Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices 20891 

1NYSEArca is the chair of the operating 

committee (‘‘Operating Committee’’ or 

‘‘Committee’’) for 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 Privilege (‘‘UTP’’) Basis (‘‘Nasdaq UTP 

Plan’’ or ‘‘Plan’’). The New York Stock Exchange 

was added as a Plan participant after the request to 

extend the operation of the Plan was submitted to 

the Commission. See Securities Exchange Act 

Release No. 55192 (January 29, 2007), 72 FR 5456 

(February 6, 2007). 2See letter from Bridget M. Farrell, Chairman, 

OTC/UTP Operating Committee, to Nancy M. 

Morris, Secretary, Commission, dated December 12, 

2006. 3See Securities Exchange Act Release No. 54988, 

71 FR 78240 (December 28, 2006). 

4See email correspondence from Gene L. Finn to 

Nancy Morris, Secretary, Commission, dated 

January 22, 2007. In his letter, Mr. Finn raises 

concerns with respect to non-professional access 

fees. However, the Plan does not address such fees. 

Consequently, the Commission is not addressing it 

in this order. 

5See Securities Exchange Act Release No. 52886 

(December 5, 2005), 70 FR 74059 (December 14, 

2005). 

6 17 CFR 242.608(b)(4). 

7The complete text of the Plan is attached as 

Exhibit A. 

8See Securities Exchange Act Release No. 28146, 

55 FR 27917 (July 6, 1990) (‘‘Original Order’’). 

9Before the Plan became operational, the CHX 

entered into an interim transaction reporting plan 

with the NASD. For a more detailed history, See 

Securities Exchange Act Release No. 34371 (July 13, 

1994), 59 FR 37103 (July 20, 1994). 

10At that time, the CHX was known as the 

Midwest Stock Exchange. 

11See Original Order. 

12See Securities Exchange Act Release No. 37772 

(October 1, 1996), 66 FR 59273 (October 9, 1996). 

13See Securities Exchange Act Release Nos. 

42269 (December 23, 1999), 65 FR 51878 (January 

6, 2000) and 43165 (August 16, 2000); 65 FR 51878 

(August 25, 2000). The PCX is now known as NYSE 

Arca. 

14 In the Commission’s order approving Nasdaq’s 

SuperMontage system, the Commission set out 

conditions with respect to the selection of a SIP for 

the Plan. See Securities Exchange Act Release No. 

43863 (January 19, 2001), 66 FR 8020 (January 26, 

2001). 

15See Securities Exchange Act Release No. 45081 

(November 19, 2001) 66 FR 59273 (November 27, 

2001) (approving the 12th Amendment to the Plan 

which made substantial changes to the Plan, 

including eliminating the category of limited 

participant). 

16The Plan Participants are: Amex, BSE, CBOE, 

CHX, ISE, NASD, Nasdaq, NSX, NYSE, NYSE Arca, 

and Phlx. See Securities Exchange Act Release No. 

55192 (January 29, 2007), 72 FR 5456 (February 6, 

2007). Amendment 14 added CBOE as a Participant 

and changed the name of the CSE to reflect its new 

name, the NSX. See Securities Exchange Act 

Release No. 51304 (March 2, 2005), 70 FR 12507 

(March 14, 2005). Amendment 16 added the ISE as 

a Participant. See Securities Exchange Act Release 

No. 53131 (January 17, 2006), 71 FR 3896 (January 

24, 2006). Amendment 19 added the NYSE as a 

Participant. See Securities Exchange Act Release 

No. 55192 (January 29, 2007), 72 FR 5456 (February 

6, 2007). 

17 In essence, the Plan permits Participants to 

provide access consistent with Regulation NMS. If 

they are not able to provide such access, they can 

continue to provide telephone access until the 

access provision of Regulation NMS is effective. See 

Securities Exchange Act Release No. 54936 

(December 14, 2006), 71 FR 76381 (December 20, 

2006). See also Securities Exchange Act Release No. 

55160, 72 FR 4203 (January 30, 2007) (extension of 

compliance dates for Rules 610 and 611 of 

Regulation NMS). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55647; File No. S7–24–89] 

Joint Industry Plan; Order Granting 

Permanent Approval of the Reporting 

Plan for Nasdaq-Listed Securities 

Traded on Exchanges on an Unlisted 

Trading Privilege Basis, Submitted by 

the American Stock Exchange LLC, the 

Boston Stock Exchange, Inc., the 

Chicago Stock Exchange, Inc., the 

Chicago Board Options Exchange, 

Inc., the International Securities 

Exchange, LLC, the National 

Association of Securities Dealers, Inc., 

the National Stock Exchange, Inc., the 

Nasdaq Stock Market LLC, NYSE Arca, 

Inc., and the Philadelphia Stock 

Exchange, Inc 

April 19, 2007. 

I. Introduction and Description 

On December 12, 2006, NYSE Arca, 

Inc. (‘‘NYSEArca’’), on behalf of itself 

and the American Stock Exchange LLC 

(‘‘Amex’’), the Boston Stock Exchange, 

Inc. (‘‘BSE’’), the Chicago Stock 

Exchange, Inc. (‘‘CHX’’), the Chicago 

Board Options Exchange, Inc. (‘‘CBOE’’), 

the International Securities Exchange, 

LLC (‘‘ISE’’), the National Association of 

Securities Dealers, Inc. (‘‘NASD’’), the 

National Stock Exchange, Inc. (‘‘NSX’’), 

the Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), and the Philadelphia Stock 

Exchange, Inc. (‘‘Phlx’’) (hereinafter 

referred to collectively as 

‘‘Participants’’),1 as members of the 

Operating Committee of the Plan 

submitted to the Securities and 

Exchange Commission (‘‘Commission’’) 

a request to extend the operation of the 

Plan, along with a request for permanent 

approval of the Plan (‘‘Request’’).2 On 

December 20, 2006, the Commission 

published notice of the Request for 

comment and simultaneously granted 

summary effectiveness to the request to 

extend the operation of the Plan on a 

temporary basis.3 The Commission 

received one comment letter in response 

to the publication of the notice.4

The Nasdaq UTP Plan governs the 

collection, processing, and 

dissemination on a consolidated basis of 

quotation and last sale information for 

Nasdaq-listed securities for each of its 

Participants. This consolidated 

information informs investors of the 

current quotation and recent trade 

prices of Nasdaq securities. It enables 

investors to ascertain from one data 

source the current prices in all the 

markets trading Nasdaq securities. The 

Plan serves as the required transaction 

reporting plan for its Participants, 

which is a prerequisite for their trading 

Nasdaq securities.5

This order approves, pursuant to Rule 

608(b)(4) under the Securities Exchange 

Act of 1934 (‘‘Act’’),6 the Plan, as 

modified by all changes previously 

made, on a permanent basis.7

II. Background 

The Plan was approved on a pilot 

basis in 1990.8 It did not become 

operational until 1993.9 At that time, 

the Participants were the Amex, the 

BSE, the CHX,10 the Phlx, and the 

NASD. The BSE joined the Plan as a 

limited participant so that it could 

continue to trade securities that were 

listed on the BSE and also traded on 

Nasdaq. Nasdaq was operated by the 

NASD, and Nasdaq securities were 

traded in the over-the-counter (‘‘OTC’’) 

market. The Plan contained the essential 

elements of a transaction reporting plan. 

The pilot, as approved, provided that 

each exchange requesting UTP would be 

permitted to trade, on an unlisted basis, 

up to 100 OTC securities designated as 

NMS Securities.11 The Commission 

approved the Plan on a pilot basis with 

the expectation that the Participants 

would conclude their financial 

negotiations and evaluate the effects of 

the pilot program and report their 

findings to the Commission. 

In 1996, the Plan Participants agreed 

on a revenue sharing formula and 

amended the Plan to reflect their 

agreement.12 The CSE joined the Plan in 

1999, and the PCX joined the Plan in 

2000.13 In 2001 the BSE became a 

Participant, and the Amex rejoined the 

Plan. In addition, the revenue sharing 

formula was amended, and a process 

was established for selecting a new 

Securities Information Processor 

(‘‘SIP’’).14 Over time, as the Commission 

observed no adverse effects in 

connection with trading Nasdaq 

securities on exchanges, it expanded the 

number of securities. The Commission 

later extended UTP to all Nasdaq 

National Market securities and Nasdaq 

Small Cap securities.15

The Plan now includes all the markets 

that trade equity securities.16 It has been 

amended numerous times to address 

issues presented by the addition of 

participants and changes in the markets. 

The Plan now includes Advisory 

Committee members, as specified in 

Regulation NMS, and also includes an 

access provision that parallels the 

requirement in Regulation NMS.17 At 


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18The allocation of market data revenue will be 

governed by Regulation NMS. 

19See Section 12(f) of the Act. 

20See 15 U.S.C. 781. 

21See Securities Exchange Act Release Nos. 

45081 (November 19, 2001), 66 FR 59273 

(November 27, 2001) and 46729 (October 25, 2002), 

67 FR 66685 (November 1, 2002). 

22See Section VI.C.1 of the Plan. 

23 15 U.S.C. 78k–1(a)(1). 

