Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fees for NYSE Arca Integrated Feed To Establish Eligibility Requirements for Redistribution, 1527-1532 [2015-00212]
Download as PDF
<![CDATA[
tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
Unaffiliated Investment Company of any
changes to the list as soon as reasonably
practicable after a change occurs. The
Unaffiliated Investment Company and
the Fund of Funds will maintain and
preserve a copy of the order, the
Participation Agreement, and the list
with any updated information for the
duration of the investment and for a
period of not less than six years
thereafter, the first two years in an
easily accessible place.
9. Before approving any advisory
contract under section 15 of the 1940
Act, the Board of each Fund of Funds,
including a majority of the Independent
Trustees, shall find that the advisory
fees charged under the advisory contract
are based on services provided that are
in addition to, rather than duplicative
of, services provided under the advisory
contract(s) of any Underlying Fund in
which the Fund of Funds may invest.
Such finding, and the basis upon which
the finding was made, will be recorded
fully in the minute books of the
appropriate Fund of Funds.
10. The Advisor will waive fees
otherwise payable to it by a Fund of
Funds in an amount at least equal to any
compensation (including fees received
pursuant to any plan adopted by an
Unaffiliated Investment Company
pursuant to rule 12b–1 under the 1940
Act) received from an Unaffiliated Fund
by the Advisor, or an affiliated person
of the Advisor, other than any advisory
fees paid to the Advisor or its affiliated
person by the Unaffiliated Investment
Company, in connection with the
investment by the Fund of Funds in the
Unaffiliated Fund. Any Sub-Adviser
will waive fees otherwise payable to the
Sub-Adviser, directly or indirectly, by
the Fund of Funds in an amount at least
equal to any compensation received by
the Sub-Adviser, or an affiliated person
of the Sub-Adviser, from an Unaffiliated
Fund, other than any advisory fees paid
to the Sub-Adviser or its affiliated
person by the Unaffiliated Investment
Company in connection with the
investment by the Fund of Funds in the
Unaffiliated Fund made at the direction
of the Sub-Adviser. In the event that the
Sub-Adviser waives fees, the benefit of
the waiver will be passed through to the
Fund of Funds.
11. Any sales charges and/or service
fees charged with respect to shares of a
Fund of Funds will not exceed the
limits applicable to funds of funds set
forth in NASD Conduct Rule 2830.
12. No Underlying Fund will acquire
securities of any other investment
company or company relying on section
3(c)(1) or 3(c)(7) of the 1940 Act, in
excess of the limits contained in section
12(d)(1)(A) of the 1940 Act, except to
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
the extent that such Underlying Fund:
(a) Acquires such securities in
compliance with section 12(d)(1)(E) of
the 1940 Act and is either an Affiliated
Fund or is in the same ‘‘group of
investment companies’’ as its
corresponding master fund; (b) receives
securities of another investment
company as a dividend or as a result of
a plan of reorganization of a company
(other than a plan devised for the
purpose of evading section 12(d)(1) of
the 1940 Act); or (c) acquires (or is
deemed to have acquired) securities of
another investment company pursuant
to exemptive relief from the
Commission permitting such
Underlying Fund to: (i) Acquire
securities of one or more investment
companies for short-term cash
management purposes or (ii) engage in
inter-fund borrowing and lending
transactions.
Other Investments by Section
12(d)(1)(G) Funds of Funds
In addition, Applicants agree that the
order granting the requested relief to
permit Section 12(d)(1)(G) Funds of
Funds to invest in Other Investments
shall be subject to the following
condition:
13. Applicants will comply with all
provisions of rule 12d1–2 under the
1940 Act, except for paragraph (a)(2) to
the extent that it restricts any Section
12(d)(1)(G) Fund of Funds from
investing in Other Investments as
described in the application.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2015–00226 Filed 1–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73993; File No. SR–
NYSEArca–2014–147]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Fees for
NYSE Arca Integrated Feed To
Establish Eligibility Requirements for
Redistribution
January 6, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00035
Fmt 4703
1527
24, 2014, NYSE Arca, Inc. (‘‘NYSE
Arca’’ 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 Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
fees for NYSE Arca Integrated Feed to
establish eligibility requirements for
redistribution on a managed nondisplay basis and to establish an access
fee for managed non-display data
recipients, operative on January 1, 2015.
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
fees for NYSE Arca Integrated Feed, as
set forth on the NYSE Arca Equities
Proprietary Market Data Fees Schedule
(‘‘Fee Schedule’’), to establish eligibility
requirements for redistribution of
market data on a Managed Non-Display
basis and establish an access fee for
Managed Non-Display data recipients,
operative on January 1, 2015.
Non-Display Use of NYSE Arca
market data means accessing,
processing, or consuming NYSE Arca
market data delivered via direct and/or
Redistributor 3 data feeds for a purpose
3 ‘‘Redistributor’’ means a vendor or any other
person that provides an NYSE Arca data product to
a data recipient or to any system that a data
Continued
Sfmt 4703
E:\FR\FM\12JAN1.SGM
12JAN1
tkelley on DSK3SPTVN1PROD with NOTICES
1528
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
other than in support of a data
recipient’s display or further internal or
external redistribution. A Redistributor
approved for Managed Non-Display
Services manages and controls the
access to NYSE Arca Integrated Feed
and does not allow for further internal
distribution or external redistribution of
NYSE Arca Integrated Feed by the data
recipients. Managed Non-Display
Services Fees apply when a data
recipient’s non-display applications are
hosted by a Redistributor that has been
approved for Managed Non-Display
Services.
A Redistributor approved for
Managed Non-Display Services is
required to report to the Exchange on a
monthly basis the data recipients that
are receiving NYSE Arca Integrated
Feed through the Redistributor’s
Managed Non-Display Service. A data
recipient receiving NYSE Arca
Integrated Feed through a
Redistributor’s Managed Non-Display
Service does not have any reporting
requirements.
