advertising revenue. Similarly, vendors will not offer NYSE MKT BBO or 
NYSE MKT Trades unless those products will help them maintain current 
users or attract new ones. For example, a broker-dealer will not choose 
to offer NYSE MKT BBO or NYSE MKT Trades to its retail customers unless 
the broker-dealer believes that the retail customers will use and value 
the data and the provision of such data will help the broker-dealer 
maintain the customer relationship, which allows the broker-dealer to 
generate profits for itself. Professional users will not request NYSE 
MKT BBO or NYSE MKT Trades from market data vendors unless they can use 
the data for profit-generating purposes in their businesses. All of 
these operate as constraints on pricing proprietary data products.
    Joint Product Nature of Exchange Platform. Transaction execution 
and proprietary data products are complementary in that market data is 
both an input and a byproduct of the execution service. In fact, market 
data and trade executions are a paradigmatic example of joint products 
with joint costs. The decision whether and on which platform to post an 
order will depend on the attributes of the platforms where the order 
can be posted, including the execution fees, data quality, and price 
and distribution of their data products. The more trade executions a 
platform does, the more valuable its market data products become.
    The costs of producing market data include not only the costs of 
the data distribution infrastructure, but also the costs of designing, 
maintaining, and operating the exchange's transaction execution 
platform and the cost of regulating the exchange to ensure its fair 
operation and maintain investor confidence. The total return that a 
trading platform earns reflects the revenues it receives from both 
products and the joint costs it incurs. Moreover, an exchange's broker-
dealer customers view the costs of transaction executions and market 
data as a unified cost of doing business with the exchange.
    Other market participants have noted that the liquidity provided by 
the order book, trade execution, core market data, and non-core market 
data are joint products of a joint platform and have common costs.\26\ 
The Exchange agrees with and adopts those discussions and the arguments 
therein. The Exchange also notes that the economics literature confirms 
that there is no way to allocate common costs between joint products 
that would shed any light on competitive or efficient pricing.\27\
---------------------------------------------------------------------------

    \26\ See Securities Exchange Act Release No. 62887 (Sept. 10, 
2010), 75 FR 57092, 57095 (Sept. 17, 2010) (SR-Phlx-2010-121); 
Securities Exchange Act Release No. 62907 (Sept. 14, 2010), 75 FR 
57314, 57317 (Sept. 20, 2010) (SR-NASDAQ-2010-110); and Securities 
Exchange Act Release No. 62908 (Sept. 14, 2010), 75 FR 57321, 57324 
(Sept. 20, 2010) (SR-NASDAQ-2010-111) (``all of the exchange's costs 
are incurred for the unified purposes of attracting order flow, 
executing and/or routing orders, and generating and selling data 
about market activity. The total return that an exchange earns 
reflects the revenues it receives from the joint products and the 
total costs of the joint products.''); see also August 1, 2008 
Comment Letter of Jeffrey S. Davis, Vice President and Deputy 
General Counsel, NASDAQ OMX Group, Inc., Statement of Janusz Ordover 
and Gustavo Bamberger (``because market data is both an input to and 
a byproduct of executing trades on a particular platform, market 
data and trade execution services are an example of `joint products' 
with `joint costs.' ''), attachment at pg. 4, available at 
www.sec.gov/comments/34-57917/3457917-12.pdf.
    \27\ See generally Mark Hirschey, Fundamentals of Managerial 
Economics, at 600 (2009) (``It is important to note, however, that 
although it is possible to determine the separate marginal costs of 
goods produced in variable proportions, it is impossible to 
determine their individual average costs. This is because common 
costs are expenses necessary for manufacture of a joint product. 
Common costs of production--raw material and equipment costs, 
management expenses, and other overhead--cannot be allocated to each 
individual by-product on any economically sound basis. . . . Any 
allocation of common costs is wrong and arbitrary.''). This is not 
new economic theory. See, e.g., F. W. Taussig, ``A Contribution to 
the Theory of Railway Rates,'' Quarterly Journal of Economics V(4) 
438, 465 (July 1891) (``Yet, surely, the division is purely 
arbitrary. These items of cost, in fact, are jointly incurred for 
both sorts of traffic; and I cannot share the hope entertained by 
the statistician of the Commission, Professor Henry C. Adams, that 
we shall ever reach a mode of apportionment that will lead to 
trustworthy results.'').
---------------------------------------------------------------------------

