Joint Industry Plan; Notice of Filing of the Fifty-Second Amendment to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis, 67562-67568 [2021-25747]

Download as PDF 67562 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices 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–PEARL–2021–56. 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 website (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 website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–PEARL–2021–56 and should be submitted on or before December 17, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–25757 Filed 11–24–21; 8:45 am] jspears on DSK121TN23PROD with NOTICES1 BILLING CODE 8011–01–P 16 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93618; File No. S7–24–89] Joint Industry Plan; Notice of Filing of the Fifty-Second Amendment to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis November 19, 2021. Pursuant to Section 11A of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 608 thereunder,2 notice is hereby given that on November 5, 2021,3 certain participants in the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for NasdaqListed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis (‘‘UTP Plan’’ or ‘‘Plan’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposal to amend the UTP Plan.4 The amendment represents the Fifty-Second Amendment to the Plan (‘‘Amendment’’). Under the Amendment, the Participants propose to amend the Plan to adopt fees for the receipt of the expanded content of consolidated market data pursuant to the Commission’s Market Data Infrastructure Rules (‘‘MDI Rules’’).5 The Participants have submitted a separate amendment to implement the non-fee-related aspects of the MDI Rules. The proposed Amendment has been filed by the Participants pursuant to Rule 608(b)(2) under Regulation NMS.6 The Commission is publishing this 1 15 U.S.C. 78k–1. CFR 242.608. 3 See Letter from Robert Books, Chair, UTP Operating Committee, to Vanessa Countryman, Secretary, Commission (Nov. 5, 2021). 4 The amendment was approved and executed by more than the required two-thirds of the selfregulatory organizations (‘‘SROs’’) that are participants of the UTP Plan. The participants that approved and executed the amendment (the ‘‘Participants’’) are: Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Nasdaq ISE, LLC, Nasdaq PHLX, Inc., The Nasdaq Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc.. The other SROs that are participants in the UTP Plan are: Financial Industry Regulatory Authority, Inc., The Investors’ Exchange LLC, Long-Term Stock Exchange, Inc., MEMX LLC, MIAX PEARL, LLC, and Nasdaq BX, Inc.. See infra Section I. G. 5 Securities Exchange Act Release No. 90610, 86 FR 18596 (April 9, 2021) (File No. S7–03–20) (‘‘MDI Rules Release’’). 6 17 CFR 242.608(b)(2). 2 17 PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 notice to solicit comments from interested persons on the proposed Amendment. Set forth in Sections I and II, which were prepared and submitted to the Commission by the Participants, is the statement of the purpose and summary of the Amendment, along with information pursuant to Rules 608(a) and 601(a) under the Act. A copy of the Plan marked to show the proposed Amendment is Attachment A to this notice. I. Rule 608(a) A. Purpose of the Amendments On December 9, 2020, the Commission adopted amendments to Regulation NMS. The effective date of these final rules was June 8, 2021. As specified in the MDI Rules Release, the Participants must submit updated fees regarding the receipt and use of the expanded content of consolidated market data by November 5, 2021.7 Consistent with that requirement, the Participants are submitting the abovecaptioned amendments to the UTP Plan to propose such fees.8 The Participants are proposing a fee structure for the following three categories of data, which collectively comprise the amended definition of core data, as that term is defined in amended Rule 600(b)(21) of Regulation NMS: 9 (1) Level 1 Service, which the Participants propose would include Top of Book Quotations, Last Sale Price Information, and odd-lot information (as defined in amended Rule 600(b)(59)). Plan fees to subscribers currently are for Top of Book Quotations and Last Sale Price Information, as well as what is now defined as administrative data (as defined in amended Rule 600(b)(2)), regulatory data (as defined in amended Rule 600(b)(78)), and self-regulatory 7 MDI Rules Release at 18699. the Commission is aware, some of the SROs (the ‘‘Petitioners’’) have challenged the MDI Rules Release in the D.C. Circuit. Certain of the Petitioners have joined in this submission, including the statement that the Plan amendments comply with the MDI Rules Release, solely to satisfy the requirements of the MDI Rules Release and Rule 608. Nothing in this submission should be construed as abandoning any arguments asserted in the D.C. Circuit, as an agreement by Petitioners with any analysis or conclusions set forth in the MDI Rules Release, or as a concession by Petitioners regarding the legality of the MDI Rules Release. Petitioners reserve all rights in connection with their pending challenge of the MDI Rules Release, including inter alia, the right to withdraw the proposed amendment or assert that any action relating to the proposed amendment has been rendered null and void, depending on the outcome of the pending challenge. Petitioners further reserve all rights with respect to this submission, including inter alia, the right to assert legal challenges regarding the Commission’s disposition of this submission. 9 17 CFR 242.600(b)(26) (‘‘Rule 600’’). 8 As E:\FR\FM\26NON1.SGM 26NON1 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices organization-specific program data (as defined in amended Rule 600(b)(85)). The Participants propose that Level 1 Service would continue to include all information that subscribers receive for current fees and add odd-lot information; (2) Depth of book data (as defined in amended Rule 600(b)(26)); and (3) Auction information (as defined in amended Rule 600(b)(5)).10 Professional and Nonprofessional Fee Structure For each of the three categories of data described above, the Participants are proposing a Professional Subscriber Charge and a Nonprofessional Subscriber Charge. With respect to Level 1 Service, the Participants are not proposing to change the Professional Subscriber and Nonprofessional Subscriber fees currently set forth in the UTP Plan. Access to odd-lot information would be made available to Level 1 Service Professional and Nonprofessional Subscribers at no additional charge. With respect to depth of book data, Professional Subscribers would pay $99.00 per device per month and Nonprofessional Subscribers would pay $4.00 per subscriber per device per month. The Participants are not proposing per-quote packet charges or enterprise rates for either Professional Subscribers or Nonprofessional Subscribers use of depth of book data at this time. Finally, with respect to auction information, both Professional Subscribers and Nonprofessional Subscribers would pay $10.00 per device per month. jspears on DSK121TN23PROD with NOTICES1 Non-Display Use Fees The Participants are proposing NonDisplay Use Fees relating to the three categories of data described above: (1) Level 1 Service; (2) depth of book data; and (3) auction information. With respect to Level 1 Service, the Participants are not proposing to change the Non-Display Use fees currently set forth in the UTP Plan. Access to odd-lot information would be made available to Level 1 Service subscribers at no additional charge. 10 The Participants propose to price subsets of data that comprise core data separately so that data subscriber users have flexibility in how much consolidated market data content they wish to purchase. For example, the Participants understand that certain data subscribers may not wish to add depth of book data or auction information, or may want to add only depth of book information, but not auction information. Accordingly, Participants are proposing to price subsets of data to provide flexibility to data subscribers. However, the Participants expect that Competing Consolidators would be purchase all core data. VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 With respect to depth of book data, Subscribers would pay Non-Display Use Fees of $12,477.00 per month for each category of Non-Display Use. With respect to auction information, Subscribers would pay Non-Display Use fees of $1,248.00 per month for each category of Non-Display Use. As is the case today, Subscribers would be charged for each category of use of depth of book data and auction information. Access Fees Finally, the Participants are proposing Access Fees regarding the use of the three categories of data: (1) Level 1 Service; (2) depth of book data; and (3) auction information. With respect to Level 1 Service, the Participants are not proposing to change the Access Fees currently set forth in the UTP Plan. Access to odd-lot information would be made available to Level 1 Service subscribers at no additional charge. With respect to depth of book data, Subscribers would pay a monthly Access Fee of $9,850.00 With respect to auction information, Subscribers would pay a monthly Access Fee of $985.00 per Network. Clarifications Related to Expanded Content In addition to the above fees, the Participants propose adding clarifying language regarding the applicability of various fees given the availability of the expanded market data content. First, the Participants propose to clarify that the Per Query Fee is not applicable to the expanded content, and only applies to the receipt and use of Level 1 Service. Under the current Price List, the Per Query Fee serves as an alternative fee schedule to the normally applied Professional and Nonprofessional Subscriber Charges. The proposed changes are designed to clarify that Per Query Fee is only available with respect to the use of Level 1 Service, and the fees for the use of depth of book data and auction information must be determined pursuant to the Professional and Nonprofessional fees described above. Second, the Participants propose to clarify that Level 1 Service would include Top of Book Quotation Information, Last Sale Price Information, odd-lot information, administrative data, regulatory data, and self-regulatory organization program data. This proposed amendment would use terms defined in amended Rule 600(b) to reflect both current data made available to data subscribers and the additional odd-lot information that PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 67563 would be included at no additional charge. Third, the Participants are proposing to clarify that the existing Redistribution Fees would be applicable to all three categories of core data, including any subset thereof. Currently, Redistribution Fees are charged to any entity that makes last sale information or quotation information available to any other entity or to any person other than its employees, irrespective of the means of transmission or access. The Participants propose to amend this description to make it applicable to core data, as that term is defined in amended Rule 600(b)(21). The Participants are not proposing to change the fee level for Redistribution Fees themselves. Fourth, the Participants are proposing that the existing Redistribution Fees would be applicable to Competing Consolidators. In the MDI Rules approval order, the SEC stated that ‘‘[t]he Commission believes imposing redistribution fees on data content underlying consolidated market data that will be disseminated by competing consolidators would be difficult to reconcile with statutory standards of being fair and reasonable and not unreasonably discriminatory in the new decentralized model.’’ 