Currently, to be approved for
Managed Non-Display Services, a
Redistributor of the Managed NonDisplay Services must be approved
under the Unit-of-Count policy.4
The Exchange is proposing to retire
the Unit-of-Count Policy, and as a
result, eligibility for Managed NonDisplay Services of NYSE Arca
Integrated Feed would no longer be
based on eligibility under the Unit-ofCount Policy. The Exchange proposes
instead to establish eligibility
requirements specifically for the
redistribution of market data for
Managed Non-Display Services. The
Exchange also proposes to add an access
fee that would apply to a data recipient
that receives NYSE Arca Integrated Feed
from an approved Redistributor of
Managed Non-Display Services.
The proposed eligibility requirements
for the provision of Managed NonDisplay Services would be similar to the
eligibility requirements for the Unit-ofCount Policy in that they would require
the Redistributor to manage and control
the access to NYSE Arca Integrated Feed
for data recipients’ non-display
applications and not allow for further
internal distribution or external
redistribution of the information by data
recipients. In addition, to be eligible to
provide Managed Non-Display Services,
the Redistributor would be required to
recipient uses, irrespective of the means of
transmission or access.
4 See Securities Exchange Act Release Nos. 69315
(Apr. 5, 2013), 78 FR 21668 (Apr. 11, 2013) (SR–
NYSEArca–2013–37) and 73011 (Sept. 5, 2014), 79
FR 54315 (Sept. 11, 2014) (SR–NYSEArca–2014–93)
(‘‘Non-Display Fee filings’’).
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
(a) host the data recipients’ non-display
applications in equipment located in the
Redistributor’s data center and/or
hosted space/cage and (b) offer NYSE
Arca Integrated Feed in the
Redistributor’s own messaging formats
(rather than using raw NYSE message
formats) by reformatting and/or altering
NYSE Arca Integrated Feed prior to
retransmission without affecting the
integrity of NYSE Arca Integrated Feed
and without rendering NYSE Arca
Integrated Feed inaccurate, unfair,
uninformative, fictitious, misleading or
discriminatory. The proposed eligibility
requirements are similar to data
distribution models currently in use and
align the Exchange with other markets.5
The reporting requirements associated
with the Managed Non-Display Service
would not change. A Redistributor
approved for Managed Non-Display
Service would be required to report to
the Exchange on a monthly basis the
data recipients that are receiving NYSE
Arca Integrated Feed through the
Redistributor’s Managed Non-Display
Service. A data recipient receiving
NYSE Arca Integrated Feed through a
Redistributor’s Managed Non-Display
Service would continue not to have any
reporting requirements.
In addition, the Exchange proposes to
adopt an Access Fee of $1,500/month
applicable only to data recipients that
receive NYSE Arca Integrated Feed from
an approved Redistributor of Managed
Non-Display Services, operative January
1, 2015. Currently, data recipients,
including recipients of Managed NonDisplay Services, are required to pay an
Access Fee of $3,000/month to receive
NYSE Arca Integrated Feed. Because the
purpose of an access fee is to charge
data recipients for access to the
Exchange’s proprietary market data, the
Exchange believes it is appropriate to
charge an access fee to all data
recipients, including recipients of
Managed Non-Display Services.6 In
5 See Securities Exchange Act Release Nos. 70748
(Oct. 23, 2013), 70748 (Oct. 23, 2013), 78 FR 64569
(Oct. 29, 2013) (SR–Phlx–2013–105) (notice of filing
and immediate effectiveness of proposed rule
change to establish non-display Managed Data
Solution for NASDAQ OMX PHLX (‘‘Phlx’’)); 70269
(Aug. 27, 2013), 78 FR 54336 (Sept. 3, 2013) (SR–
NASDAQ–2013–106) (notice of filing and
immediate effectiveness of proposed rule change to
establish non-display Managed Data Solution for
NASDAQ Stock Market (‘‘NASDAQ’’)); and 69182
(Mar. 19, 2013), 78 FR 18378 (Mar. 26, 2013) (SR–
Phlx–2013–28) (notice of filing and immediate
effectiveness of proposed rule change to establish
non-display Managed Data Solution for Phlx
equities market PSX).
6 In order to harmonize its approach to fees for
its market data products, the Exchange is proposing
to establish an access fee for Managed Non-Display
Services for NYSE Arca BBO, NYSE Arca Trades,
and NYSE ArcaBook that are also half of the
existing access fee for each respective data feed. See
PO 00000
Frm 00036
Fmt 4703
Sfmt 4703
recognition that data recipients of
Managed Non-Display Services receive
NYSE Arca Integrated Feed in a
controlled format, the Exchange
proposes to establish an Access Fee that
would be applicable only to data
recipients of Managed Non-Display
Services and that would be half the size
of the current Access Fee. In connection
with this change, the Exchange also
proposes to amend the Fee Schedule to
specify that the current Access Fee of
$3,000/month is charged to data
recipients other than those receiving
data through Managed Non-Display
Services. The proposed Managed NonDisplay Access fee would be in addition
to the current Managed Non-Display
Services Fee of $2,500/month by each
data recipient.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,7
in general, and Sections 6(b)(4) and
6(b)(5) of the Act,8 in particular, in that
it provides an equitable allocation of
reasonable fees among users and
recipients of the data and is not
designed to permit unfair
discrimination among customers,
issuers, and brokers.
The Exchange believes that revising
the eligibility requirements for Managed
Non-Display Services so that the
requirements are more closely aligned
with the nature of the services being
provided is reasonable. The proposed
additional requirements for hosting in
the Redistributor’s data center and for
reformatting and/or altering the market
data prior to retransmission are also
consistent with similar requirements of
other markets for the provision of
managed data.9
The Exchange believes that the
proposed Access Fee for Managed NonDisplay Services is reasonable, because
the data is of value to recipients, and it
is reasonable to charge them a lower
access fee because they are receiving the
data through a Redistributor in a
controlled form rather than from the
Exchange in raw form. The Exchange
believes that the proposed fee directly
and appropriately reflects the significant
value of using non-display data in a
wide range of computer-automated
functions relating to both trading and
non-trading activities and that the
number and range of these functions
continue to grow through innovation
SR–NYSEArca–2014–148 and SR–NYSEArca–
2014–149.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4), (5).
9 See supra note 5.
E:\FR\FM\12JAN1.SGM
12JAN1
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
and technology developments.
