Federal Register / Vol. 75, No. 21 / Tuesday, February 2, 2010 / Notices 5363 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 61143 

(December 10, 2009), 74 FR 67290. 

4See Securities Exchange Act Release No. 60002 

(May 29, 2009), 74 FR 26901 (June 4, 2009) (SR– 

NYSEArca–2009–32). 

5The Exchange notes that it makes the NYSE 

Arca Realtime Reference Prices available to vendors 

no earlier than it makes those prices available to the 

processor under the CTA Plan. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61404; File No. SR– 

NYSEArca–2009–108] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving Proposed 

Rule Change Modifying the NYSE Arca 

Realtime Reference Prices Service 

January 22, 2010. 

I. Introduction 

On December 1, 2009, NYSE Arca, 

Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to add data elements to its 

‘‘NYSE Arca Realtime Reference Prices’’ 

service and to add a usage-based fee 

alternative for that service. The 

proposed rule change was published for 

comment in the Federal Register on 

December 18, 2009.3 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change. 

II. Description of the Proposal 

The Exchange proposes several 

changes to the NYSE Arca Realtime 

Reference Prices service. In a recent 

filing,4 the Exchange established a fixed 

monthly fee for its NYSE Arca-only 

market data service that allows a vendor 

to redistribute on a real-time basis last 

sale prices of transactions that take 

place on the Exchange. The Exchange 

has found that the NYSE Arca Realtime 

Reference Prices service provides a lowcost service that makes real-time prices 

widely available to many millions of 

casual investors, provides vendors with 

a real-time substitute for delayed prices, 

and relieves vendors of all 

administrative burdens. The service 

allows internet service providers, 

traditional market data vendors, and 

others (‘‘NYSE Arca-Only Vendors’’) to 

make available NYSE Arca Realtime 

Reference Prices on a real-time basis.5

NYSE Arca Realtime Reference Prices 

information includes last sale prices for 

all securities that are traded on the 

Exchange. 

The Exchange proposes to make the 

following changes to the service and its 

fees: 

a. Data Elements 

Currently, the NYSE Arca Realtime 

Reference Prices service includes only 

prices. It does not include the size of 

each trade and does not include bid/ask 

quotations. For each security, the 

Exchange is proposing to add the 

following data elements to the service: 

• High price 

• Low price 

• Cumulative volume 

The Exchange states that it anticipates 

that it would update these data elements 

every second, though initially it would 

update them once per minute. A 

security’s high (low) price would reflect 

the highest (lowest) price at which the 

security has traded on the Exchange 

during the trading session through the 

point in time at which it is 

disseminated. Further, the cumulative 

volume would reflect a security’s 

aggregate volume during a trading 

session through the point in time at 

which it is last disseminated. The 

Exchange believes that adding these 

data elements would make the product 

more attractive to the customers of 

NYSE Arca-Only Vendors. 

b. Usage-Based Fee 

Currently, the NYSE Arca Realtime 

Reference Prices service features a flat, 

fixed monthly vendor fee of $30,000 and 

no user-based fees. For that fee, the 

NYSE Arca-Only Vendor may provide 

unlimited NYSE Arca Realtime 

Reference Prices to an unlimited 

number of the NYSE Arca-Only 

Vendor’s subscribers and customers 

without having to differentiate between 

professional subscribers and 

nonprofessional subscribers, without 

having to account for the extent of 

access to the data, and without having 

to report the number of users. 

The Exchange proposes to establish as 

an alternative to the fixed monthly fee 

a fee of $.004 for each real-time 

reference price that a NYSE Arca-Only 

Vendor disseminates to its customers. 

The Exchange proposes to limit a NYSE 

Arca-Only Vendor’s exposure under this 

alternative fee by setting $30,000, the 

same amount as the proposed fixed 

monthly rate, as the maximum fee that 

a NYSE Arca-Only Vendor would have 

to pay for real-time reference prices that 

it disseminates in any calendar month 

pursuant to the per-query fee. 

In order to take advantage of the perquery fee, a NYSE Arca-Only Vendor 

must document in its Exhibit A that it 

has the ability to measure accurately the 

number of queries and must have the 

ability to report aggregate query 

quantities on a monthly basis. 

The Exchange states that it will 

impose the per-query fee only on the 

dissemination of real-time reference 

prices. NYSE Arca-Only Vendors may 

provide delayed data services in the 

same manner as they do today. 

The per-query charge would be 

imposed on NYSE Arca-Only Vendors, 

not end-users, and would be payable on 

a monthly basis. Because it would 

represent a new and additional 

alternative to the monthly fixed fee, 

NYSE Arca-Only Vendors may elect to 

disseminate NYSE Arca Realtime 

Reference Prices pursuant to the perquery fee rather than the fixed monthly 

fee. 

c. Justification of Fees 

The Exchange believes that the fee 

enables internet service providers and 

traditional vendors that have large 

numbers of casual investors as 

subscribers and customers to contribute 

to the Exchange’s operating costs in a 

manner that is appropriate for their 

means of distribution. According to the 

Exchange, adding a per-query payment 

option would reduce the costs of the 

service to those internet service 

providers and traditional vendors. The 

Exchange believes that this would 

enable NYSE Arca Realtime Reference 

Prices vendors to make a more 

appropriate contribution to the 

Exchange’s operating costs. 