24 17 CFR 242.601 and 17 CFR 242.608. 

25 15 U.S.C. 78k–1(a). 

26See Original Order. 

27 15 U.S.C. 78k–1. 

28 17 CFR 242.608(b)(4). 

29 17 CFR 200.30–3(a)(27). 

this time, the provisions of the UTP 

Plan conform to the requirements of 

Regulation NMS and are consistent with 

the objectives set forth in Section 11A 

of the Act.18

Before Nasdaq separated from the 

NASD and registered as a national 

securities exchange, trading in Nasdaq 

stocks occurred in the OTC market. As 

such, the Commission had to approve 

the extension of unlisted trading 

privileges to Nasdaq securities before an 

exchange was able to trade them.19 Now 

that Nasdaq is an exchange, the 

securities listed on Nasdaq are exchange 

listed securities, which entitles other 

exchanges to trade the securities 

without a separate Commission order 

conferring unlisted trading privileges.20

The Plan is the joint transaction 

reporting plan for Nasdaq-listed 

securities; several of the exemptions 

that were needed when the plan was 

first approved are no longer necessary. 

At the outset, the Plan Participants 

needed exemptive relief from Rule 

11Ac1–2 under the Act regarding 

calculation of the best bid and offer 

(‘‘BBO’’), as well as an exemption for 

BSE from the provision of Rule 11Aa3–

1 under the Act that required 

transaction reporting plans to include 

market identifiers for transaction reports 

and last sale data. Once the BSE became 

a full participant and the method of 

calculation of the BBO by the Plan’s SIP 

was converted from price/time/size to 

price/size/time methodology, neither 

exemption was necessary.21 Similarly, 

after Nasdaq became registered as a 

national securities exchange with 

respect to Nasdaq-listed securities, Plan 

Participants no longer needed an 

exemption from Rule 11Aa3–2 regarding 

the dissemination of multiple BBOs 

from a single Plan Participant.22

III. Findings 

The Commission finds that approving 

the Plan on a permanent basis is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder, and, in particular, Section 

11A(a)(1) 23 of the Act and Rules 601 

and 608, thereunder.24 Section 11A of 

the Act directs the Commission to 

facilitate the development of a national 

market system for securities, ‘‘having 

due regard for the public interest, the 

protection of investors, and the 

maintenance of fair and orderly 

markets,’’ and cites as an objective of 

that system the ‘‘fair competition * * * 

between exchange markets and markets 

other than exchange markets.’’ 25 When 

the Commission first approved the Plan 

on a pilot basis, it found that the Plan 

‘‘should enhance market efficiency and 

fair competition, avoid investor 

confusion, and facilitate surveillance of 

concurrent exchange and OTC 

trading.’’ 26 The Participants have been 

trading Nasdaq securities since 1993 

with the Plan as their transaction 

reporting plan. The Commission 

believes that the Plan has enhanced 

market efficiency and promoted 

competition between markets trading 

Nasdaq securities. 

The Commission finds that granting 

permanent approval of the Plan furthers 

the goals described above. The 

Commission believes that the Plan is a 

critical component of the national 

market system and, as such, should be 

approved on a permanent basis. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 11A of the Act 27 and paragraph 

(b)(4) of Rule 608 thereunder,28 that the 

Plan, as modified by all changes made 

to date, be, and hereby is, approved on 

a permanent basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.29

Florence E. Harmon, 

Deputy Secretary. 

Exhibit A—Nasdaq UTP Plan 

Amended and Restated Plan 

The undersigned registered national 

securities association and national 

securities exchanges (collectively 

referred to as the ‘‘Participants’’), have 

jointly developed and hereby enter into 

this Nasdaq Unlisted Trading Privileges 

Plan (‘‘Nasdaq UTP Plan’’ or ‘‘Plan’’). 

I. Participants 

The Participants include the 

following: 

A. Participants 

1. American Stock Exchange LLC, 86 

Trinity Place, New York, New York 

10006. 

2. Boston Stock Exchange, 100 

Franklin Street, Boston, Massachusetts 

02110. 

3. Chicago Stock Exchange, 440 South 

LaSalle Street, Chicago, Illinois 60605. 

4. Chicago Board Options Exchange, 

Inc., 400 South LaSalle Street, 26th 

Floor, Chicago, Illinois 60605. 

5. International Securities Exchange, 

LLC, 60 Broad Street, New York, New 

York 10004. 

6. National Association of Securities 

Dealers, Inc., 1735 K Street, NW., 

Washington, DC 20006. 

7. National Stock Exchange, Inc., 440 

South LaSalle Street, 26th Floor, 

Chicago, Illinois 60605. 

8. New York Stock Exchange LLC, 11 

Wall Street, New York, New York, 

10005. 

9. NYSE Arca, Inc., 100 South Wacker 

Drive, Suite 1800, Chicago, IL 60606. 

10. Philadelphia Stock Exchange, 

1900 Market Street, Philadelphia, 

Pennsylvania 19103. 

11. The Nasdaq Stock Market LLC, 1 

Liberty Plaza, 165 Broadway, New York, 

NY 10006. 

B. Additional Participants 

Any other national securities 

association or national securities 

exchange, in whose market Eligible 

Securities become traded, may become 

a Participant, provided that said 

organization executes a copy of this 

Plan and pays its share of development 

costs as specified in Section XIII. 

II. Purpose of Plan 

The purpose of this Plan is to provide 

for the collection, consolidation and 

dissemination of Quotation Information 

and Transaction Reports in Eligible 

Securities from the Participants in a 

manner consistent with the Exchange 

Act. 

It is expressly understood that each 

Participant shall be responsible for the 

collection of Quotation Information and 

Transaction Reports within its market 

and that nothing in this Plan shall be 

deemed to govern or apply to the 

manner in which each Participant does 

so. 

III. Definitions 

A. ‘‘Current’’ means, with respect to 

Transaction Reports or Quotation 

Information, such Transaction Reports 

or Quotation Information during the 

fifteen (15) minute period immediately 

following the initial transmission 

thereof by the Processor. 

B. ‘‘Eligible Security’’ means any 

Nasdaq Global Market or Nasdaq Capital 

Market security, as defined in NASDAQ 

Rule 4200. Eligible Securities under this 

Nasdaq UTP Plan shall not include any 

security that is defined as an ‘‘Eligible 

Security’’ within Section VII of the 

Consolidated Tape Association Plan. 


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A security shall cease to be an Eligible 

Security for purposes of this Plan if: (i) 

The security does not substantially meet 

the requirements from time to time in 

effect for continued listing on Nasdaq, 

and thus is suspended from trading; or 

(ii) the security has been suspended 

from trading because the issuer thereof 

is in liquidation, bankruptcy or other 

similar type proceedings. The 

determination as to whether a security 

substantially meets the criteria of the 

definition of Eligible Security shall be 

made by the exchange on which such 

security is listed provided, however, 

that if such security is listed on more 

than one exchange, then such 

determination shall be made by the 

exchange on which, the greatest number 

of the transactions in such security were 

effected during the previous twelvemonth period. 

C. ‘‘Commission’’ and ‘‘SEC’’ shall 

mean the U.S. Securities and Exchange 

Commission. 

D. ‘‘Exchange Act’’ means the 

Securities Exchange Act of 1934. 

E. ‘‘Market’’ shall mean (i) when used 

with respect to Quotation Information, 

the NASD in the case of an NASD 

Participant, or the Participant on whose 

floor or through whose facilities the 

quotation was disseminated; and (ii) 

when used with respect to Transaction 

Reports, the Participant through whose 

facilities the transaction took place or is 

reported, or the Participant to whose 

facilities the order was sent for 

execution. 

F. ‘‘NASD’’ means the National 

Association of Securities Dealers, Inc. 

G. ‘‘NASD Participant’’ means an 

NASD member that is registered as a 

market maker or an electronic 

communications network or otherwise 

utilizes the facilities of the NASD 

pursuant to applicable NASD rules. 

H. ‘‘ Transaction Reporting System’’

means the System provided for in the 

Transaction Reporting Plan filed with 

and approved by the Commission 

pursuant to SEC Rule 11Aa3–1, 

subsequently re-designated as Rule 601 

of Regulation NMS, governing the 

reporting of transactions in Nasdaq 

securities. 

I. ‘‘UTP Quote Data Feed’’ means the 

service that provides Subscribers with 

the National Best Bid and Offer 

quotations, size and market center 

identifier, as well as the Best Bid and 

Offer quotations, size and market center 

identifier from each individual 

Participant in Eligible Securities and, in 

the case of NASD, the NASD 

Participant(s) that constitute NASD’s 

Best Bid and Offer quotations. 

J. ‘‘Nasdaq System’’ means the 

automated quotation system operated by 

Nasdaq. 

K. ‘‘UTP Trade Data Feed’’ means the 

service that provides Vendors and 

Subscribers with Transaction Reports. 

L. ‘‘Nasdaq Security’’ or ‘‘Nasdaqlisted Security’’ means any security 

listed on the Nasdaq Global Market or 

Nasdaq Capital Market. 