NASDAQ and Phlx also both offer
managed non-display data solutions and
charge access fees for such services.10
The fee is also equitable and not
unfairly discriminatory because it
would apply to all data recipients that
choose to subscribe to Managed NonDisplay Services for NYSE Arca
Integrated Feed.
The fees are also equitable and not
unfairly discriminatory because they
will apply to all data recipients that
choose to subscribe to the feeds.
The Exchange notes that NYSE Arca
Integrated Feed is entirely optional. The
Exchange is not required to make NYSE
Arca Integrated Feed available or to
offer any specific pricing alternatives to
any customers, nor is any firm required
to purchase NYSE Arca Integrated Feed.
Firms that do purchase NYSE Arca
Integrated Feed do so for the primary
goals of using it to increase revenues,
reduce expenses, and in some instances
compete directly with the Exchange
(including for order flow); those firms
are able to determine for themselves
whether NYSE Arca Integrated Feed or
any other similar products are
attractively priced or not.
Firms that do not wish to purchase
NYSE Arca Integrated Feed at the new
prices have a variety of alternative
market data products from which to
choose,11 or if NYSE Arca Integrated
Feed does not provide sufficient value
to firms as offered based on the uses
those firms have or planned to make of
it, such firms may simply choose to
conduct their business operations in
ways that do not use NYSE Arca
Integrated Feed. The Exchange notes
that broker-dealers are not required to
purchase proprietary market data to
comply with their best execution
obligations.12 Similarly, there is no
requirement in Regulation NMS or any
other rule that proprietary data be
10 See supra note 5. NASDAQ offers a Managed
Data Solution that assesses a monthly Managed
Data Solution Administration fee of $1,500 and
monthly Subscriber fees of $60 for nonprofessionals to $300 for professionals. See
NASDAQ Rule 7026(b). Phlx charges a monthly
Managed Data Solution Administration fee of
$2,000 and a monthly Subscriber fee of $500. The
monthly License fee is in addition to the monthly
Distributor fee of $3,500 (for external usage), and
the $500 monthly Subscriber fee is assessed for
each Subscriber of a Managed Data Solution. See
Securities Exchange Act Release No. 70748 (Oct. 23,
2013), 78 FR 64569 (Oct. 29, 2013) (SR–Phlx–2013–
105).
11 See NASDAQ Rule 7023 (Nasdaq Totalview)
and BATS Rule 11.22.(a) and (c) (BATS TCP Pitch
and Multicast Pitch).
12 See In the Matter of the Application of
Securities Industry And Financial Markets
Association For Review of Actions Taken by SelfRegulatory Organizations, Release Nos. 34–72182;
AP–3–15350; AP–3–15351 (May 16, 2014).
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
utilized for order routing decisions, and
some broker-dealers and ATSs have
chosen not to do so.13
The decision of the United States
Court of Appeals for the District of
Columbia Circuit in NetCoalition v.
SEC, 615 F.3d 525 (D.C. Cir. 2010),
upheld reliance by the Securities and
Exchange Commission (‘‘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.’ ’’ 14
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 proprietary market
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.
In addition, the existence of alternatives
to these data products, such as
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
select such alternatives.
As the NetCoalition decision noted,
the Commission is not required to
undertake a cost-of-service or
ratemaking approach. The Exchange
believes that, even if it were possible as
a matter of economic theory, cost-based
pricing for non-core market data would
be so complicated that it could not be
13 For example, Goldman Sachs Execution and
Clearing, L.P. has disclosed that it does not use
proprietary market data in connection with Sigma
X, its ATS. See response to Question E3, available
at https://www.goldmansachs.com/media-relations/
in-the-news/current/pdf-media/gsec-orderhandling-practices-ats-specific.pdf. By way of
comparison, IEX has disclosed that it uses
proprietary market data feeds from all registered
stock exchanges and the LavaFlow ECN. See
https://www.iextrading.com/about/.
14 NetCoalition, 615 F.3d at 535.
PO 00000
Frm 00037
Fmt 4703
Sfmt 4703
1529
done practically or offer any significant
benefits.15
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
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 market data feed products is
constrained by actual competition for
the sale of proprietary market data
products, the joint product nature of
exchange platforms, and the existence of
alternatives to the Exchange’s
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 for the creation of proprietary
data and strict pricing discipline for the
proprietary products themselves.
Numerous exchanges compete with one
another for listings and order flow and
sales of market data itself, providing
ample 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. Indeed,
15 The Exchange believes that cost-based pricing
would be impractical because it would create
enormous administrative burdens for all parties and
the Commission, to cost-regulate a large number of
participants and standardize and analyze
extraordinary amounts of information, accounts,
and reports. In addition, and as described below, it
is impossible to regulate market data prices in
isolation from prices charged by markets for other
services that are joint products. Cost-based rate
regulation would also lead to litigation and may
distort incentives, including those to minimize
costs and to innovate, leading to further waste.
Under cost-based pricing, the Commission would
be burdened with determining a fair rate of return,
and the industry could experience frequent rate
increases based on escalating expense levels. Even
in industries historically subject to utility
regulation, cost-based ratemaking has been
discredited. As such, the Exchange believes that
cost-based ratemaking would be inappropriate for
proprietary market data and inconsistent with
Congress’s direction that the Commission use its
authority to foster the development of the national
market system, and that market forces will continue
to provide appropriate pricing discipline. See
Appendix C to NYSE’s comments to the
Commission’s 2000 Concept Release on the
Regulation of Market Information Fees and
Revenues, which can be found on the Commission’s
Web site at https://www.sec.gov/rules/concept/
s72899/buck1.htm.
E:\FR\FM\12JAN1.SGM
12JAN1
1530
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
the U.S. Department of Justice (‘‘DOJ’’)
(the primary antitrust regulator) has
expressly acknowledged the aggressive
actual competition among exchanges,
including for the sale of proprietary
market data. In 2011, the DOJ 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.’’ 16
Moreover, 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. Broker-dealers send their
order flow and transaction reports to
multiple venues, rather than providing
them all to a single venue, which in turn
reinforces this competitive constraint.
