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[Federal Register Volume 89, Number 249 (Monday, December 30, 2024)]
[Notices]
[Pages 106685-106688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30924]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-102007; File No. SR-NYSE-2024-80]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Certain Fees for the NYSE Integrated Data Feed

December 19, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on December 16, 2024, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain fees for the NYSE Integrated 
data feed. The proposed rule change is available on the Exchange's 
website 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 amend the NYSE Proprietary Market Data 
Fees Schedule (``Fee Schedule'') to amend certain fees for the NYSE 
Integrated data feed (``NYSE Integrated Feed'') that would be operative 
February 3, 2025. Specifically, the Exchange proposes a one-time 
adjustment to certain of its fees for subscribing to the NYSE 
Integrated Feed,\4\ with certain exceptions. The Fee Schedule includes 
the Exchange's fees for subscribing to the NYSE Integrated Feed, 
including an Access Fee, Redistribution Fee, Per User fees for 
Professional and Non-Professional Users, various categories of Non-
Display Fees, a Non-Display Declaration Late Fee and a Multiple Data 
Feed Fee.\5\ With the exception of the Non-Professional User Fee, the 
Non-Display Declaration Late Fee and the Multiple Data Feed Fee, the 
Exchange proposes to increase the remaining fees by up to 12.31% on a 
one-time basis.\6\
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    \4\ The proposed rule change establishing the NYSE Integrated 
Feed was immediately effective on January 21, 2015. See Securities 
Exchange Act Release No. 74128 (January 23, 2015), 80 FR 4951 
(January 29, 2015) (SR-NYSE-2015-03) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change Establishing the NYSE 
Integrated Feed Data Feed).
    \5\ See Securities Exchange Act Release Nos. 76485 (November 20, 
2015), 80 FR 74158 (November 27, 2015) (SR-NYSE-2015-57) 
(establishing access fee, user fees, non-display use fees, non-
display declaration late fee and redistribution fee for NYSE 
Integrated Feed); and 76973 (January 26, 2016), 81 FR 5158 (February 
1, 2016) (SR-NYSE-2016-09) (amending fees for NYSE Integrated Feed 
by adopting a multiple data feed fee).
    \6\ The Exchange proposes to exclude the Non-Display Declaration 
Late Fee and the Multiple Data Feed Fee from the proposed fee 
increase because unlike the other fees for subscribing to the NYSE 
Integrated Feed, the Non-Display Declaration Late Fee and the 
Multiple Data Feed Fee are administrative fees and are uniform 
across all of the Exchange's market data products. The Exchange also 
proposes to exclude the Non-Professional User fees from the proposed 
fee increase because these fees are applicable to retail investors.
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    The Exchange currently charges the following fees to subscribe to 
the NYSE Integrated Feed on a monthly basis: an Access Fee of $7,500; a 
Redistribution Fee of $4,000; a Professional User Fee and Non-
Professional User Fee, on a per user basis, of $70 and $16, 
respectively; a Non-Display Fee of $20,000, whether the use is for 
category 1, category 2 or category 3, with a category 3 cap of $60,000; 
\7\ a Non-Display Declaration Late Fee of $1,000; and a Multiple Data 
Feed Fee of $200. The Exchange proposes to increase the aforementioned 
fees on a one-time basis as follows: the Access Fee, from $7,500/month 
to $8,400/month; the Redistribution Fee from $4,000/month to $4,400/
month; the Professional User Fee (Per User) from $70/month to $78/
month; and the Non-Display Fee from $20,000/month to $22,400/month, 
whether the use is for category 1, category 2 or category 3, with a 
category 3 cap of $67,200/month. The Exchange's proposal to adjust fees 
excludes the Non-Professional User fee, the Non-Display Declaration 
Late fee and the Multiple Data Feed fee.
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    \7\ Category 1 Fees apply when a data recipient's Non-Display 
Use of real-time market data is on its own behalf as opposed to use 
on behalf of its clients. Category 2 Fees apply when a data 
recipient's Non-Display Use of real-time market data is on behalf of 
its clients as opposed to use on its own behalf. Category 3 Fees 
apply when a data recipient's Non-Display Use of real-time market 
data is for the purpose of internally matching buy and sell orders 
within an organization, including matching customer orders on a data 
recipient's own behalf and/or on behalf of its clients.
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    The NYSE Integrated Feed was established almost a decade ago. The

[[Page 106686]]

Exchange has not amended fees for the NYSE Integrated Feed since the 
fees were initially adopted in 2016. Between the implementation of fees 
for the NYSE Integrated Feed in January 2016 and October 2024, there 
was a remarkable increase in the number of messages processed by the 
Exchange. The following message rate metrics illustrate this increase 
in throughput: \8\
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    \8\ The message rate metrics are for the period from January 
2017 through October 2024.