    Analyzing the cost of market data product production and 
distribution in isolation from the cost of all of the inputs supporting 
the creation of market data and market data products will inevitably 
underestimate the cost of the data and data products. Thus, because it 
is impossible to obtain the data inputs to create market data products 
without a fast, technologically robust, and well-regulated execution 
system, system costs and regulatory costs affect the price of both 
obtaining the market data itself and creating and distributing market 
data products. It would be equally misleading, however, to attribute 
all of an exchange's costs to the market data portion of an exchange's 
joint products. Rather, all of an exchange's costs are incurred for the 
unified purposes of attracting order flow, executing and/or routing 
orders, and generating and selling data about market activity. The 
total return that an exchange earns reflects the revenues it receives 
from the joint products and the total costs of the joint products.
    The level of competition and contestability in the market is 
evident in the numerous alternative venues that compete for order flow, 
including 12 equities self-regulatory organization (``SRO'') markets, 
as well as internalizing broker-dealers (``BDs'') and various forms of 
alternative trading systems (``ATSs''), including dark pools and 
electronic communication networks (``ECNs''). Competition among trading 
platforms can be expected to constrain the aggregate return that each 
platform earns from the sale of its joint products, but different 
platforms may choose from a range of possible, and equally reasonable, 
pricing strategies as the means of recovering total costs. For example, 
some platforms may choose to pay rebates to attract orders, charge 
relatively low prices for market data products (or provide market data 
products free of charge), and charge relatively high prices for 
accessing posted liquidity. Other platforms may choose a strategy of 
paying lower rebates (or no rebates) to attract orders, setting 
relatively high prices for market data products, and setting relatively 
low prices for accessing posted liquidity. In this environment, there 
is no economic basis for regulating maximum prices for one of the joint 
products in an industry in which suppliers face competitive constraints 
with regard to the joint offering.
    Existence of Alternatives. The large number of SROs, BDs, and ATSs 
that currently produce proprietary data or are currently capable of 
producing it provides further pricing discipline for proprietary data 
products. Each SRO, ATS, and BD is currently permitted to produce 
proprietary data products, and

[[Page 51779]]

many currently do or have announced plans to do so, including but not 
limited to the Exchange, NYSE, NYSE Arca, NASDAQ OMX, BATS, and Direct 
Edge.
    The fact that proprietary data from ATSs, BDs, and vendors can 
bypass SROs is significant in two respects. First, non-SROs can compete 
directly with SROs for the production and sale of proprietary data 
products. Second, because a single order or transaction report can 
appear in an SRO proprietary product, a non-SRO proprietary product, or 
both, the amount of data available via proprietary products is greater 
in size than the actual number of orders and transaction reports that 
exist in the marketplace. Because market data users can thus find 
suitable substitutes for most proprietary market data products, a 
market that overprices its market data products stands a high risk that 
users may substitute another source of market data information for its 
own.
    Moreover, consolidated data provides two additional measures of 
pricing discipline for proprietary data products that are a subset of 
the consolidated data stream. First, the consolidated data is widely 
available in real-time at $0.50-$1 per month for non-professional 
users. Second, consolidated data is also available at no cost with a 
15- or 20-minute delay. Because consolidated data contains marketwide 
information, it effectively places a cap on the fees assessed for 
proprietary data that is simply a subset of the consolidated data (such 
as NYSE MKT Trades and NYSE MKT BBO). The mere availability of low-cost 
or free consolidated data provides a powerful form of pricing 
discipline for proprietary data products that contain data elements 
that are a subset of the consolidated data by highlighting the optional 
nature of proprietary products.
    Those competitive pressures imposed by available alternatives are 
clearly evident in the Exchange's proposed pricing. As noted above, the 
Exchange's proposed user and enterprise fees are substantially less 
than the fees charged by both NASDAQ and the CTA and CQ Plans, and the 
Exchange's enterprise fee also permits distribution by a non-broker-
dealer.\28\
---------------------------------------------------------------------------