11 The Commission then compared Competing Consolidators to Self- Aggregators and noted that Self-Aggregators would not be subject to redistribution fees. The Participants believe that the comparison between Competing Consolidators and Self-Aggregators is not appropriate in determining whether a redistribution fee is not unreasonably discriminatory. The Participants also do not believe that the Commission’s comparison is consistent with current long-standing practice that redistribution fees are charged to any entity that distributes data externally.12 By definition, a Self-Aggregator would not be distributing data externally and therefore would not be subject to such 11 MDI Rules Release at 18685. current exclusive securities information processor (‘‘SIP’’) is not charged a Redistribution Fee. However, unlike Competing Consolidators, the processor has been retained by the UTP Plan to serve as an exclusive SIP, is subject to oversight by both the UTP Plan and the Commission, and neither pays for the data nor engages with data subscriber customers. By contrast, under the Competing Consolidator model, the UTP Plan would have no role in either oversight of or determining which entities choose to be a Competing Consolidator, a Competing Consolidator would need to purchase consolidated market data just as any other vendor would, and Competing Consolidators would be responsible for competing for data subscriber clients. Accordingly, Competing Consolidators would be more akin to vendors than the current exclusive SIPs. The Participants note that if any entity that is currently an exclusive SIP chooses to register as a Competing Consolidator, such entity would be subject to the Redistribution Fee. 12 The E:\FR\FM\26NON1.SGM 26NON1 67564 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices fees, which is consistent with current practice that a Subscriber to consolidated data that only uses data for internal use is not charged a Redistribution Fee. Instead, the more appropriate comparison would be between Competing Consolidators and downstream vendors, both of which would be selling consolidated market data directly to market data subscribers. Vendors are and still would be subject to Redistribution Fees when redistributing data to market data subscribers. It would be unreasonably discriminatory for Competing Consolidators, which would be competing with downstream market data vendors for the same data subscriber customers, to not be charged a Redistribution Fee for exactly the same activity. Consequently, the Participants believe that it would be unreasonably discriminatory and impose a burden on competition to not charge Competing Consolidators the Redistribution Fee.13 Third, the UTP Plan fee schedule currently permits the redistribution of UTP Level 1 Service on a delayed basis for $250.00 per month. The Participants propose adding a statement that depth of book data and auction information may not be redistributed on a delayed basis. Finally, the Participants are proposing to make non-substantive changes to language in the fee schedules to take into account the expanded content. For example, the Participants propose updating various fee descriptions to either add or remove a reference to UTP Level 1 Service. Additionally, while FINRA OTC Data will not be provided to Competing Consolidators, it is still being provided to the UTP Processor for inclusion in the consolidated market data made available by the UTP Processor. The Participants propose adding clarifying language to make clear that UTP Level 1 Service obtained from the Processor will include FINRA OTC Data but will not include Odd-lot information. B. Governing or Constituent Documents jspears on DSK121TN23PROD with NOTICES1 Not applicable. 13 The Participants believe it would be more appropriate to compare Competing Consolidators and Self-Aggregators with respect to the fees charged for receipt and use of market data from the Participants and address the fees for the usage of consolidated market data based on their actual usage, which is consistent with the statutory requirements of the Act that the data be provided on terms that are not unreasonably discriminatory. For instance, Participants have proposed to charge a data access fee to Competing Consolidators that would be the same fee to Self-Aggregators. VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 C. Implementation of Amendments The amendments proposed herein would be implemented to coincide with the phased implementation of the MDI Rules as required by the Commission. D. Development and Implementation Phases The amendments proposed herein would be implemented to coincide with the phased implementation of the MDI Rules as required by the Commission. E. Analysis of Impact on Competition The Participants believe that the proposed amendments comply with the requirements of the MDI Rules, which have been approved by the Commission. F. Written Understanding or Agreements Relating to Interpretation of, or Participation in, Plans Not applicable. G. Approval by Sponsors in Accordance With Plan Section IV.C.2 of the UTP Plan provides that ‘‘[t]he affirmative vote of two-thirds of the Participants entitled to vote shall be necessary to constitute the action of the Operating Committee with respect to the establishment of new fees, the deletion of existing fees, or increases or reductions in existing fees relating to Quotation Information and Transaction Reports in Eligible Securities.’’ The Participants have executed this Amendment and represent not less than two-thirds of all of the parties to the UTP Plan. That satisfies the UTP Plan’s Participant-approval requirements.14 H. Description of Operation of Facility Contemplated by the Proposed Amendment Not applicable. I. Terms and Conditions of Access Not applicable. 14 FINRA, IEX, LTSE, MIAX, and MEMX have not joined in the decision to approve the filing of the proposed amendment, and Nasdaq BX is also withholding its vote at the time. Additionally, the Advisory Committee requested that the following statement be inserted into the filing: The Advisory Committee has actively participated in the rate setting process with the SROs and has provided the SROs with opinion and guidance on rate setting appropriate to the interests of consumers throughout the process. The Advisors collectively believe that SIP data content fees should be universally lower to align with the un-coupling of SIP data content from the SIP exclusive processor, a function to be performed by Competing Consolidators. The Advisors believe that while their input was important in the process, the core principle of fees being fair and reasonable was not achieved. PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 J. Method of Determination and Imposition, and Amount of, Fees and Charges Fees established for consolidated market data must be fair and reasonable and not unreasonably discriminatory.15 The Commission expressed that the Operating Committee of the UTP Plan ‘‘should continue to have an important role in the operation, development, and regulation of the national market system for the collection, consolidation, and dissemination of consolidated market data.’’ 16 The Commission further stated that ‘‘the fees for data content underlying consolidated market data, as now defined, are subject to the national market system process that has been established,’’ and that the ‘‘Operating Committee(s) have plenty of experience in developing fees for SIP data.’’ 17 The Operating Committee is bringing this experience to bear to determine the fees for the new core data elements and is proposing fees that are fair and reasonable and not unreasonably discriminatory. The Commission has stated that one way to demonstrate that fees for consolidated market data are fair and reasonable is to show that they are reasonably related to costs. However, the Exchange Act does not require a showing of costs, and historically, the UTP Plan has not demonstrated that their fees are fair and reasonable on the basis of cost data. Moreover, under the decentralized Competing Consolidator model, the Operating Committee has no knowledge of any of the costs associated with consolidated market data. Under the current exclusive SIP model, the Operating Committee (1) specifies the technology that each Participant must use to provide the SIPs with data, and (2) contracts directly with a SIP to collect, consolidate, and disseminate consolidated market data, and therefore has knowledge of a subset of costs associated with collecting and consolidating market data. By contrast, under the decentralized Competing Consolidator model, the UTP Plan no longer has a role in either specifying the technology associated with exchanges providing data or contracting with a SIP. Rather, as specified in amended Rule 603(b), each national securities exchange will be responsible for determining the methods of access to and format of data necessary to generate consolidated market data. Moreover, Competing Consolidators will be responsible for connecting to the 15 15 U.S.C. 78o(c)(1)(C) and (D) and Rule 603(a)(1) and (2). 16 MDI Rules Release at 18682. 17 MDI Rules Release at 18683. E:\FR\FM\26NON1.SGM 26NON1 67565 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices jspears on DSK121TN23PROD with NOTICES1 exchanges to obtain data directly from each exchange, without any involvement of the Operating Committee. Nor does the Operating Committee have access to information about how each exchange would generate the data that they each would be required to disseminate under amended Rule 603(b). Accordingly, under the decentralized Competing Consolidator model, the Operating Committee does not have access to any information about the cost of providing consolidated market data. In the absence of cost information being available to the Operating Committee, the Participants believe instead that fees for consolidated market data are fair and reasonable and not unreasonably discriminatory if they are related to the value of the data to subscribers. The Participants believe that the value of depth of book data and auction information is well-established, as this content has been available to market participants directly from the exchanges for years, and in some cases, decades, at prices constrained by direct and platform competition. Exchanges have filed fees for this data pursuant to the standards specified in Section 6(b)(5) of the Act. To determine the value of depth of book data, the Participants considered a number of methodologies to determine the appropriate level to set fees for the expanded data content that are based on the current fees charged for depth of book data by exchanges that have chosen to charge for their data. In particular, the Participants reviewed (1) an ISO Trade-Based Model 18; (2) a Exchange Product Nasdaq ......... Cboe ............ NYSE ........... IEX ............... Nasdaq Basic/Nasdaq Total View ..................................................................... Cboe ONE Summary/Cboe Full Depth ............................................................. BQT/NYSE Integrated ....................................................................................... TOPS/DEEP ...................................................................................................... Depth to Top-Of-Book Ratio Model (‘‘Depth-to-TOB Model’’); and (3) a Message-Based Model.19 Ultimately, the Participants selected a Depth-to-TOB Model to determine the appropriate fees for the expanded data content. In particular, the Participants reviewed the depth to top-of-book ratios of Professional device rates on Nasdaq (Nasdaq Basic/Nasdaq TotalView), Cboe (Cboe Full Depth) and NYSE (BQT/ NYSE Integrated). In addition, IEX has recently proposed data access fees for its TOPS and DEEP data feeds, which are not proposed to be charged on a per individual basis. The Participants also reviewed the ratio proposed by IEX between its proposed fees for real-time top of book and depth feeds (TOPS/ DEEP), as set forth below: Prop Level 1 $26 10 18 500 Depth $76 100 70 2,500 Ratio (%) 292 1000 389 500 The Participants noted that utilizing the ratios calculated for Nasdaq, NYSE, and IEX resulted in an average ratio of 3.94x and resulted in market data fees the Participants believe are fair and reasonable. The Participants also conducted alternative calculations by including a broader range of products or those products offering more robust depth fees. These alternative calculations resulted in ratios greater than 3.94x and were not selected by the Participants. The Participants believe that the 3.94x ratio represents the difference in value between top-of-book and five levels of depth that would be required to be included in consolidated market data under amended Rule 603(b). Because the alternate methodologies, which focused on only the top five levels of depth, resulted in higher ratios, the Participants believe that the more conservative 3.94x ratio would be a fair and reasonable ratio between the proposed fees for depth of book data required to be included in the consolidated market data and the current fees for the existing Top of Book Quotation information. The Participants then applied the 3.94x ratio to the current fees charged for consolidated market data, as follows: • The Participants applied the 3.94x ratio to the current fees charged to Professional Subscribers taking all three Networks ($75.00). This resulted in the total fee level for depth of book data for Professional Subscribers equaling $296.00 (i.e., $75.00 × 3.94 = $295.50, rounded to $296.00). This fee was then split evenly among the three Networks resulting in a proposed Professional Subscriber fee of $99.00 per Network. • The Participants applied the 3.94x ratio to the current fees charged for Nonprofessional Subscribers taking all three Networks ($3.00). This resulted in the total fee level for depth of book data for Nonprofessional Subscribers equaling $12.00 (i.e., $3.00 × 3.94 = $11.82, rounded to $12.00). This fee was then split evenly among the three Networks, resulting in a proposed Nonprofessional Subscriber fee of $4.00 per Network. • The Participants applied the 3.94x ratio to the current fees charged for NonDisplay Use for all three Networks ($9,500.00). This resulted in the total fee level for depth of book data for NonDisplay Use equaling $37,430.00 (i.e., $9,500.00 × 3.94 = $37,430.00). This fee was then split evenly among the three Networks, resulting in a proposed NonDisplay Use Fee of $12,477.00 per Network (including rounding). • The Participants applied the 3.94x ratio to the current fees charged for direct Data Access for all three Networks ($7,500.00). This resulted in the total fee level for depth of book data for Non-Display Use equaling $29,550.00 (i.e., $7,500.00 × 3.94 = $29,550.00). This fee was then split evenly among the three Networks (including Network C), resulting in a proposed Non-Display Use Fee of $9,850.00 per Network. With respect to the fees for auction information, the Participants looked to the number of trades that occur during the auction process as compared to the trading day, and determined that roughly 10% of the trading volume is concentrated in auctions. Consequently, the Participants believed that charging a fee that was 10% of the fee charged for depth of book data was an appropriate proxy for determining the value of auction information. As a result, the Participants proposed a $10.00 fee per Network for auction information, which the Participants believe is fair and reasonable and not unreasonably discriminatory. With respect to the fees for Level 1 Service, the Participants believe that it is fair and reasonable and not unreasonably discriminatory to include access to odd-lot information at no additional charge to the current fees, which the Participants are not proposing to change. 18 The ISO-Based model analyzed the number of intermarket sweep orders executing through the NBBO, looking at the number of ISOs executed in the first five levels of depth as compared to all ISOs executed. 19 The Message-based model looked at the total number of orders displayable in the first five levels of depth as compared to all displayable orders. VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 E:\FR\FM\26NON1.SGM 26NON1 67566 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices Finally, as detailed above, the Participants are proposing to specify that the existing Redistribution Fees would be applicable to the amended core data, and that such fees would also be applicable to Competing Consolidators. In the MDI Rules Release, the SEC stated that ‘‘[t]he Commission believes imposing redistribution fees on data content underlying consolidated market data that will be disseminated by competing consolidators would be difficult to reconcile with statutory standards of being fair and reasonable and not unreasonably discriminatory in the new decentralized model.’’ The Commission then compared Competing Consolidators to Self- Aggregators and noted that Self-Aggregators would not be subject to redistribution fees. The Participants believe that the comparison between Competing Consolidators and Self-Aggregators is not appropriate in determining whether a redistribution fee is not unreasonably discriminatory. Instead, the more appropriate comparison would be between Competing Consolidators and downstream vendors, both of which would be competing to sell consolidated market data directly to the same market data subscribers. Vendors are and still will be subject to Redistribution Fees when redistributing data to market data subscribers. It would be incongruent and impose a burden on competition for Competing Consolidators to not be charged a redistribution fee for exactly the same activity. Consequently, the Participants believe that it would be unreasonably discriminatory to not charge Competing Consolidators the redistribution fee. To the contrary, based on the long-standing policy that Redistribution Fees are charged to any entity that distributes data externally, the Participants believe it would be a significant departure from established policy, a burden on competition, and unreasonably discriminatory not to charge a Redistribution Fee to Competing Consolidators. K. Method and Frequency of Processor Evaluation Not applicable. L. Dispute Resolution Not applicable. jspears on DSK121TN23PROD with NOTICES1 II. Rule 601(a) A. Reporting Requirements Not applicable. B. Manner of Collecting, Processing, Sequencing, Making Available and Disseminating Last Sale Information Not applicable. VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 C. Manner of Consolidation Not applicable. D. Standards and Methods Ensuring Promptness, Accuracy and Completeness of Transaction Reports Not applicable. E. Rules and Procedures Addressed to Fraudulent or Manipulative Dissemination Not applicable. F. Terms of Access to Transaction Reports Not applicable. G. Identification of Marketplace of Execution Not applicable. III. Solicitation of Comments The Commission seeks comments on the Amendment. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed Amendment is consistent with the Act and the rules and regulations thereunder applicable to national market system plans. 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 S7– 24–89 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 S7–24–89. 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 website (https://www.sec.gov/rules/ sro.shtml). Copies of the submission, all written statements with respect to the proposed Amendment that are filed with the Commission, and all written communications relating to the proposed Amendment 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 website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00p.m. Copies of the filing will also be available for website viewing and printing at the principal office of the Plan. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number S7–24–89 and should be submitted on or before December 17, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 J. Matthew DeLesDernier, Assistant Secretary. Attachment A—Proposed Changes to the UTP Plan Attachment A Proposed Changes to the UTP Plan (Additions are italicized; Deletions are in [brackets].) Exhibit 2 Fees for UTP Services (a) [UTP Level 1 Service] Professional Services. The charge for each interrogation device receiving UTP Level 1 Service is $24.00 per month. This Service includes the following data: (1) Inside bid/ask quotations calculated for securities listed in The Nasdaq Stock Market; (2) last sale information on Nasdaqlisted securities; (3) Odd-lot information; and (4) Administrative data, regulatory data, and self-regulatory organizationspecific program data. UTP Level 1 Service obtained from the Processor [also] includes FINRA OTC Data but will not include Odd-lot information. The charge for each interrogation device receiving depth of book data is $99.00 per month. The charge for each interrogation device receiving auction information is $10.00 per month. Vendors with employees that are [UTP Level 1] Professional Subscribers may opt to join the ‘‘Multiple Instance, Single User’’ (‘‘MISU’’) Program. The MISU Program allows such Vendors to pay a single device fee for an individual employee’s use of [UTP Level 1 Service] data when the individual employee receives [UTP Level 1 Service] data on 20 17 E:\FR\FM\26NON1.SGM CFR 200.30–3(a)(85). 26NON1 jspears on DSK121TN23PROD with NOTICES1 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices multiple devices. The MISU Program permits a single device fee for an individual on multiple devices regardless of whether the individual employee uses an internally-controlled devices or vendor-controlled terminals. To join the MISU Program, Vendors must be party to a vendor agreement, submit a MISU application form, and a sample MISU Report to demonstrate that the Vendor can comply with the reporting requirements of the MISU Program. Additionally, Vendors must demonstrate adequate internal controls for entitlements, monitoring, and usage reporting requirements. Vendors must submit a MISU Report in a format and include the details requested by the UTP Administrator by the 20th day of the month for which they are requesting credit. Failure to submit a MISU Report by the deadline will result in credit being forfeited for that particular month. (b) Non-Professional Services. (1) The charge for distribution of UTP Level 1 Service to a nonprofessional subscriber shall be $1.00 per interrogation device per month. (2) The charge for distribution of depth of book data to a non-professional subscriber shall be $4 per interrogation device per month. (3) The charge for distribution of auction information to a nonprofessional subscriber shall be $10 per interrogation device per month. [(2)](4) A ‘‘non-professional’’ is a natural person who is neither: (A) registered or qualified in any capacity with the Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association or any commodities or futures contract market or association; (B) engaged as an ‘‘investment adviser’’ as that term is defined in Section 202(a)(11) of the Investment Advisors Act of 1940 (whether or not registered or qualified under that Act); nor (C) employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt. (c) Automated Voice Response Service Fee. The monthly charge for distribution of UTP Level 1 Service through automated voice response services shall be $21.25 for each voice port. (d) Per