M. ‘‘News Service’’ means a person 

that receives Transaction Reports or 

Quotation Information provided by the 

Systems or provided by a Vendor, on a 

Current basis, in connection with such 

person’s business of furnishing such 

information to newspapers, radio and 

television stations and other news 

media, for publication at least fifteen 

(15) minutes following the time when 

the information first has been published 

by the Processor. 

N. ‘‘OTC Montage Data Feed’’ means 

the data stream of information that 

provides Vendors and Subscribers with 

quotations and sizes from each NASD 

Participant. 

O. ‘‘Participant’’ means a registered 

national securities exchange or national 

securities association that is a signatory 

to this Plan. 

P. ‘‘Plan’’ means this Nasdaq UTP 

Plan, as from time to time amended 

according to its provisions, governing 

the collection, consolidation and 

dissemination of Quotation Information 

and Transaction Reports in Eligible 

Securities. 

Q. ‘‘Processor’’ means the entity 

selected by the Participants to perform 

the processing functions set forth in the 

Plan. 

R. ‘‘Quotation Information’’ means all 

bids, offers, displayed quotation sizes, 

the market center identifiers and, in the 

case of NASD, the NASD Participant 

that entered the quotation, withdrawals 

and other information pertaining to 

quotations in Eligible Securities 

required to be collected and made 

available to the Processor pursuant to 

this Plan. 

S. ‘‘Regulatory Halt’’ means a trade 

suspension or halt called for the 

purpose of dissemination of material 

news, as described at Section X hereof 

or that is called for where there are 

regulatory problems relating to an 

Eligible Security that should be clarified 

before trading therein is permitted to 

continue, including a trading halt for 

extraordinary market activity due to 

system misuse or malfunction under 

Section X.E.1. of the Plan 

(‘‘Extraordinary Market Regulatory 

Halt’’). 

T. ‘‘Subscriber’’ means a person that 

receives Current Quotation Information 

or Transaction Reports provided by the 

Processor or provided by a Vendor, for 

its own use or for distribution on a nonCurrent basis, other than in connection 

with its activities as a Vendor. 

U. ‘‘Transaction Reports’’ means 

reports required to be collected and 

made available pursuant to this Plan 

containing the stock symbol, price, and 

size of the transaction executed, the 

Market in which the transaction was 

executed, and related information, 

including a buy/sell/cross indicator and 

trade modifiers, reflecting completed 

transactions in Eligible Securities. 

V. ‘‘Upon Effectiveness of the Plan’’

means July 12, 1993, the date on which 

the Participants commenced publication 

of Quotation Information and 

Transaction Reports on Eligible 

Securities as contemplated by this Plan. 

W. ‘‘Vendor’’ means a person that 

receives Current Quotation Information 

or Transaction Reports provided by the 

Processor or provided by a Vendor, in 

connection with such person’s business 

of distributing, publishing, or otherwise 

furnishing such information on a 

Current basis to Subscribers, News 

Services or other Vendors. 

IV. Administration of Plan 

A. Operating Committee: Composition 

The Plan shall be administered by the 

Participants through an operating 

committee (‘‘Operating Committee’’), 

which shall be composed of one 

representative designated by each 

Participant. Each Participant may 

designate an alternate representative or 

representatives who shall be authorized 

to act on behalf of the Participant in the 

absence of the designated 

representative. Within the areas of its 

responsibilities and authority, decisions 

made or actions taken by the Operating 

Committee, directly or by duly 

delegated individuals, committees as 

may be established from time to time, or 

others, shall be binding upon each 

Participant, without prejudice to the 

rights of any Participant to seek redress 

from the SEC pursuant to Rule 608 of 

Regulation NMS under the Exchange 

Act or in any other appropriate forum. 

An Electronic Communications 

Network, Alternative Trading System, 

Broker-Dealer or other securities 

organization (‘‘Organization’’) which is 

not a Participant, but has an actively 

pending Form 1 Application on file 

with the Commission to become a 

national securities exchange, will be 

permitted to appoint one representative 

and one alternate representative to 

attend regularly scheduled Operating 

Committee meetings in the capacity of 

an observer/advisor. If the 

Organization’s Form 1 petition is 


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20894 Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices 

withdrawn, returned, or is otherwise not 

actively pending with the Commission 

for any reason, then the Organization 

will no longer be eligible to be 

represented in the Operating Committee 

meetings. The Operating Committee 

shall have the discretion, in limited 

instances, to deviate from this policy if, 

as indicated by majority vote, the 

Operating Committee agrees that 

circumstances so warrant. 

Nothing in this section or elsewhere 

within the Plan shall authorize any 

person or organization other than 

Participants and their representatives to 

participate on the Operating Committee 

in any manner other than as an advisor 

or observer, or in any Executive Session 

of the Operating Committee. 

B. Operating Committee: Authority 

The Operating Committee shall be 

responsible for: 

1. Overseeing the consolidation of 

Quotation Information and Transaction 

Reports in Eligible Securities from the 

Participants for dissemination to 

Vendors, Subscribers, News Services 

and others in accordance with the 

provisions of the Plan; 

2. Periodically evaluating the 

Processor; 

3. Setting the level of fees to be paid 

by Vendors, Subscribers, News Services 

or others for services relating to 

Quotation Information or Transaction 

Reports in Eligible Securities, and 

taking action in respect thereto in 

accordance with the provisions of the 

Plan; 

4. Determining matters involving the 

interpretation of the provisions of the 

Plan; 

5. Determining matters relating to the 

Plan’s provisions for cost allocation and 

revenue-sharing; and 

6. Carrying out such other specific 

responsibilities as provided under the 

Plan. 

C. Operating Committee: Voting 

Each Participant shall have one vote 

on all matters considered by the 

Operating Committee. 

1. The affirmative and unanimous 

vote of all Participants entitled to vote 

shall be necessary to constitute the 

action of the Operating Committee with 

respect to: 

a. Amendments to the Plan; 

b. Amendments to contracts between 

the Processor and Vendors, Subscribers, 

News Services and others receiving 

Quotation Information and Transaction 

Reports in Eligible Securities; 

c. Replacement of the Processor, 

except for termination for cause, which 

shall be governed by Section V(B) 

hereof; 

d. Reductions in existing fees relating 

to Quotation Information and 

Transaction Reports in Eligible 

Securities; 

e. Except as provided under Section 

IV(C)(3) hereof, requests for system 

changes; and 

f. All other matters not specifically 

addressed by the Plan. 

2. With respect to the establishment of 

new fees or increases in existing fees 

relating to Quotation Information and 

Transaction Reports in Eligible 

Securities, the affirmative vote of twothirds of the Participants entitled to vote 

shall be necessary to constitute the 

action of the Operating Committee. 

3. The affirmative vote of a majority 

of the Participants entitled to vote shall 

be necessary to constitute the action of 

the Operating Committee with respect 

to: 

a. Requests for system changes 

reasonably related to the function of the 

Processor as defined under the Plan. All 

other requests for system changes shall 

be governed by Section IV(C)(1)(e) 

hereof; 

b. Interpretive matters and decisions 

of the Operating Committee arising 

under, or specifically required to be 

taken by, the provisions of the Plan as 

written; 

c. Interpretive matters arising under 

Rules 601 and 602 of Regulation NMS; 

and 

d. Denials of access (other than for 

breach of contract, which shall be 

handled by the Processor). 

4. It is expressly agreed and 

understood that neither this Plan nor 

the Operating Committee shall have 

authority in any respect over any 

Participant’s proprietary systems. Nor 

shall the Plan or the Operating 

Committee have any authority over the 

collection and dissemination of 

quotation or transaction information in 

Eligible Securities in any Participant’s 

marketplace, or, in the case of the 

NASD, from NASD Participants. 

D. Operating Committee: Meetings 

Regular meetings of the Operating 

Committee may be attended by each 

Participant’s designated representative 

and/or its alternate representative(s), 

and may be attended by one or more 

other representatives of the parties. 

Meetings shall be held at such times and 

locations as shall from time to time be 

determined by the Operating 

Committee. 

Quorum: Any action requiring a vote 

only can be taken at a meeting in which 

a quorum of all Participants is present. 

For actions requiring a simple majority 

vote of all Participants, a quorum of 

greater than 50% of all Participants 

entitled to vote must be present at the 

meeting before such a vote may be 

taken. For actions requiring a 2⁄3rd 

majority vote of all Participants, a 

quorum of at least 2⁄3rd of all 

Participants entitled to vote must be 

present at the meeting before such a 

vote may be taken. For actions requiring 

a unanimous vote of all Participants, a 

quorum of all Participants entitled to 

vote must be present at the meeting 

before such a vote may be taken. 

A Participant is considered present at 

a meeting only if a Participant’s 

designated representative or alternate 

representative(s) is either in physical 

attendance at the meeting or is 

participating by conference telephone, 

or other acceptable electronic means. 

Any action sought to be resolved at a 

meeting must be sent to each Participant 

entitled to vote on such matter at least 

one week prior to the meeting via 

electronic mail, regular U.S. or private 

mail, or facsimile transmission, 

provided however that this requirement 

may be waived by the vote of the 

percentage of the Committee required to 

vote on any particular matter, under 

Section C above. 

