Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Establishing the NYSE Best Quote & Trades Data Feed, 46494-46498 [2014-18747]
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condition.20 Accordingly, no clearing
member will bear a disproportionate
share of any intra-month increase in the
size of the clearing fund.
For the foregoing reasons, OCC
believes that the proposed changes are
in the public interest, would be
consistent with the requirements of the
Act applicable to clearing agencies and
would not impose a burden on
competition because the changes would
permit OCC to increase the size of its
clearing fund intra-month in response to
an increase in OCC’s projected
exposure, and to provide for
adjustments of a clearing member’s
required clearing fund contribution at
any time under specified circumstances
reflecting a change in its financial
condition or risk profile, thereby
promoting the purposes of the Act and
Rule 17Ad-22 thereunder as described
above.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants, or Others
Written comments on the proposed
rule change were not and are not
intended to be solicited with respect to
the proposed rule change and none have
been received.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
The proposal shall not take effect
until all regulatory actions required
with respect to the proposal are
completed.21
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.
20 See
Rule 1001(b).
also filed the proposals in this proposed
rule change as an advance notice under Section
806(e)(1) of Title VIII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act entitled the
Payment, Clearing, and Settlement Supervision Act
of 2010. See supra note 3.
21 OCC
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Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–72750; File No. SR–NYSE–
2014–40]
• 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–
OCC–2014–17 on the subject line.
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change
Establishing the NYSE Best Quote &
Trades Data Feed
Paper Comments
August 4, 2014.
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–OCC–2014–17. 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 OCC and on OCC’s Web site at
https://www.theocc.com/components/
docs/legal/rules_and_bylaws/sr_occ_14_
17.pdf. 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–OCC–2014–17 and should
be submitted on or before August 29,
2014.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.22
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 July 21,
2014, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) 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 self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–18749 Filed 8–7–14; 8:45 am]
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to establish
the NYSE Best Quote & Trades (‘‘NYSE
BQT’’) data feed. 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 these 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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to establish
the NYSE BQT data feed. The NYSE
BQT data feed would provide a unified
view of best bid and offer (‘‘BBO’’) and
BILLING CODE 8011–01–P
1 15
22 17
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CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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last sale information for the Exchange
and its affiliates, NYSE Arca Equities,
Inc. (‘‘NYSE Arca’’) and NYSE MKT
LLC (‘‘NYSE MKT’’).
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Background
In 2009, the Securities and Exchange
Commission (the ‘‘Commission’’)
approved the NYSE Trades data feed
and certain fees for it.3 NYSE Trades is
an NYSE-only market data feed that
distributes 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.
NYSE Arca established the NYSE
Arca Trades data feed in 2009, and
NYSE MKT established the NYSE MKT
Trades data feed in 2010.4 Similar to
NYSE Trades, NYSE Arca Trades is an
NYSE Arca-only data feed and NYSE
MKT Trades is an NYSE MKT-only data
feed. As with NYSE Trades, the NYSE
Arca Trades and NYSE MKT Trades
data feeds each distribute on a real-time
basis the same last sale information that
NYSE Arca and NYSE MKT report,
respectively, under the CTA Plan for
inclusion in the CTA Plan’s
consolidated data streams.
In 2010, the Commission approved
the NYSE BBO data feed and certain
fees for it.5 NYSE BBO is an NYSE-only
market data feed that distributes on a
real-time basis the same BBO
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 reports
quotes under the CQ Plan.
In 2010, the Commission also
approved the NYSE Arca BBO and
NYSE MKT BBO data feeds and
associated fees.6 As with NYSE BBO,
NYSE Arca BBO is an NYSE Arca-only
market data feed and NYSE MKT BBO
is an NYSE MKT-only market data feed.
Similar to NYSE BBO, NYSE Arca BBO
3 See Securities Exchange Act Release Nos. 59290
(Jan. 23, 2009), 74 FR 5707 (Jan. 30, 2009) (SR–
NYSE–2009–05); 59606 (Mar. 19, 2009), 74 FR
13293 (Mar. 26, 2009) (SR–NYSE–2009–04).
4 See Securities Exchange Act Release Nos. 59289
(Jan. 23, 2009), 74 FR 5711 (Jan. 30, 2009) (SR–
NYSEArca-2009–06); 59598 (Mar. 18, 2009), 74 FR
12919 (Mar. 25, 2009) (SR–NYSEArca-2009–05);
62187 (May 27, 2010), 75 FR 31500 (June 3, 2010)
(SR–NYSEAmex–2010–35).
5 See Securities Exchange Act Release No. 62181
(May 26, 2010), 75 FR 31488 (June 3, 2010) (SR–
NYSE–2010–30).
6 See Securities Exchange Act Release Nos. 62188
(May 27, 2010), 75 FR 31484 (June 3, 2010) (SR–
NYSEArca–2010–23); 62187 (May 27, 2010), 75 FR
31500 (June 3, 2010) (SR–NYSEAmex–2010–35).
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and NYSE MKT BBO each distribute on
a real-time basis the same BBO
information that NYSE Arca and NYSE
MKT report, respectively, under the CQ
Plan for inclusion in the CQ Plan’s
consolidated quotation information data
stream. NYSE Arca BBO includes the
best bids and offers for all securities that
are traded on NYSE Arca and for which
NYSE Arca reports quotes under the CQ
Plan. NYSE MKT includes the best bids
and offers for all securities that are
traded on NYSE MKT and for which
NYSE MKT reports quotes under the CQ
Plan.
Proposed NYSE BQT Data Feed
In response to customer requests, the
Exchange proposes to establish the
NYSE BQT data feed, a data feed
consisting of certain data elements from
six market data feeds—NYSE Trades,
NYSE BBO, NYSE Arca Trades, NYSE
Arca BBO, NYSE MKT Trades, and
NYSE MKT BBO. The Exchange does
not currently offer this product. The
NYSE BQT data feed would have three
channels: One channel for the last sale
data (the ‘‘last sale channel’’); another
channel for the BBO data (the ‘‘best
quotes channel’’); and a third channel
for consolidated volume data (the
‘‘consolidated volume channel’’).