Query Fee: The charge for distribution of UTP Level 1 Service through a per query system shall be $.0075 per query. The VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 Per Query Fee is not available for depth of book data and auction information. (e) Nonprofessional Subscriber Enterprise Cap An entity that is registered as a broker/dealer under the Securities Exchange Act of 1934 is not required to pay more than the ‘‘Enterprise Maximum’’ for any month for each entitlement system. The ‘‘Enterprise Maximum’’ equals the aggregate amount of fees payable for distribution of UTP Level 1 Service to nonprofessional subscribers that are brokerage account customers of the broker/dealer under paragraphs (b)(1) and (d) of this Exhibit 2. For calendar year 2016, the monthly Enterprise Maximum is $648,000 per entitlement system. For each subsequent calendar year, the Participants may, by the affirmative vote of not less than twothirds of all of the then voting members of the Operating Committee, determine to increase the monthly Enterprise Maximum; provided, however, that no such annual increase shall exceed four percent of the then current Enterprise Maximum amount. (f) Cable Television Ticker Fee. The monthly charge for distribution of UTP Level 1 Service through a cable television distribution system shall be as set forth below: First 10 million Subscriber Households—$2.00 per 1,000 households Next 10 million Subscriber Households—$1.00 per 1,000 households For Subsequent Subscriber Households—$0.50 per 1,000 households (g) Data Access Charges.1 The monthly fee for direct access to UTP Level 1 real-time data feeds shall be $2,500 for direct access and $500 for indirect access. The monthly fee for access to depth of book data shall be $9,850. The monthly fee for access to auction information shall be $985. (h) Redistribution Charge The charge for redistributing real-time [UTP Level 1 Service] core data, or any subset thereof, is $1,000 per month. The charge for redistributing delayed UTP Level 1 Service is $250 per month. Depth of book data and auction information may not be redistributed on a delayed basis. The charge applies to any entity that makes [UTP Level 1 Service] data available to any other entity or to any person other than its employees, irrespective of the means of 1 The data recipient is responsible for the telecommunications facilities necessary to access data. PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 67567 transmission or access. The charge applies to Competing Consolidators. (i) Non-Display Use Fees The monthly charge for Non-Display Use of UTP Level 1 Service is $3,500 for each of three types of Non-Display Use. The charge entitles the data recipient to use both quotation information and last sale information. The monthly charge for Non-Display Use of depth of book data is $12,477 for each of three types of Non-Display Use. The monthly charge for Non-Display Use of auction information is $1,248 for each of three types of Non-Display Use. Non-Display Use refers to accessing, processing or consuming data, whether received via direct and/or redistributor data feeds, for a purpose other than (a) in support of the datafeed recipient’s display or (b) for the purpose of further internally or externally redistributing the data. Further redistribution of the data includes, but is not limited to, the transportation or dissemination to another server, location or device or the aggregation of data with other data sources. Non-Display Use fees do not apply to the use of the data in NonDisplay to create derived data and use the derived data for the purposes of solely displaying the derived data, but the data may be fee liable under the regular fee schedule. The Non-Display Use fees apply separately for each use type and a single organization may be liable for multiple Non-Display Uses. The Participants recognize three types of Non-Display Uses as follows: (a) The Non-Display Use fee for Electronic Trading Systems applies when a datafeed recipient makes a NonDisplay Use of data in an electronic trading system, whether the system trades on the datafeed recipient’s own behalf or on behalf of its customers. This fee includes, but is not limited to, use of data in any trading platform(s), such as exchanges, alternative trading systems (‘‘ATS’s’’), broker crossing networks, broker crossing systems not filed as ATS’s, dark pools, multilateral trading facilities, and systematic internalization systems. An organization that uses data in electronic trading systems must count each platform that uses data on a nondisplay basis. For example, an organization that uses quotation information for the purposes of operating an ATS and also for operating a broker crossing system not registered as an ATS would be required to pay two Electronic Trading System fees. (b) Non-Display Enterprise Licenses: (i) The Non-Display Use fee for Internal Use applies when a datafeed recipient’s Non-Display Use is on its E:\FR\FM\26NON1.SGM 26NON1 67568 Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices own behalf (other than for purposes of an electronic trading system). (ii) The Non-Display Use fee for Internal Use applies when a datafeed recipient’s Non-Display Use is on behalf of its customers (other than for purposes of an electronic trading system). The two types of Non-Display Enterprise Licenses include, but are not limited to, use of data for automated order or quote generation and/or order pegging, price referencing for algorithmic trading, price referencing for smart order routing, operations control programs, investment analysis, order verification, surveillance programs, risk management, compliance or portfolio valuation. (j) Annual Administrative Fees. The annual administrative fee to be paid by distributor for access to UTP Level 1 Service shall be as set forth below: Delayed distributor—$250 [FR Doc. 2021–25747 Filed 11–24–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93627; File No. SR–IEX– 2021–16] Self-Regulatory Organizations: Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Definition of a Retail Order for the Retail Price Improvement Program November 19, 2021. jspears on DSK121TN23PROD with NOTICES1 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 November 12, 2021, the Investors Exchange LLC (‘‘IEX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II, 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 Pursuant to the provisions of Section 19(b)(1) under the Act,3 and Rule 19b– 4 thereunder,4 the Exchange is filing with the Commission a proposed rule change to modify the definition of a 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(1). 4 17 CFR 240.19b–4. 2 17 VerDate Sep<11>2014 20:16 Nov 24, 2021 Jkt 256001 Retail order set forth in IEX Rule 11.190(b)(15) to encourage the submission of more Retail orders. The Exchange has designated this rule change as ‘‘non-controversial’’ under Section 19(b)(3)(A) of the Act 5 and provided the Commission with the notice required by Rule 19b–4(f)(6) thereunder.6 The text of the proposed rule change is available at the Exchange’s website at www.iextrading.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 statement may be examined at the places specified in Item IV below. The self-regulatory organization 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 modify the definition of a Retail order 7 set forth in IEX Rule 11.190(b)(15) for the benefit of retail investors. Specifically, IEX is proposing to revert a recent change to IEX Rule 11.190(b)(15), so that Retail orders can once again be submitted on behalf of all retail customers without the requirements that the retail customer submits no more than 390 orders per day on average (the ‘‘390-order threshold’’). The Exchange proposes to make this change to offer the benefits of IEX’s Retail Price Improvement Program (‘‘Retail Program’’) to as many retail investors as possible. Background In 2019 the Commission approved the Retail Program,8 which is designed to provide retail investors with meaningful price improvement opportunities through trading at the Midpoint Price 9 5 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4. 7 See IEX Rule 11.190(b)(15). 8 See Securities Exchange Act Release No. 86619 (August 9, 2019), 84 FR 41769 (August 15, 2019) (SR–IEX–2019–05) (SEC order approving IEX’s Retail Program). 9 The term ‘‘Midpoint Price’’ means the midpoint of the NBBO. See IEX Rule 1.160(t). The term 6 17 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 or better.10 The Exchange launched the Retail Program on October 1, 2019.11 Under IEX’s Retail Program, Members 12 that qualify as Retail Member Organizations (‘‘RMOs’’) 13 are eligible to submit Retail orders 14 to the Exchange. Any Member is able to provide price improvement to Retail orders through orders priced to execute at the Midpoint Price or better, including Retail Liquidity Provider (‘‘RLP’’) orders 15 that are only eligible to execute against a Retail order at the Midpoint Price and execute in pricetime priority with other orders resting on the Order Book priced to trade at the Midpoint Price. On July 13, 2021, the Commission approved an IEX rule change proposal that revised its Retail Program (the ‘‘Retail Program Update Filing’’).16 The Retail Program Update Filing was designed to further support and enhance the ability of non-professional retail investors to obtain meaningful price improvement by incentivizing market participants to compete to provide such price improvement.17 Specifically, the ‘‘NBBO’’ means the national best bid or offer, as set forth in Rule 600(b) of Regulation NMS under the Act, determined as set forth in IEX Rule 11.410(b). 10 On March 1, 2021, IEX filed an immediately effective rule change proposal to provide that, in addition to executing at the Midpoint Price, a Retail order can execute against a displayed unprotected odd lot order that is resting on the Order Book at a price more aggressive than the Midpoint Price (i.e., above the Midpoint Price in the case of an odd lot buy order and below the Midpoint Price in the case of an odd lot sell order). Executing against such an odd lot order thus provides more price improvement to the Retail order than executing at the Midpoint Price. See Securities Exchange Act Release No. 91324 (March 15, 2021), 86 FR 15015 (March 19, 2021) (SR–IEX–2021–03). 11 See Trading Alert #2019–026, available at https://iextrading.com/alerts/#/82. 12 See IEX Rule 1.160(s). 13 See IEX Rule 11.232(a)(1). 14 A Retail order is currently defined as an order submitted by an RMO and designated with a ‘‘Retail order’’ modifier. A Retail order must be an agency order, or riskless principal order that satisfies the criteria of FINRA Rule 5320.03, and must reflect trading interest of a natural person with no change made to the terms of the underlying order of the natural person with respect to price (except in the case of a market order that is changed to a marketable limit order) or side of market and that does not originate from a trading algorithm or any other computerized methodology (a ‘‘retail customer’’). An order from a retail customer can include orders submitted on behalf of accounts that are held in a corporate legal form that have been established for the benefit of an individual or group of related family members, provided that the order is submitted by an individual. A Retail order may only be submitted on behalf of a retail customer that does not place more than 390 equity orders per day on average during a calendar month for its own beneficial account(s). See IEX Rule 11.190(b)(15). 15 See IEX Rule 11.190(b)(14). 16 See Securities Exchange Act Release No. 92398 (July 13, 2021), 86 FR 38166 (July 19, 2021) (approving SR–IEX–2021–06). 17 See supra note 17. E:\FR\FM\26NON1.SGM 26NON1