Any action may be taken without a 

meeting if a consent in writing, setting 

forth the action so taken, is sent to and 

signed by all Participant representatives 

entitled to vote with respect to the 

subject matter thereof. All the approvals 

evidencing the consent shall be 

delivered to the Chairman of the 

Operating Committee to be filed in the 

Operating Committee records. The 

action taken shall be effective when the 

minimum number of Participants 

entitled to vote have approved the 

action, unless the consent specifies a 

different effective date. 

The Chairman of the Operating 

Committee shall be elected annually by 

and from among the Participants by a 

majority vote of all Participants entitled 

to vote. The Chairman shall designate a 

person to act as Secretary to record the 

minutes of each meeting. The location 

of meetings shall be rotated among the 

locations of the principal offices of the 

Participants, or such other locations as 

may from time to time be determined by 

the Operating Committee. Meetings may 

be held by conference telephone and 

action may be taken without a meeting 

if the representatives of all Participants 

entitled to vote consent thereto in 

writing or other means the Operating 

Committee deems acceptable. 

E. Advisory Committee 

(a) Formation. Notwithstanding any 

other provision of this Plan, an 

Advisory Committee to the Plan shall be 

formed and shall function in accordance 


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with the provisions set forth in this 

section. 

(b) Composition. Members of the 

Advisory Committee shall be selected 

for two-year terms as follows: 

(1) Operating Committee Selections. 

By affirmative vote of a majority of the 

Participants entitled to vote, the 

Operating Committee shall select at 

least one representative from each of the 

following categories to be members of 

the Advisory Committee: (i) A brokerdealer with a substantial retail investor 

customer base, (ii) a broker-dealer with 

a substantial institutional investor 

customer base, (iii) an alternative trade 

system, (iv) a data vendor, and (v) an 

investor. 

(2) Participant Selections. Each 

Participant shall have the right to select 

one member of the Advisory Committee. 

A Participant shall not select any person 

employed by or affiliated with any 

participant or its affiliates or facilities. 

(c) Function. Members of the 

Advisory Committee shall have the right 

to submit their views to the Operating 

Committee on Plan matters, prior to a 

decision by the Operating Committee on 

such matters. Such matters shall 

include, but not be limited to, any new 

or modified product, fee, contract, or 

pilot program that is offered or used 

pursuant to the Plan. 

(d) Meetings and Information. 

Members of the Advisory Committee 

shall have the right to attend all 

meetings of the Operating Committee 

and to receive any information 

concerning Plan matters that is 

distributed to the Operating Committee; 

provided, however, that the Operating 

Committee may meet in executive 

session if, by affirmative vote of a 

majority of the Participants entitled to 

vote, the Operating Committee 

determines that an item of Plan business 

requires confidential treatment. 

V. Selection and Evaluation of the 

Processor 

A. Generally 

The Processor’s performance of its 

functions under the Plan shall be 

subject to review by the Operating 

Committee at least every two years, or 

from time to time upon the request of 

any two Participants but not more 

frequently than once each year. Based 

on this review, the Operating Committee 

may choose to make a recommendation 

to the Participants with respect to the 

continuing operation of the Processor. 

The Operating Committee shall notify 

the SEC of any recommendations the 

Operating Committee shall make 

pursuant to the Operating Committee’s 

review of the Processor and shall supply 

the Commission with a copy of any 

reports that may be prepared in 

connection therewith. 

B. Termination of the Processor for 

Cause 

If the Operating Committee 

determines that the Processor has failed 

to perform its functions in a reasonably 

acceptable manner in accordance with 

the provisions of the Plan or that its 

reimbursable expenses have become 

excessive and are not justified on a cost 

basis, the Processor may be terminated 

at such time as may be determined by 

a majority vote of the Operating 

Committee. 

C. Factors To Be Considered in 

Termination for Cause 

Among the factors to be considered in 

evaluating whether the Processor has 

performed its functions in a reasonably 

acceptable manner in accordance with 

the provisions of the Plan shall be the 

reasonableness of its response to 

requests from Participants for 

technological changes or enhancements 

pursuant to Section IV(C)(3) hereof. The 

reasonableness of the Processor’s 

response to such requests shall be 

evaluated by the Operating Committee 

in terms of the cost to the Processor of 

purchasing the same service from a 

third party and integrating such service 

into the Processor’s existing systems 

and operations as well as the extent to 

which the requested change would 

adversely impact the then current 

technical (as opposed to business or 

competitive) operations of the 

Processor. 

D. Processor’s Right to Appeal 

Termination for Cause 

The Processor shall have the right to 

appeal to the SEC a determination of the 

Operating Committee terminating the 

Processor for cause and no action shall 

become final until the SEC has ruled on 

the matter and all legal appeals of right 

therefrom have been exhausted. 

E. Process for Selecting New Processor 

At any time following effectiveness of 

the Plan, but no later than upon the 

termination of the Processor, whether 

for cause pursuant to Section IV(C)(1)(c) 

or V(B) of the Plan or upon the 

Processor’s resignation, the Operating 

Committee shall establish procedures 

for selecting a new Processor (the 

‘‘Selection Procedures’’). The Operating 

Committee, as part of the process of 

establishing Selection Procedures, may 

solicit and consider the timely comment 

of any entity affected by the operation 

of this Plan. The Selection Procedures 

shall be established by a two-thirds 

majority vote of the Plan Participants, 

and shall set forth, at a minimum: 

1. The entity that will: 

(a) Draft the Operating Committee’s 

request for proposal for bids on a new 

processor; 

(b) Assist the Operating Committee in 

evaluating bids for the new processor; 

and 

(c) Otherwise provide assistance and 

guidance to the Operating Committee in 

the selection process. 

2. The minimum technical and 

operational requirements to be fulfilled 

by the Processor; 

3. The criteria to be considered in 

selecting the Processor; and 

4. The entities (other than Plan 

Participants) that are eligible to 

comment on the selection of the 

Processor. 

Nothing in this provision shall be 

interpreted as limiting Participants’

rights under Section IV or Section V of 

the Plan or other Commission order. 

VI. Functions of the Processor 

A. Generally 

The Processor shall collect from the 

Participants, and consolidate and 

disseminate to Vendors, Subscribers and 

News Services, Quotation Information 

and Transaction Reports in Eligible 

Securities in a manner designed to 

assure the prompt, accurate and reliable 

collection, processing and 

dissemination of information with 

respect to all Eligible Securities in a fair 

and non-discriminatory manner. The 

Processor shall commence operations 

upon the Processor’s notification to the 

Participants that it is ready and able to 

commence such operations. 

B. Collection and Consolidation of 

Information 

For as long as Nasdaq is the Processor, 

the Processor shall be capable of 

receiving Quotation Information and 

Transaction Reports in Eligible 

Securities from Participants by the Planapproved, Processor-sponsored 

interface, and shall consolidate and 

disseminate such information via the 

UTP Quote Data Feed, the UTP Trade 

Data Feed, and the OTC Montage Data 

Feed to Vendors, Subscribers and News 

Services. For so long as Nasdaq is not 

registered as a national securities 

exchange and for so long as Nasdaq is 

the Processor, the Processor shall also 

collect, consolidate, and disseminate the 

quotation information contained in 

NQDS. For so long as Nasdaq is not 

registered as a national securities 

exchange and after Nasdaq is no longer 

the Processor for other SIP datafeeds, 

either Nasdaq or a third party will act 


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as the Processor to collect, consolidate, 

and disseminate the quotation 

information contained in NQDS. 

C. Dissemination of Information 

The Processor shall disseminate 

consolidated Quotation Information and 

Transaction Reports in Eligible 

Securities via the UTP Quote Data Feed, 

the UTP Trade Data Feed, and the OTC 

Montage Data Feed to authorized 

Vendors, Subscribers and News Services 

in a fair and non-discriminatory 

manner. The Processor shall specifically 

be permitted to enter into agreements 

with Vendors, Subscribers and News 

Services for the dissemination of 

quotation or transaction information on 

Eligible Securities to foreign (non-U.S.) 

marketplaces or in foreign countries. 

The Processor shall, in such instance, 

disseminate consolidated quotation or 

transaction information on Eligible 

Securities from all Participants. 

Nothing herein shall be construed so 

as to prohibit or restrict in any way the 

right of any Participant to distribute 

quotation, transaction or other 

information with respect to Eligible 

Securities quoted on or traded in its 

marketplace to a marketplace outside 

the United States solely for the purpose 

of supporting an intermarket linkage, or 

to distribute information within its own 

marketplace concerning Eligible 

Securities in accordance with its own 

format. If a Participant requests, the 

Processor shall make information about 

Eligible Securities in the Participant’s 

marketplace available to a foreign 

marketplace on behalf of the requesting 

Participant, in which event the cost 

shall be borne by that Participant. 

1. Best Bid and Offer 

The Processor shall disseminate on 

the UTP Quote Data Feed the best bid 

and offer information supplied by each 

Participant, including the NASD 

Participant(s) that constitute NASD’s 

single Best Bid and Offer quotations, 

and shall also calculate and disseminate 

on the UTP Quote Data Feed a national 

best bid and asked quotation with size 

based upon Quotation Information for 

Eligible Securities received from 

Participants. The Processor shall not 

calculate the best bid and offer for any 

individual Participant, including the 

NASD. 

