4956 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Notices 

(1948), aff’d sub nom. Hughes v. SEC, 174 F.2d 969 

(D.C. Cir. 1949)). See also Order Execution 

Obligations, Securities Exchange Act Release No. 

37619A (Sept. 6, 1996), 61 FR 48290 (Sept. 12, 

1996) (‘‘Order Handling Rules Release’’); 51808 

(June 9, 2005), 70 FR 37496, 37537–8 (June 29, 

2005). 

36Order Handling Rules Release, 61 FR at 48322. 

See also Newton, 135 F.3d at 270. Failure to satisfy 

the duty of best execution can constitute fraud 

because a broker-dealer, in agreeing to execute a 

customer’s order, makes an implied representation 

that it will execute it in a manner that maximizes 

the customer’s economic gain in the transaction. 

See Newton, 135 F.3d at 273 (‘‘[T]he basis for the 

duty of best execution is the mutual understanding 

that the client is engaging in the trade—and 

retaining the services of the broker as his agent— 

solely for the purpose of maximizing his own 

economic benefit, and that the broker receives her 

compensation because she assists the client in 

reaching that goal.’’); Marc N. Geman, Securities 

Exchange Act Release No. 43963 (Feb. 14, 2001) 

(citing Newton, but concluding that respondent 

fulfilled his duty of best execution). See also 

Payment for Order Flow, Securities Exchange Act 

Release No. 34902 (Oct. 27, 1994), 59 FR 55006, 

55009 (Nov. 2, 1994) (‘‘Payment for Order Flow 

Final Rules’’). If the broker-dealer intends not to act 

in a manner that maximizes the customer’s benefit 

when he accepts the order and does not disclose 

this to the customer, the broker-dealer’s implied 

representation is false. See Newton, 135 F.3d at 

273–274. 

37Newton, 135 F.3d at 270. Newton also noted 

certain factors relevant to best execution—order 

size, trading characteristics of the security, speed of 

execution, clearing costs, and the cost and difficulty 

of executing an order in a particular market. Id. at 

270 n. 2 (citing Payment for Order Flow, Securities 

Exchange Act Release No. 33026 (Oct. 6, 1993), 58 

FR 52934, 52937–38 (Oct. 13, 1993) (Proposed 

Rules)). See In re E.F. Hutton & Co. (‘‘Manning’’), 

Securities Exchange Act Release No. 25887 (July 6, 

1988). See also Payment for Order Flow Final Rules, 

59 FR at 55008–55009. 

38Order Handling Rules Release, 61 FR at 48322– 

48333 (‘‘In conducting the requisite evaluation of its 

internal order handling procedures, a broker-dealer 

must regularly and rigorously examine execution 

quality likely to be obtained from different markets 

or market makers trading a security.’’). See also 

Newton, 135 F.3d at 271; Market 2000: An 

Examination of Current Equity Market 

Developments V–4 (SEC Division of Market 

Regulation January 1994) (‘‘Without specific 

instructions from a customer, however, a brokerdealer should periodically assess the quality of 

competing markets to ensure that its order flow is 

directed to markets providing the most 

advantageous terms for the customer’s order.’’); 

Payment for Order Flow Final Rules, 59 FR at 

55009. 

39Order Handling Rules, 61 FR at 48323. 

40Order Handling Rules, 61 FR at 48323. For 

example, in connection with orders that are to be 

executed at a market opening price, ‘‘[b]rokerdealers are subject to a best execution duty in 

executing customer orders at the opening, and 

should take into account the alternative methods in 

determining how to obtain best execution for their 

customer orders.’’ Disclosure of Order Execution 

and Routing Practices, Securities Exchange Act 

Release No. 43590 (Nov.17, 2000), 65 FR 75414, 

75422 (Dec. 1, 2000) (adopting new Exchange Act 

Rules 11Ac1–5 and 11Ac1–6 and noting that 

alternative methods offered by some Nasdaq market 

centers for pre-open orders included the mid-point 

of the spread or at the bid or offer). 

41 15 U.S.C. 78f(b)(5). 

42 15 U.S.C. 78s(b)(2). 

43 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

best execution derives from common 

law agency principles and fiduciary 

obligations, and is incorporated in SRO 

rules and, through judicial and 

Commission decisions, the antifraud 

provisions of the federal securities 

laws.36 The duty of best execution 

requires broker-dealers to execute 

customers’ trades at the most favorable 

terms reasonably available under the 

circumstances, i.e., at the best 

reasonably available price.37 The duty 

of best execution requires broker-dealers 

to periodically assess the quality of 

competing markets to assure that order 

flow is directed to the markets 

providing the most beneficial terms for 

their customer orders.38 Broker-dealers 

must examine their procedures for 

seeking to obtain best execution in light 

of market and technology changes and 

modify those practices if necessary to 

enable their customers to obtain the best 

reasonably available prices.39 In doing 

so, broker-dealers must take into 

account price improvement 

opportunities, and whether different 

markets may be more suitable for 

different types of orders or particular 

securities.40

For these reasons, the Commission 

believes that the proposal is consistent 

with the requirements of Section 6(b)(5) 

of the Act.41

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,42 that the 

proposed rule change (SR–BX–2014– 

049) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.43

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01648 Filed 1–28–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74127; File No. SR– 