The last sale channel provides an
aggregation of the same data that is
available through NYSE Trades, NYSE
Arca Trades, and NYSE MKT Trades.
The best quotes channel provides the
NYSE BQT BBO, which is the best quote
from among the NYSE BBO, NYSE Arca
BBO, and NYSE MKT BBO based on the
following criteria, in order:
• Price: the exchange with the highest
bid or the lowest offer has overall
priority;
• Size: the largest size takes
precedence when multiple exchanges
submit the same bid and/or offer price;
and
• Time: the earliest time takes
precedence when multiple exchanges
submit the same bid and/or offer price
with the same sizes.
For each security, the best quotes
channel would only include one best
bid and one best offer from among the
three exchanges. The NYSE BQT BBO
would be marked with a market center
ID identifying the exchange from which
the BBO originated. For example, if XYZ
stock were traded on both NYSE and
NYSE Arca, and the highest bid and
lowest offer according to the NYSE BBO
were 1,000 shares at $10.00 and 1,000
shares at $10.03, respectively, and the
highest bid and lowest offer for XYZ
stock according to the NYSE Arca BBO
were 1,200 shares at $9.99 and 900
shares at $10.02, respectively, then
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NYSE BQT would generate the best bid
for XYZ stock as 1,000 shares at $10.00
on NYSE and the best offer at 900 shares
at $10.02 on NYSE Arca.
The consolidated volume channel
will carry consolidated volume for all
listed equities in a manner consistent
with the requirements for redistributing
such data as set forth in the securities
information processor plans.7
NYSE BQT would also provide
related data elements, such as trade and
security status updates (e.g., trade
corrections and trading halts).
The Exchange proposes to offer NYSE
BQT through the Exchange’s Secure
Financial Transaction Infrastructure
(‘‘SFTI’’) network and market data
vendors, as the Exchange does with its
other proprietary market data products.
The Exchange believes that NYSE
BQT would provide high-quality,
comprehensive last sale and BBO data
for the Exchange, NYSE Arca, and NYSE
MKT in a unified view and respond to
subscriber demand for such a product.
The Exchange notes that an anticipated
end user might use NYSE BQT for
purposes of identifying an indicative
price of Tape A, B, and C securities
through leveraging the depth and
breadth of NYSE, NYSE Arca, and NYSE
MKT without having to purchase
consolidated data and thus it would not
be a latency-sensitive product. The
Exchange does not anticipate that an
end user would, or could, use the NYSE
BQT data for purposes of making orderrouting or trading decisions. Rather, the
Exchange notes that under Rule 603 of
Regulation NMS, NYSE BQT could not
be substituted for consolidated data in
all instances in which consolidated data
is used and certain subscribers would
still be required to purchase
consolidated data for trading and orderrouting purposes.8
Exchange Not an Exclusive Distributor
of NYSE BQT
The Exchange proposes to offer the
NYSE BQT data feed in a capacity
similar to that of a vendor. The
Exchange, NYSE Arca, and NYSE MKT
are the exclusive distributors of the six
BBO and Trades feeds 9 from which
certain data elements would be taken to
create the NYSE BQT. By contrast, the
Exchange would not be the exclusive
7 The ‘‘securities information processor plans’’
refer to the CTA Plan and Nasdaq UTP Plan. See
Telephone conversation between Leah Mesfin,
Special Counsel, Division of Trading & Markets,
Commission, and Marija Willen, Chief Counsel of
NYSE Group Inc., NYSE (July 30, 2014).
8 17 CFR 242.603(c).
9 These other data feeds are offered pursuant to
pre-existing and already effective rules filed with
the Commission; those rules will not be altered by
this filing.
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distributor of the aggregated and
consolidated information that would
compose the proposed NYSE BQT data
feed. Other vendors would be able, if
they chose, to create a data feed with the
same information as proposed for
inclusion in NYSE BQT, and to
distribute it to clients with no greater
latency than the Exchange would be
able to distribute NYSE BQT. In
addition, the pricing the Exchange
would charge clients for NYSE BQT
would not be lower than the cost to a
vendor of receiving the underlying data
feeds and of maintaining co-located
operations to receive such data feeds
with no greater latency than the
Exchange.
After creating the NYSE BQT, the
Exchange would distribute this data
feed through SFTI and market data
vendors. The path for distribution by
the Exchange of this data would not be
faster than a vendor that independently
created an NYSE BQT-like product
could distribute its own product. As
such, the proposed NYSE BQT data feed
is a data product that a competing
vendor could create and sell without
being in a disadvantaged position
relative to the Exchange. In recognition
that the Exchange is the source of its
own market data and is affiliated with
NYSE Arca and NYSE MKT, the
Exchange represents that the source of
the market data it uses to create the
proposed NYSE BQT is the same as the
source available to other vendors.
With respect to latency, the Exchange,
NYSE Arca, and NYSE MKT are located
in the same data center in Mahwah,
New Jersey. The system creating and
supporting the proposed NYSE BQT
data feed would need to obtain the six
underlying data feeds from these three
exchanges before it could aggregate and
consolidate information to create NYSE
BQT and then distribute it to end users.
The Exchange also offers third parties
access to its data center through colocation. Accordingly, a competing
market data vendor co-located in the
Exchange’s Mahwah, New Jersey facility
offering a similar competing product
would similarly need to obtain the six
underlying data feeds.
The Exchange has designed the NYSE
BQT data feed so that it would not have
a competitive advantage over a
competing vendor with respect to the
speed of access to those six underlying
data feeds. Likewise, the NYSE BQT
data feed would not have a speed
`
advantage vis-a-vis competing vendors
co-located in the data center with
respect to access to end user customers,
whether those end users are also colocated or not. As such, a market data
vendor could perform the aggregation
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and consolidation function in the
Mahwah facility and redistribute a
competing product from that location to
similarly situated customers on a level
playing field with respect to the speed
that the Exchange could create and
redistribute the NYSE BQT data feed.