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
market participants with varying trading
needs.’’ 17 More recently, SEC Chair
Mary Jo White has noted that
competition for order flow in exchangelisted equities is ‘‘intense’’ and divided
among many trading venues, including
exchanges, more than 40 alternative
trading systems, and more than 250
broker-dealers.18
16 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, 20111),
available at https://www.justice.gov/iso/opa/atr/
speeches/2011/at-speech-110516.html; see also
Complaint in U.S. v. Deutsche Borse AG and NYSE
Euronext, Case No. 11–cv–2280 (DC Dist.) ¶ 24
(‘‘NYSE and Direct Edge compete head-to-head . . .
in the provision of real-time proprietary equity data
products.’’).
17 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. Data
available on ArcaVision show that from June 30,
2013 to June 30, 2014, no exchange traded more
than 12% of the volume of listed stocks by either
trade or dollar volume, further evidencing the
continued dispersal of and fierce competition for
trading activity. See https://www.arcavision.com/
Arcavision/arcalogin.jsp.
18 Mary Jo White, Enhancing Our Equity Market
Structure, Sandler O’Neill & Partners, L.P. Global
Exchange and Brokerage Conference (June 5, 2014)
(available on the Commission Web site), citing
Tuttle, Laura, 2014, ‘‘OTC Trading: Description of
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
If an exchange succeeds in its
competition for quotations, order flow,
and trade executions, then it earns
trading revenues and increases the value
of its proprietary market data products
because they will contain greater quote
and trade information. Conversely, if an
exchange is less successful in attracting
quotes, order flow, and trade
executions, then its market data
products may be less desirable to
customers using them in support of
order routing and trading decisions in
light of the diminished content; data
products offered by competing venues
may become correspondingly more
attractive. Thus, competition for
quotations, order flow, and trade
executions puts significant pressure on
an exchange to maintain both execution
and data fees at reasonable levels.
In addition, in the case of products
that are also redistributed through
market data vendors, such as Bloomberg
and Thompson Reuters, the 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. Vendors
will not elect to make available NYSE
Arca Integrated Feed unless their
customers request it, and customers will
not elect to pay the proposed fees unless
NYSE Arca Integrated Feed can provide
value by sufficiently increasing
revenues or reducing costs in the
customer’s business in a manner that
will offset the fees. All of these factors
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, proprietary market data and trade
executions are a paradigmatic example
of joint products with joint costs. The
decision of 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 availability and
quality, and price and distribution of
data products. Without a platform to
post quotations, receive orders, and
Non-ATS OTC Trading in National Market System
Stocks,’’ at 7–8.
PO 00000
Frm 00038
Fmt 4703
Sfmt 4703
execute trades, exchange data products
would not exist.
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 platform for
posting quotes, accepting orders, and
executing transactions 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 brokerdealer customers generally view the
costs of transaction executions and
market data as a unified cost of doing
business with the exchange. A brokerdealer will only choose to direct orders
to an exchange if the revenue from the
transaction exceeds its cost, including
the cost of any market data that the
broker-dealer chooses to buy in support
of its order routing and trading
decisions. If the costs of the transaction
are not offset by its value, then the
broker-dealer may choose instead not to
purchase the product and trade away
from that exchange. There is substantial
evidence of the strong correlation
between order flow and market data
purchases. For example, in November
2014 more than 80% of the transaction
volume on each of NYSE Arca and
NYSE Arca’s affiliates New York Stock
Exchange LLC (‘‘NYSE’’) and NYSE
MKT, LLC (‘‘NYSE MKT’’) was executed
by market participants that purchased
one or more proprietary market data
products (the 20 firms were not the
same for each market). A supracompetitive increase in the fees for
either executions or market data would
create a risk of reducing an exchange’s
revenues from both products.
Other market participants have noted
that proprietary market data and trade
executions are joint products of a joint
platform and have common costs.19 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
19 See Securities Exchange Act Release No. 72153
(May 12, 2014), 79 FR 28575, 28578 n.15 (May 16,
2014) (SR–NASDAQ–2014–045) (‘‘[A]ll 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 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).
E:\FR\FM\12JAN1.SGM
12JAN1
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
between joint products that would shed
any light on competitive or efficient
pricing.20
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 because it is
impossible to obtain the data inputs to
create market data products without a
fast, technologically robust, and wellregulated execution system, and system
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.
As noted above, the level of
competition and contestability in the
market is evident in the numerous
alternative venues that compete for
order flow, including 12 equities selfregulatory organization (‘‘SRO’’)
markets, as well as various forms of
ATSs, including dark pools and
electronic communication networks
(‘‘ECNs’’), and internalizing brokerdealers. SRO markets compete to attract
order flow and produce transaction
reports via trade executions, and two
FINRA-regulated Trade Reporting
Facilities compete to attract transaction
reports from the non-SRO venues.21
20 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.’’).
21 FINRA’s Alternative Display Facility also
receives over-the-counter trade reports that it sends
to CTA.
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
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 trading 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. For
example, BATS and Direct Edge, which
previously operated as ATSs and
obtained exchange status in 2008 and
2010, respectively, have provided
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.22 Similarly, LavaFlow ECN
provides market data to its subscribers
at no charge.23 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, ATSs, and
internalizing broker-dealers that
currently produce proprietary data or
are currently capable of producing it
provides further pricing discipline for
proprietary data products. Each SRO,
ATS, and broker-dealer is currently
permitted to produce and sell
proprietary data products, and many
currently do or have announced plans to
do so, including but not limited to the
Exchange, NYSE, NYSE MKT, NASDAQ
OMX, BATS, and Direct Edge.
The fact that proprietary data from
ATSs, internalizing broker-dealers, 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. By way of example, BATS and
NYSE Arca both published proprietary
22 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.
23 See ‘‘LavaFlow—ADF Migration,’’ available at
https://www.lavatrading.com/news/pdf/LavaFlow_
ADF_Migration.pdf.
PO 00000
Frm 00039
Fmt 4703
Sfmt 4703
1531
data on the Internet before registering as
exchanges. 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.
With respect to NYSE Arca Integrated
Feed, competitors offer similar
products.24 Because market data users
can 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.