NYSEMKT–2015–06] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Establishing the NYSE 

MKT Integrated Feed Data Feed 

January 23, 2015. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on January 

21, 2015, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to establish 

the NYSE MKT Integrated Feed (‘‘NYSE 

MKT Integrated Feed’’) data feed. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to establish 

the NYSE MKT Integrated Feed. The 

NYSE MKT Integrated Feed would 

provide real-time market data in a 

unified view of events, in sequence, as 

they appear on the NYSE MKT 

matching engines. The NYSE MKT 

Integrated Feed would include depth of 

book order data, last sale data, and 

opening and closing imbalance data. 

The NYSE MKT Integrated Feed would 

also include security status updates 

(e.g., trade corrections and trading halts) 

and stock summary messages. The stock 

summary message updates every minute 

and includes NYSE MKT’s opening 

price, high price, low price, closing 

price, and cumulative volume for the 

security. The NYSE MKT Integrated 

Feed would include information 

currently available from three existing 

NYSE MKT real-time market data feeds: 

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Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Notices 4957 

4See Securities Exchange Act Release No. 60123 

(June 17, 2009), 74 FR 30192 (June 24, 2009) (SR– 

NYSEAmex–2009–28). 

5See Securities Exchange Act Release No. 62187 

(May 27, 2010), 75 FR 31500 (June 3, 

2010)(NYSEAmex–2010–35). 

6See Securities Exchange Act Release Nos. 59743 

(April 9, 2009), 74 FR 17699 (April 16, 2009) (SR– 

NYSEAmex–2009–11); 60151 (June 19, 2009), 74 FR 

30653 (June 26, 2009)(SR–NYSEAmex–29). 

7Neither this filing nor the later filing 

establishing fees for the NYSE MKT Integrated Feed 

will have any effect on the filings for NYSE MKT 

Openbook, NYSE MKT Trades, or NYSE MKT 

Order Imbalances. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

11 15 U.S.C. 78f(b)(8). 

12See NYSE Arca Integrated Feed, http://

www.nyxdata.com/page/1084 (last visited January 

5, 2015) (data feed that provides a unified view of 

events, in sequence as they appear on the NYSE 

Arca matching engine, including depth of book, 

trades, order imbalance data, and security status 

messages). 

13See Nasdaq TotalView-ITCH, http://

www.nasdaqtrader.com/Trader.aspx?id=Totalview2 

(last visited January 5, 2015) (displays the full order 

book depth for Nasdaq market participants and also 

disseminates the Net Order Imbalance Indicator 

(NOII) for the Nasdaq Opening and Closing Crosses 

and Nasdaq IPO/Halt Cross). 

14See BATS Multicast PITCH, http://www.bat

strading.com/market_data/products/ (last visited 

January 5, 2015) (real-time depth of book quotations 

and execution information). 

15See Regulation NMS Adopting Release, supra, 

at 37503. 

NYSE MKT OpenBook,4 which provides 

a compilation of all limit orders resident 

in the NYSE MKT limit order book; 

NYSE MKT Trades,5 which provides 

NYSE MKT last sale information on a 

real-time basis; and NYSE MKT Order 

Imbalances,6 which publishes order 

imbalance information prior to the 

opening and closing of trading.7

The Exchange proposes to offer the 

NYSE MKT Integrated Feed through the 

Exchange’s Liquidity Center Network 

(‘‘LCN’’), a local area network in the 

Exchange’s Mahwah, New Jersey data 

center that is available to users of the 

Exchange’s co-location services. The 

Exchange also would offer the NYSE 

MKT Integrated Feed through the 

Exchange’s Secure Financial 

Transaction Infrastructure (‘‘SFTI’’) 

network, through which all other users 

and member organizations access the 

Exchange’s trading and execution 

systems and other proprietary market 

data products. 

Offering an integrated product 

addresses requests received from 

vendors and subscribers that would like 

to receive the data described above in an 

integrated fashion. An integrated data 

feed would provide greater efficiencies 

and reduce errors for vendors and 

subscribers that currently choose to 

integrate the data after receiving it from 

the Exchange. The Exchange believes 

that providing vendors and subscribers 

with the option of a market data product 

that both integrates existing products 

and includes additional market data 

would allow vendors and subscribers to 

choose the best solution for their 

specific businesses. 