With respect to cost, the Exchange
will file a separate rule filing to
establish the fees for NYSE BQT. To
ensure that vendors could compete with
the Exchange by creating the same
product as NYSE BQT and sell it to their
clients, the Exchange would charge its
clients for the NYSE BQT feed an
amount that represents the cost to a
market data vendor to obtain the six
underlying data feeds, plus $1,000 per
month to reflect the value of the
aggregation and consolidation function.
The Exchange notes that a competing
vendor might engage in a different
analysis of assessing the cost of a
competing product, which may
incorporate passing through fees
associated with co-location at the
Mahwah, New Jersey data center.
However, the incremental co-location
costs to a particular vendor might be
inconsequential if such vendor is
already co-located and is able to allocate
its co-location costs over numerous
product and customer relationships.
The Exchange therefore believes that a
competing vendor could create and offer
a product similar to the proposed NYSE
BQT data feed at a similar cost. For
these reasons, the Exchange believes
that vendors could readily offer a
product similar to NYSE BQT on a
competitive basis.
The Exchange will announce the
effective date of the proposed rule
change in a notice to be published as
soon as practicable following approval
of the proposed rule change by the
Commission. The Exchange anticipates
making available the NYSE BQT data
feed as soon as practicable after
approval of the proposed rule change by
the Commission.
2. Statutory Basis
As noted above, the Exchange would
be acting in the capacity of a vendor
with respect to the proposed NYSE BQT
data feed. The proposed NYSE BQT data
feed is a product that relies on the
Exchange’s receipt of underlying data,
which is available to all market
participants, before it can aggregate and
consolidate information to create the
NYSE BQT; this is a process that a
competing vendor could also perform.
Accordingly, although the Exchange
might be the only distributor of the
NYSE BQT data feed initially, it is not
an exclusive position to provide a
product like the NYSE BQT data feed.
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Because the Exchange is acting in a
vendor capacity, the Exchange does not
believe that its proposed NYSE BQT
data feed is subject to review under the
Act.10 Nonetheless, the Exchange
believes that the proposed rule change
is consistent with Section 6(b) 11 of the
Act, in general, and furthers the
objectives of Section 6(b)(5) 12 of the
Act, in particular, in that it is designed
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 it is not
designed to permit unfair
discrimination among customers,
brokers, or dealers.
Specifically, the Exchange has taken
into consideration its affiliated
relationship with NYSE Arca and NYSE
MKT in its design of the NYSE BQT
data feed to assure that similarly
situated competing vendors would be
able to offer a similar product on the
same terms as the Exchange, both from
the perspective of latency and cost. As
discussed in detail above, the Exchange
proposes to begin offering the NYSE
BQT data feed voluntarily in response to
demand from vendors and subscribers
that are interested in receiving BBO and
last sale information from the Exchange,
NYSE Arca, and NYSE MKT in a unified
view. Specifically, portfolio managers,
wealth managers, back-office
employees, and others are looking for a
cost-effective, easy-to-administer, highquality market data product with the
characteristics of the NYSE BQT data
feed. The NYSE BQT data feed will help
to protect a free and open market by
providing vendors and subscribers with
additional choices in receiving this type
of market data, thus promoting
competition and innovation.
The Exchange believes that NYSE
BQT will offer an alternative to the use
of consolidated data products and
proprietary data products such as
NASDAQ Basic and NLS Plus in certain
circumstances. NASDAQ Basic, which
is offered by The NASDAQ Stock
Market, Inc. (‘‘NASDAQ’’) pursuant to
NASDAQ Rule 7047, provides best bid
and offer and last sale information for
all U.S. exchange-listed securities
(including NYSE and its affiliates) based
on liquidity within NASDAQ, as well as
trades reported to the FINRA/NASDAQ
Trade Reporting Facility (‘‘TRF’’),
including NASDAQ last sale, NASDAQ
10 The Exchange reserves the right to argue, with
respect to the NYSE BQT data feed or any other
product, that there is no requirement for a filing
under Section 19 of the Act to enable the Exchange
to offer such products.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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BBO, NASDAQ opening and closing
prices, and other market status
information. According to NASDAQ,
seven vendors offer and more than 1,000
firms subscribe to NASDAQ Basic,
including 9 of the 10 largest banks.13
NLS Plus is a data product that is
offered by NASDAQ OMX Information,
LLC, a NASDAQ affiliate that is not a
self-regulatory organization (‘‘SRO’’);
neither NLS Plus nor its pricing was
subject to the rule filing process. NLS
Plus provides all trade data from
NASDAQ, the FINRA/NASDAQ TRF,
NASDAQ OMX BX, and NASDAQ OMX
PSX, as well as consolidated volume
information as part of each trade
message.14
BATS Global Markets (‘‘BATS’’) has
announced that it intends to offer a
market data product that provides a
unified view of the aggregated best bid
and offer, last sale, and optional depth
information (five levels), including size,
for all four equity exchanges operated
by BATS.15 The Exchange believes that
NYSE BQT will offer a competitive
alternative to the two existing NASDAQ
products and the proposed BATS
product, but notes that, unlike BATS, it
is offering NYSE BQT in the capacity of
a vendor.
In addition, the proposal would not
permit unfair discrimination because
the product will be available to all of the
Exchange’s customers through SFTI and
market data vendors on an equivalent
basis. In addition, any customer that
wished to continue to be able to
purchase one or more of the individual
underlying data feeds would be able to
do so.
In addition, the Exchange does not
believe that the proposal would permit
unfair discrimination among customers,
brokers, or dealers and thus is
consistent with the Act because the
Exchange will be offering the product
on terms that a competing vendor could
offer a competing product. Specifically,
13 See NASDAQ Basic, Doing More with Less,
available at https://www.brainshark.com/
nasdaqomx/vu?pi=zG8z33O6ozAgBpz0&tx=
preview&preview=1 and https://www.nasdaqtrader.
com/Trader.aspx?id=nasdaqbasic#vendors.
