Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 26825 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

9The Commission believes that this statement is 

incorrect. The proposed rule change does not 

simply eliminate erroneous citations; instead, the 

proposed rule change makes specific changes to 

align Nasdaq’s rules with that of FINRA. 

10 17 CFR 240.19b–4(f)(6)(iii). 

11For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 12 17 CFR 200.30–3(a)(12). 

remedy for this misconduct with the 

remedy provided in its by-laws. 

NASDAQ is proposing to incorporate all 

the changes made by FINRA to its 

expedited proceedings rules into the 

analogous NASDAQ Rules 9552, 9554, 

and 9559. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general and with Section 6(b)(5) of the 

Act,6 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 regulating, clearing, 

settling, processing information with 

respect to, and 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. The 

proposed changes will conform 

NASDAQ’s rules to recent changes 

made to corresponding FINRA rules, 

which will promote the application of 

consistent regulatory standards. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ 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, as amended. 

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 

Because the foregoing 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 for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) 7 of the Act and Rule 19b– 

4(f)(6) thereunder.8

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. NASDAQ has 

provided the Commission written notice 

of its intent to file the proposed rule 

change, along with a brief description 

and text of the proposed rule change, at 

least five business days prior to the date 

of filing of the proposed rule change. 

NASDAQ believes that the proposed 

rule change does not significantly affect 

the protection of investors or the public 

interest because it merely eliminates 

erroneous citations that, if left in the 

rule text, would cause investor 

confusion.9

NASDAQ asks that the Commission 

waive the 30-day pre-operative waiting 

period contained in Exchange Act Rule 

19b–4(f)(6)(iii).10 NASDAQ requests this 

waiver so that these corrections can be 

both immediately effective and 

operative, thus minimizing any 

confusion that may be caused by the 

differing rule sets. 

The Commission acknowledges that 

the proposal presents no novel issues, 

and that it will provide a benefit to 

market participants by aligning 

Nasdaq’s rules with those of FINRA. For 

these reasons, the Commission believes 

it is consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay, and 

hereby grants such waiver.11

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–NASDAQ–2010–057 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–NASDAQ–2010–057. 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 web site viewing and 

printing in the Commission’s Public 

Reference Room. 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– 

NASDAQ–2010–057 and should be 

submitted on or before June 2, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11255 Filed 5–11–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62038; File No. SR–NYSE– 

2010–22] 

Self-Regulatory Organizations; New 

York Stock Exchange, LLC; Order 

Approving Proposed Rule Change To 

Make Permanent a Unit-of-Count 

Metric Alternative for NYSE OpenBook 

Products 

May 5, 2010. 

I. Introduction 

On March 11, 2010, the New York 

Stock Exchange, LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

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26826 Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 61779 

(March 25, 2010), 75 FR 16537 (‘‘Notice’’). 

4Letter to Elizabeth M. Murphy, Secretary, 

Commission, from Melissa MacGregor, Managing 

Director and Associate General Counsel, SIFMA, 

dated May 5, 2010. 

5See Securities Exchange Act Release No. 59544 

(March 9, 2009), 74 FR 11162 (March 16, 2009) (SR– 

NYSE–2008–131) (approving the one-year pilot 

program that revises the unit-of-count methodology 

to determine the device fees payable by data 

recipients (‘‘Pilot Program’’)). The Commission 

subsequently approved an extension of the Pilot 

Program. See Securities Exchange Act Release No. 

61780 (March 25, 2010), 75 FR 16535 (April 1, 

2010) (SR–NYSE–2010–21). 

6 In the case of derived displays, the Vendor is 

required to: (1) Pay the Exchange’s device fees 

(described below); (2) include derived displays in 

its reports of NYSE OpenBook usage; and (3) use 

reasonable efforts to assure that any person viewing 

a display of derived data understands what the 

display represents and the manner in which it was 

derived. 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

make the unit-of-count metric a 

permanent alternative to the traditional 

device fee. The proposed rule change 

was published for comment in the 

Federal Register on April 1, 2010.3 The 

Commission received one comment 

letter on the proposal.4 This order 

approves the proposed rule change. 

II. Description of the Proposal 

A. Unit-of-Count 

The Exchange proposes to 

permanently implement the ‘‘Subscriber 

Entitlement’’ unit-of-count methodology 

in accordance with the terms set forth 

in the Pilot Program.5 Under the Pilot 

Program, instead of defining the 

Vendor-subscriber relationship based on 

how the Data Feed Recipient or 

subscriber receives data (i.e., through 

controlled displays or through data 

feeds), the Exchange proposed to adopt 

a more objective billing criteria. The 

following basic principles underlie this 

proposal. 

i. Vendors. 

• ‘‘Vendors’’ are market data vendors, 

broker-dealers, private network 

providers and other entities that control 

Subscribers’ access to data through 

Subscriber Entitlement Controls. 

ii. Subscribers. 

• ‘‘Subscribers’’ are unique individual 

persons or devices to which a Vendor 

provides data. Any individual or device 

that receives data from a Vendor is a 

Subscriber, whether the individual or 

device works for or belongs to the 

Vendor, or works for or belongs to an 

entity other than the Vendor. 