The Participant responsible for each 

side of the best bid and asked quotation 

making up the national best bid and 

offer shall be identified by an 

appropriate symbol. If the quotations of 

more than one Participant shall be the 

same best price, the largest displayed 

size among those shall be deemed to be 

the best. If the quotations of more than 

one Participant are the same best price 

and best displayed size, the earliest 

among those measured by the time 

reported shall be deemed to be the best. 

A reduction of only bid size and/or ask 

size will not change the time priority of 

a Participant’s quote for the purposes of 

determining time reported, whereas an 

increase of the bid size and/or ask size 

will result in a new time reported. The 

consolidated size shall be the size of the 

Participant that is at the best. 

If the best bid/best offer results in a 

locked or crossed quotation, the 

Processor shall forward that locked or 

crossed quote on the appropriate output 

lines (i.e., a crossed quote of bid 12, ask 

11.87 shall be disseminated). The 

Processor shall normally cease the 

calculation of the best bid/best offer 

after 6:30 p.m., Eastern Time. 

2. Quotation Data Streams 

The Processor shall disseminate on 

the UTP Quote Data Feed a data stream 

of all Quotation Information regarding 

Eligible Securities received from 

Participants. Each quotation shall be 

designated with a symbol identifying 

the Participant from which the 

quotation emanates and, in the case of 

NASD, the NASD Participant(s) that 

constitute NASD’s Best Bid and Offer 

quotations. In addition, the Processor 

shall separately distribute on the OTC 

Montage Data Feed the Quotation 

Information regarding Eligible Securities 

from all NASD Participants from which 

quotations emanate. The Processor shall 

separately distribute NQDS for so long 

as Nasdaq is not registered as a national 

securities exchange and for so long as 

Nasdaq is the Processor. For so long as 

Nasdaq is not registered as a national 

securities exchange and after Nasdaq is 

no longer the Processor for other SIP 

datafeeds, either Nasdaq or a third party 

will act as the Processor to collect, 

consolidate, and disseminate the 

quotation information contained in 

NQDS. 

3. Transaction Reports 

The Processor shall disseminate on 

the UTP Trade Data Feed a data stream 

of all Transaction Reports in Eligible 

Securities received from Participants. 

Each transaction report shall be 

designated with a symbol identifying 

the Participant in whose Market the 

transaction took place. 

D. Closing Reports 

At the conclusion of each trading day, 

the Processor shall disseminate a 

‘‘closing price’’ for each Eligible 

Security. Such ‘‘closing price’’ shall be 

the price of the last Transaction Report 

in such security received prior to 

dissemination. The Processor shall also 

tabulate and disseminate at the 

conclusion of each trading day the 

aggregate volume reflected by all 

Transaction Reports in Eligible 

Securities reported by the Participants. 

E. Statistics 

The Processor shall maintain 

quarterly, semi-annual and annual 

transaction and volume statistical 

counts. The Processor shall, at cost to 

the user Participant(s), make such 

statistics available in a form agreed 

upon by the Operating Committee, such 

as a secure website. 

VII. Administrative Functions of the 

Processor 

Subject to the general direction of the 

Operating Committee, the Processor 

shall be responsible for carrying out all 

administrative functions necessary to 

the operation and maintenance of the 

consolidated information collection and 

dissemination system provided for in 

this Plan, including, but not limited to, 

record keeping, billing, contract 

administration, and the preparation of 

financial reports. 

VIII. Transmission of Information to 

Processor by Participants 

A. Quotation Information 

Each Participant shall, during the 

time it is open for trading be responsible 

promptly to collect and transmit to the 

Processor accurate Quotation 

Information in Eligible Securities 

through any means prescribed herein. 

Quotation Information shall include: 

1. Identification of the Eligible 

Security, using the Nasdaq Symbol; 

2. The price bid and offered, together 

with size; 

3. The NASD Participant along with 

the NASD Participant’s market 

participant identification or Participant 

from which the quotation emanates; 

4. Identification of quotations that are 

not firm; and 

5. Through appropriate codes and 

messages, withdrawals and similar 

matters. 

B. Transaction Reports 

Each Participant shall, during the 

time it is open for trading, be 

responsible promptly to collect and 

transmit to the Processor Transaction 

Reports in Eligible Securities executed 

in its Market by means prescribed 

herein. With respect to orders sent by 

one Participant Market to another 

Participant Market for execution, each 

Participant shall adopt procedures 

governing the reporting of transactions 

in Eligible Securities specifying that the 

transaction will be reported by the 


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Participant whose member sold the 

security. This provision shall apply only 

to transactions between Plan 

Participants. 

Transaction Reports shall include: 

1. Identification of the Eligible 

Security, using the Nasdaq Symbol; 

2. The number of shares in the 

transaction; 

3. The price at which the shares were 

purchased or sold; 

4. The buy/sell/cross indicator; 

5. The Market of execution; and 

6. Through appropriate codes and 

messages, late or out-of-sequence trades, 

corrections and similar matters. 

All such Transaction Reports shall be 

transmitted to the Processor within 90 

seconds after the time of execution of 

the transaction. Transaction Reports 

transmitted beyond the 90-second 

period shall be designated as ‘‘late’’ by 

the appropriate code or message. 

The following types of transactions 

are not required to be reported to the 

Processor pursuant to the Plan: 

1. Transactions that are part of a 

primary distribution by an issuer or of 

a registered secondary distribution or of 

an unregistered secondary distribution; 

2. Transactions made in reliance on 

Section 4(2) of the Securities Act of 

1933; 

3. Transactions in which the buyer 

and the seller have agreed to trade at a 

price unrelated to the Current Market 

for the security, e.g., to enable the seller 

to make a gift; 

4. Odd-lot transactions; 

5. The acquisition of securities by a 

broker-dealer as principal in 

anticipation of making an immediate 

exchange distribution or exchange 

offering on an exchange; 

6. Purchases of securities pursuant to 

a tender offer; and 

7. Purchases or sales of securities 

effected upon the exercise of an option 

pursuant to the terms thereof or the 

exercise of any other right to acquire 

securities at a pre-established 

consideration unrelated to the Current 

Market. 

C. Symbols for Market Identification for 

Quotation Information and Transaction 

Reports 

The following symbols shall be used 

to denote the marketplaces: 

Code Participant 

A .......... American Stock Exchange LLC. 

B .......... Boston Stock Exchange, Inc. 

W ......... Chicago Board Options Exchange, 

Inc. 

M ......... Chicago Stock Exchange, Inc. 

I ........... International Securities Exchange, 

LLC. 

D .......... NASD. 

Code Participant 

Q ......... Nasdaq Stock Market LLC. 

C .......... National Stock Exchange, Inc. 

N .......... New York Stock Exchange LLC. 

P .......... NYSE Arca, Inc. 

X .......... Philadelphia Stock Exchange, Inc. 

D. Whenever a Participant determines 

that a level of trading activity or other 

unusual market conditions prevent it 

from collecting and transmitting 

Quotation Information or Transaction 

Reports to the Processor, or where a 

trading halt or suspension in an Eligible 

Security is in effect in its Market, the 

Participant shall promptly notify the 

Processor of such condition or event 

and shall resume collecting and 

transmitting Quotation Information and 

Transaction Reports to it as soon as the 

condition or event is terminated. In the 

event of a system malfunction resulting 

in the inability of a Participant or its 

members to transmit Quotation 

Information or Transaction Reports to 

the Processor, the Participant shall 

promptly notify the Processor of such 

event or condition. Upon receiving such 

notification, the Processor shall take 

appropriate action, including either 

closing the quotation or purging the 

system of the affected quotations. 

IX. Market Access 

Consistent with the state of electronic 

technology and pursuant to the 

requirements of Rule 610 of Regulation 

NMS, a Participant that operates an SRO 

trading facility shall provide for fair and 

efficient order execution access to 

quotations in each Eligible Security 

displayed through its trading facility. In 

the case of a Participant that operates an 

SRO display-only quotation facility, 

trading centers posting quotations 

through such SRO display-only 

quotation facility must provide for fair 

and efficient order execution access to 

quotations in each Eligible Security 

displayed through the SRO display-only 

quotation facility. A Participant that 

operates an SRO trading facility may 

elect to allow such access to its 

quotations through the utilization of 

private electronic linkages between the 

Participant and other trading centers. In 

the case of a Participant that operates an 

SRO display-only quotation facility, 

trading centers posting quotations 

through such SRO display-only 

quotation facility may elect to allow 

such access to their quotations through 

the utilization of private electronic 

linkages between the trading center and 

SRO trading facilities of Plan 

Participants and/or other trading 

centers. 