14 See NLS Product page, available at https://
www.nasdaqtrader.com/Trader.aspx?id=NLSplus.
BATS Exchange, Inc. has announced its intention
to offer the BATS One Feed, which will deliver
aggregated quote, trade, and optional depth
information for all four U.S. equity exchanges
operated by BATS, as of August 1, 2014, available
at https://cdn.batstrading.com/resources/market_
data/products/bats_bats-one-feed.pdf.
15 See https://cdn.batstrading.com/resources/
press_releases/BATS-One-AnnouncementFINAL.pdf. BATS has also submitted rule filings on
behalf it its four exchanges to the Commission on
the basis that its proposed unified feed is a
proprietary market data product. See also SR–
BATS–2014–028, SR–BYX–2014–011, SR–EDGA–
2014–16, and SR–EDGX–2014–19.
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the proposed data feed does not
represent Exchange core data, but rather
a new product that represents an
aggregation and consolidation of
existing, previously filed market data
products of the Exchange, NYSE Arca,
and NYSE MKT. As such, a competing
vendor could similarly obtain the six
underlying data feeds and perform a
similar aggregation and consolidation
function to create the same data product
with the same latency. More
specifically, a competing vendor that is
co-located in the Exchange’s Mahwah,
New Jersey data center could obtain the
six underlying data feeds from the
Exchange, NYSE Arca, and NYSE MKT
on the same latency basis as the system
that would be performing the
aggregation and consolidation of the
proposed NYSE BQT data feed and
provide the same type of product to its
customers with the same latency they
could achieve by purchasing the NYSE
BQT product from the Exchange. As
such, the Exchange would not have any
unfair advantage over competing
vendors with respect to obtaining data
from NYSE Arca and NYSE MKT; in
fact, the technology supporting the
NYSE BQT data feed would similarly
need to obtain the Exchange’s data feed
as well and even this connection would
be on a level playing field with a
competing vendor co-located at the data
center. In addition, the Exchange would
be charging for the proposed NYSE BQT
data feed competitively with the price
that a competing vendor could assess for
a competing product.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,16 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.
As noted above, the Exchange proposes
to offer the NYSE BQT data feed in a
capacity similar to that of a vendor.
Although the Exchange, NYSE Arca,
and NYSE MKT are the exclusive
distributors of the six BBO and Trades
feeds from which certain data elements
would be taken to create the NYSE BQT,
the Exchange would not be the
exclusive distributor of the aggregated
and consolidated information that
would compose the proposed NYSE
BQT data feed. Vendors would be able,
if they chose, to create a data feed with
the same information as the NYSE BQT
and distribute it to their clients on a
level-playing field with respect to
latency and cost as compared to the
16 15
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Exchange’s proposed BQT data feed. In
addition, the pricing the Exchange
would charge clients for NYSE BQT
would not be lower than the cost to a
vendor of receiving the underlying data
feeds and of maintaining co-located
operations to receive and distribute
such data feeds with no greater latency
than the Exchange.
With respect to latency, the Exchange,
NYSE Arca, and NYSE MKT are located
in the same data center in Mahwah,
New Jersey. The system creating and
supporting the proposed NYSE BQT
data feed would need to obtain the six
underlying data feeds from these three
exchanges before it could aggregate and
consolidate information to create NYSE
BQT and then distribute it to end users.
A competing market data vendor colocated at the Exchange’s Mahwah, New
Jersey facility offering a similar
competing product would similarly
need to obtain the six underlying data
feeds.
The Exchange has designed the NYSE
BQT data feed so that it would not have
a competitive advantage over a
competing vendor with respect to the
speed of access to those six underlying
data feeds. Likewise, the NYSE BQT
data feed would not have a speed
`
advantage vis-a-vis competing vendors
co-located in the data center with
respect to access to end user customers,
whether those end users are also colocated or not. As such, a market data
vendor could perform the aggregation
and consolidation function in the
Mahwah facility and redistribute a
competing product from that location to
similarly situated customers on a levelplaying field with respect to the speed
that the Exchange could create and
redistribute the NYSE BQT data feed.
With respect to cost, the Exchange
will file a separate rule filing to
establish the fees for NYSE BQT. To
ensure that vendors could compete with
the Exchange by creating the same
product as NYSE BQT and sell it to their
clients, the Exchange would charge its
clients for the NYSE BQT feed an
amount that represents the cost to a
market data vendor to obtain the six
underlying data feeds, plus $1,000 per
month to reflect both the value of the
aggregation and consolidation function.
The Exchange notes that a competing
vendor might engage in a different
analysis of assessing the cost of a
competing product, which may
incorporate passing through fees
associated with co-location at the
Mahwah, New Jersey data center.
However, the incremental co-location
costs to a particular vendor may be
inconsequential if such vendor is
already co-located and is able to allocate
E:\FR\FM\08AUN1.SGM
08AUN1
46498
Federal Register / Vol. 79, No. 153 / Friday, August 8, 2014 / Notices
its co-location costs over numerous
product and customer relationships.
The Exchange therefore believes that a
competing vendor could create and offer
a product similar to the proposed NYSE
BQT data feed at a similar cost. For
these reasons, the Exchange believes
that vendors could readily offer a
product similar to NYSE BQT on a
competitive basis.
The Exchange further believes that
NYSE BQT will promote competition
among exchanges by offering an
alternative to NASDAQ Basic and NLS
Plus, which are already offered by
NASDAQ. As noted above, seven
vendors are already offering and more
than 1,000 firms are already subscribing
to NASDAQ Basic, including 9 of the 10
largest banks.17 BATS also has
announced that it intends to offer a
market data product that is similar to
the NASDAQ products and NYSE
BQT.18 For these reasons, the Exchange
believes that offering NYSE BQT will
promote, rather than unnecessarily or
inappropriately burden, competition for
market data products that are offered in
the capacity as a vendor and are not
core exchange market data products.