Agencies

[Federal Register Volume 86, Number 225 (Friday, November 26, 2021)]
[Notices]
[Pages 67562-67568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25747]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93618; File No. S7-24-89]


Joint Industry Plan; Notice of Filing of the Fifty-Second 
Amendment to the Joint Self-Regulatory Organization Plan Governing the 
Collection, Consolidation and Dissemination of Quotation and 
Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privileges Basis

November 19, 2021.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on November 5, 2021,\3\ certain participants in the Joint Self-
Regulatory Organization Plan Governing the Collection, Consolidation 
and Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading Privileges 
Basis (``UTP Plan'' or ``Plan'') filed with the Securities and Exchange 
Commission (``Commission'') a proposal to amend the UTP Plan.\4\ The 
amendment represents the Fifty-Second Amendment to the Plan 
(``Amendment''). Under the Amendment, the Participants propose to amend 
the Plan to adopt fees for the receipt of the expanded content of 
consolidated market data pursuant to the Commission's Market Data 
Infrastructure Rules (``MDI Rules'').\5\ The Participants have 
submitted a separate amendment to implement the non-fee-related aspects 
of the MDI Rules.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ See Letter from Robert Books, Chair, UTP Operating 
Committee, to Vanessa Countryman, Secretary, Commission (Nov. 5, 
2021).
    \4\ The amendment was approved and executed by more than the 
required two-thirds of the self-regulatory organizations (``SROs'') 
that are participants of the UTP Plan. The participants that 
approved and executed the amendment (the ``Participants'') are: Cboe 
BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, 
Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Nasdaq ISE, 
LLC, Nasdaq PHLX, Inc., The Nasdaq Stock Market LLC, New York Stock 
Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, 
Inc., and NYSE National, Inc.. The other SROs that are participants 
in the UTP Plan are: Financial Industry Regulatory Authority, Inc., 
The Investors' Exchange LLC, Long-Term Stock Exchange, Inc., MEMX 
LLC, MIAX PEARL, LLC, and Nasdaq BX, Inc.. See infra Section I. G.
    \5\ Securities Exchange Act Release No. 90610, 86 FR 18596 
(April 9, 2021) (File No. S7-03-20) (``MDI Rules Release'').
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    The proposed Amendment has been filed by the Participants pursuant 
to Rule 608(b)(2) under Regulation NMS.\6\ The Commission is publishing 
this notice to solicit comments from interested persons on the proposed 
Amendment. Set forth in Sections I and II, which were prepared and 
submitted to the Commission by the Participants, is the statement of 
the purpose and summary of the Amendment, along with information 
pursuant to Rules 608(a) and 601(a) under the Act. A copy of the Plan 
marked to show the proposed Amendment is Attachment A to this notice.
---------------------------------------------------------------------------

    \6\ 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

I. Rule 608(a)

A. Purpose of the Amendments

    On December 9, 2020, the Commission adopted amendments to 
Regulation NMS. The effective date of these final rules was June 8, 
2021. As specified in the MDI Rules Release, the Participants must 
submit updated fees regarding the receipt and use of the expanded 
content of consolidated market data by November 5, 2021.\7\ Consistent 
with that requirement, the Participants are submitting the above-
captioned amendments to the UTP Plan to propose such fees.\8\
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    \7\ MDI Rules Release at 18699.
    \8\ As the Commission is aware, some of the SROs (the 
``Petitioners'') have challenged the MDI Rules Release in the D.C. 
Circuit. Certain of the Petitioners have joined in this submission, 
including the statement that the Plan amendments comply with the MDI 
Rules Release, solely to satisfy the requirements of the MDI Rules 
Release and Rule 608. Nothing in this submission should be construed 
as abandoning any arguments asserted in the D.C. Circuit, as an 
agreement by Petitioners with any analysis or conclusions set forth 
in the MDI Rules Release, or as a concession by Petitioners 
regarding the legality of the MDI Rules Release. Petitioners reserve 
all rights in connection with their pending challenge of the MDI 
Rules Release, including inter alia, the right to withdraw the 
proposed amendment or assert that any action relating to the 
proposed amendment has been rendered null and void, depending on the 
outcome of the pending challenge. Petitioners further reserve all 
rights with respect to this submission, including inter alia, the 
right to assert legal challenges regarding the Commission's 
disposition of this submission.
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    The Participants are proposing a fee structure for the following 
three categories of data, which collectively comprise the amended 
definition of core data, as that term is defined in amended Rule 
600(b)(21) of Regulation NMS: \9\
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    \9\ 17 CFR 242.600(b)(26) (``Rule 600'').
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    (1) Level 1 Service, which the Participants propose would include 
Top of Book Quotations, Last Sale Price Information, and odd-lot 
information (as defined in amended Rule 600(b)(59)). Plan fees to 
subscribers currently are for Top of Book Quotations and Last Sale 
Price Information, as well as what is now defined as administrative 
data (as defined in amended Rule 600(b)(2)), regulatory data (as 
defined in amended Rule 600(b)(78)), and self-regulatory

[[Page 67563]]