Those competitive pressures imposed
by available alternatives are evident in
the Exchange’s proposed pricing.
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. As noted above, BATS launched
as an ATS in 2006 and became an
exchange in 2008, while Direct Edge
began operations in 2007 and obtained
exchange status in 2010. As noted
above, LavaFlow ECN provides market
data to its subscribers at no charge.25
In setting 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 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 the attendant fees are not
justified by the returns that any
particular vendor or data recipient
would achieve through the purchase.
24 See
25 See
E:\FR\FM\12JAN1.SGM
supra note 11.
supra note 23.
12JAN1
1532
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
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 has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 26 and
paragraph (f)(2) of Rule 19b–4
thereunder.27 At any time within 60
days of the filing of the 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.
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:
tkelley on DSK3SPTVN1PROD with NOTICES
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–
NYSEArca–2014–147 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–NYSEArca–2014–147. 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 Arca. 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–
NYSEArca–2014–147 and should be
submitted on or before February 2, 2015.
at https://www.miaxoptions.com/filter/
wotitle/rule_filing, at MIAX’s principal
office, and at the Commission’s Public
Reference Room.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Brent J. Fields,
Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2015–00212 Filed 1–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74008; File No. SR–MIAX–
2014–70]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
January 6, 2015.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on December 24, 2014, Miami
International Securities Exchange LLC
(‘‘MIAX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I, II, and III below,
which Items have been prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend its Fee Schedule.
The text of the proposed rule change
is available on the Exchange’s Web site
28 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
26 15
U.S.C. 78s(b)(3)(A)(ii).
27 17 CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
17:35 Jan 09, 2015
1 15
Jkt 235001
PO 00000
Frm 00040
Fmt 4703
Sfmt 4703
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
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.
1. Purpose
The Exchange proposes to amend its
current MIAX Market Maker 3 sliding
scale for transaction fees to: (i) Add an
additional volume tier; (ii) modify the
volume thresholds in the tiers; and (iii)
add an additional tier to the Priority
Customer rebate incentive.
The sliding scale for MIAX Market
Maker transaction fees is based on the
substantially similar fees of the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’).4 Specifically, the program
reduces a MIAX Market Maker’s per
contract transaction fee based on
percentages of total national Market
Maker volume of any options classes
that trade on the exchange during the
calendar month, based on the following
scale:
Tier
1
2
3
4
5
......
......
......
......
......
Percentage of national
Market Maker volume
Transaction
fee per
contract
0.00%–0.03% ..............
Above 0.03%–0.40% ...
Above 0.40%–0.80% ...
Above 0.80%–1.50% ...
Above 1.50% ...............
$0.23
0.17
0.12
0.07
0.05
The sliding scale would apply to all
MIAX Market Makers for transactions in
all products except mini-options. By
3 ‘‘MIAX Market Maker’’ for purposes of the
proposed sliding scale means any MIAX Market
Maker including RMM, LMM, PLMM, DLMM, and
DPLMM.
4 See Securities Exchange Act Release Nos. 55193
(January 30, 2007), 72 FR 5476 (February 6, 2007)
(SR–CBOE–2006–111); 57191 (January 24, 2008), 73
FR 5611 (January 30, 2008); 58321 (August 6, 2008),
73 FR 46955 (SR–CBOE–2008–78). See also CBOE
Fees Schedule, p. 3.
E:\FR\FM\12JAN1.SGM
12JAN1
]]>Agencies
[Federal Register Volume 80, Number 7 (Monday, January 12, 2015)]
[Notices]
[Pages 1527-1532]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00212]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73993; File No. SR-NYSEArca-2014-147]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the Fees
for NYSE Arca Integrated Feed To Establish Eligibility Requirements for
Redistribution
January 6, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 24, 2014, NYSE Arca, Inc. (``NYSE Arca'' 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 amend the fees for NYSE Arca Integrated
Feed to establish eligibility requirements for redistribution on a
managed non-display basis and to establish an access fee for managed
non-display data recipients, operative on January 1, 2015. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the fees for NYSE Arca Integrated
Feed, as set forth on the NYSE Arca Equities Proprietary Market Data
Fees Schedule (``Fee Schedule''), to establish eligibility requirements
for redistribution of market data on a Managed Non-Display basis and
establish an access fee for Managed Non-Display data recipients,
operative on January 1, 2015.
Non-Display Use of NYSE Arca market data means accessing,
processing, or consuming NYSE Arca market data delivered via direct
and/or Redistributor \3\ data feeds for a purpose
[[Page 1528]]
other than in support of a data recipient's display or further internal
or external redistribution. A Redistributor approved for Managed Non-
Display Services manages and controls the access to NYSE Arca
Integrated Feed and does not allow for further internal distribution or
external redistribution of NYSE Arca Integrated Feed by the data
recipients. Managed Non-Display Services Fees apply when a data
recipient's non-display applications are hosted by a Redistributor that
has been approved for Managed Non-Display Services.
---------------------------------------------------------------------------
\3\ ``Redistributor'' means a vendor or any other person that
provides an NYSE Arca data product to a data recipient or to any
system that a data recipient uses, irrespective of the means of
transmission or access.
---------------------------------------------------------------------------
A Redistributor approved for Managed Non-Display Services is
required to report to the Exchange on a monthly basis the data
recipients that are receiving NYSE Arca Integrated Feed through the
Redistributor's Managed Non-Display Service. A data recipient receiving
NYSE Arca Integrated Feed through a Redistributor's Managed Non-Display
Service does not have any reporting requirements.
Currently, to be approved for Managed Non-Display Services, a
Redistributor of the Managed Non-Display Services must be approved
under the Unit-of-Count policy.\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release Nos. 69315 (Apr. 5,
2013), 78 FR 21668 (Apr. 11, 2013) (SR-NYSEArca-2013-37) and 73011
(Sept. 5, 2014), 79 FR 54315 (Sept. 11, 2014) (SR-NYSEArca-2014-93)
(``Non-Display Fee filings'').