The Exchange will file a separate rule 

filing to establish the fees for the NYSE 

MKT Integrated Feed and will announce 

the date that the NYSE MKT Integrated 

Feed will be available through an NYSE 

Market Data Notice. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) 8 of the Act, in general, and 

furthers the objectives of Section 

6(b)(5) 9 of the Act, in particular, in that 

it is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest, and it is not designed to 

permit unfair discrimination among 

customers, brokers, or dealers. This 

proposal is in keeping with those 

principles in that it promotes increased 

transparency through the dissemination 

of the NYSE MKT Integrated Feed to 

those interested in receiving it. 

The Exchange also believes this 

proposal is consistent with Section 

6(b)(5) of the Act because it protects 

investors and the public interest and 

promotes just and equitable principles 

of trade by providing investors with 

new options for receiving market data as 

requested by market data vendors and 

purchasers. The proposed rule change 

would benefit investors by facilitating 

their prompt access to the real-time 

information contained in the NYSE 

MKT Integrated Feed. 

In adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations (‘‘SROs’’) and broker 

dealers increased authority and 

flexibility to offer new and unique 

market data to consumers of such data. 

It was believed that this authority would 

expand the amount of data available to 

users and consumers of such data and 

also spur innovation and competition 

for the provision of market data. The 

Exchange believes that the NYSE MKT 

Integrated Feed is precisely the sort of 

market data product that the 

Commission envisioned when it 

adopted Regulation NMS. The 

Commission concluded that Regulation 

NMS would itself further the Act’s goals 

of facilitating efficiency and 

competition: 

Efficiency is promoted when brokerdealers who do not need the data beyond the 

prices, sizes, market center identifications of 

the NBBO and consolidated last sale 

information are not required to receive (and 

pay for) such data. The Commission also 

believes that efficiency is promoted when 

broker-dealers may choose to receive (and 

pay for) additional market data based on their 

own internal analysis of the need for such 

data.10

The Exchange further notes that the 

existence of alternatives to the 

Exchange’s product, including real-time 

consolidated data, free delayed 

consolidated data, and proprietary data 

from other sources, as well as the 

continued availability of the Exchange’s 

separate data feeds, ensures that the 

Exchange is not unreasonably 

discriminatory because vendors and 

subscribers can elect these alternatives 

as their individual business cases 

warrant. 

The NYSE MKT Integrated Feed will 

help to protect a free and open market 

by providing additional data to the 

marketplace and by giving investors 

greater choices. In addition, the 

proposal would not permit unfair 

discrimination because the product will 

be available to all of the Exchange’s 

customers and broker-dealers through 

both the LCN and SFTI. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,11 the Exchange does not believe 

that the proposed rule change will 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Because other exchanges already offer 

similar products, the Exchange’s 

proposed NYSE MKT Integrated Feed 

will enhance competition. The NYSE 

MKT Integrated Feed will foster 

competition by providing an alternative 

to similar products offered by other 

exchanges, including the NYSE Arca 

Integrated Feed,12 offered by the 

Exchange’s affiliate, NYSE Arca, Inc. 

(‘‘NYSE Arca’’), Nasdaq TotalViewItch,13 offered by The Nasdaq Stock 

Market, Inc., and BATS Multicast 

Pitch,14 offered by BATS Global 

Markets. This proposed new data feed 

provides investors with new options for 

receiving market data, which was a 

primary goal of the market data 

amendments adopted by Regulation 

NMS.15

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4958 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Notices 

16 15 U.S.C. 78s(b)(3)(A)(iii). 

17 17 CFR 240.19b–4(f)(6). 

18The Exchange has satisfied this requirement. 

19 15 U.S.C. 78s(b)(2)(B). 20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Section II of the Pricing Schedule includes 

options overlying equities, ETFs, ETNs and indexes 

which are Multiply Listed. 

4MNX represents options on the one-tenth value 

of the Nasdaq 100 Index traded under the symbol 

MNX (‘‘MNX’’). 

5NDX represents options on the Nasdaq 100 

Index traded under the symbol NDX (‘‘NDX’’). 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 16 and Rule 

19b–4(f)(6) thereunder.17 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, 

provided that the self-regulatory 

organization has given the Commission 

written notice of its intent to file the 

proposed rule change at least five 

business days prior to the date of filing 

of the proposed rule change or such 

shorter time as designated by the 

Commission,18 the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act and Rule 

19b–4(f)(6)(iii) thereunder. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 19 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEMKT–2015–06 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEMKT–2015–06. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street NE., 

Washington, DC 20549–1090, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing will also be available for 

inspection and copying at the NYSE’s 

principal office and on its Internet Web 

site at www.nyse.com. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–

NYSEMKT–2015–06 and should be 

submitted on or before February 19, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01646 Filed 1–28–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74125; File No. SR–PHLX– 

2015–05] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

MNX and NDX 

January 23, 2015. 

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 January 

21, 2015, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Section II 3 of the Pricing Schedule 

entitled ‘‘Multiply Listed Options Fees’’ 

to assess an increased Options 

Surcharge in MNX 4 and NDX.5

While changes to the Pricing 

Schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated the proposed amendment to 

be operative on February 2, 2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxphlx.cchwallstreet.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 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

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