1744 Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 

14See supra notes 8 and 9 and accompanying 

text. 

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

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Release No. 34–59039 (December 2, 2008); 

File No. SR–NYSEArca–2006–21. 

option or other equity compensation 

plans under the same terms and 

conditions as other Nasdaq listed 

companies, the new rule will ensure 

that shareholders of all Nasdaq 

companies will have the same 

protections against the potential dilutive 

effects of such plans. 

The Commission also believes that the 

proposed clarifying changes specifying 

that an auditor of a listed LP must be 

registered with the PCAOB and that an 

LP must notify Nasdaq of any material 

non-compliance with the corporate 

governance rules should eliminate any 

confusion regarding the requirements 

for LPs. As noted above, Nasdaq asserts 

that LPs are already subject to these 

requirements, but these proposed 

changes will ensure that such 

requirements are part of Nasdaq’s 

rulebook governing the listing 

requirements for LPs and thus are 

transparent to issuers.14 Accordingly, 

the Commission finds that the proposed 

rule change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,15 that the 

proposed rule change (SR–NASDAQ– 

2008–084) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–437 Filed 1–12–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59202; File No. SR–NYSE– 

2008–132] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change to 

Introduce a NYSE Order Imbalance 

Information Fee 

January 6, 2009. 

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 December 

19, 2008, the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘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 is proposing to 

introduce a fee for access to its NYSE 

Order Imbalance Information datafeed. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NYSE included statements concerning 

the purpose of, and basis for, the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. NYSE has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

(a) The Service. 

In June 2008, the Exchange added 

Order Imbalance Information to the 

NYSE OpenBook® package of products.3

For no additional charge, the Exchange 

decided to make available to recipients 

of NYSE OpenBook an additional 

datafeed containing Order Imbalance 

Information. 

NYSE Order Imbalance Information is 

a datafeed of real-time order imbalances 

that accumulate prior to the opening of 

trading on the Exchange and prior to the 

close of trading on the Exchange. These 

orders are subject to execution at the 

market’s opening or closing price, as the 

case may be, and represent issues that 

are likely to be of particular trading 

interest at the opening or closing. 

The Exchange distributes information 

about these imbalances in real-time at 

specified intervals prior to the opening 

and closing auctions. Initially, the 

Exchange proposes to make order 

imbalance information available at the 

following intervals. 

For opening order imbalances: 

• Every five minutes between 8:30 

a.m. EST and 9 a.m. EST. 

• Every one minute between 9 a.m. 

EST and 9:20 a.m. EST. 

• Every 15 seconds between 9:20 a.m. 

EST and the opening (or 9:35 a.m. EST 

if the opening is delayed). 

For closing order imbalances: 

• Every fifteen seconds between 3:40 

p.m. EST and 3:50 p.m. EST. 

• Every five seconds between 3:50 

p.m. EST and 4 p.m. EST. 

If the Exchange were to change these 

intervals, it would notify NYSE Order 

Imbalance Information recipients in 

advance and/or post the changes on the 

Exchange’s Web site. 

NYSE Order Imbalance Information 

also includes the imbalance information 

that the Exchange is required to 

disseminate under NYSE Rule 123C(5), 

as well as automated real-time 

streaming order imbalance information 

at specified intervals. 

After consultation with its customers, 

the Exchange has determined to make 

the NYSE Order Imbalance Information 

datafeed available as a stand-alone 

market data product, separate and apart 

from NYSE OpenBook. This would 

enable all investors to gain access to 

information regarding opening and 

closing imbalances on the Exchange, 

especially because the Exchange is not 

imposing end-user fees, is not requiring 

end-users to sign contracts and is 

making vendor receipt and use of the 

information inexpensive and very few 

administrative burdens (e.g., no 

reporting requirements and no end-user 

contracts). 

Many investors have not been able to 

access this data. However, as a result of 

the Commission’s NYSE ArcaBook 

Approval Order, the Exchange may now 

bring the NYSE order Imbalance 

Information product to market. The 

Exchange anticipates that this will 

provide important information to 

millions of investors. 

In the Exchange’s view, the 

Commission’s recent ‘‘Order Setting 

Aside Action by Delegated Authority 

and Approving Proposed Rule Change 

Relating to NYSE Arca Data’’ (the 

‘‘NYSE ArcaBook Approval Order’’) 

makes this product offering possible. In 

the NYSE ArcaBook Approval Order, 

the Commission strongly supported the 

right of SROs to expand their market 

data offerings outside of the 

consolidated products that markets offer 

under joint industry plans such as the 

CTA Plan and the CQ Plan. It 

established fee-setting standards for 

market data products for those non-core 

offerings. Prior to the NYSE ArcaBook 

Approval Order, the Exchange’s ability 

to bring the NYSE Order Imbalance 

Information product to market was 

limited distribution to NYSE OpenBook 

subscribers only. That order affirmed 

the Commission’s embrace of allowing 

Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 1745 

4See Regulation NMS Release, 70 FR at 37566– 

37567 (addressing differences in distribution 

standards between core data and non-core data). 