    \28\ See supra nn.18-20.
---------------------------------------------------------------------------

    In addition to the competition and price discipline described 
above, the market for proprietary data products is also highly 
contestable because market entry is rapid and inexpensive. The history 
of electronic trading is replete with examples of entrants that swiftly 
grew into some of the largest electronic trading platforms and 
proprietary data producers: Archipelago, Bloomberg Tradebook, Island, 
RediBook, Attain, TrackECN, BATS Trading and Direct Edge. Today, BATS 
and Direct Edge provide certain market data at no charge on their Web 
sites in order to attract more order flow, and use revenue rebates from 
resulting additional executions to maintain low execution charges for 
their users.\29\
---------------------------------------------------------------------------

    \29\ This is simply a securities market-specific example of the 
well-established principle that in certain circumstances more sales 
at lower margins can be more profitable than fewer sales at higher 
margins; this example is additional evidence that market data is an 
inherent part of a market's joint platform.
---------------------------------------------------------------------------

    Further, data products are valuable to professional users only if 
they can be used for profit-generating purposes in their businesses and 
valuable to non-professional users only insofar as they provide 
information that such users expect will assist them in tracking prices 
and market trends and making order routing and trading decisions.\30\ 
The Exchange believes that the proposed lower user fees and the 
enterprise fees, which may permit wider distribution of last sale and 
quote information at a lower cost to vendors with a large number of 
professional and non-professional users, may encourage more users to 
demand and more vendors to choose to offer NYSE MKT BBO and NYSE MKT 
Trades, thereby benefitting professional and non-professional users, 
including public investors. The Exchange also believes that offering 
NYSE MKT Trades for non-professional users on a per user basis and 
providing the same information as is provided to professional users 
will create more choices for vendors that will allow them to offer 
products with the appropriate level of information at a range of 
prices, thereby encouraging wider distribution of the data.
---------------------------------------------------------------------------

    \30\ Rule 603(c) of Regulation NMS requires vendors to make the 
consolidated core data feeds available to customers when trading and 
order-routing decisions can be implemented. See 17 CFR 242.603(c).
---------------------------------------------------------------------------

    In establishing the proposed fees, the Exchange considered the 
competitiveness of the market for proprietary data and all of the 
implications of that competition. The Exchange believes that it has 
considered all relevant factors and has not considered irrelevant 
factors in order to establish fair, reasonable, and not unreasonably 
discriminatory fees and an equitable allocation of fees among all 
users. The existence of numerous alternatives to the Exchange's 
products, including real-time consolidated data, free delayed 
consolidated data, and proprietary data from other sources, ensures 
that the Exchange cannot set unreasonable fees, or fees that are 
unreasonably discriminatory, when vendors and subscribers can elect 
these alternatives or choose not to purchase a specific proprietary 
data product if its cost to purchase is not justified by the returns 
any particular vendor or subscriber would achieve through the purchase.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \31\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \32\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(3)(A).
    \32\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \33\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \33\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 email to rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2013-69 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.


[[Page 51780]]


All submissions should refer to File Number SR-NYSEMKT-2013-69. This 
file number should be included on the subject line if email 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 Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will 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 Number SR-NYSEMKT-2013-69 and should 
be submitted on or before September 11, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\34\
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    \34\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-20339 Filed 8-20-13; 8:45 am]
BILLING CODE 8011-01-P
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