3768 Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Notices 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(2). 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The FINRA TRFs are facilities used by members 

to report over-the-counter transactions in NMS 

stocks to FINRA. There are two TRFs in operation 

today: the FINRA/Nasdaq TRF and the FINRA/ 

NYSE TRF. Each TRF is operated in conjunction 

with the respective exchange ‘‘Business Member.’’ 

4See, e.g., Rule 301(b)(3)(i)(A) of Regulation ATS. 

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 

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) 10 of the Act and 

subparagraph (f)(2) of Rule 19b–4 11

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

NYSE. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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. 

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 

Number SR–NYSE–2010–01 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2010–01. 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, 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. 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–2010–01 and should 

be submitted on or before February 12, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–1141 Filed 1–21–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61361; File No. SR–FINRA– 

2010–001] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Publication of Certain Aggregate Daily 

Trading Volume Data 

January 14, 2010. 

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 6, 

2010, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 FINRA. 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 

FINRA has filed a proposed rule 

change relating to the publication of 

aggregate daily trading volume data for 

over-the-counter trades in NMS stocks 

that are executed within a FINRA 

member’s alternative trading system 

(‘‘ATS’’) dark pool and reported to a 

FINRA Trade Reporting Facility 

(‘‘TRF’’).3 The proposed rule change 

would amend FINRA Rule 6160 

(Multiple MPIDs for Trade Reporting 

Facility Participants) to (1) require 

members that opt to have their trading 

data published to obtain and use a 

separate Market Participant Identifier 

(‘‘MPID’’) designated exclusively for 

reporting the member’s ATS dark pool 

transactions, and (2) adopt related 

Supplementary Material. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 

Some FINRA members operate ‘‘dark 

pools,’’ a type of ATS that does not 

display quotations or subscribers’ orders 

to any person or entity either internally 

within the ATS dark pool or externally 

beyond the ATS dark pool (other than 

employees of the ATS).4 Over-thecounter transactions executed within an 

ATS dark pool are reported by the ATS 

to a FINRA facility, e.g., a FINRA TRF. 


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Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Notices 3769 

5Under the TRF Limited Liability Company 

Agreements between FINRA and the exchanges, 

FINRA, the ‘‘SRO Member,’’ has sole regulatory 

responsibility for the TRFs. The Business Member 

(see note 3) is primarily responsible for the 

management of the TRF’s business affairs, including 

establishing pricing for use of the TRF, to the extent 

those affairs are not inconsistent with the regulatory 

and oversight functions of FINRA. Additionally, the 

Business Member is obligated to pay the cost of 

regulation and is entitled to the profits and losses, 

if any, derived from the operation of the TRF. 

6The TRFs receive the data and the Business 

Members, because they operate the TRFs, have 

access to the data through their contractual 

arrangements with FINRA. Thus, FINRA will not be 

required to take any specific action to ‘‘distribute’’ 

or make the data available to the Business Members. 

7FINRA notes that the TRF Business Members 

have previously posted data on their web site that 

did not require a rule filing; however, because this 

data product is not derived directly (or indirectly) 

from publicly disseminated information, SEC staff 

have indicated that a rule filing is necessary. 

8Similarly, FINRA permits members to obtain 

and use multiple MPIDs for purposes of displaying 

quotes/orders and reporting trades to the 

Alternative Display Facility (‘‘ADF’’) under Rule 

6170. 

9FINRA considers the issuance of, and trade 

reporting with, multiple MPIDs to be a privilege 

and not a right. If FINRA determines that the use 

of multiple MPIDs is detrimental to the 

marketplace, or that a TRF Participant is using one 

or more additional MPIDs improperly or for other 

than the purpose(s) identified by the Participant, 

FINRA staff retains full discretion to limit or 

withdraw its grant of the additional MPID(s) to the 

Participant for purposes of reporting trades to a 

TRF. See Rule 6160. 

10Today, a broker-dealer that operates an ATS 

dark pool may report trades executed within the 

ATS using the same MPID that it uses for 

transactions it executes in other areas of its business 

(including, e.g., other ATSs it operates). As a result, 

it would not be possible to determine from the trade 

reporting data which trades were executed within 

the ATS dark pool as opposed to other areas of the 

broker-dealer’s business. An ATS dark pool using 

such a ‘‘multi-purpose’’ MPID would be ineligible to 

opt in to the proposed program for publication of 

ATS dark pool volume. 