5NYSE ArcaBook Approval Order at pp 46–47. 

6 Id. at pp. 48–49. 7 Id. at p 52. 

market forces to determine the fairness 

and reasonableness of fees for non-core 

products, such as NYSE Order 

Imbalance Information. As a result, the 

Exchange is now able to make this 

important information available to 

millions of investors, investors who do 

not desire to subscribe to NYSE 

OpenBook services in order to receive 

NYSE Order Imbalance Information. 

(b) The Fee. The Exchange proposes 

to charge recipients of the NYSE Order 

Imbalance Information datafeed $500 

per month. The fee applies whether the 

recipient receives the datafeed directly 

from the Exchange or indirectly from an 

intermediary. The fee entitles the 

datafeed recipient to make displays of 

that information available to an 

unlimited number of subscribers for no 

extra charge. The Exchange is not 

proposing to impose an end-user or 

display device fee on those subscribers. 

The fee would allow vendors to 

redistribute NYSE Order Imbalance 

Information without having to 

differentiate between professional 

subscribers and nonprofessional 

subscribers, without having to account 

for the extent of access to the data, 

without having to procure contracts 

with its subscribers for the benefit of the 

Exchange and without having to report 

the number of its subscribers. 

By establishing the access fee at an 

inexpensive rate and declining to 

impose an end-user fee on the 

consumption of NYSE Order Imbalance 

Information, the Exchange seeks to 

enable all investors to gain access to 

information regarding opening and 

closing imbalances on the Exchange. 

The fee enables the investment 

community that has an interest in the 

receipt of order imbalance information 

to contribute to the Exchange’s 

operating costs in a manner that is 

appropriate for this market data 

product. 

In setting the level of the NYSE Order 

Imbalance Information fee, the 

Exchange took into consideration 

several factors, including: 

i. Consultation with some of the 

entities that the Exchange anticipates 

will be the most likely to take advantage 

of the proposed product; 

ii. The contribution of market data 

revenues that the Exchange believes is 

appropriate for the investment 

community that has an interest in the 

receipt and use of order imbalance 

information; and 

iii. The fact that the proposed fee 

provides an alternative to the receipt of 

NYSE Order Imbalance Information as 

part of NYSE OpenBook. 

In short, the Exchange believes that 

the proposed NYSE Order Imbalance 

Information fee would reflect an 

equitable allocation of its overall costs 

to users of its facilities. 

(c) The Fee is Fair and Reasonable. 

The Exchange believes that $500 access 

fee for NYSE Order Imbalance 

Information comports with the standard 

that the Commission established for 

determining whether market data fees 

relating to non-core market data 

products are fair and reasonable. In 

NYSE ArcaBook Approval Order, the 

Commission reiterated its position from 

its release approving Regulation NMS 

that it should ‘‘allow market forces, 

rather than regulatory requirements, to 

determine what, if any, additional 

quotations outside the NBBO are 

displayed to investors.’’4

The Commission went on to state that: 

The Exchange Act and its legislative 

history strongly support the Commission’s 

reliance on competition, whenever possible, 

in meeting its regulatory responsibilities for 

overseeing the SROs and the national market 

system. Indeed, competition among multiple 

markets and market participants trading the 

same products is the hallmark of the national 

market system.5

The Commission then articulated the 

standard that it will apply in assessing 

the fairness and reasonableness of 

market data fees for non-core products, 

as follows: 

With respect to non-core data, * * * the 

Commission has maintained a market-based 

approach that leaves a much fuller 

opportunity for competitive forces to work. 

This market-based approach to non-core data 

has two parts. The first is to ask whether the 

exchange was subject to significant 

competitive forces in setting the terms of its 

proposal for non-core data, including the 

level of any fees. If an exchange was subject 

to significant competitive forces in setting the 

terms of a proposal, the Commission will 

approve the proposal unless it determines 

that there is a substantial countervailing basis 

to find that the terms nevertheless fail to 

meet an applicable requirement of the 

Exchange Act or the rules thereunder.6

The Exchange believes that the 

proposed access fee is fair and 

reasonable by this standard or any other 

standard. The Exchange is subject to 

significant competitive forces and the 

low level at which the Exchange 

proposes to establish the NYSE Order 

Imbalance Information access fee 

represents, in part, a response to that 

competition. To start, the Exchange 

competes intensely for order flow. It 

competes with the other 10 national 

securities exchanges that currently trade 

equities, with electronic communication 

networks, with quotes posted in 

FINRA’s Alternative Display Facility 

and Trade Reporting Facilities, with 

alternative trading systems, and with 

securities firms that primarily trade as 

principal with their customer order flow 

‘‘and the competition is fierce.’’ 7

The Exchange believes that making 

the NYSE Order Imbalance Information 

datafeed available to vendors at $500 

per month and allowing the vendors to 

redistribute that data to an unlimited 

number of their customers at no 

additional charge would help the 

Exchange to compete for order flow by 

making the Exchange’s order imbalance 

information freely available to millions 

of investors. The Exchange hopes that 

some of those investors may favor the 

Exchange with order flow as a result of 

access to the imbalance information. 