 Peak Rate by Millisecond: up approximately 116%
 Average Rate per Millisecond: up approximately 27%
 Peak Rate per Second: up approximately 34% \9\
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    \9\ Due to a technology upgrade, the Peak Rate per Second metric 
is for the period from December 2019 through October 2024.
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 Average Rate per Second: up approximately 92%
 Peak Total Messages: up approximately 39%
 Average Total Messages: up approximately 92%
 Average Daily Volume: up approximately 32%

    With this increase in message traffic the Exchange expended 
significant resources to improve its market data products to meet 
customer expectations, including continued investment in all aspects of 
the technology ecosystem (e.g., software, hardware, and network). 
During the period between 2016 (when the Exchange first adopted fees 
for the NYSE Integrated Feed) and 2024, advancements in system 
performance as measured by latency not only accommodated the high 
message traffic volumes, but stayed well ahead of it. The following 
latency metrics \10\ illustrate the increase in message processing 
speed, despite the significant message traffic growth:
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    \10\ These measurements compare the time difference between 
events on the NYSE matching engine and the time these events are 
published on the NYSE Integrated Feed. The latency metrics are for 
the period from January 2017 through October 2024.

 Median: down approximately 77%
 Average: down approximately 67%
 Max: down approximately 64%

    The Exchange continues to invest heavily in enhancing its 
technology for the benefit and often at the behest of its customers, 
and these investments have increased the performance of the NYSE 
Integrated Feed. Yet the Exchange has not adjusted any of the fees 
included in this proposal since 2016, to even partially offset the 
costs of maintaining and enhancing its market data offerings.
    As discussed below, the Exchange proposes to adjust its fees by an 
industry- and product-specific inflationary measure. It is reasonable 
and consistent with the Act for the Exchange to recoup its investments, 
at least in part, by adjusting its fees. Continuing to operate at fees 
frozen at 2016 levels impacts the Exchange's ability to enhance its 
offerings and the interests of market participants and investors.
    The fee increases the Exchange proposes are based on an industry-
specific Producer Price Index (PPI), which is a tailored measure of 
inflation.\11\ As a general matter, the Producer Price Index is a 
family of indexes that measures the average change over time in selling 
prices received by domestic producers of goods and services. PPI 
measures price change from the perspective of the seller. This 
contrasts with other metrics, such as the Consumer Price Index (CPI), 
that measure price change from the purchaser's perspective.\12\ About 
10,000 PPIs for individual products and groups of products are tracked 
and released each month.\13\ PPIs are available for the output of 
nearly all industries in the goods-producing sectors of the U.S. 
economy--mining, manufacturing, agriculture, fishing, and forestry--as 
well as natural gas, electricity, and construction, among others. The 
PPI program covers approximately 69 percent of the service sector's 
output, as measured by revenue reported in the 2017 Economic Census.
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    \11\ See https://fred.stlouisfed.org/series/PCU51825182#0.
    \12\ See https://www.bls.gov/ppi/overview.htm.
    \13\ Id.
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    For purposes of this proposal, the relevant industry-specific PPI 
is the Data Processing and Related Services PPI (``Data PPI''), which 
is an industry net-output PPI that measures the average change in 
selling prices received by companies that provide data processing 
services.
    The Data PPI was introduced in January 2002 by the Bureau of Labor 
Statistics (BLS) as part of an ongoing effort to expand Producer Price 
Index coverage of the services sector of the U.S. economy and is 
identified as NAICS--518210 in the North American Industry 
Classification System.\14\ According to the BLS ``[t]he primary output 
of NAICS 518210 is the provision of electronic data processing 
services. In the broadest sense, computer services companies help their 
customers efficiently use technology. The processing services market 
consists of vendors who use their own computer systems--often utilizing 
proprietary software--to process customers' transactions and data. 
Companies that offer processing services collect, organize, and store a 
customer's transactions and other data for record-keeping purposes. 
Price movements for the NAICS 518210 index are based on changes in the 
revenue received by companies that provide data processing services. 
Each month, companies provide net transaction prices for a specified 
service. The transaction is an actual contract selected by probability, 
where the price-determining characteristics are held constant while the 
service is repriced. The prices used in index calculation are the 
actual prices billed for the selected service contract.'' \15\
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    \14\ NAICS appears in table 5 of the PPI Detailed Report and is 
available at https://data.bls.gov/timeseries/PCU518210518210.
    \15\ See https://www.bls.gov/ppi/factsheets/producer-price-index-for-the-data-processing-and-related-services-industry-naics-518210.htm.
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    The Exchange believes the Data PPI is an appropriate measure to be 
considered in the context of the proposed rule change to modify the fee 
for its proprietary market data products because the Exchange uses its 
``own computer systems'' and ``proprietary software,'' i.e., its own 
data center and proprietary matching engine software, respectively, to 
collect, organize, store and report customers' transactions in U.S. 
equity securities on Pillar, the Exchange's proprietary trading 
platform. In other words, the Exchange is in the business of data 
processing and related services.
    For purposes of this proposed rule change, the Exchange examined 
the Data PPI value for the period from January 2016 to October 2024. 
The Data PPI had a starting value of 103.2 in January 2016 and an 
ending value of 115.902 in October 2024, a 12.31% increase. This 
indicates that companies who are also in the data storage and 
processing business have generally increased prices for a specified 
service covered under NAICS 518210 by an average of 12.31% during this 
period. Based on that percentage change, the Exchange proposes to make 
a one-time fee increase by up to 12.31% for the NYSE Integrated Feed, 
which reflects an increase covering the entire period since the fees 
for NYSE Integrated Feed were initially adopted.
    The Exchange further believes the Data PPI is an appropriate 
measure for purposes of the proposed rule change on the basis that it 
is a stable metric with limited volatility, unlike other consumer-side 
inflation metrics. In fact, the Data PPI has not experienced a greater 
than 2.16% increase for any one calendar year period since Data PPI was 
introduced into the PPI in January 2002.

