Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Notices 12921 

20See NYSE Arca Order at 74784 nn. 218–219 

and accompanying text (noting exchange strategy of 

offering data for free as a means to gain visibility 

in the marketplace). 21See Richard Posner, Economic Analysis of Law 

§ 9.1 (5th ed. 1998) (discussing the theory of 

monopolies and pricing). See also U.S. Dep’t of 

Justice & Fed’l Trade Comm’n, Horizontal Merger 

Guidelines § 1.11 (1992), as revised (1997) 

(explaining the importance of alternatives to the 

presence of competition and the definition of 

markets and market power). Courts frequently refer 

to the Department of Justice and Federal Trade 

Commission merger guidelines to define product 

markets and evaluate market power. See, e.g., FTC 

v. Whole Foods Market, Inc., 502 F. Supp. 2d 1 

(D.D.C. 2007); FTC v. Arch Coal, Inc., 329 F. Supp. 

2d 109 (D.D.C. 2004). In considering antitrust 

issues, courts have recognized the value of 

competition in producing lower prices. See, e.g., 

Leegin Creative Leather Products v. PSKS, Inc., 127 

S. Ct. 2705 (2007); Atlanta Richfield Co. v. United 

States Petroleum Co., 495 U.S. 328 (1990); 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

475 U.S. 574 (1986); State Oil Co. v. Khan, 522 U.S. 

3 (1997); Northern Pacific Raliway Co. v. U.S., 356 

U.S. 1 (1958). 

22See NYSE Arca Order at 74783. 

23 Id. 

24 Id. 

25 15 U.S.C. 78s(b)(2). 

26 17 CFR 200.30–3(a)(12). 

TABLE 1 

[Reported Share Volume in U.S.-Listed Equities during January 2009 (%)] 

Trading venue All stocks NYSE-listed NASDAQlisted 

NASDAQ ...................................................................................................................................... 27.1 20.5 39.9 

All Non-Exchange ........................................................................................................................ 26.7 26.2 31.0 

NYSE Arca ................................................................................................................................... 17.9 15.7 15.8 

NYSE ........................................................................................................................................... 14.8 26.2 0.0 

BATS ............................................................................................................................................ 10.7 9.0 10.8 

International Stock Exchange ...................................................................................................... 1.3 1.4 1.4 

National Stock Exchange ............................................................................................................ 0.6 0.7 0.7 

Chicago Stock Exchange ............................................................................................................ 0.4 0.4 0.3 

CBOE Stock Exchange ............................................................................................................... 0.2 0.0 0.1 

NYSE Alternext ............................................................................................................................ 0.1 0.0 0.0 

NASDAQ OMX BX ...................................................................................................................... 0.0 0.0 0.0 

The market share percentages in Table 

1 strongly indicate that NYSE Arca must 

compete vigorously for order flow to 

maintain its share of trading volume. 

The need to attract order flow imposes 

significant pressure on NYSE Arca to act 

reasonably in setting its fees for NYSE 

Arca market data, particularly given that 

the market participants that must pay 

such fees often will be the same market 

participants from whom NYSE Arca 

must attract order flow. These market 

participants particularly include the 

large broker-dealer firms that control the 

handling of a large volume of customer 

and proprietary order flow. Given the 

portability of order flow from one 

trading venue to another, any exchange 

that sought to charge unreasonably high 

data fees would risk alienating many of 

the same customers on whose orders it 

depends for competitive survival. 

Moreover, distributing data widely 

among investors, and thereby promoting 

familiarity with the exchange and its 

services, is an important exchange 

strategy for attracting order flow.20

In addition to the need to attract order 

flow, the availability of alternatives to 

NYSE Arca Trades significantly affect 

the terms on which NYSE Arca can 

distribute this market data.21 In setting 

the fees for its NYSE Arca Trades, the 

Exchange must consider the extent to 

which market participants would 

choose one or more alternatives instead 

of purchasing the Exchange’s data.22 Of 

course, the most basic source of 

information generally available at an 

exchange is the complete record of an 

exchange’s transactions that is provided 

in the core data feeds.23 In this respect, 

the core data feeds that include an 

exchange’s own transaction information 

are a significant alternative to the 

exchange’s market data product.24

The various self-regulatory 

organizations, the several Trade 

Reporting Facilities of FINRA, and ECNs 

that produce proprietary data, as well as 

the core data feed, are all sources of 

competition in non-core data products. 

As Table 1 illustrates, share volume in 

U.S.-listed equities is widely dispersed 

among trading venues, and these venues 

are able to offer competitive data 

products as alternatives to NYSE Arca 

Trades. The Commission believes that 

the availability of those alternatives, as 

well as the NYSE Arca’s compelling 

need to attract order flow, imposed 

significant competitive pressure on the 

NYSE Arca to act equitably, fairly, and 

reasonably in setting the terms of its 

proposal. 

Because NYSE Arca was subject to 

significant competitive forces in setting 

the terms of the proposal, the 

Commission will approve the proposal 

in the absence of a substantial 

countervailing basis to find that its 

terms nevertheless fail to meet an 

applicable requirement of the Act or the 

rules thereunder. An analysis of the 

proposal does not provide such a basis. 

No comments were submitted on this 

proposal, and the Commission notes 

that the proposal does not unreasonably 

discriminate among types of users. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,25 that the 

proposed rule change (SR–NYSEArca– 

2009–05), be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6465 Filed 3–24–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59468; File No. SR– 

NYSEALTR–2009–16] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Alternext US LLC Amending Rule 

300.10T—NYSE Alternext Equities To 

Provide a Grace Period Under That 

Rule for Member Organizations That 

Have Applied for a Trading License To 

Comply With Certain Exchange Rules 

Correction 

In notice document E9–4678 

beginning on page 9651 in the issue of 

Thursday, March 5, 2009, make the 

following correction: 

On page 9654, in the first column, in 

the first paragraph, in the second line 

from the bottom, ‘‘March 25, 2009’’ 

should read ‘‘March 26, 2009’’. 

[FR Doc. Z9–4678 Filed 3–25–09; 8:45 am] 

BILLING CODE 1505–01–D 


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