In addition, the Exchange believes 

that no substantial countervailing basis 

exists to support a finding that the 

NYSE Order Imbalance Information 

access fee fails to meet the requirement 

of the Exchange Act. 

In sum, NYSE’s compelling need to 

attract order flow imposes significant 

competitive pressure on NYSE to act 

equitably, fairly, and reasonably in 

setting the NYSE Order Imbalance 

Information access fee. Making that data 

readily available to investors is a 

response to that pressure. 

(d) Continued Distribution Through 

NYSE OpenBook. The Exchange would 

continue to permit NYSE OpenBook 

datafeed recipients to receive the NYSE 

Order Imbalance Information datafeed 

as part of the NYSE OpenBook package 

without having to pay the $500 fee or 

any other additional charge. Those 

NYSE OpenBook datafeed recipients 

may then redistribute the NYSE Order 

Imbalance Information to any of their 

subscribers, whether or not the 

subscriber also receives NYSE 

OpenBook information. The Exchange 

imposes no end-user charge on those 

subscribers. 

(e) Contracts. The Exchange proposes 

to provide the NYSE Order Imbalance 

Information datafeed available under 

the same contracting arrangement that 

the Commission has approved for the 

receipt and use of market datafeeds 

under the CTA and CQ Plans. That 

arrangement contemplates that each 

datafeed recipient enter into the 

Commission-approved standard form of 

‘‘Agreement for Receipt and Use of 

Market Data’’ that Network A uses for 

data redistributors and other parties that 

use the data for purposes other than 

1746 Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 

8The Participants in the CTA and CQ Plans first 

submitted the Consolidated Vendor Form to the 

Commission for immediate effectiveness in 1990. 

See Release No. 34–28407 (September 6, 1990); 55 

FR 37276 (September 10, 1990) (File No. 4–281). 

The Commission approved a revised version of it 

in 1996 in conjunction with the participants’ 

restatement of the CTA and CQ Plans. See Release 

No. 34–37191 (May 9, 1996); 61 FR 24842 (May 16, 

1996) (File No. SR–CTA/CQ–96–1). 

9 15 U.S.C. 78f(b)(4). 

10 15 U.S.C. 78f(b)(5). 

11 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. 

interrogation.8 Exhibit A to each of 

those agreements would need to be 

updated to reflect the receipt and use of 

NYSE Order Imbalance Information. 

The arrangement does not require an 

end-user of the information (other than 

a data feed recipient) to enter into any 

agreement. 

2. Statutory Basis 

The bases under the Securities 

Exchange Act of 1934 (the ‘‘1934 Act’’) 

for the proposed rule change are the 

requirement under section 6(b)(4) 9 that 

an exchange have rules that provide for 

the equitable allocation of reasonable 

dues, fees and other charges among its 

members and other persons using its 

facilities and the requirements under 

section 6(b)(5) 10 that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, 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. The Exchange believes 

that the proposal benefits investors by 

facilitating their prompt access to 

widespread, free NYSE Order Imbalance 

Information. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments 

regarding the proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve the proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

No. SR–NYSE–2008–132 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–132. This file 

number should be included on the 

subject line if e-mail 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 inspection and copying in 

the Commission’s Public Reference 

Room, on official business days between 

the hours of 10 a.m. and 3 p.m. Copies 

of such filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–NYSE– 

2008–132 and should be submitted on 

or before February 3, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–414 Filed 1–12–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59207; File No. SR–NYSE– 

2008–134] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending 

Exchange Rule 1500 (‘‘MatchPoint’’) To 

Clarify the Functionality of the IntraDay Matching Sessions in Relation to 

Order Entry, Correction and 

Cancellation Capabilities, and When 

the MatchPoint System Cancels 

Unexecuted Orders Back to the User 

and Disseminates Intra-Day and After 

Hours Trade Reports 

January 6, 2009. 

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 December 

22, 2008, New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rule 1500 (NYSE 

MatchPointSM) (‘‘MatchPoint’’) to clarify 

the functionality of the intra-day 

matching sessions in relation to order 

entry, correction and cancellation 

capabilities, and when the MatchPoint 

system cancels unexecuted orders back 

to the User and disseminates intra-day 

and after hours trade reports. The text 

of the proposed rule change is available 

at http://www.nyse.com, NYSE, and the 

Commission’s Public Reference Room.