11 In other words, once a member has opted in to 

the program, 100% of its ATS dark pool 

transactions must be reported under a single MPID 

to one or more TRFs (the member can choose to 

report to a single TRF or multiple TRFs) and 100% 

of the member’s volume will be published. Because 

the ADF does not offer a program to publish dark 

pool transaction data, the member would be 

prohibited from reporting to the ADF in this 

instance. 

Currently, information relating to the 

trading volume reported to FINRA 

facilities by participants operating ATS 

dark pools is not separately identified to 

the public. 

The TRF Business Members have 

determined to publish aggregate daily 

trading volume data for transactions 

executed within ATS dark pools and 

reported to the TRFs.5 FINRA, through 

its TRF Limited Liability Companies, 

will distribute transaction reporting data 

to the Business Members so that the 

Business Members may publish, after 

the close of trading, aggregate daily 

trading volume data for trades executed 

within participating ATS dark pools. 

FINRA is making such data available to 

the Business Members and the Business 

Members will make the data widely 

available to the public at no cost.6

The data for transactions reported to 

each TRF will be posted on the 

respective Business Member’s Web site 

(i.e., the NYSE will post daily trading 

volume data on its Web site based on 

transactions reported to the FINRA/ 

NYSE TRF, and Nasdaq will post daily 

trading volume data on its Web site 

based on transactions reported to the 

FINRA/Nasdaq TRF).7 The daily trading 

volume data will be segregated by 

participating ATS dark pool. Initially, 

the data may be presented as an overall 

volume percentage; however, at a later 

date, it may be further broken down by 

security. As discussed below, members 

that opt into the proposed program must 

acknowledge that their data may be 

published in one of these two ways. 

FINRA member participation in the 

proposed program to publish dark pool 

transaction data is voluntary. No 

member’s data will be included in the 

aggregate daily trading volume unless 

the member expressly requests that it be 

published. 

Any member that opts to have its 

volume included in the published data 

must comply with proposed new 

paragraph (c) of Rule 6160. Under 

current Rule 6160, FINRA permits 

members to obtain and use multiple 

MPIDs for purposes of reporting trades 

to a TRF on a pilot basis.8 Members 

must submit a written request to, and 

obtain approval from, FINRA 

Operations for additional MPID(s). As 

part of the approval process, members 

must provide bona fide business and/or 

regulatory reasons for requesting an 

additional MPID, such as to facilitate a 

member’s back office operations (e.g., 

the member might use multiple MPIDs 

for trade reporting purposes if it clears 

trades through multiple clearing firms).9

Proposed paragraph (c) of Rule 6160 

would apply only to members that 

voluntarily participate in the proposed 

program to publish ATS dark pool data. 

The proposed rule requires that the 

member obtain and use a separate MPID 

designated exclusively for the reporting 

of transactions executed within the ATS 

dark pool.10 The member must use such 

separate MPID to report all transactions 

executed within the ATS dark pool to a 

TRF(s). The member shall not use such 

separate MPID to report any transaction 

that is not executed within the ATS 

dark pool, including, e.g., trades that are 

routed out by the ATS dark pool. The 

member cannot obtain more than one 

MPID under proposed paragraph (c) for 

purposes of reporting transactions 

executed within a single ATS dark pool. 

In addition, any member that operates 

multiple ATS dark pools and opts to 

have each ATS dark pool participate in 

the proposed program must obtain a 

separate MPID for each ATS dark pool; 

the member cannot use a single MPID to 

report transactions executed within 

multiple ATS dark pools. Members that 

opt to have their volume included in the 

published data must have policies and 

procedures in place to ensure that trades 

reported with a separate MPID obtained 

under proposed Rule 6160(c) are 

restricted to trades executed within the 

ATS dark pool. 

If a member designates a separate 

MPID for dark pool transaction 

reporting for purposes of the proposed 

program, then all transactions reported 

under such MPID will be included in 

the published ATS dark pool volume, 

irrespective of whether the member 

reports to a single TRF or multiple 

TRFs.11 Because a member that opts in 

to the proposed program may report 

transactions executed within its ATS 

dark pool to more than one TRF, the 

data published on one Business 

Member’s Web site may not reflect 

100% of that member’s volume. 