[[Page 106687]]

The average calendar year change from January 2002 to December 2023 was 
.62%,\16\ with a cumulative increase of 15.67% over this 21-year 
period. The Exchange believes the Data PPI is considerably less 
volatile than other inflation metrics such as CPI, which has had 
individual calendar-year increases of more than 6.5%, and a cumulative 
increase of over 73% over the same period.\17\
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    \16\ The Data PPI through the calendar year 2024 does not become 
available until January 2025.
    \17\ See https://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/.
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    The Exchange believes the Data PPI, and significant investments 
into, and enhanced performance of, the Exchange support the 
reasonableness of the proposed fee increases.\18\
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    \18\ See supra discussion of system performance advancements. 
Additionally, the Exchange's affiliate, NYSE Arca, Inc. recently 
increased certain fees for subscribing to the NYSE Arca Integrated 
Feed, based on comparisons to inflation. See Securities Exchange Act 
Release Nos. 34-100994 (September 10, 2024), 89 FR 75612 (September 
16, 2024) (SR-NYSEARCA-2024-79).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\19\ in general, and Sections 
6(b)(4) and 6(b)(5) of the Act,\20\ in particular, in that it provides 
an equitable allocation of reasonable fees among users and recipients 
of the data and is not designed to permit unfair discrimination among 
customers, issuers, and brokers.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(4), (5).
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    This belief is based on two factors. First, the current fees do not 
properly reflect the quality of the services and products, as fees for 
the services and products in question have been static in nominal 
terms, and therefore falling in real terms due to inflation. Second, 
the Exchange believes that investments made in enhancing the capacity 
and speed of Exchange systems increase the performance of the services 
and products.
The Proposed Rule Change Is Reasonable
    As noted above, the Exchange has not increased any of the fees 
included in the proposal since 2016. However, in the years since the 
adoption of the initial fees the Exchange has made significant 
investments in upgrades to Exchange systems, enhancing the quality of 
its services, as measured by, among other things, increased throughput 
and faster processing speeds. In other words, Exchange customers have 
greatly benefitted, while the Exchange's ability to recoup its 
investments has been hampered.
    Between 2016 and 2024, the inflation rate is 3.48% per year, on 
average, producing a cumulative inflation rate of 31.52%.\21\ Using the 
more targeted inflation number of Data PPI, the cumulative inflation 
rate was 12.31%. The exchange believes the Data PPI is a reasonable 
metric to base this fee increase on because it is targeted to producer-
side increases in the data processing industry, which based on the 
definition adopted by BLS would include the Exchange's market data 
products.
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    \21\ See https://www.officialdata.org/us/inflation/2016?amount=1.
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    Notwithstanding inflation, as noted above, the Exchange has not 
increased its fees at all for over nine years for the subject services. 
The proposed fee changes represent a modest increase from the current 
fees.
    The Exchange believes the proposed fee increase is reasonable in 
light of the Exchange's continued expenditure in maintaining a robust 
technology ecosystem. Furthermore, the Exchange continues to invest in 
maintaining and enhancing its market data products--for the benefit and 
often at the behest of its customers and global investors. Such 
enhancements include refreshing all aspects of the technology ecosystem 
including software, hardware, and network while introducing new and 
innovative products.\22\ The goal of the enhancements discussed above, 
among other things, is to provide faster and more consistent market 