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days of such date (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the Exchange
consents, the Commission shall:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
17 See
supra note 12.
https://cdn.batstrading.com/resources/
press_releases/BATS-One-AnnouncementFINAL.pdf, supra note 15.
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–
NYSE–2014–40 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2014–40. 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 NYSE. 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–NYSE–
2014–40 and should be submitted on or
before August 29, 2014.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–18747 Filed 8–7–14; 8:45 am]
BILLING CODE 8011–01–P
18 See
VerDate Mar<15>2010
16:51 Aug 07, 2014
Jkt 232001
SECURITIES AND EXCHANGE
COMMISSION
File No. 500–1
In the Matter of Amico Games Corp.,
Andina Group Inc., Cougar Oil & Gas
Canada Inc., Encorium Group, Inc., and
Waccamaw Bankshares, Inc., Order of
Suspension of Trading
August 6, 2014.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Amico
Games Corp. because it has not filed any
periodic reports since the period ended
May 31, 2011.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Andina
Group Inc. because it has not filed any
periodic reports since the period ended
March 31, 2011.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Cougar Oil
& Gas Canada Inc. because it has not
filed any periodic reports since the
period ended December 31, 2010.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Encorium
Group, Inc. because it has not filed any
periodic reports since the period ended
December 31, 2010.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Waccamaw
Bankshares, Inc. because it has not filed
any periodic reports since the period
ended December 31, 2010.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed companies
is suspended for the period from 9:30
a.m. EDT on August 6, 2014, through
11:59 p.m. EDT on August 19, 2014.
By the Commission.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–18914 Filed 8–6–14; 11:15 am]
19 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00104
Fmt 4703
Sfmt 9990
BILLING CODE 8011–01–P
E:\FR\FM\08AUN1.SGM
08AUN1
Agencies
[Federal Register Volume 79, Number 153 (Friday, August 8, 2014)]
[Notices]
[Pages 46494-46498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18747]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72750; File No. SR-NYSE-2014-40]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Establishing the NYSE Best
Quote & Trades Data Feed
August 4, 2014.
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 July 21, 2014, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') 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 self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to establish the NYSE Best Quote & Trades
(``NYSE BQT'') data feed. 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 these 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 aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to establish the NYSE BQT data feed. The NYSE
BQT data feed would provide a unified view of best bid and offer
(``BBO'') and
[[Page 46495]]
last sale information for the Exchange and its affiliates, NYSE Arca
Equities, Inc. (``NYSE Arca'') and NYSE MKT LLC (``NYSE MKT'').
Background
In 2009, the Securities and Exchange Commission (the
``Commission'') approved the NYSE Trades data feed and certain fees for
it.\3\ NYSE Trades is an NYSE-only market data feed that distributes 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.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release Nos. 59290 (Jan. 23,
2009), 74 FR 5707 (Jan. 30, 2009) (SR-NYSE-2009-05); 59606 (Mar. 19,
2009), 74 FR 13293 (Mar. 26, 2009) (SR-NYSE-2009-04).
---------------------------------------------------------------------------
NYSE Arca established the NYSE Arca Trades data feed in 2009, and
NYSE MKT established the NYSE MKT Trades data feed in 2010.\4\ Similar
to NYSE Trades, NYSE Arca Trades is an NYSE Arca-only data feed and
NYSE MKT Trades is an NYSE MKT-only data feed. As with NYSE Trades, the
NYSE Arca Trades and NYSE MKT Trades data feeds each distribute on a
real-time basis the same last sale information that NYSE Arca and NYSE
MKT report, respectively, under the CTA Plan for inclusion in the CTA
Plan's consolidated data streams.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release Nos. 59289 (Jan. 23,
2009), 74 FR 5711 (Jan. 30, 2009) (SR-NYSEArca-2009-06); 59598 (Mar.
18, 2009), 74 FR 12919 (Mar. 25, 2009) (SR-NYSEArca-2009-05); 62187
(May 27, 2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
---------------------------------------------------------------------------
In 2010, the Commission approved the NYSE BBO data feed and certain
fees for it.\5\ NYSE BBO is an NYSE-only market data feed that
distributes on a real-time basis the same BBO 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 reports
quotes under the CQ Plan.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 62181 (May 26,
2010), 75 FR 31488 (June 3, 2010) (SR-NYSE-2010-30).
---------------------------------------------------------------------------
In 2010, the Commission also approved the NYSE Arca BBO and NYSE
MKT BBO data feeds and associated fees.\6\ As with NYSE BBO, NYSE Arca
BBO is an NYSE Arca-only market data feed and NYSE MKT BBO is an NYSE
MKT-only market data feed. Similar to NYSE BBO, NYSE Arca BBO and NYSE
MKT BBO each distribute on a real-time basis the same BBO information
that NYSE Arca and NYSE MKT report, respectively, under the CQ Plan for
inclusion in the CQ Plan's consolidated quotation information data
stream. NYSE Arca BBO includes the best bids and offers for all
securities that are traded on NYSE Arca and for which NYSE Arca reports
quotes under the CQ Plan. NYSE MKT includes the best bids and offers
for all securities that are traded on NYSE MKT and for which NYSE MKT
reports quotes under the CQ Plan.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 62188 (May 27,
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23); 62187 (May
27, 2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
---------------------------------------------------------------------------
Proposed NYSE BQT Data Feed
In response to customer requests, the Exchange proposes to
establish the NYSE BQT data feed, a data feed consisting of certain
data elements from six market data feeds--NYSE Trades, NYSE BBO, NYSE
Arca Trades, NYSE Arca BBO, NYSE MKT Trades, and NYSE MKT BBO. The
Exchange does not currently offer this product. The NYSE BQT data feed
would have three channels: One channel for the last sale data (the
``last sale channel''); another channel for the BBO data (the ``best
quotes channel''); and a third channel for consolidated volume data
(the ``consolidated volume channel'').
The last sale channel provides an aggregation of the same data that
is available through NYSE Trades, NYSE Arca Trades, and NYSE MKT
Trades.