In accordance with Regulation NMS, 

a Participant shall not impose, or permit 

to be imposed, any fee or fees for the 

execution of an order against a protected 

quotation of the Participant or of a 

trading center posting quotes through a 

Participant’s SRO display-only 

quotation facility in an Eligible Security 

or against any other quotation displayed 

by the Participant in an Eligible Security 

that is the Participant’s displayed best 

bid or offer for that Eligible Security, 

where such fee or fees exceed the limits 

provided for in Rule 610(c) of 

Regulation NMS. As required under 

Regulation NMS, the terms of access to 

a Participant’s quotations or of a trading 

center posting quotes through a 

Participant’s SRO display-only 

quotation facility in an Eligible Security 

may not be unfairly discriminatory so as 

to prevent or inhibit any person from 

obtaining efficient access to such 

displayed quotations through a member 

of the Participant or a subscriber of a 

trading center. 

If quotations in an Eligible Security 

are displayed by a Participant that 

operates an SRO trading facility (or are 

displayed by a trading center that posts 

quotations through an SRO display-only 

quotation facility) that complies with 

the fair and efficient access 

requirements of Regulation NMS (an 

‘‘NMS Compliant Facility’’), including 

prior to the compliance date of such 

access requirements, that Participant (or 

trading center posting quotes through an 

SRO display-only quotation facility) 

shall no longer be required to permit 

each NASD market participant to have 

direct telephone access to the specialist, 

trading post, market maker and 

supervisory center in such Eligible 

Security that trades on that NMS 

Compliant Facility. For quotations in 

Eligible Securities that are displayed by 

a Participant that operates an SRO 

trading facility that is not an NMS 

Compliant Facility, such telephone 

access requirement will continue to be 

applicable to the Participant. 

X. Regulatory Halts 

A. Whenever, in the exercise of its 

regulatory functions, the Listing Market 

for an Eligible Security determines that 

a Regulatory Halt is appropriate 

pursuant to Section III.S, the Listing 

Market will notify all other Participants 

pursuant to Section X.E and all other 

Participants shall also halt or suspend 

trading in that security until notification 

that the halt or suspension is no longer 

in effect. The Listing Market shall 

immediately notify the Processor of 

such Regulatory Halt as well as notice 

of the lifting of a Regulatory Halt. The 

Processor, in turn, shall disseminate to 


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Participants notice of the Regulatory 

Halt (as well as notice of the lifting of 

a regulatory halt) through the UTP 

Quote Data Feed. This notice shall serve 

as official notice of a regulatory halt for 

purposes of the Plan only, and shall not 

substitute or otherwise supplant notice 

that a Participant may recognize or 

require under its own rules. Nothing in 

this provision shall be read so as to 

supplant or be inconsistent with a 

Participant’s own rules on trade halts, 

which rules apply to the Participant’s 

own members. The Processor will reject 

any quotation information or transaction 

reports received from any Participant on 

an Eligible Security that has a 

Regulatory Halt in effect. 

B. Whenever the Listing Market 

determines that an adequate publication 

or dissemination of information has 

occurred so as to permit the termination 

of the Regulatory Halt then in effect, the 

Listing Market shall promptly notify the 

Processor and each of the other 

Participants that conducts trading in 

such security pursuant to Section X.F. 

Except in extraordinary circumstances, 

adequate publication or dissemination 

shall be presumed by the Listing Market 

to have occurred upon the expiration of 

one hour after initial publication in a 

national news dissemination service of 

the information that gave rise to the 

Regulatory Halt. 

C. Except in the case of a Regulatory 

Halt, the Processor shall not cease the 

dissemination of quotation or 

transaction information regarding any 

Eligible Security. In particular, it shall 

not cease dissemination of such 

information because of a delayed 

opening, imbalance of orders or other 

market-related problems involving such 

security. During a regulatory halt, the 

Processor shall collect and disseminate 

Transaction Information but shall cease 

collection and dissemination of all 

Quotation Information. 

D. For purposes of this Section X, 

‘‘Listing Market’’ for an Eligible Security 

means the Participant’s Market on 

which the Eligible Security is listed. If 

an Eligible Security is dually listed, 

Listing Market shall mean the 

Participant’s Market on which the 

Eligible Security is listed that also has 

the highest number of the average of the 

reported transactions and reported share 

volume for the preceding 12-month 

period. The Listing Market for duallylisted Eligible Securities shall be 

determined at the beginning of each 

calendar quarter. 

E. For purposes of coordinating 

trading halts in Eligible Securities, all 

Participants are required to utilize the 

national market system communication 

media (‘‘Hoot-n-Holler’’) to verbally 

provide real-time information to all 

Participants. Each Participant shall be 

required to continuously monitor the 

Hoot-n-Holler system during market 

hours, and the failure of a Participant to 

do so at any time shall not prevent the 

Listing Market from initiating a 

Regulatory Halt in accordance with the 

procedures specified herein. 

1. The following procedures shall be 

followed when one or more Participants 

experiences extraordinary market 

activity in an Eligible Security that is 

believed to be caused by the misuse or 

malfunction of systems operated by or 

linked to one or more Participants. 

a. The Participant(s) experiencing the 

extraordinary market activity or any 

Participant that becomes aware of 

extraordinary market activity will 

immediately use best efforts to notify all 

Participants of the extraordinary market 

activity utilizing the Hoot-n-Holler 

system. 

b. The Listing Market will use best 

efforts to determine whether there is 

material news regarding the Eligible 

Security. If the Listing Market 

determines that there is non-disclosed 

material news, it will immediately call 

a Regulatory Halt pursuant to Section 

X.E.2. 

c. Each Participant(s) will use best 

efforts to determine whether one of its 

systems, or the system of a direct or 

indirect participant in its market, is 

responsible for the extraordinary market 

activity. 

d. If a Participant determines the 

potential source of extraordinary market 

activity pursuant to Section X.1.c., the 

Participant will use best efforts to 

determine whether removing the 

quotations of one or more direct or 

indirect market participants or barring 

one or more direct or indirect market 

participants from entering orders will 

resolve the extraordinary market 

activity. Accordingly, the Participant 

will prevent the quotations from one or 

more direct or indirect market 

participants in the affected Eligible 

Securities from being transmitted to the 

Processor. 

e. If the procedures described in 

Section X.E.1.a.–d. do not rectify the 

situation, the Participant(s) 

experiencing extraordinary market 

activity will cease transmitting all 

quotations in the affected Eligible 

Securities to the Processor. 

f. If the procedures described in 

Section X.E.1.a–e do not rectify the 

situation within five minutes of the first 

notification through the Hoot-n-Holler 

system, or if Participants agree to call a 

halt sooner through unanimous 

approval among those Participants 

actively trading impacted Eligible 

Securities, the Listing Market may 

determine based on the facts and 

circumstances, including available 

input from Participants, to declare an 

Extraordinary Market Regulatory Halt in 

the affected Eligible Securities. 

Simultaneously with the notification of 

the Processor to suspend the 

dissemination of quotations across all 

Participants, the Listing Market must 

verbally notify all Participants of the 

trading halt utilizing the Hoot-n-Holler 

system. 

g. Absent any evidence of system 

misuse or malfunction, best efforts will 

be used to ensure that trading is not 

halted across all Participants. 

2. If the Listing Market declares a 

Regulatory Halt in circumstances other 

than pursuant to Section X.E.1.f., the 

Listing Market must, simultaneously 

with the notification of the Processor to 

suspend the dissemination of quotations 

across all Participants, verbally notify 

all Participants of the trading halt 

utilizing the Hoot-n-Holler system. 

F. If the Listing Market declares a 

Regulatory Halt, trading will resume 

according to the following procedures: 

1. Within 15 minutes of the 

declaration of the halt, all Participants 

will make best efforts to indicate via the 

Hoot-n-Holler their intentions with 

respect to canceling or modifying 

transactions. 

2. All Participants will disseminate to 

their members information regarding the 

canceled or modified transactions as 

promptly as possible, and in any event 

prior to the resumption of trading. 

3. After all Participants have met the 

requirements of Section X.F.1–2, the 

Listing Market will notify the 

Participants utilizing the Hoot-n-Holler 

and the Processor when trading may 

resume. Upon receiving this 

information, Participants may 

commence trading pursuant to Section 

X.A. 

XI. Hours of Operation 

A. Quotation Information may be 

entered by Participants as to all Eligible 

Securities in which they make a market 

between 9:30 a.m. and 4 p.m. Eastern 

Time (‘‘ET’’) on all days the Processor 

is in operation. Transaction Reports 

shall be entered between 9:30 a.m. and 

4:01:30 p.m. ET by Participants as to all 

Eligible Securities in which they 

execute transactions between 9:30 a.m. 

and 4 p.m. ET on all days the Processor 

is in operation. 

B. Participants that execute 

transactions in Eligible Securities 

outside the hours of 9:30 a.m. ET and 

4 p.m., ET, shall be required to report 

such transactions as follows: 


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(i) Transactions in Eligible Securities 

executed between 4 a.m. and 9:29:59 

a.m. ET and between 4:00:01 and 8 p.m. 

ET, shall be designated as ‘‘.T’’ trades to 

denote their execution outside normal 

market hours; 

(ii) Transactions in Eligible Securities 

executed after 8 p.m. and before 12 a.m. 