• Only a Vendor may control 

Subscriber access to data. 

• Subscribers may not redistribute 

data in any manner. 

iii. Subscriber Entitlements. 

• A Subscriber Entitlement is a 

Vendor’s permitting a Subscriber to 

receive access to data through an 

Exchange-approved Subscriber 

Entitlement Control. 

• A Vendor may not provide data 

access to a Subscriber except through a 

unique Subscriber Entitlement. 

• The Exchange will require each 

Vendor to provide a unique Subscriber 

Entitlement to each unique Subscriber. 

• At prescribed intervals (normally 

monthly), the Exchange will require 

each Vendor to report each unique 

Subscriber Entitlement. 

iv. Subscriber Entitlement Controls. 

• A Subscriber Entitlement Control is 

the Vendor’s process of permitting 

Subscribers’ access to data. 

• Prior to using any Subscriber 

Entitlement Control or changing a 

previously approved Subscriber 

Entitlement Control, a Vendor must 

provide the Exchange with a 

demonstration and a detailed written 

description of the control or change and 

the Exchange must have approved it in 

writing. 

• The Exchange will approve a 

Subscriber Entitlement Control if it 

allows only authorized, unique endusers or devices to access data or 

monitors access to data by each unique 

end-user or device. 

• Vendors must design Subscriber 

Entitlement Controls to produce an 

audit report and make each audit report 

available to the Exchange upon request. 

The audit report must identify: 

A. each entitlement update to the 

Subscriber Entitlement Control; 

B. the status of the Subscriber 

Entitlement Control; and 

C. any other changes to the Subscriber 

Entitlement Control over a given period. 

• Only the Vendor may have access to 

Subscriber Entitlement Controls. 

The proposal does not restrict how 

Vendors use NYSE OpenBook data in 

their display services. In fact, the 

Exchange believes that proposal could 

encourage Vendors to create and 

promote innovative uses of NYSE 

OpenBook information. For instance, a 

Vendor may use NYSE OpenBook data 

to create derived information displays, 

such as displays that aggregate NYSE 

OpenBook data with data from other 

markets.6 In addition, the proposal’s 

unit-of-count concepts would apply 

equally to all data recipients and users. 

Under the proposed rule change, the 

Exchange would require Vendors to 

count every Subscriber Entitlement, 

whether it be an individual person or a 

device. Thus, the Vendor’s count would 

include every person and device that 

accesses the data regardless of the 

purpose for which the individual or 

device uses the data. The proposal is 

designed to subject the count to a more 

objective process and simplify the 

reporting obligation for Vendors by 

eliminating current exceptions to the 

device-reporting obligation. For 

instance, the Exchange noted that 

Vendors were not previously required to 

report certain programmers and other 

individuals who receive access to data 

for certain specific, non-trading 

purposes but that these exceptions 

required the Exchange to monitor the 

manner end-users consume data, which 

adds cost for both the Exchange and 

customers. 

To simplify the process, the Exchange 

proposes that Vendors would be 

required to report all entitlements in 

accordance with the following: 

i. In connection with a Vendor’s 

external distribution of NYSE 

OpenBook data, the Vendor should 

count as one Subscriber Entitlement 

each unique Subscriber that the Vendor 

has entitled to have access to the 

Exchange’s market data. However, 

where a device is dedicated specifically 

to a single individual, the Vendor 

should count only the individual and 

need not count the device. 

ii. In connection with a Vendor’s 

internal distribution of NYSE OpenBook 

data, the Vendor should count as one 

Subscriber Entitlement each unique 

individual (but not devices) that the 

Vendor has entitled to have access to 

the Exchange’s market data. 

iii. The Vendor should identify and 

report each unique Subscriber. If a 

Subscriber uses the same unique 

Subscriber Entitlement to gain access to 

multiple market data services, the 

Vendor should count that as one 

Subscriber Entitlement. However, if a 

unique Subscriber uses multiple 

Subscriber Entitlements to gain access 

to one or more market data services 

(e.g., a single Subscriber has multiple 

passwords and user identifications), the 

Vendor should report all of those 

Subscriber Entitlements. 

iv. Vendors should report each unique 

individual person who receives access 

through multiple devices as one 

Subscriber Entitlement so long as each 

device is dedicated specifically to that 

individual. 

v. The Vendor should include in the 

count as one Subscriber Entitlement 

devices serving no entitled individuals. 

However, if the Vendor entitles one or 

more individuals to use the same 

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Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 26827 

7 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

8 15 U.S.C. 78f(b)(4). 

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

10 15 U.S.C. 78f(b)(8). 

11 17 CFR 242.603(a). 

12NYSE is an exclusive processor of NYSE depthof-book data under Section 3(a)(22)(B) of the Act, 

15 U.S.C. 78c(a)(22)(B), which defines an exclusive 

processor as, among other things, an exchange that 

distributes information with respect to quotations 

or transactions on an exclusive basis on its own 

behalf. 

13Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca-2006–21) (‘‘NYSE Arca 

Order’’). In the NYSE Arca Order, the Commission 

describes in great detail the competitive factors that 

apply to non-core market data products. The 

Commission hereby incorporates by reference the 

data and analysis from the NYSE Arca Order into 

this order. 

14See note 5, supra. 

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

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19d–1(c)(2). 

3See Securities Exchange Act Release No. 61753 

(March 22, 2010), 75 FR 15471. 

4 17 CFR 240.19d–1(c)(1). 

5The Commission adopted amendments to 

paragraph (c) of Rule 19d–1 to allow self-regulatory 

organizations (‘‘SROs’’) to submit for Commission 

approval plans for the abbreviated reporting of 

minor disciplinary infractions. See Securities 

Exchange Act Release No. 21013 (June 1, 1984), 49 

FR 23828 (June 8, 1984). Any disciplinary action 

taken by an SRO against any person for violation 

of a rule of the SRO which has been designated as 

a minor rule violation pursuant to such a plan shall 

not be considered ‘‘final’’ for purposes of Section 

19(d)(1) of the Act if the sanction imposed consists 

of a fine not exceeding $2,500 and the sanctioned 

person has not sought an adjudication, including a 

hearing, or otherwise exhausted his or her 

administrative remedies. 

6On March 12, 2010, the Commission approved 

EDGA Exchange’s application for registration as a 

Continued 

device, the Vendor should include only 

the entitled individuals, and not the 

device, in the count. 

III. Discussion 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.7 In 

particular, it is consistent with Section 

6(b)(4) of the Act,8 which requires that 

the rules of a national securities 

exchange provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

issuers and other parties using its 

facilities, and Section 6(b)(5) of the 

Act,9 which requires, among other 

things, that the rules of a national 

securities 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, and 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission also finds that the 

proposed rule change is consistent with 

the provisions of Section 6(b)(8) of the 

Act,10 which requires that the rules of 

an exchange not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. Finally, the 

Commission finds that the proposed 

rule change is consistent with Rule 

603(a) of Regulation NMS,11 adopted 

under Section 11A(c)(1) of the Act, 

which requires an exclusive processor 

that distributes information with respect 

to quotations for or transactions in an 

NMS stock to do so on terms that are 

fair and reasonable and that are not 

unreasonably discriminatory.12

The Exchange proposes to 

permanently implement the Subscriber 

Entitlement unit-of-count methodology 

in accordance with the terms set forth 

in the Pilot Program. According to the 

Exchange, the proposed rule change 

would simplify the way it charges for 

NYSE OpenBook by changing the 

methodology for the unit-of-count, and 

this change should reduce the fees and 

administrative costs related to the 

receipt and distribution of NYSE 

OpenBook packages. The Exchange has 

indicated that its experience with the 

Pilot Program has been successful. The 

Commission has reviewed the proposal 

using the approach set forth in the 

NYSE Arca Order for non-core market 

data fees.13 The Commission has 

previously found that NYSE was subject 

to significant competitive forces in 

setting fees for its depth-of-book order 

data in the proposed rule changes that 

established and extended the Pilot 

Program’s revised unit-of-count 

methodology.14 There are a variety of 

alternative sources of information that 

impose significant competitive 

pressures on the NYSE in setting the 

terms for distributing its depth-of-book 

order data. The Commission believes 

that the availability of those 

alternatives, as well as the NYSE’s 

compelling need to attract order flow, 

imposed significant competitive 

pressure on the NYSE to act equitably, 

fairly, and reasonably in setting the 

terms of its proposal. 

Because the NYSE 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. 

IV. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–NYSE–2010– 

22) 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. 2010–11258 Filed 5–11–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62037; File No. 4–595] 

Self-Regulatory Organizations; Order 

Approving Minor Rule Violation Plan 

for EDGA Exchange, Inc. 

May 5, 2010. 

On March 19, 2010, EDGA Exchange, 

Inc. (‘‘EDGA Exchange’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) a proposed minor rule 

violation plan (‘‘MRVP’’) pursuant to 

Section 19(d)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’)1 and Rule 

19d–1(c)(2) thereunder.2 The proposed 

MRVP was published for public 

comment on March 29, 2010.3 The 

Commission received no comments on 

the proposal. This order approves EDGA 

Exchange’s proposed MRVP. 

EDGA Exchange’s MRVP specifies 

those uncontested minor rule violations 

with sanctions not exceeding $2,500 

which would not be subject to the 

provisions of Rule 19d–1(c)(1) under the 

Act4 requiring that a self-regulatory 

organization promptly file notice with 

the Commission of any final 

disciplinary action taken with respect to 

any person or organization.5 In 

accordance with Rule 19d–1(c)(2), the 

Exchange proposed to designate certain 

rule violations as minor rule violations, 

and requested that it be relieved of the 

reporting requirements regarding such 

violations, provided it gives notice of 

such violations to the Commission on a 

quarterly basis. EDGA Exchange 

included in its proposed MRVP the 

policies and procedures currently 

included in EDGA Exchange Rule 8.15 

(‘‘Imposition of Fines for Minor 

Violation(s) of Rules’’) and the rule 

violations included in EDGA Exchange 

Rule 8.15.01.6

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