The best quotes channel provides the NYSE BQT BBO, which is the
best quote from among the NYSE BBO, NYSE Arca BBO, and NYSE MKT BBO
based on the following criteria, in order:
Price: the exchange with the highest bid or the lowest
offer has overall priority;
Size: the largest size takes precedence when multiple
exchanges submit the same bid and/or offer price; and
Time: the earliest time takes precedence when multiple
exchanges submit the same bid and/or offer price with the same sizes.
For each security, the best quotes channel would only include one
best bid and one best offer from among the three exchanges. The NYSE
BQT BBO would be marked with a market center ID identifying the
exchange from which the BBO originated. For example, if XYZ stock were
traded on both NYSE and NYSE Arca, and the highest bid and lowest offer
according to the NYSE BBO were 1,000 shares at $10.00 and 1,000 shares
at $10.03, respectively, and the highest bid and lowest offer for XYZ
stock according to the NYSE Arca BBO were 1,200 shares at $9.99 and 900
shares at $10.02, respectively, then NYSE BQT would generate the best
bid for XYZ stock as 1,000 shares at $10.00 on NYSE and the best offer
at 900 shares at $10.02 on NYSE Arca.
The consolidated volume channel will carry consolidated volume for
all listed equities in a manner consistent with the requirements for
redistributing such data as set forth in the securities information
processor plans.\7\
---------------------------------------------------------------------------
\7\ The ``securities information processor plans'' refer to the
CTA Plan and Nasdaq UTP Plan. See Telephone conversation between
Leah Mesfin, Special Counsel, Division of Trading & Markets,
Commission, and Marija Willen, Chief Counsel of NYSE Group Inc.,
NYSE (July 30, 2014).
---------------------------------------------------------------------------
NYSE BQT would also provide related data elements, such as trade
and security status updates (e.g., trade corrections and trading
halts).
The Exchange proposes to offer NYSE BQT through the Exchange's
Secure Financial Transaction Infrastructure (``SFTI'') network and
market data vendors, as the Exchange does with its other proprietary
market data products.
The Exchange believes that NYSE BQT would provide high-quality,
comprehensive last sale and BBO data for the Exchange, NYSE Arca, and
NYSE MKT in a unified view and respond to subscriber demand for such a
product. The Exchange notes that an anticipated end user might use NYSE
BQT for purposes of identifying an indicative price of Tape A, B, and C
securities through leveraging the depth and breadth of NYSE, NYSE Arca,
and NYSE MKT without having to purchase consolidated data and thus it
would not be a latency-sensitive product. The Exchange does not
anticipate that an end user would, or could, use the NYSE BQT data for
purposes of making order-routing or trading decisions. Rather, the
Exchange notes that under Rule 603 of Regulation NMS, NYSE BQT could
not be substituted for consolidated data in all instances in which
consolidated data is used and certain subscribers would still be
required to purchase consolidated data for trading and order-routing
purposes.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 242.603(c).
---------------------------------------------------------------------------
Exchange Not an Exclusive Distributor of NYSE BQT
The Exchange proposes to offer the NYSE BQT data feed in a capacity
similar to that of a vendor. The Exchange, NYSE Arca, and NYSE MKT are
the exclusive distributors of the six BBO and Trades feeds \9\ from
which certain data elements would be taken to create the NYSE BQT. By
contrast, the Exchange would not be the exclusive
[[Page 46496]]
distributor of the aggregated and consolidated information that would
compose the proposed NYSE BQT data feed. Other vendors would be able,
if they chose, to create a data feed with the same information as
proposed for inclusion in NYSE BQT, and to distribute it to clients
with no greater latency than the Exchange would be able to distribute
NYSE BQT. In addition, the pricing the Exchange would charge clients
for NYSE BQT would not be lower than the cost to a vendor of receiving
the underlying data feeds and of maintaining co-located operations to
receive such data feeds with no greater latency than the Exchange.
---------------------------------------------------------------------------
\9\ These other data feeds are offered pursuant to pre-existing
and already effective rules filed with the Commission; those rules
will not be altered by this filing.
---------------------------------------------------------------------------
After creating the NYSE BQT, the Exchange would distribute this
data feed through SFTI and market data vendors. The path for
distribution by the Exchange of this data would not be faster than a
vendor that independently created an NYSE BQT-like product could
distribute its own product. As such, the proposed NYSE BQT data feed is
a data product that a competing vendor could create and sell without
being in a disadvantaged position relative to the Exchange. In
recognition that the Exchange is the source of its own market data and
is affiliated with NYSE Arca and NYSE MKT, the Exchange represents that
the source of the market data it uses to create the proposed NYSE BQT
is the same as the source available to other vendors.
With respect to latency, the Exchange, NYSE Arca, and NYSE MKT are
located in the same data center in Mahwah, New Jersey. The system
creating and supporting the proposed NYSE BQT data feed would need to
obtain the six underlying data feeds from these three exchanges before
it could aggregate and consolidate information to create NYSE BQT and
then distribute it to end users. The Exchange also offers third parties
access to its data center through co-location. Accordingly, a competing
market data vendor co-located in the Exchange's Mahwah, New Jersey
facility offering a similar competing product would similarly need to
obtain the six underlying data feeds.
The Exchange has designed the NYSE BQT data feed so that it would
not have a competitive advantage over a competing vendor with respect
to the speed of access to those six underlying data feeds. Likewise,
the NYSE BQT data feed would not have a speed advantage vis-[agrave]-
vis competing vendors co-located in the data center with respect to
access to end user customers, whether those end users are also co-
located or not. As such, a market data vendor could perform the
aggregation and consolidation function in the Mahwah facility and
redistribute a competing product from that location to similarly
situated customers on a level playing field with respect to the speed
that the Exchange could create and redistribute the NYSE BQT data feed.