(midnight) shall be reported to the 

Processor between the hours of 4 a.m. 

and 8 p.m. ET on the next business day 

(T+1), and shall be designated ‘‘as/of’’

trades to denote their execution on a 

prior day, and be accompanied by the 

time of execution; 

(iii) Transactions in Eligible Securities 

executed between 12 a.m. (midnight) 

and 4 a.m. ET shall be transmitted to the 

Processor between 4 a.m. and 9:30 a.m. 

ET, on trade date, shall be designated as 

‘‘.T’’ trades to denote their execution 

outside normal market hours, and shall 

be accompanied by the time of 

execution; 

(iv) Transactions reported pursuant to 

this provision of the Plan shall be 

included in the calculation of total trade 

volume for purposes of determining net 

distributable operating revenue, but 

shall not be included in the calculation 

of the daily high, low, or last sale. 

C. Late trades shall be reported in 

accordance with the rules of the 

Participant in whose Market the 

transaction occurred and can be 

reported between the hours of 4 a.m. 

and 8 p.m. 

D. The Processor shall collect, process 

and disseminate Quotation Information 

in Eligible Securities at other times 

between 4 a.m. and 9:30 a.m. ET, and 

after 4 p.m. ET, when any Participant or 

Nasdaq market participant is open for 

trading, until 8 p.m. ET (the ‘‘Additional 

Period’’); provided, however, that the 

best bid and offer quotation will not be 

disseminated before 4 a.m. or after 8 

p.m. ET. Participants that enter 

Quotation Information or submit 

Transaction Reports to the Processor 

during the Additional Period shall do so 

for all Eligible Securities in which they 

enter quotations. 

XII. Undertaking by All Participants 

The filing with and approval by the 

Commission of this Plan shall obligate 

each Participant to enforce compliance 

by its members with the provisions 

thereof. In all other respects not 

inconsistent herewith, the rules of each 

Participant shall apply to the actions of 

its members in effecting, reporting, 

honoring and settling transactions 

executed through its facilities, and the 

entry, maintenance and firmness of 

quotations to ensure that such occurs in 

a manner consistent with just and 

equitable principles of trade. 

XIII. Financial Matters 

A. Development Costs 

Any Participant becoming a signatory 

to this Plan after June 26, 1990, shall, as 

a condition to becoming a Participant, 

pay to the other Plan Participants a 

proportionate share of the aggregate 

development costs previously paid by 

Plan Participants to the Processor, 

which aggregate development costs 

totaled $439,530, with the result that 

each Participant’s share of all 

development costs is the same. 

Each Participant shall bear the cost of 

implementation of any technical 

enhancements to the Nasdaq system 

made at its request and solely for its use, 

subject to reapportionment should any 

other Participant subsequently make use 

of the enhancement, or the development 

thereof. 

B. Cost Allocation and Revenue Sharing 

The provisions governing cost 

allocation and revenue sharing among 

the Participants are set forth in Exhibit 

1 to the Plan. 

C. Maintenance of Financial Records 

The Processor shall maintain records 

of revenues generated and development 

and operating expenditures incurred in 

connection with the Plan. In addition, 

the Processor shall provide the 

Participants with: (a) A statement of 

financial and operational condition on a 

quarterly basis; and (b) an audited 

statement of financial and operational 

condition on an annual basis. 

XIV. Indemnification 

Each Participant agrees, severally and 

not jointly, to indemnify and hold 

harmless each other Participant, 

Nasdaq, and each of its directors, 

officers, employees and agents 

(including the Operating Committee and 

its employees and agents) from and 

against any and all loss, liability, claim, 

damage and expense whatsoever 

incurred or threatened against such 

persons as a result of any Transaction 

Reports, Quotation Information or other 

information reported to the Processor by 

such Participant and disseminated by 

the Processor to Vendors. This 

indemnity agreement shall be in 

addition to any liability that the 

indemnifying Participant may otherwise 

have. 

Promptly after receipt by an 

indemnified Participant of notice of the 

commencement of any action, such 

indemnified Participant will, if a claim 

in respect thereof is to be made against 

an indemnifying Participant, notify the 

indemnifying Participant in writing of 

the commencement thereof; but the 

omission to so notify the indemnifying 

Participant will not relieve the 

indemnifying Participant from any 

liability which it may have to any 

indemnified Participant. In case any 

such action is brought against any 

indemnified Participant and it promptly 

notifies an indemnifying Participant of 

the commencement thereof, the 

indemnifying Participant will be 

entitled to participate in, and, to the 

extent that it may wish, jointly with any 

other indemnifying Participant similarly 

notified, to assume and control the 

defense thereof with counsel chosen by 

it. After notice from the indemnifying 

Participant of its election to assume the 

defense thereof, the indemnifying 

Participant will not be liable to such 

indemnified Participant for any legal or 

other expenses subsequently incurred 

by such indemnified Participant in 

connection with the defense thereof but 

the indemnified Participant may, at its 

own expense, participate in such 

defense by counsel chosen by it 

without, however, impairing the 

indemnifying Participant’s control of 

the defense. The indemnifying 

Participant may negotiate a compromise 

or settlement of any such action, 

provided that such compromise or 

settlement does not require a 

contribution by the indemnified 

Participant. 

XV. Withdrawal 

Any Participant may withdraw from 

the Plan at any time on not less than 30 

days prior written notice to each of the 

other Participants. Any Participant 

withdrawing from the Plan shall remain 

liable for, and shall pay upon demand, 

any fees for equipment or services being 

provided to such Participant pursuant to 

the contract executed by it or an 

agreement or schedule of fees covering 

such then in effect. 

A withdrawing Participant shall also 

remain liable for its proportionate share, 

without any right of recovery, of 

administrative and operating expenses, 

including start-up costs and other sums 

for which it may be responsible 

pursuant to Section XIV hereof. Except 

as aforesaid, a withdrawing Participant 

shall have no further obligation under 

the Plan or to any of the other 

Participants with respect to the period 

following the effectiveness of its 

withdrawal. 

XVI. Modifications to Plan 

The Plan may be modified from time 

to time when authorized by the 

agreement of all of the Participants, 

subject to the approval of the SEC or 

which otherwise becomes effective 


rwilkins on PROD1PC63 with NOTICES
20900 Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices 

pursuant to Section 11A of the Act and 

Rule 608 of Regulation NMS. 

XVII. Applicability of Securities 

Exchange Act of 1934 

The rights and obligations of the 

Participants and of Vendors, News 

Services, Subscribers and other persons 

contracting with Participant in respect 

of the matters covered by the Plan shall 

at all times be subject to any applicable 

provisions of the Act, as amended, and 

any rules and regulations promulgated 

thereunder. 

XVIII. Operational Issues 

A. Each Participant shall be 

responsible for collecting and validating 

quotes and last sale reports within their 

own system prior to transmitting this 

data to the Processor. 

B. Each Participant may utilize a 

dedicated Participant line into the 

Processor to transmit trade and quote 

information in Eligible Securities to the 

Processor. The Processor shall accept 

from Exchange Participants input for 

only those issues that are deemed 

Eligible Securities. 

C. The Processor shall consolidate 

trade and quote information from each 

Participant and disseminate this 

information on the Processor’s existing 

vendor lines. 

D. The Processor shall perform gross 

validation processing for quotes and last 

sale messages in addition to the 

collection and dissemination functions, 

as follows: 

1. Basic Message Validation 

(a) The Processor may validate format 

for each type of message, and reject nonconforming messages. 

(b) Input must be for an Eligible 

Security. 

2. Logging Function—The Processor 

shall return all Participant input 

messages that do not pass the validation 

checks (described above) to the 

inputting Participant, on the entering 

Participant line, with an appropriate 

reject notation. For all accepted 

Participant input messages (i.e., those 

that pass the validation check), the 

information shall be retained in the 

Processor system. 

XIX. Headings 

The section and other headings 

contained in this Plan are for reference 

purposes only and shall not be deemed 

to be a part of this Plan or to affect the 

meaning or interpretation of any 

provisions of this Plan. 

XX. Counterparts 

This Plan may be executed by the 

Participants in any number of 

counterparts, no one of which need 

contain the signature of all Participants. 

As many such counterparts as shall 

together contain all such signatures 

shall constitute one and the same 

instrument. 

XXI. Depth of Book Display 

The Operating Committee has 

determined that the entity that succeeds 

Nasdaq as the Processor should have the 

ability to collect, consolidate, and 

disseminate quotations at multiple price 

levels beyond the best bid and best offer 

from any Participant that voluntarily 

chooses to submit such quotations while 

determining that no Participant shall be 

required to submit such information. 

The Operating Committee has further 

determined that the costs of developing, 

collecting, processing, and 

disseminating such depth of book data 

shall be borne exclusively by those 

Participants that choose to submit this 

information to the Processor, by 

whatever allocation those Participants 

may choose among themselves. The 

Operating Committee has determined 

further that the primary purpose of the 

Processor is the collection, processing 

and dissemination of best bid, best offer 

and last sale information (‘‘core data’’), 

and as such, the Participants will adopt 

procedures to ensure that such 

functionality in no way hinders the 

collecting, processing and 

dissemination of this core data. 