data products, while ensuring quicker processing time. Accordingly, the 
Exchange continues to expend resources to innovate and modernize 
technology so that it may benefit its members in offering its market 
data products.
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    \22\ See, e.g., Securities Exchange Act Release No. 99689 (March 
7, 2024), 89 FR 18466 (March 13, 2024) (SR-NYSE-2024-12) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To 
Establish the NYSE Aggregated Lite Market Data Feed).
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The Proposed Fees Are Equitably Allocated and Not Unfairly 
Discriminatory
    The Exchange believes that the proposed fee increases are equitably 
allocated and not unfairly discriminatory because they would apply to 
all data recipients that choose to subscribe to the NYSE Integrated 
Feed. Any subscriber that chooses to subscribe to the NYSE Integrated 
Feed would be subject to the same Fee Schedule, regardless of what type 
of business they operate or the use they plan to make of the data feed. 
Additionally, the fee increase would be applied uniformly to 
subscribers without regard to Exchange membership status or the extent 
of any other business with the Exchange or affiliated entities.
    The Exchange also believes that the proposal represents an 
equitable allocation of reasonable dues, fees and other charges because 
Exchange fees have fallen in real terms during the relevant period.
    Finally, the Exchange believes that the proposed fee changes are 
not unfairly discriminatory because the fees would be assessed 
uniformly across all market participants, in the same manner they are 
today, that voluntarily subscribe to the NYSE Integrated Feed, which 
would remain available for purchase by all market participants.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed fees will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
    Intramarket Competition. The Exchange believes that the proposed 
fees do not put any market participants at a relative disadvantage 
compared to other market participants. As noted above, the fee schedule 
would continue to apply to all subscribers of the NYSE Integrated Feed 
in the same manner as it does today albeit at inflation-adjusted rates 
for certain fees, and customers may choose whether to subscribe to the 
feed at all. The Exchange also believes that the level of the proposed 
fees neither favor nor penalize one or more categories of market 
participants in a manner that would impose an undue burden on 
competition.
    Intermarket Competition. The Exchange believes that the proposed 
fees do not impose a burden on competition or on other SROs that is not 
necessary or appropriate. In determining the proposed fees, the 
Exchange utilized an objective and stable metric with limited 
volatility. Utilizing Data PPI over a specified period of time is a 
reasonable means of recouping the Exchange's investment in maintaining 
and enhancing the NYSE Integrated Feed. The Exchange believes utilizing 
Data PPI, a tailored measure of inflation, to increase certain fees for 
NYSE Integrated Feed to recoup the Exchange's investment in maintaining 
and enhancing its market data products would not impose a burden on 
competition.

[[Page 106688]]

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 foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \23\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \24\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f)(2).
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    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) \25\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \25\ 15 U.S.C. 78s(b)(2)(B).
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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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2024-80 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-NYSE-2024-80. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NYSE-2024-80 and should be 
submitted on or before January 21, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-30924 Filed 12-27-24; 8:45 am]
BILLING CODE 8011-01-P
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