With respect to cost, the Exchange will file a separate rule filing
to establish the fees for NYSE BQT. To ensure that vendors could
compete with the Exchange by creating the same product as NYSE BQT and
sell it to their clients, the Exchange would charge its clients for the
NYSE BQT feed an amount that represents the cost to a market data
vendor to obtain the six underlying data feeds, plus $1,000 per month
to reflect the value of the aggregation and consolidation function. The
Exchange notes that a competing vendor might engage in a different
analysis of assessing the cost of a competing product, which may
incorporate passing through fees associated with co-location at the
Mahwah, New Jersey data center. However, the incremental co-location
costs to a particular vendor might be inconsequential if such vendor is
already co-located and is able to allocate its co-location costs over
numerous product and customer relationships. The Exchange therefore
believes that a competing vendor could create and offer a product
similar to the proposed NYSE BQT data feed at a similar cost. For these
reasons, the Exchange believes that vendors could readily offer a
product similar to NYSE BQT on a competitive basis.
The Exchange will announce the effective date of the proposed rule
change in a notice to be published as soon as practicable following
approval of the proposed rule change by the Commission. The Exchange
anticipates making available the NYSE BQT data feed as soon as
practicable after approval of the proposed rule change by the
Commission.
2. Statutory Basis
As noted above, the Exchange would be acting in the capacity of a
vendor with respect to the proposed NYSE BQT data feed. The proposed
NYSE BQT data feed is a product that relies on the Exchange's receipt
of underlying data, which is available to all market participants,
before it can aggregate and consolidate information to create the NYSE
BQT; this is a process that a competing vendor could also perform.
Accordingly, although the Exchange might be the only distributor of the
NYSE BQT data feed initially, it is not an exclusive position to
provide a product like the NYSE BQT data feed. Because the Exchange is
acting in a vendor capacity, the Exchange does not believe that its
proposed NYSE BQT data feed is subject to review under the Act.\10\
Nonetheless, the Exchange believes that the proposed rule change is
consistent with Section 6(b) \11\ of the Act, in general, and furthers
the objectives of Section 6(b)(5) \12\ of the Act, in particular, in
that it is designed 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 it is not designed to
permit unfair discrimination among customers, brokers, or dealers.
---------------------------------------------------------------------------
\10\ The Exchange reserves the right to argue, with respect to
the NYSE BQT data feed or any other product, that there is no
requirement for a filing under Section 19 of the Act to enable the
Exchange to offer such products.
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Specifically, the Exchange has taken into consideration its
affiliated relationship with NYSE Arca and NYSE MKT in its design of
the NYSE BQT data feed to assure that similarly situated competing
vendors would be able to offer a similar product on the same terms as
the Exchange, both from the perspective of latency and cost. As
discussed in detail above, the Exchange proposes to begin offering the
NYSE BQT data feed voluntarily in response to demand from vendors and
subscribers that are interested in receiving BBO and last sale
information from the Exchange, NYSE Arca, and NYSE MKT in a unified
view. Specifically, portfolio managers, wealth managers, back-office
employees, and others are looking for a cost-effective, easy-to-
administer, high-quality market data product with the characteristics
of the NYSE BQT data feed. The NYSE BQT data feed will help to protect
a free and open market by providing vendors and subscribers with
additional choices in receiving this type of market data, thus
promoting competition and innovation.
The Exchange believes that NYSE BQT will offer an alternative to
the use of consolidated data products and proprietary data products
such as NASDAQ Basic and NLS Plus in certain circumstances. NASDAQ
Basic, which is offered by The NASDAQ Stock Market, Inc. (``NASDAQ'')
pursuant to NASDAQ Rule 7047, provides best bid and offer and last sale
information for all U.S. exchange-listed securities (including NYSE and
its affiliates) based on liquidity within NASDAQ, as well as trades
reported to the FINRA/NASDAQ Trade Reporting Facility (``TRF''),
including NASDAQ last sale, NASDAQ
[[Page 46497]]
BBO, NASDAQ opening and closing prices, and other market status
information. According to NASDAQ, seven vendors offer and more than
1,000 firms subscribe to NASDAQ Basic, including 9 of the 10 largest
banks.\13\
---------------------------------------------------------------------------
\13\ See NASDAQ Basic, Doing More with Less, available at https://www.brainshark.com/nasdaqomx/vu?pi=zG8z33O6ozAgBpz0&tx=preview&preview=1 and https://www.nasdaqtrader.com/Trader.aspx?id=nasdaqbasic#vendors.
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NLS Plus is a data product that is offered by NASDAQ OMX
Information, LLC, a NASDAQ affiliate that is not a self-regulatory
organization (``SRO''); neither NLS Plus nor its pricing was subject to
the rule filing process. NLS Plus provides all trade data from NASDAQ,
the FINRA/NASDAQ TRF, NASDAQ OMX BX, and NASDAQ OMX PSX, as well as
consolidated volume information as part of each trade message.\14\
---------------------------------------------------------------------------
\14\ See NLS Product page, available at https://www.nasdaqtrader.com/Trader.aspx?id=NLSplus. BATS Exchange, Inc. has
announced its intention to offer the BATS One Feed, which will
deliver aggregated quote, trade, and optional depth information for
all four U.S. equity exchanges operated by BATS, as of August 1,
2014, available at https://cdn.batstrading.com/resources/market_data/products/bats_bats-one-feed.pdf.
---------------------------------------------------------------------------
BATS Global Markets (``BATS'') has announced that it intends to
offer a market data product that provides a unified view of the
aggregated best bid and offer, last sale, and optional depth
information (five levels), including size, for all four equity
exchanges operated by BATS.\15\ The Exchange believes that NYSE BQT
will offer a competitive alternative to the two existing NASDAQ
products and the proposed BATS product, but notes that, unlike BATS, it
is offering NYSE BQT in the capacity of a vendor.
---------------------------------------------------------------------------
\15\ See https://cdn.batstrading.com/resources/press_releases/BATS-One-Announcement-FINAL.pdf. BATS has also submitted rule
filings on behalf it its four exchanges to the Commission on the
basis that its proposed unified feed is a proprietary market data
product. See also SR-BATS-2014-028, SR-BYX-2014-011, SR-EDGA-2014-
16, and SR-EDGX-2014-19.