Therefore, implementing the depth of 

book display functionality will require a 

plan amendment that addresses all 

pertinent issues, including: 

(1) Procedures for ensuring that the 

fully-loaded cost of the collection, 

processing, and dissemination of depthof-book information will be tracked and 

invoiced directly to those Plan 

Participants that voluntarily choose to 

send that data, voluntarily, to the 

Processor, allocating in whatever 

manner those Participants might agree; 

and 

(2) Necessary safeguards the Processor 

will take to ensure that its processing of 

depth-of-book data will not impede or 

hamper, in any way, its core Processor 

functionality of collecting, 

consolidating, and disseminating 

National Best Bid and Offer data, 

exchange best bid and offer data, and 

consolidated last sale data. 

Upon approval of a Plan amendment 

implementing depth of book display, 

this article of the Plan shall be 

automatically deleted. 

In witness whereof, this Plan has been 

executed as of the llll day of 

llll, 200ll, by each of the 

Signatories hereto. 

American Stock Exchange LLC 

By: 

Boston Stock Exchange, Inc. 

By: 

Chicago Stock Exchange, Inc. 

By: 

Chicago Board Options Exchange, Inc. 

By: 

International Securities Exchange, LLC 

By: 

NASD 

By: 

National Stock Exchange, Inc. 

By: 

New York Stock Exchange LLC 

By: 

NYSE Arca, Inc. 

By: 

Philadelphia Stock Exchange, Inc. 

By: 

The Nasdaq Stock Market LLC 

Exhibit 1 

1. Each Participant eligible to receive 

revenue under the Plan will receive an 

annual payment for each calendar year 

to be determined by multiplying (i) that 

Participant’s percentage of total volume 

in Nasdaq securities reported to the 

Processor for that calendar year by (ii) 

the total distributable net operating 

income (as defined below) for that 

calendar year. In the event that total 

distributable net operating income is 

negative, each Participant eligible to 

receive revenue under the Plan will 

receive an annual bill for each calendar 

year to be determined according to the 

same formula (described in this 

paragraph) for determining annual 

payments to eligible Participants. 

2. A Participant’s percentage of total 

volume in Nasdaq securities will be 

calculated by taking the average of (i) 

the Participant’s percentage of total 

trades in Nasdaq securities reported to 

the Processor for the year and (ii) the 

Participant’s percentage of total share 

volume in Nasdaq securities reported to 

the Processor for the year (trade/volume 

average). For any given year, a 

Participant’s percentage of total trades 

shall be calculated by dividing the total 

number of trades that that Participant 

reports to the Processor for that year by 

the total number of trades in Nasdaq 

securities reported to the Processor for 

the year. A Participant’s total share 

volume shall be calculated by 

multiplying the total number of trades 

in Nasdaq securities in that year that 

that Participant reports to the Processor 

by the number of shares for each such 

trade. Unless otherwise stated in this 

agreement, a year shall run from January 

1 to December 31 and quarters shall end 

on March 31, June 30, September 30, 

and December 31. Processor shall 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices 20901 

endeavor to provide Participants with 

written estimates of each Participant’s 

percentage of total volume within five 

business days of month end. 

3. For purposes of this Exhibit 1, net 

distributable operating income for any 

particular calendar year shall be 

calculated by adding all revenues from 

the UTP Quote Data Feed, the UTP 

Trade Data Feed, and the OTC Montage 

Data Feed including revenues from the 

dissemination of information respecting 

Eligible Securities to foreign 

marketplaces (collectively, ‘‘the Data 

Feeds’’), and subtracting from such 

revenues the costs incurred by the 

Processor, set forth below, in collecting, 

consolidating, validating, generating, 

and disseminating the Data Feeds. 

These costs include, but are not limited 

to, the following: 

a. The Processor costs directly 

attributable to creating OTC Montage 

Data Feed, including: 

1. Cost of collecting Participant quotes 

into the Processor’s quote engine; 

2. Cost of processing quotes and 

creating OTC Montage Data Feed 

messages within the Processor’s quote 

engine; 

3. Cost of the Processor’s 

communication management subsystem 

that distributes OTC Montage Data Feed 

to the market data vendor network for 

further distribution. 

b. The costs directly attributable to 

creating the UTP Quote Data Feed, 

including: 

1. The costs of collecting each 

Participant’s best bid, best offer, and 

aggregate volume into the Processor’s 

quote engine and, in the case of NASD, 

the costs of identifying the NASD 

Participant(s) that constitute NASD’s 

Best Bid and Offer quotations; 

2. Cost of calculating the national best 

bid and offer price within the 

Processor’s quote engine; 

3. Cost of creating the UTP Quote Data 

Feed message within the Processor’s 

quote engine; 

4. Cost of the Processor’s 

communication management subsystem 

that distributes the UTP Quote Data 

Feed to the market data vendors’

networks for further distribution. 

c. The costs directly attributable to 

creating the UTP Trade Data Feed, 

including: 

1. The costs of collecting each 

Participant’s last sale and volume 

amount into the Processor’s quote 

engine 

2. Cost of determining the appropriate 

last sale price and volume amount 

within the Processor’s trade engine; 

3. Cost of utilizing the Processor’s 

trade engine to distribute the UTP Trade 

Data Feed for distribution to the market 

data vendors. 

4. Cost of the Processor’s 

communication management subsystem 

that distributes the UTP Trade Data 

Feed to the market data vendors’

networks for further distribution. 

d. The additional costs that are shared 

across all Data Feeds, including: 

1. Telecommunication Operations 

costs of supporting the Participant lines 

into the Processor’s facilities; 

2. Telecommunications Operations 

costs of supporting the external market 

data vendor network; 

3. Data Products account management 

and auditing function with the market 

data vendors; 

4. Market Operations costs to support 

symbol maintenance, and other data 

integrity issues; 

5. Overhead costs, including 

management support of the Processor, 

Human Resources, Finance, Legal, and 

Administrative Services. 

e. Processor costs excluded from the 

calculation of net distributable 

operating income include trade 

execution costs for transactions 

executed using a Nasdaq service and 

trade report collection costs reported 

through a Nasdaq service, as such 

services are market functions for which 

Participants electing to use such 

services pay market rate. 

f. For the purposes of this provision, 

the following definitions shall apply: 

1. ‘‘Quote engine’’ shall mean the 

Nasdaq’s NT or Tandem system that is 

operated by Nasdaq to collect quotation 

information for Eligible Securities; 

2. ‘‘Trade engine’’ shall mean the 

Nasdaq Tandem system that is operated 

by Nasdaq for the purpose of collecting 

last sale information in Eligible 

Securities. 

3. At the time a Participant 

implements a Processor-approved 

electronic interface with the Processor, 

the Participant will become eligible to 

receive revenue. 

4. Processor shall endeavor to provide 

Participants with written estimates of 

each Participant’s quarterly net 

distributable operating income within 

45 calendar days of the end of the 

quarter, and estimated quarterly 

payments or billings shall be made on 

the basis of such estimates. All quarterly 

payments or billings shall be made to 

each eligible Participant within 45 days 

following the end of each calendar 

quarter in which the Participant is 

eligible to receive revenue, provided 

that each quarterly payment or billing 

shall be reconciled against a 

Participant’s cumulative year-to-date 

payment or billing received to date and 

adjusted accordingly, and further 

provided that the total of such estimated 

payments or billings shall be reconciled 

at the end of each calendar year and, if 

necessary, adjusted by March 31st of the 

following year. Interest shall be 

included in quarterly payments and in 

adjusted payments made on March 31st 

of the following year. Such interest shall 

accrue monthly during the period in 

which revenue was earned and not yet 

paid and will be based on the 90-day 

Treasury bill rate in effect at the end of 

the quarter in which the payment is 

made. Monthly interest shall start 

accruing 45 days following the month in 

which it is earned and accrue until the 

date on which the payment is made. 

In conjunction with calculating 

estimated quarterly and reconciled 

annual payments under this Exhibit 1, 

the Processor shall submit to the 

Participants a quarterly itemized 

statement setting forth the basis upon 

which net operating income was 

calculated, including a quarterly 

itemized statement of the Processor 

costs set forth in Paragraph 3 of this 

Exhibit. Such Processor costs and Plan 

revenues shall be adjusted annually 

based solely on the Processor’s quarterly 

itemized statement audited pursuant to 

Processor’s annual audit. Processor shall 

pay or bill Participants for the audit 

adjustments within thirty days of 

completion of the annual audit. By 

majority vote of the Operating 

Committee, the Processor shall engage 

an independent auditor to audit the 

Processor’s costs or other calculation(s), 

the cost of which audit shall be shared 

equally by all Participants. The 

Processor agrees to cooperate fully in 

providing the information necessary to 

complete such audit. 

[FR Doc. E7–7953 Filed 4–25–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

In the Matter of Internetstudios.com, 

Inc., and World Cyberlinks Corp. File 

No. 500–1; Order of Suspension of 

Trading 

April 24, 2007. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of 

Internetstudios.com, Inc. because it has 

not filed any periodic reports since it 

filed a Form 10–QSB for the period 

ended September 30, 2005. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of World 


rwilkins on PROD1PC63 with NOTICES