organization-specific program data (as defined in amended Rule 
600(b)(85)). The Participants propose that Level 1 Service would 
continue to include all information that subscribers receive for 
current fees and add odd-lot information;
    (2) Depth of book data (as defined in amended Rule 600(b)(26)); and
    (3) Auction information (as defined in amended Rule 600(b)(5)).\10\
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    \10\ The Participants propose to price subsets of data that 
comprise core data separately so that data subscriber users have 
flexibility in how much consolidated market data content they wish 
to purchase. For example, the Participants understand that certain 
data subscribers may not wish to add depth of book data or auction 
information, or may want to add only depth of book information, but 
not auction information. Accordingly, Participants are proposing to 
price subsets of data to provide flexibility to data subscribers. 
However, the Participants expect that Competing Consolidators would 
be purchase all core data.
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Professional and Nonprofessional Fee Structure
    For each of the three categories of data described above, the 
Participants are proposing a Professional Subscriber Charge and a 
Nonprofessional Subscriber Charge.
    With respect to Level 1 Service, the Participants are not proposing 
to change the Professional Subscriber and Nonprofessional Subscriber 
fees currently set forth in the UTP Plan. Access to odd-lot information 
would be made available to Level 1 Service Professional and 
Nonprofessional Subscribers at no additional charge.
    With respect to depth of book data, Professional Subscribers would 
pay $99.00 per device per month and Nonprofessional Subscribers would 
pay $4.00 per subscriber per device per month. The Participants are not 
proposing per-quote packet charges or enterprise rates for either 
Professional Subscribers or Nonprofessional Subscribers use of depth of 
book data at this time.
    Finally, with respect to auction information, both Professional 
Subscribers and Nonprofessional Subscribers would pay $10.00 per device 
per month.
Non-Display Use Fees
    The Participants are proposing Non-Display Use Fees relating to the 
three categories of data described above: (1) Level 1 Service; (2) 
depth of book data; and (3) auction information.
    With respect to Level 1 Service, the Participants are not proposing 
to change the Non-Display Use fees currently set forth in the UTP Plan. 
Access to odd-lot information would be made available to Level 1 
Service subscribers at no additional charge.
    With respect to depth of book data, Subscribers would pay Non-
Display Use Fees of $12,477.00 per month for each category of Non-
Display Use.
    With respect to auction information, Subscribers would pay Non-
Display Use fees of $1,248.00 per month for each category of Non-
Display Use. As is the case today, Subscribers would be charged for 
each category of use of depth of book data and auction information.
Access Fees
    Finally, the Participants are proposing Access Fees regarding the 
use of the three categories of data: (1) Level 1 Service; (2) depth of 
book data; and (3) auction information.
    With respect to Level 1 Service, the Participants are not proposing 
to change the Access Fees currently set forth in the UTP Plan. Access 
to odd-lot information would be made available to Level 1 Service 
subscribers at no additional charge.
    With respect to depth of book data, Subscribers would pay a monthly 
Access Fee of $9,850.00
    With respect to auction information, Subscribers would pay a 
monthly Access Fee of $985.00 per Network.
Clarifications Related to Expanded Content
    In addition to the above fees, the Participants propose adding 
clarifying language regarding the applicability of various fees given 
the availability of the expanded market data content.
    First, the Participants propose to clarify that the Per Query Fee 
is not applicable to the expanded content, and only applies to the 
receipt and use of Level 1 Service. Under the current Price List, the 
Per Query Fee serves as an alternative fee schedule to the normally 
applied Professional and Nonprofessional Subscriber Charges. The 
proposed changes are designed to clarify that Per Query Fee is only 
available with respect to the use of Level 1 Service, and the fees for 
the use of depth of book data and auction information must be 
determined pursuant to the Professional and Nonprofessional fees 
described above.
    Second, the Participants propose to clarify that Level 1 Service 
would include Top of Book Quotation Information, Last Sale Price 
Information, odd-lot information, administrative data, regulatory data, 
and self-regulatory organization program data. This proposed amendment 
would use terms defined in amended Rule 600(b) to reflect both current 
data made available to data subscribers and the additional odd-lot 
information that would be included at no additional charge.
    Third, the Participants are proposing to clarify that the existing 
Redistribution Fees would be applicable to all three categories of core 
data, including any subset thereof. Currently, Redistribution Fees are 
charged to any entity that makes last sale information or quotation 
information available to any other entity or to any person other than 
its employees, irrespective of the means of transmission or access. The 
Participants propose to amend this description to make it applicable to 
core data, as that term is defined in amended Rule 600(b)(21). The 
Participants are not proposing to change the fee level for 
Redistribution Fees themselves.
    Fourth, the Participants are proposing that the existing 
Redistribution Fees would be applicable to Competing Consolidators. In 
the MDI Rules approval order, the SEC stated that ``[t]he Commission 
believes imposing redistribution fees on data content underlying 
consolidated market data that will be disseminated by competing 
consolidators would be difficult to reconcile with statutory standards 
of being fair and reasonable and not unreasonably discriminatory in the 
new decentralized model.'' \11\ The Commission then compared Competing 
Consolidators to Self- Aggregators and noted that Self-Aggregators 
would not be subject to redistribution fees. The Participants believe 
that the comparison between Competing Consolidators and Self-
Aggregators is not appropriate in determining whether a redistribution 
fee is not unreasonably discriminatory. The Participants also do not 
believe that the Commission's comparison is consistent with current 
long-standing practice that redistribution fees are charged to any 
entity that distributes data externally.\12\ By definition, a Self-
Aggregator would not be distributing data externally and therefore 
would not be subject to such

[[Page 67564]]

fees, which is consistent with current practice that a Subscriber to 
consolidated data that only uses data for internal use is not charged a 
Redistribution Fee.
---------------------------------------------------------------------------

    \11\ MDI Rules Release at 18685.
    \12\ The current exclusive securities information processor 
(``SIP'') is not charged a Redistribution Fee. However, unlike 
Competing Consolidators, the processor has been retained by the UTP 
Plan to serve as an exclusive SIP, is subject to oversight by both 
the UTP Plan and the Commission, and neither pays for the data nor 
engages with data subscriber customers. By contrast, under the 
Competing Consolidator model, the UTP Plan would have no role in 
either oversight of or determining which entities choose to be a 
Competing Consolidator, a Competing Consolidator would need to 
purchase consolidated market data just as any other vendor would, 
and Competing Consolidators would be responsible for competing for 
data subscriber clients. Accordingly, Competing Consolidators would 
be more akin to vendors than the current exclusive SIPs. The 
Participants note that if any entity that is currently an exclusive 
SIP chooses to register as a Competing Consolidator, such entity 
would be subject to the Redistribution Fee.
---------------------------------------------------------------------------

    Instead, the more appropriate comparison would be between Competing 
Consolidators and downstream vendors, both of which would be selling 
consolidated market data directly to market data subscribers. Vendors 
are and still would be subject to Redistribution Fees when 
redistributing data to market data subscribers. It would be 
unreasonably discriminatory for Competing Consolidators, which would be 
competing with downstream market data vendors for the same data 
subscriber customers, to not be charged a Redistribution Fee for 
exactly the same activity. Consequently, the Participants believe that 
it would be unreasonably discriminatory and impose a burden on 
competition to not charge Competing Consolidators the Redistribution 
Fee.\13\
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    \13\ The Participants believe it would be more appropriate to 
compare Competing Consolidators and Self-Aggregators with respect to 
the fees charged for receipt and use of market data from the 
Participants and address the fees for the usage of consolidated 
market data based on their actual usage, which is consistent with 
the statutory requirements of the Act that the data be provided on 
terms that are not unreasonably discriminatory. For instance, 
Participants have proposed to charge a data access fee to Competing 
Consolidators that would be the same fee to Self-Aggregators.
---------------------------------------------------------------------------

    Third, the UTP Plan fee schedule currently permits the 
redistribution of UTP Level 1 Service on a delayed basis for $250.00 
per month. The Participants propose adding a statement that depth of 
book data and auction information may not be redistributed on a delayed 
basis.
    Finally, the Participants are proposing to make non-substantive 
changes to language in the fee schedules to take into account the 
expanded content. For example, the Participants propose updating 
various fee descriptions to either add or remove a reference to UTP 
Level 1 Service. Additionally, while FINRA OTC Data will not be 
provided to Competing Consolidators, it is still being provided to the 
UTP Processor for inclusion in the consolidated market data made 
available by the UTP Processor. The Participants propose adding 
clarifying language to make clear that UTP Level 1 Service obtained 
from the Processor will include FINRA OTC Data but will not include 
Odd-lot information.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendments

    The amendments proposed herein would be implemented to coincide 
with the phased implementation of the MDI Rules as required by the 
Commission.

D. Development and Implementation Phases

    The amendments proposed herein would be implemented to coincide 
with the phased implementation of the MDI Rules as required by the 
Commission.

E. Analysis of Impact on Competition

    The Participants believe that the proposed amendments comply with 
the requirements of the MDI Rules, which have been approved by the 
Commission.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plans

    Not applicable.

G. Approval by Sponsors in Accordance With Plan

    Section IV.C.2 of the UTP Plan provides that ``[t]he affirmative 
vote of two-thirds of the Participants entitled to vote shall be 
necessary to constitute the action of the Operating Committee with 
respect to the establishment of new fees, the deletion of existing 
fees, or increases or reductions in existing fees relating to Quotation 
Information and Transaction Reports in Eligible Securities.''
    The Participants have executed this Amendment and represent not 
less than two-thirds of all of the parties to the UTP Plan. That 
satisfies the UTP Plan's Participant-approval requirements.\14\
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    \14\ FINRA, IEX, LTSE, MIAX, and MEMX have not joined in the 
decision to approve the filing of the proposed amendment, and Nasdaq 
BX is also withholding its vote at the time. Additionally, the 
Advisory Committee requested that the following statement be 
inserted into the filing: The Advisory Committee has actively 
participated in the rate setting process with the SROs and has 
provided the SROs with opinion and guidance on rate setting 
appropriate to the interests of consumers throughout the process. 
The Advisors collectively believe that SIP data content fees should 
be universally lower to align with the un-coupling of SIP data 
content from the SIP exclusive processor, a function to be performed 
by Competing Consolidators. The Advisors believe that while their 
input was important in the process, the core principle of fees being 
fair and reasonable was not achieved.
---------------------------------------------------------------------------

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    Fees established for consolidated market data must be fair and 
reasonable and not unreasonably discriminatory.\15\ The Commission 
expressed that the Operating Committee of the UTP Plan ``should 
continue to have an important role in the operation, development, and 
regulation of the national market system for the collection, 
consolidation, and dissemination of consolidated market data.'' \16\ 
The Commission further stated that ``the fees for data content 
underlying consolidated market data, as now defined, are subject to the 
national market system process that has been established,'' and that 
the ``Operating Committee(s) have plenty of experience in developing 
fees for SIP data.'' \17\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78o(c)(1)(C) and (D) and Rule 603(a)(1) and (2).
    \16\ MDI Rules Release at 18682.
    \17\ MDI Rules Release at 18683.
---------------------------------------------------------------------------