---------------------------------------------------------------------------
The Exchange is proposing to retire the Unit-of-Count Policy, and
as a result, eligibility for Managed Non-Display Services of NYSE Arca
Integrated Feed would no longer be based on eligibility under the Unit-
of-Count Policy. The Exchange proposes instead to establish eligibility
requirements specifically for the redistribution of market data for
Managed Non-Display Services. The Exchange also proposes to add an
access fee that would apply to a data recipient that receives NYSE Arca
Integrated Feed from an approved Redistributor of Managed Non-Display
Services.
The proposed eligibility requirements for the provision of Managed
Non-Display Services would be similar to the eligibility requirements
for the Unit-of-Count Policy in that they would require the
Redistributor to manage and control the access to NYSE Arca Integrated
Feed for data recipients' non-display applications and not allow for
further internal distribution or external redistribution of the
information by data recipients. In addition, to be eligible to provide
Managed Non-Display Services, the Redistributor would be required to
(a) host the data recipients' non-display applications in equipment
located in the Redistributor's data center and/or hosted space/cage and
(b) offer NYSE Arca Integrated Feed in the Redistributor's own
messaging formats (rather than using raw NYSE message formats) by
reformatting and/or altering NYSE Arca Integrated Feed prior to
retransmission without affecting the integrity of NYSE Arca Integrated
Feed and without rendering NYSE Arca Integrated Feed inaccurate,
unfair, uninformative, fictitious, misleading or discriminatory. The
proposed eligibility requirements are similar to data distribution
models currently in use and align the Exchange with other markets.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release Nos. 70748 (Oct. 23,
2013), 70748 (Oct. 23, 2013), 78 FR 64569 (Oct. 29, 2013) (SR-Phlx-
2013-105) (notice of filing and immediate effectiveness of proposed
rule change to establish non-display Managed Data Solution for
NASDAQ OMX PHLX (``Phlx'')); 70269 (Aug. 27, 2013), 78 FR 54336
(Sept. 3, 2013) (SR-NASDAQ-2013-106) (notice of filing and immediate
effectiveness of proposed rule change to establish non-display
Managed Data Solution for NASDAQ Stock Market (``NASDAQ'')); and
69182 (Mar. 19, 2013), 78 FR 18378 (Mar. 26, 2013) (SR-Phlx-2013-28)
(notice of filing and immediate effectiveness of proposed rule
change to establish non-display Managed Data Solution for Phlx
equities market PSX).
---------------------------------------------------------------------------
The reporting requirements associated with the Managed Non-Display
Service would not change. A Redistributor approved for Managed Non-
Display Service would be required to report to the Exchange on a
monthly basis the data recipients that are receiving NYSE Arca
Integrated Feed through the Redistributor's Managed Non-Display
Service. A data recipient receiving NYSE Arca Integrated Feed through a
Redistributor's Managed Non-Display Service would continue not to have
any reporting requirements.
In addition, the Exchange proposes to adopt an Access Fee of
$1,500/month applicable only to data recipients that receive NYSE Arca
Integrated Feed from an approved Redistributor of Managed Non-Display
Services, operative January 1, 2015. Currently, data recipients,
including recipients of Managed Non-Display Services, are required to
pay an Access Fee of $3,000/month to receive NYSE Arca Integrated Feed.
Because the purpose of an access fee is to charge data recipients for
access to the Exchange's proprietary market data, the Exchange believes
it is appropriate to charge an access fee to all data recipients,
including recipients of Managed Non-Display Services.\6\ In recognition
that data recipients of Managed Non-Display Services receive NYSE Arca
Integrated Feed in a controlled format, the Exchange proposes to
establish an Access Fee that would be applicable only to data
recipients of Managed Non-Display Services and that would be half the
size of the current Access Fee. In connection with this change, the
Exchange also proposes to amend the Fee Schedule to specify that the
current Access Fee of $3,000/month is charged to data recipients other
than those receiving data through Managed Non-Display Services. The
proposed Managed Non-Display Access fee would be in addition to the
current Managed Non-Display Services Fee of $2,500/month by each data
recipient.
---------------------------------------------------------------------------
\6\ In order to harmonize its approach to fees for its market
data products, the Exchange is proposing to establish an access fee
for Managed Non-Display Services for NYSE Arca BBO, NYSE Arca
Trades, and NYSE ArcaBook that are also half of the existing access
fee for each respective data feed. See SR-NYSEArca-2014-148 and SR-
NYSEArca-2014-149.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\7\ in general, and
Sections 6(b)(4) and 6(b)(5) of the Act,\8\ in particular, in that it
provides an equitable allocation of reasonable fees among users and
recipients of the data and is not designed to permit unfair
discrimination among customers, issuers, and brokers.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------
The Exchange believes that revising the eligibility requirements
for Managed Non-Display Services so that the requirements are more
closely aligned with the nature of the services being provided is
reasonable. The proposed additional requirements for hosting in the
Redistributor's data center and for reformatting and/or altering the
market data prior to retransmission are also consistent with similar
requirements of other markets for the provision of managed data.\9\
---------------------------------------------------------------------------
\9\ See supra note 5.
---------------------------------------------------------------------------
The Exchange believes that the proposed Access Fee for Managed Non-
Display Services is reasonable, because the data is of value to
recipients, and it is reasonable to charge them a lower access fee
because they are receiving the data through a Redistributor in a
controlled form rather than from the Exchange in raw form. The Exchange
believes that the proposed fee directly and appropriately reflects the
significant value of using non-display data in a wide range of
computer-automated functions relating to both trading and non-trading
activities and that the number and range of these functions continue to
grow through innovation
[[Page 1529]]
and technology developments. NASDAQ and Phlx also both offer managed
non-display data solutions and charge access fees for such
services.\10\ The fee is also equitable and not unfairly discriminatory
because it would apply to all data recipients that choose to subscribe
to Managed Non-Display Services for NYSE Arca Integrated Feed.
---------------------------------------------------------------------------
\10\ See supra note 5. NASDAQ offers a Managed Data Solution
that assesses a monthly Managed Data Solution Administration fee of
$1,500 and monthly Subscriber fees of $60 for non-professionals to
$300 for professionals. See NASDAQ Rule 7026(b). Phlx charges a
monthly Managed Data Solution Administration fee of $2,000 and a
monthly Subscriber fee of $500. The monthly License fee is in
addition to the monthly Distributor fee of $3,500 (for external
usage), and the $500 monthly Subscriber fee is assessed for each
Subscriber of a Managed Data Solution. See Securities Exchange Act
Release No. 70748 (Oct. 23, 2013), 78 FR 64569 (Oct. 29, 2013) (SR-
Phlx-2013-105).