Interested parties would need to consult 

all Business Members’ Web sites to see 

the total volume for any given ATS dark 

pool, and the Business Members will 

make prominent disclosure to this effect 

on their Web sites. The proposed 

Supplementary Material also would 

clarify that the Business Members will 

make such disclosure. 

Pursuant to the proposed 

Supplementary Material, a member 

operating an ATS dark pool must certify 

in writing to FINRA that (1) the member 

is affirmatively opting in for purposes of 

having its dark pool transaction data 

included in the published data and 

acknowledges that its data may be 

presented as an overall percentage 

volume only or may be broken down by 

security; (2) the member meets the 

definition of ATS dark pool in proposed 

Rule 6160(c); and (3) the member has 

obtained a separate MPID that will be 

used exclusively for reporting its dark 

pool transactions as required by 

proposed Rule 6160(c). The member 

will be required to identify to FINRA 

the MPID (or MPIDs, if the member 

operates more than one ATS dark pool 

and opts to have each ATS dark pool 

participate in the proposed program) 

that should be aggregated in the 

published volume. 

The proposed requirements relating to 

the establishment and use of separate 

MPIDs for purposes of dark pool 


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3770 Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Notices 

12 15 U.S.C. 78o–3(b)(6). 

13See Rule 603(a)(2) of Regulation NMS. 14 17 CFR 200.30–3(a)(12). 

transaction reporting will ensure that 

the published volume is limited to the 

member’s dark pool activity. In addition 

to these requirements, FINRA has 

established certain other parameters to 

minimize the risk of double counting 

and ensure the accuracy and reliability 

of the published data. The data posted 

on each TRF Business Member’s Web 

site will show the trading volume 

reported to the respective TRF only and 

will not include transactions reported to 

or counted by another venue, e.g., 

another TRF. Only transactions that are 

reported for purposes of publication 

will be included in the published data 

(i.e., ‘‘non-tape’’ regulatory or clearingonly reports will not be included in the 

aggregate volume). In addition, there 

will be no double counting of trade 

volume (i.e., a 1,000 share trade 

reported for publication purposes will 

not be counted as 2,000 shares to reflect 

1,000 shares on the buy side and 1,000 

shares on the sell side). 

FINRA notes that members will not be 

charged a fee for having their ATS dark 

pool data included in the published 

aggregate daily trading volume data. 

Additionally, no TRF Business Member 

will charge a fee to view the aggregate 

daily trading volume data posted on its 

Web site. 

The proposed rule change will be 

effective upon Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,12 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes that by 

providing additional market data 

relating to ATS dark pools, the proposed 

rule change will increase market 

transparency of trading volumes within 

those ATS dark pools that choose to 

participate. 

FINRA also believes that distribution 

of this data is consistent with Rule 

603(a) of Regulation NMS, which 

requires, among other things, that 

distributions of certain data by FINRA 

not be unreasonably discriminatory.13

FINRA, through its TRF Limited 

Liability Companies, will distribute 

certain data to the Business Members so 

that the Business Members may publish, 

after the close of trading, aggregate daily 

trading volume data for trades executed 

within participating ATS dark pools. 

FINRA is making such data available to 

the Business Members and the Business 

Members will make the data widely 

available to the public at no cost. 

Because the data that FINRA is 

proposing to distribute to the Business 

Members will be published by each 

Business Member on its Web site in a 

widely disseminated and easily 

accessible manner, the proposal is not 

unreasonably discriminatory. In 

addition, the benefit to the marketplace 

of increased transparency regarding 

dark pool transaction volume, together 

with the readily accessible manner in 

which this reference data will be made 

available by the Business Members, 

offers compelling justification for the 

proposed program to publish ATS dark 

pool data. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in 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 

Written comments were neither 

solicited nor received. 

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 self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve such 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 

Number SR–FINRA–2010–001 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2010–001. 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, 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 FINRA. 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–FINRA– 

2010–001 and should be submitted on 

or before February 12, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–1145 Filed 1–21–10; 8:45 am] 

BILLING CODE 8011–01–P 


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