    The Operating Committee is bringing this experience to bear to 
determine the fees for the new core data elements and is proposing fees 
that are fair and reasonable and not unreasonably discriminatory. The 
Commission has stated that one way to demonstrate that fees for 
consolidated market data are fair and reasonable is to show that they 
are reasonably related to costs. However, the Exchange Act does not 
require a showing of costs, and historically, the UTP Plan has not 
demonstrated that their fees are fair and reasonable on the basis of 
cost data.
    Moreover, under the decentralized Competing Consolidator model, the 
Operating Committee has no knowledge of any of the costs associated 
with consolidated market data. Under the current exclusive SIP model, 
the Operating Committee (1) specifies the technology that each 
Participant must use to provide the SIPs with data, and (2) contracts 
directly with a SIP to collect, consolidate, and disseminate 
consolidated market data, and therefore has knowledge of a subset of 
costs associated with collecting and consolidating market data. By 
contrast, under the decentralized Competing Consolidator model, the UTP 
Plan no longer has a role in either specifying the technology 
associated with exchanges providing data or contracting with a SIP. 
Rather, as specified in amended Rule 603(b), each national securities 
exchange will be responsible for determining the methods of access to 
and format of data necessary to generate consolidated market data. 
Moreover, Competing Consolidators will be responsible for connecting to 
the

[[Page 67565]]

exchanges to obtain data directly from each exchange, without any 
involvement of the Operating Committee. Nor does the Operating 
Committee have access to information about how each exchange would 
generate the data that they each would be required to disseminate under 
amended Rule 603(b). Accordingly, under the decentralized Competing 
Consolidator model, the Operating Committee does not have access to any 
information about the cost of providing consolidated market data.
    In the absence of cost information being available to the Operating 
Committee, the Participants believe instead that fees for consolidated 
market data are fair and reasonable and not unreasonably discriminatory 
if they are related to the value of the data to subscribers. The 
Participants believe that the value of depth of book data and auction 
information is well-established, as this content has been available to 
market participants directly from the exchanges for years, and in some 
cases, decades, at prices constrained by direct and platform 
competition. Exchanges have filed fees for this data pursuant to the 
standards specified in Section 6(b)(5) of the Act.
    To determine the value of depth of book data, the Participants 
considered a number of methodologies to determine the appropriate level 
to set fees for the expanded data content that are based on the current 
fees charged for depth of book data by exchanges that have chosen to 
charge for their data. In particular, the Participants reviewed (1) an 
ISO Trade-Based Model \18\; (2) a Depth to Top-Of-Book Ratio Model 
(``Depth-to-TOB Model''); and (3) a Message-Based Model.\19\ 
Ultimately, the Participants selected a Depth-to-TOB Model to determine 
the appropriate fees for the expanded data content.
---------------------------------------------------------------------------

    \18\ The ISO-Based model analyzed the number of intermarket 
sweep orders executing through the NBBO, looking at the number of 
ISOs executed in the first five levels of depth as compared to all 
ISOs executed.
    \19\ The Message-based model looked at the total number of 
orders displayable in the first five levels of depth as compared to 
all displayable orders.
---------------------------------------------------------------------------

    In particular, the Participants reviewed the depth to top-of-book 
ratios of Professional device rates on Nasdaq (Nasdaq Basic/Nasdaq 
TotalView), Cboe (Cboe Full Depth) and NYSE (BQT/NYSE Integrated). In 
addition, IEX has recently proposed data access fees for its TOPS and 
DEEP data feeds, which are not proposed to be charged on a per 
individual basis. The Participants also reviewed the ratio proposed by 
IEX between its proposed fees for real-time top of book and depth feeds 
(TOPS/DEEP), as set forth below:

----------------------------------------------------------------------------------------------------------------
           Exchange                          Product               Prop Level 1        Depth         Ratio (%)
----------------------------------------------------------------------------------------------------------------
Nasdaq........................  Nasdaq Basic/Nasdaq Total View..             $26             $76             292
Cboe..........................  Cboe ONE Summary/Cboe Full Depth              10             100            1000
NYSE..........................  BQT/NYSE Integrated.............              18              70             389
IEX...........................  TOPS/DEEP.......................             500           2,500             500
----------------------------------------------------------------------------------------------------------------

    The Participants noted that utilizing the ratios calculated for 
Nasdaq, NYSE, and IEX resulted in an average ratio of 3.94x and 
resulted in market data fees the Participants believe are fair and 
reasonable.
    The Participants also conducted alternative calculations by 
including a broader range of products or those products offering more 
robust depth fees. These alternative calculations resulted in ratios 
greater than 3.94x and were not selected by the Participants. The 
Participants believe that the 3.94x ratio represents the difference in 
value between top-of-book and five levels of depth that would be 
required to be included in consolidated market data under amended Rule 
603(b). Because the alternate methodologies, which focused on only the 
top five levels of depth, resulted in higher ratios, the Participants 
believe that the more conservative 3.94x ratio would be a fair and 
reasonable ratio between the proposed fees for depth of book data 
required to be included in the consolidated market data and the current 
fees for the existing Top of Book Quotation information.
    The Participants then applied the 3.94x ratio to the current fees 
charged for consolidated market data, as follows:
     The Participants applied the 3.94x ratio to the current 
fees charged to Professional Subscribers taking all three Networks 
($75.00). This resulted in the total fee level for depth of book data 
for Professional Subscribers equaling $296.00 (i.e., $75.00 x 3.94 = 
$295.50, rounded to $296.00). This fee was then split evenly among the 
three Networks resulting in a proposed Professional Subscriber fee of 
$99.00 per Network.
     The Participants applied the 3.94x ratio to the current 
fees charged for Nonprofessional Subscribers taking all three Networks 
($3.00). This resulted in the total fee level for depth of book data 
for Nonprofessional Subscribers equaling $12.00 (i.e., $3.00 x 3.94 = 
$11.82, rounded to $12.00). This fee was then split evenly among the 
three Networks, resulting in a proposed Nonprofessional Subscriber fee 
of $4.00 per Network.
     The Participants applied the 3.94x ratio to the current 
fees charged for Non-Display Use for all three Networks ($9,500.00). 
This resulted in the total fee level for depth of book data for Non-
Display Use equaling $37,430.00 (i.e., $9,500.00 x 3.94 = $37,430.00). 
This fee was then split evenly among the three Networks, resulting in a 
proposed Non-Display Use Fee of $12,477.00 per Network (including 
rounding).
     The Participants applied the 3.94x ratio to the current 
fees charged for direct Data Access for all three Networks ($7,500.00). 
This resulted in the total fee level for depth of book data for Non-
Display Use equaling $29,550.00 (i.e., $7,500.00 x 3.94 = $29,550.00). 
This fee was then split evenly among the three Networks (including 
Network C), resulting in a proposed Non-Display Use Fee of $9,850.00 
per Network.
    With respect to the fees for auction information, the Participants 
looked to the number of trades that occur during the auction process as 
compared to the trading day, and determined that roughly 10% of the 
trading volume is concentrated in auctions. Consequently, the 
Participants believed that charging a fee that was 10% of the fee 
charged for depth of book data was an appropriate proxy for determining 
the value of auction information. As a result, the Participants 
proposed a $10.00 fee per Network for auction information, which the 
Participants believe is fair and reasonable and not unreasonably 
discriminatory.
    With respect to the fees for Level 1 Service, the Participants 
believe that it is fair and reasonable and not unreasonably 
discriminatory to include access to odd-lot information at no 
additional charge to the current fees, which the Participants are not 
proposing to change.

[[Page 67566]]

    Finally, as detailed above, the Participants are proposing to 
specify that the existing Redistribution Fees would be applicable to 
the amended core data, and that such fees would also be applicable to 
Competing Consolidators. In the MDI Rules Release, the SEC stated that 
``[t]he Commission believes imposing redistribution fees on data 
content underlying consolidated market data that will be disseminated 
by competing consolidators would be difficult to reconcile with 
statutory standards of being fair and reasonable and not unreasonably 
discriminatory in the new decentralized model.'' The Commission then 
compared Competing Consolidators to Self- Aggregators and noted that 
Self-Aggregators would not be subject to redistribution fees. The 
Participants believe that the comparison between Competing 
Consolidators and Self-Aggregators is not appropriate in determining 
whether a redistribution fee is not unreasonably discriminatory. 
Instead, the more appropriate comparison would be between Competing 
Consolidators and downstream vendors, both of which would be competing 
to sell consolidated market data directly to the same market data 
subscribers. Vendors are and still will be subject to Redistribution 
Fees when redistributing data to market data subscribers. It would be 
incongruent and impose a burden on competition for Competing 
Consolidators to not be charged a redistribution fee for exactly the 
same activity. Consequently, the Participants believe that it would be 
unreasonably discriminatory to not charge Competing Consolidators the 
redistribution fee. To the contrary, based on the long-standing policy 
that Redistribution Fees are charged to any entity that distributes 
data externally, the Participants believe it would be a significant 
departure from established policy, a burden on competition, and 
unreasonably discriminatory not to charge a Redistribution Fee to 
Competing Consolidators.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 601(a)

A. Reporting Requirements

    Not applicable.

B. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

C. Manner of Consolidation

    Not applicable.

D. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

E. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

F. Terms of Access to Transaction Reports

    Not applicable.

G. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The Commission seeks comments on the Amendment. Interested persons 
are invited to submit written data, views, and arguments concerning the 
foregoing, including whether the proposed Amendment is consistent with 
the Act and the rules and regulations thereunder applicable to national 
market system plans. 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 [email protected]. Please include 
File Number S7-24-89 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 S7-24-89. 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 website (https://www.sec.gov/rules/sro.shtml). Copies of 
the submission, all written statements with respect to the proposed 
Amendment that are filed with the Commission, and all written 
communications relating to the proposed Amendment 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 website 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 3:00p.m. Copies of 
the filing will also be available for website viewing and printing at 
the principal office of the Plan.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number S7-24-89 and should be 
submitted on or before December 17, 2021.

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

    \20\ 17 CFR 200.30-3(a)(85).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.

Attachment A--Proposed Changes to the UTP Plan

Attachment A

Proposed Changes to the UTP Plan

    (Additions are italicized; Deletions are in [brackets].)

Exhibit 2

Fees for UTP Services
    (a) [UTP Level 1 Service] Professional Services.
    The charge for each interrogation device receiving UTP Level 1 
Service is $24.00 per month. This Service includes the following data:
    (1) Inside bid/ask quotations calculated for securities listed in 
The Nasdaq Stock Market;
    (2) last sale information on Nasdaq-listed securities;
    (3) Odd-lot information; and
    (4) Administrative data, regulatory data, and self-regulatory 
organization-specific program data.
    UTP Level 1 Service obtained from the Processor [also] includes 
FINRA OTC Data but will not include Odd-lot information.
    The charge for each interrogation device receiving depth of book 
data is $99.00 per month. The charge for each interrogation device 
receiving auction information is $10.00 per month.
    Vendors with employees that are [UTP Level 1] Professional 
Subscribers may opt to join the ``Multiple Instance, Single User'' 
(``MISU'') Program. The MISU Program allows such Vendors to pay a 
single device fee for an individual employee's use of [UTP Level 1 
Service] data when the individual employee receives [UTP Level 1 
Service] data on

[[Page 67567]]

multiple devices. The MISU Program permits a single device fee for an 
individual on multiple devices regardless of whether the individual 
employee uses an internally-controlled devices or vendor-controlled 
terminals.
    To join the MISU Program, Vendors must be party to a vendor 
agreement, submit a MISU application form, and a sample MISU Report to 
demonstrate that the Vendor can comply with the reporting requirements 
of the MISU Program. Additionally, Vendors must demonstrate adequate 
internal controls for entitlements, monitoring, and usage reporting 
requirements.
    Vendors must submit a MISU Report in a format and include the 
details requested by the UTP Administrator by the 20th day of the month 
for which they are requesting credit. Failure to submit a MISU Report 
by the deadline will result in credit being forfeited for that 
particular month.
    (b) Non-Professional Services.
    (1) The charge for distribution of UTP Level 1 Service to a 
nonprofessional subscriber shall be $1.00 per interrogation device per 
month.
    (2) The charge for distribution of depth of book data to a non-
professional subscriber shall be $4 per interrogation device per month.
    (3) The charge for distribution of auction information to a non-
professional subscriber shall be $10 per interrogation device per 
month.
    [(2)](4) A ``non-professional'' is a natural person who is neither:
    (A) registered or qualified in any capacity with the Commission, 
the Commodities Futures Trading Commission, any state securities 
agency, any securities exchange or association or any commodities or 
futures contract market or association;
    (B) engaged as an ``investment adviser'' as that term is defined in 
Section 202(a)(11) of the Investment Advisors Act of 1940 (whether or 
not registered or qualified under that Act); nor
    (C) employed by a bank or other organization exempt from 
registration under federal or state securities laws to perform 
functions that would require registration or qualification if such 
functions were performed for an organization not so exempt.
    (c) Automated Voice Response Service Fee.
    The monthly charge for distribution of UTP Level 1 Service through 
automated voice response services shall be $21.25 for each voice port.
    (d) Per Query Fee:
    The charge for distribution of UTP Level 1 Service through a per 
query system shall be $.0075 per query. The Per Query Fee is not 
available for depth of book data and auction information.
    (e) Nonprofessional Subscriber Enterprise Cap
    An entity that is registered as a broker/dealer under the 
Securities Exchange Act of 1934 is not required to pay more than the 
``Enterprise Maximum'' for any month for each entitlement system. The 
``Enterprise Maximum'' equals the aggregate amount of fees payable for 
distribution of UTP Level 1 Service to nonprofessional subscribers that 
are brokerage account customers of the broker/dealer under paragraphs 
(b)(1) and (d) of this Exhibit 2.
    For calendar year 2016, the monthly Enterprise Maximum is $648,000 
per entitlement system. For each subsequent calendar year, the 
Participants may, by the affirmative vote of not less than two-thirds 
of all of the then voting members of the Operating Committee, determine 
to increase the monthly Enterprise Maximum; provided, however, that no 
such annual increase shall exceed four percent of the then current 
Enterprise Maximum amount.
    (f) Cable Television Ticker Fee.
    The monthly charge for distribution of UTP Level 1 Service through 
a cable television distribution system shall be as set forth below:

First 10 million Subscriber Households--$2.00 per 1,000 households
Next 10 million Subscriber Households--$1.00 per 1,000 households
For Subsequent Subscriber Households--$0.50 per 1,000 households

    (g) Data Access Charges.\1\
---------------------------------------------------------------------------

    \1\ The data recipient is responsible for the telecommunications 
facilities necessary to access data.
---------------------------------------------------------------------------

    The monthly fee for direct access to UTP Level 1 real-time data 
feeds shall be $2,500 for direct access and $500 for indirect access.
    The monthly fee for access to depth of book data shall be $9,850. 
The monthly fee for access to auction information shall be $985.
    (h) Redistribution Charge
    The charge for redistributing real-time [UTP Level 1 Service] core 
data, or any subset thereof, is $1,000 per month. The charge for 
redistributing delayed UTP Level 1 Service is $250 per month. Depth of 
book data and auction information may not be redistributed on a delayed 
basis. The charge applies to any entity that makes [UTP Level 1 
Service] data available to any other entity or to any person other than 
its employees, irrespective of the means of transmission or access. The 
charge applies to Competing Consolidators.
    (i) Non-Display Use Fees
    The monthly charge for Non-Display Use of UTP Level 1 Service is 
$3,500 for each of three types of Non-Display Use. The charge entitles 
the data recipient to use both quotation information and last sale 
information.
    The monthly charge for Non-Display Use of depth of book data is 
$12,477 for each of three types of Non-Display Use. The monthly charge 
for Non-Display Use of auction information is $1,248 for each of three 
types of Non-Display Use.
    Non-Display Use refers to accessing, processing or consuming data, 
whether received via direct and/or redistributor data feeds, for a 
purpose other than (a) in support of the datafeed recipient's display 
or (b) for the purpose of further internally or externally 
redistributing the data. Further redistribution of the data includes, 
but is not limited to, the transportation or dissemination to another 
server, location or device or the aggregation of data with other data 
sources. Non-Display Use fees do not apply to the use of the data in 
Non-Display to create derived data and use the derived data for the 
purposes of solely displaying the derived data, but the data may be fee 
liable under the regular fee schedule.
    The Non-Display Use fees apply separately for each use type and a 
single organization may be liable for multiple Non-Display Uses.
    The Participants recognize three types of Non-Display Uses as 
follows:
    (a) The Non-Display Use fee for Electronic Trading Systems applies 
when a datafeed recipient makes a Non-Display Use of data in an 
electronic trading system, whether the system trades on the datafeed 
recipient's own behalf or on behalf of its customers. This fee 
includes, but is not limited to, use of data in any trading 
platform(s), such as exchanges, alternative trading systems 
(``ATS's''), broker crossing networks, broker crossing systems not 
filed as ATS's, dark pools, multilateral trading facilities, and 
systematic internalization systems.
    An organization that uses data in electronic trading systems must 
count each platform that uses data on a non-display basis. For example, 
an organization that uses quotation information for the purposes of 
operating an ATS and also for operating a broker crossing system not 
registered as an ATS would be required to pay two Electronic Trading 
System fees.
    (b) Non-Display Enterprise Licenses:
    (i) The Non-Display Use fee for Internal Use applies when a 
datafeed recipient's Non-Display Use is on its

[[Page 67568]]

own behalf (other than for purposes of an electronic trading system).
    (ii) The Non-Display Use fee for Internal Use applies when a 
datafeed recipient's Non-Display Use is on behalf of its customers 
(other than for purposes of an electronic trading system).
    The two types of Non-Display Enterprise Licenses include, but are 
not limited to, use of data for automated order or quote generation 
and/or order pegging, price referencing for algorithmic trading, price 
referencing for smart order routing, operations control programs, 
investment analysis, order verification, surveillance programs, risk 
management, compliance or portfolio valuation.
    (j) Annual Administrative Fees.
    The annual administrative fee to be paid by distributor for access 
to UTP Level 1 Service shall be as set forth below:

Delayed distributor--$250

[FR Doc. 2021-25747 Filed 11-24-21; 8:45 am]
BILLING CODE 8011-01-P
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