---------------------------------------------------------------------------
The fees are also equitable and not unfairly discriminatory because
they will apply to all data recipients that choose to subscribe to the
feeds.
The Exchange notes that NYSE Arca Integrated Feed is entirely
optional. The Exchange is not required to make NYSE Arca Integrated
Feed available or to offer any specific pricing alternatives to any
customers, nor is any firm required to purchase NYSE Arca Integrated
Feed. Firms that do purchase NYSE Arca Integrated Feed do so for the
primary goals of using it to increase revenues, reduce expenses, and in
some instances compete directly with the Exchange (including for order
flow); those firms are able to determine for themselves whether NYSE
Arca Integrated Feed or any other similar products are attractively
priced or not.
Firms that do not wish to purchase NYSE Arca Integrated Feed at the
new prices have a variety of alternative market data products from
which to choose,\11\ or if NYSE Arca Integrated Feed does not provide
sufficient value to firms as offered based on the uses those firms have
or planned to make of it, such firms may simply choose to conduct their
business operations in ways that do not use NYSE Arca Integrated Feed.
The Exchange notes that broker-dealers are not required to purchase
proprietary market data to comply with their best execution
obligations.\12\ Similarly, there is no requirement in Regulation NMS
or any other rule that proprietary data be utilized for order routing
decisions, and some broker-dealers and ATSs have chosen not to do
so.\13\
---------------------------------------------------------------------------
\11\ See NASDAQ Rule 7023 (Nasdaq Totalview) and BATS Rule
11.22.(a) and (c) (BATS TCP Pitch and Multicast Pitch).
\12\ See In the Matter of the Application of Securities Industry
And Financial Markets Association For Review of Actions Taken by
Self-Regulatory Organizations, Release Nos. 34-72182; AP-3-15350;
AP-3-15351 (May 16, 2014).
\13\ For example, Goldman Sachs Execution and Clearing, L.P. has
disclosed that it does not use proprietary market data in connection
with Sigma X, its ATS. See response to Question E3, available at
https://www.goldmansachs.com/media-relations/in-the-news/current/pdf-media/gsec-order-handling-practices-ats-specific.pdf. By way of
comparison, IEX has disclosed that it uses proprietary market data
feeds from all registered stock exchanges and the LavaFlow ECN. See
https://www.iextrading.com/about/.
---------------------------------------------------------------------------
The decision of the United States Court of Appeals for the District
of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
2010), upheld reliance by the Securities and Exchange Commission
(``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.' '' \14\
---------------------------------------------------------------------------
\14\ 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 proprietary market 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. In addition, the existence of
alternatives to these data products, such as 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
select such alternatives.
As the NetCoalition decision noted, the Commission is not required
to undertake a cost-of-service or ratemaking approach. The Exchange
believes that, even if it were possible as a matter of economic theory,
cost-based pricing for non-core market data would be so complicated
that it could not be done practically or offer any significant
benefits.\15\
---------------------------------------------------------------------------
\15\ The Exchange believes that cost-based pricing would be
impractical because it would create enormous administrative burdens
for all parties and the Commission, to cost-regulate a large number
of participants and standardize and analyze extraordinary amounts of
information, accounts, and reports. In addition, and as described
below, it is impossible to regulate market data prices in isolation
from prices charged by markets for other services that are joint
products. Cost-based rate regulation would also lead to litigation
and may distort incentives, including those to minimize costs and to
innovate, leading to further waste. Under cost-based pricing, the
Commission would be burdened with determining a fair rate of return,
and the industry could experience frequent rate increases based on
escalating expense levels. Even in industries historically subject
to utility regulation, cost-based ratemaking has been discredited.
As such, the Exchange believes that cost-based ratemaking would be
inappropriate for proprietary market data and inconsistent with
Congress's direction that the Commission use its authority to foster
the development of the national market system, and that market
forces will continue to provide appropriate pricing discipline. See
Appendix C to NYSE's comments to the Commission's 2000 Concept
Release on the Regulation of Market Information Fees and Revenues,
which can be found on the Commission's Web site at https://www.sec.gov/rules/concept/s72899/buck1.htm.
---------------------------------------------------------------------------
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
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 market data feed products is constrained by
actual competition for the sale of proprietary market data products,
the joint product nature of exchange platforms, and the existence of
alternatives to the Exchange's 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 for the creation of proprietary data and strict
pricing discipline for the proprietary products themselves. Numerous
exchanges compete with one another for listings and order flow and
sales of market data itself, providing ample 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. Indeed,
[[Page 1530]]
the U.S. Department of Justice (``DOJ'') (the primary antitrust
regulator) has expressly acknowledged the aggressive actual competition
among exchanges, including for the sale of proprietary market data. In
2011, the DOJ 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.'' \16\
---------------------------------------------------------------------------
\16\ 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, 20111), available at https://www.justice.gov/iso/opa/atr/speeches/2011/at-speech-110516.html; see
also Complaint in U.S. v. Deutsche Borse AG and NYSE Euronext, Case
No. 11-cv-2280 (DC Dist.) ] 24 (``NYSE and Direct Edge compete head-
to-head . . . in the provision of real-time proprietary equity data
products.'').
---------------------------------------------------------------------------
Moreover, 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. Broker-dealers send their order
flow and transaction reports to multiple venues, rather than providing
them all to a single venue, which in turn reinforces this competitive
constraint. 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 market participants with varying trading
needs.'' \17\ More recently, SEC Chair Mary Jo White has noted that
competition for order flow in exchange-listed equities is ``intense''
and divided among many trading venues, including exchanges, more than
40 alternative trading systems, and more than 250 broker-dealers.\18\
---------------------------------------------------------------------------
\17\ 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. Data
available on ArcaVision show that from June 30, 2013 to June 30,
2014, no exchange traded more than 12% of the volume of listed
stocks by either trade or dollar volume, further evidencing the
continued dispersal of and fierce competition for trading activity.