In establishing the per-query fee, the 

Exchange states that it took into 

consideration several factors, including: 

(1) the fees that Nasdaq and NYSE are 

charging for similar services and that 

NYSE Amex has proposed to charge; 

(2) consultation with some of the 

entities that currently receive the 

service or that the Exchange anticipates 

may commence to take advantage of the 

service; 

(3) the contribution of market data 

revenues that the Exchange believes is 

appropriate for entities that are most 

likely to take advantage of the proposed 

service; 

(4) the contribution that revenues 

accruing from the proposed fees would 

make to meet the overall costs of the 

Exchange’s operations; 

(5) the savings in administrative and 

reporting costs that the NYSE Arca 

Realtime Reference Prices service would 

provide to NYSE Arca-Only Vendors; 

and 

(6) the fact that the proposed fee 

would provide an attractive alternative 

to existing fees under the CTA Plan and 

to NYSE Arca’s monthly flat fee, an 

alternative that vendors would purchase 

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5364 Federal Register / Vol. 75, No. 21 / Tuesday, February 2, 2010 / Notices 

6See Securities Exchange Act Release No. 59039 

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

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

Order’’). 

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 Arca is an exclusive processor of NYSE 

Arca depth-of-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. 

13See supra note 6. 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. 

14 Id. at 74781. 

15 Id. at 74781–82. 

16 Id. at 74781. 

17 15 U.S.C. 78s(b)(2). 

18 17 CFR 200.30–3(a)(12). 

only if they determine that the 

perceived benefits outweigh the cost. 

The Exchange believes that the level 

of the per-query fee is consistent with 

the approach set forth in the order by 

which the Commission approved 

ArcaBook fees.6 The Exchange 

represents that the NYSE Arca Realtime 

Reference Prices constitute ‘‘non-core 

data;’’ i.e., the Exchange does not require 

a central processor to consolidate and 

distribute the product to the public 

pursuant to joint-SRO plans. Rather, the 

Exchange states that it distributes the 

product voluntarily. In addition, the 

Exchange believes that both types of the 

competitive forces that the Commission 

described in the NYSE Arca Order are 

present in the case of NYSE Arca 

Realtime Reference Prices: (i) The 

Exchange has a compelling need to 

attract order flow; and (ii) the product 

competes with a number of alternative 

products. 

The Exchange states that it must 

compete vigorously for order flow to 

maintain its share of trading volume, 

which requires the Exchange to act 

reasonably in setting market data fees 

for non-core products such as NYSE 

Arca Realtime Reference Prices. The 

Exchange hopes that NYSE Arca 

Realtime Reference Prices will enable 

vendors to distribute NYSE Arca last 

sale price data widely among investors, 

and thereby provide a means for 

promoting the Exchange’s visibility in 

the marketplace. 

III. Discussion and Commission 

Findings 

The Commission has reviewed 

carefully the proposed rule change and 

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, the 

Commission finds that the proposal is 

consistent with Section 6(b)(4) of the 

Act,8 which requires 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 

Section 6(b)(5) of the Act,9 which 

requires, among other things, 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, 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

Under this proposal, the Exchange 

would (1) add high price, low price, and 

cumulative volume data elements to its 

‘‘NYSE Arca Realtime Reference Prices’’ 

service and (2) add a usage-based fee 

alternative of $.004 for each real-time 

reference price that a vendor 

disseminates to its customers (capped at 

the monthly fee level). In order to take 

advantage of the usage-based fee 

alternative, a vendor must document in 

its Exhibit A that it has the ability to 

measure accurately the number of 

queries and must have the ability to 

report aggregate query quantities on a 

monthly basis. 

The Commission has reviewed the 

proposal using the approach set forth in 

the NYSE Arca Order for non-core 

market data fees.13 In the NYSE Arca 

Order, the Commission stated that 

‘‘when possible, reliance on competitive 

forces is the most appropriate and 

effective means to assess whether the 

terms for the distribution of non-core 

data are equitable, fair and reasonable, 

and not unreasonably 

discriminatory.’’ 14 It noted that the 

‘‘existence of significant competition 

provides a substantial basis for finding 

that the terms of an exchange’s fee 

proposal are equitable, fair, reasonable, 

and not unreasonably or unfairly 

discriminatory.’’ 15 If an exchange ‘‘was 

subject to significant competitive forces 

in setting the terms of a proposal,’’ the 

Commission will approve a 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.’’ 16

There are a variety of alternative 

sources of information that impose 

significant competitive pressures on the 

Exchange in setting the terms for 

distributing its market data. The 

Commission believes that the 

availability of those alternatives, as well 

as 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 the 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. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–NYSEArca– 

2009–108) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2109 Filed 2–1–10; 8:45 am] 

BILLING CODE 8011–01–P 

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