---------------------------------------------------------------------------
In addition, the proposal would not permit unfair discrimination
because the product will be available to all of the Exchange's
customers through SFTI and market data vendors on an equivalent basis.
In addition, any customer that wished to continue to be able to
purchase one or more of the individual underlying data feeds would be
able to do so.
In addition, the Exchange does not believe that the proposal would
permit unfair discrimination among customers, brokers, or dealers and
thus is consistent with the Act because the Exchange will be offering
the product on terms that a competing vendor could offer a competing
product. Specifically, the proposed data feed does not represent
Exchange core data, but rather a new product that represents an
aggregation and consolidation of existing, previously filed market data
products of the Exchange, NYSE Arca, and NYSE MKT. As such, a competing
vendor could similarly obtain the six underlying data feeds and perform
a similar aggregation and consolidation function to create the same
data product with the same latency. More specifically, a competing
vendor that is co-located in the Exchange's Mahwah, New Jersey data
center could obtain the six underlying data feeds from the Exchange,
NYSE Arca, and NYSE MKT on the same latency basis as the system that
would be performing the aggregation and consolidation of the proposed
NYSE BQT data feed and provide the same type of product to its
customers with the same latency they could achieve by purchasing the
NYSE BQT product from the Exchange. As such, the Exchange would not
have any unfair advantage over competing vendors with respect to
obtaining data from NYSE Arca and NYSE MKT; in fact, the technology
supporting the NYSE BQT data feed would similarly need to obtain the
Exchange's data feed as well and even this connection would be on a
level playing field with a competing vendor co-located at the data
center. In addition, the Exchange would be charging for the proposed
NYSE BQT data feed competitively with the price that a competing vendor
could assess for a competing product.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\16\ 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. As noted above, the Exchange proposes to offer
the NYSE BQT data feed in a capacity similar to that of a vendor.
Although the Exchange, NYSE Arca, and NYSE MKT are the exclusive
distributors of the six BBO and Trades feeds from which certain data
elements would be taken to create the NYSE BQT, the Exchange would not
be the exclusive distributor of the aggregated and consolidated
information that would compose the proposed NYSE BQT data feed. Vendors
would be able, if they chose, to create a data feed with the same
information as the NYSE BQT and distribute it to their clients on a
level-playing field with respect to latency and cost as compared to the
Exchange's proposed BQT data feed. In addition, the pricing the
Exchange would charge clients for NYSE BQT would not be lower than the
cost to a vendor of receiving the underlying data feeds and of
maintaining co-located operations to receive and distribute such data
feeds with no greater latency than the Exchange.
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\16\ 15 U.S.C. 78f(b)(8).
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With respect to latency, the Exchange, NYSE Arca, and NYSE MKT are
located in the same data center in Mahwah, New Jersey. The system
creating and supporting the proposed NYSE BQT data feed would need to
obtain the six underlying data feeds from these three exchanges before
it could aggregate and consolidate information to create NYSE BQT and
then distribute it to end users. A competing market data vendor co-
located at the Exchange's Mahwah, New Jersey facility offering a
similar competing product would similarly need to obtain the six
underlying data feeds.
The Exchange has designed the NYSE BQT data feed so that it would
not have a competitive advantage over a competing vendor with respect
to the speed of access to those six underlying data feeds. Likewise,
the NYSE BQT data feed would not have a speed advantage vis-[agrave]-
vis competing vendors co-located in the data center with respect to
access to end user customers, whether those end users are also co-
located or not. As such, a market data vendor could perform the
aggregation and consolidation function in the Mahwah facility and
redistribute a competing product from that location to similarly
situated customers on a level-playing field with respect to the speed
that the Exchange could create and redistribute the NYSE BQT data feed.
With respect to cost, the Exchange will file a separate rule filing
to establish the fees for NYSE BQT. To ensure that vendors could
compete with the Exchange by creating the same product as NYSE BQT and
sell it to their clients, the Exchange would charge its clients for the
NYSE BQT feed an amount that represents the cost to a market data
vendor to obtain the six underlying data feeds, plus $1,000 per month
to reflect both the value of the aggregation and consolidation
function. The Exchange notes that a competing vendor might engage in a
different analysis of assessing the cost of a competing product, which
may incorporate passing through fees associated with co-location at the
Mahwah, New Jersey data center. However, the incremental co-location
costs to a particular vendor may be inconsequential if such vendor is
already co-located and is able to allocate
[[Page 46498]]
its co-location costs over numerous product and customer relationships.
The Exchange therefore believes that a competing vendor could create
and offer a product similar to the proposed NYSE BQT data feed at a
similar cost. For these reasons, the Exchange believes that vendors
could readily offer a product similar to NYSE BQT on a competitive
basis.
The Exchange further believes that NYSE BQT will promote
competition among exchanges by offering an alternative to NASDAQ Basic
and NLS Plus, which are already offered by NASDAQ. As noted above,
seven vendors are already offering and more than 1,000 firms are
already subscribing to NASDAQ Basic, including 9 of the 10 largest
banks.\17\ BATS also has announced that it intends to offer a market
data product that is similar to the NASDAQ products and NYSE BQT.\18\
For these reasons, the Exchange believes that offering NYSE BQT will
promote, rather than unnecessarily or inappropriately burden,
competition for market data products that are offered in the capacity
as a vendor and are not core exchange market data products.
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\17\ See supra note 12.
\18\ See https://cdn.batstrading.com/resources/press_releases/BATS-One-Announcement-FINAL.pdf, supra note 15.
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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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days of such
date (i) as the Commission may designate if it finds such longer period
to be appropriate and publishes its reasons for so finding or (ii) as
to which the Exchange consents, the Commission shall:
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2014-40 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2014-40. 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 NYSE. 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-NYSE-2014-40 and should be
submitted on or before August 29, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-18747 Filed 8-7-14; 8:45 am]
BILLING CODE 8011-01-P