See https://www.arcavision.com/Arcavision/arcalogin.jsp.
\18\ Mary Jo White, Enhancing Our Equity Market Structure,
Sandler O'Neill & Partners, L.P. Global Exchange and Brokerage
Conference (June 5, 2014) (available on the Commission Web site),
citing Tuttle, Laura, 2014, ``OTC Trading: Description of Non-ATS
OTC Trading in National Market System Stocks,'' at 7-8.
---------------------------------------------------------------------------
If an exchange succeeds in its competition for quotations, order
flow, and trade executions, then it earns trading revenues and
increases the value of its proprietary market data products because
they will contain greater quote and trade information. Conversely, if
an exchange is less successful in attracting quotes, order flow, and
trade executions, then its market data products may be less desirable
to customers using them in support of order routing and trading
decisions in light of the diminished content; data products offered by
competing venues may become correspondingly more attractive. Thus,
competition for quotations, order flow, and trade executions puts
significant pressure on an exchange to maintain both execution and data
fees at reasonable levels.
In addition, in the case of products that are also redistributed
through market data vendors, such as Bloomberg and Thompson Reuters,
the 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. Vendors will not elect to make available NYSE Arca Integrated
Feed unless their customers request it, and customers will not elect to
pay the proposed fees unless NYSE Arca Integrated Feed can provide
value by sufficiently increasing revenues or reducing costs in the
customer's business in a manner that will offset the fees. All of these
factors 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, proprietary market data and trade
executions are a paradigmatic example of joint products with joint
costs. The decision of 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 availability and quality,
and price and distribution of data products. Without a platform to post
quotations, receive orders, and execute trades, exchange data products
would not exist.
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 platform for posting quotes,
accepting orders, and executing transactions 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 generally view the
costs of transaction executions and market data as a unified cost of
doing business with the exchange. A broker-dealer will only choose to
direct orders to an exchange if the revenue from the transaction
exceeds its cost, including the cost of any market data that the
broker-dealer chooses to buy in support of its order routing and
trading decisions. If the costs of the transaction are not offset by
its value, then the broker-dealer may choose instead not to purchase
the product and trade away from that exchange. There is substantial
evidence of the strong correlation between order flow and market data
purchases. For example, in November 2014 more than 80% of the
transaction volume on each of NYSE Arca and NYSE Arca's affiliates New
York Stock Exchange LLC (``NYSE'') and NYSE MKT, LLC (``NYSE MKT'') was
executed by market participants that purchased one or more proprietary
market data products (the 20 firms were not the same for each market).
A supra-competitive increase in the fees for either executions or
market data would create a risk of reducing an exchange's revenues from
both products.
Other market participants have noted that proprietary market data
and trade executions are joint products of a joint platform and have
common costs.\19\ 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
[[Page 1531]]
between joint products that would shed any light on competitive or
efficient pricing.\20\
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 72153 (May 12,
2014), 79 FR 28575, 28578 n.15 (May 16, 2014) (SR-NASDAQ-2014-045)
(``[A]ll 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 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).
\20\ 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 because it is
impossible to obtain the data inputs to create market data products
without a fast, technologically robust, and well-regulated execution
system, and system 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.
As noted above, 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 various forms of ATSs, including dark
pools and electronic communication networks (``ECNs''), and
internalizing broker-dealers. SRO markets compete to attract order flow
and produce transaction reports via trade executions, and two FINRA-
regulated Trade Reporting Facilities compete to attract transaction
reports from the non-SRO venues.\21\
---------------------------------------------------------------------------
\21\ FINRA's Alternative Display Facility also receives over-
the-counter trade reports that it sends to CTA.
---------------------------------------------------------------------------
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 trading 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. For example, BATS and Direct Edge, which previously operated
as ATSs and obtained exchange status in 2008 and 2010, respectively,
have provided 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.\22\ Similarly, LavaFlow ECN provides market data to its
subscribers at no charge.\23\ 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.
---------------------------------------------------------------------------
\22\ 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.
\23\ See ``LavaFlow--ADF Migration,'' available at https://www.lavatrading.com/news/pdf/LavaFlow_ADF_Migration.pdf.
---------------------------------------------------------------------------
Existence of Alternatives
The large number of SROs, ATSs, and internalizing broker-dealers
that currently produce proprietary data or are currently capable of
producing it provides further pricing discipline for proprietary data
products. Each SRO, ATS, and broker-dealer is currently permitted to
produce and sell proprietary data products, and many currently do or
have announced plans to do so, including but not limited to the
Exchange, NYSE, NYSE MKT, NASDAQ OMX, BATS, and Direct Edge.
The fact that proprietary data from ATSs, internalizing broker-
dealers, 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. By way of example, BATS and NYSE
Arca both published proprietary data on the Internet before registering
as exchanges. 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. With respect to NYSE Arca Integrated Feed,
competitors offer similar products.\24\ Because market data users can
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.
---------------------------------------------------------------------------
\24\ See supra note 11.
---------------------------------------------------------------------------
Those competitive pressures imposed by available alternatives are
evident in the Exchange's proposed pricing.
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. As noted
above, BATS launched as an ATS in 2006 and became an exchange in 2008,
while Direct Edge began operations in 2007 and obtained exchange status
in 2010. As noted above, LavaFlow ECN provides market data to its
subscribers at no charge.\25\
---------------------------------------------------------------------------
\25\ See supra note 23.
---------------------------------------------------------------------------
In setting 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 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 the attendant fees are not justified by the returns
that any particular vendor or data recipient would achieve through the
purchase.
[[Page 1532]]
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 has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \26\ and paragraph (f)(2) of Rule 19b-4
thereunder.\27\ At any time within 60 days of the filing of the
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.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(3)(A)(ii).
\27\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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-NYSEArca-2014-147 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-NYSEArca-2014-147. 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 Arca. 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-NYSEArca-2014-147 and should
be submitted on or before February 2, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
---------------------------------------------------------------------------
\28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2015-00212 Filed 1-9-15; 8:45 am]
BILLING CODE 8011-01-P
