Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 59755 

change, or such shorter time as designated by the 

Commission. NYSE Amex has satisfied this 

requirement. 

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6). 

13For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

14The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov/rules/sro.shtml. 

15 17 CFR 200.30–3(a)(12). 

1 17 CFR 242.608. 

2The Plan Participants (collectively, 

‘‘Participants’’) are the: BATS Exchange, Inc. 

(‘‘BATS’’); Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’); Chicago Stock Exchange, 

Inc. (‘‘CHX’’); Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’); International Securities 

Exchange LLC (‘‘ISE’’); NASDAQ OMX BX, Inc. 

(‘‘BX’’); NASDAQ OMX PHLX, Inc. (‘‘PHLX’’); 

Nasdaq Stock Market LLC (‘‘Nasdaq’’); National 

Stock Exchange, Inc. (‘‘NSX’’); New York Stock 

Exchange LLC (‘‘NYSE’’); NYSE Amex, Inc. 

(‘‘NYSEAmex’’); and NYSE Arca, Inc. (‘‘NYSEArca’’). 

3The Plan governs the collection, processing, and 

dissemination on a consolidated basis of quotation 

information and transaction reports in Eligible 

Securities for each of its Participants. This 

consolidated information informs investors of the 

current quotation and recent trade prices of Nasdaq 

securities. It enables investors to ascertain from one 

data source the current prices in all the markets 

trading Nasdaq securities. The Plan serves as the 

required transaction reporting plan for its 

Participants, which is a prerequisite for their 

trading Eligible Securities. See Securities Exchange 

Act Release No. 55647 (April 19, 2007) 72 FR 20891 

(April 26, 2007). 

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 11 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 12

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. NYSE Amex requests 

that the Commission waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission notes that the 

proposed rule change codifies into rule 

text an existing policy and provides 

certain other clarifications. For this 

reason, the Commission believes that 

waiving the 30-day operative delay 13 is 

consistent with the protection of 

investors and the public interest. 

Therefore, the Commission designates 

the proposal operative upon filing. 

At any time within the 60-day period 

beginning on the date of the filing of the 

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. 

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–NYSEAmex–2010–71 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–NYSEAmex–2010–71. 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,14 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, 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–NYSEAmex–2010–71 and 

should be submitted on or before 

October 19, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–24178 Filed 9–27–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62965; File No. S7–24–89] 

Joint Industry Plan; Notice of Filing 

and Immediate Effectiveness of 

Amendment No. 22 to the Joint SelfRegulatory Organization Plan 

Governing the Collection, 

Consolidation and Dissemination of 

Quotation and Transaction Information 

for Nasdaq-Listed Securities Traded on 

Exchanges on an Unlisted Trading 

Privileges Basis Submitted by the 

BATS Exchange, Inc., Chicago Board 

Options Exchange, Incorporated, 

Chicago Stock Exchange, Inc., 

Financial Industry Regulatory 

Authority, Inc., International Securities 

Exchange LLC, NASDAQ OMX BX, Inc., 

NASDAQ OMX PHLX, Inc., Nasdaq 

Stock Market LLC, National Stock 

Exchange, Inc., New York Stock 

Exchange LLC, NYSE Amex, Inc., and 

NYSE Arca, Inc. 

September 21, 2010. 

Pursuant to Rule 608 of the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 1

notice is hereby given that on 

September 21, 2010, the operating 

committee (‘‘Operating Committee’’ or 

‘‘Committee’’) 2 of the Joint SelfRegulatory Organization Plan Governing 

the Collection, Consolidation, and 

Dissemination of Quotation and 

Transaction Information for NasdaqListed Securities Traded on Exchanges 

on an Unlisted Trading Privilege Basis 

(‘‘Nasdaq/UTP Plan’’ or ‘‘Plan’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) an 

amendment to the Plan.3 This 

amendment represents Amendment No. 

22 to the Plan and proposes to add 

EDGA Exchange, Inc. and EDGX 


srobinson on DSKHWCL6B1PROD with NOTICES
59756 Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 

4 17 CFR 200.30–3(a)(27). 

Exchange, Inc. to the Plan. The 

Commission is publishing this notice to 

solicit comments from interested 

persons on the proposed Amendment. 

I. Rule 608(a) 

A. Purpose of the Amendments 

The amendment proposes to add 

EDGA Exchange, Inc. and EDGX 

Exchange, Inc. as new Participants to 

each Plan. 

B. Governing or Constituent Documents 

Not applicable. 

C. Implementation of Amendment 

Because the Participants designate the 

amendment as concerned solely with 

the administration of the Plan, the 

amendment becomes effective upon 

filing with the Commission. 

D. Development and Implementation 

Phases 

Not applicable. 

E. Analysis of Impact on Competition 

The proposed amendment does not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. The Participants do not 

believe that the proposed plan 

amendment introduces terms that are 

unreasonably discriminatory for the 

purposes of Section 11A(c)(1)(D) of the 

Exchange Act. 

F. Written Understanding or Agreements 

Relating to Interpretation of, or 

Participation in, Plan 

Not applicable. 

G. Approval by Sponsors in Accordance 

With Plan 

Each of the Plan’s Participants has 

executed a written amendment to the 

Plan. 

H. Description of Operation of Facility 

Contemplated by the Proposed 

Amendment 

Not applicable. 

I. Terms and Conditions of Access 

See Item I(A) above. 

J. Method of Determination and 

Imposition, and Amount of, Fees and 

Charges 

See Item I(A) above. 

K. Method and Frequency of Processor 

Evaluation 

Not applicable. 

L. Dispute Resolution 

Not applicable. 

II. Rule 601(a) 

A. Reporting Requirements 

Not applicable. 

B. Manner of Collecting, Processing, 

Sequencing, Making Available and 

Disseminating Last Sale Information 

Not applicable. 

C. Manner of Consolidation 

Not applicable. 

D. Standards and Methods Ensuring 

Promptness, Accuracy and 

Completeness of Transaction Reports 

Not applicable. 

E. Rules and Procedures Addressed to 

Fraudulent or Manipulative 

Dissemination 

Not applicable. 

F. Terms of Access to Transaction 

Reports 

Not applicable. 

G. Identification of Marketplace of 

Execution 

Not Applicable. 

III. Solicitation of Comments 

The Commission seeks general 

comments on Amendment No. 22. 

Interested persons are invited to submit 

written data, views, and arguments 

concerning the foregoing, including 

whether the proposal 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 S7–24–89 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 S7–24–89. 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 written statements with 

respect to the proposed Plan 

amendment that are filed with the 

Commission, and all written 

communications relating to the 

proposed Plan amendment 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 on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing also will be 

available for Web site viewing and 

printing at the Office of the Secretary of 

the Committee, currently located at the 

CBOE, 400 S. LaSalle Street, Chicago, IL 

60605. 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 S7–24–89 and should be 

submitted on or before October 19, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.4

Florence E. Harmon, 

Deputy Secretary. 

Exhibit A 

Nasdaq UTP Plan 

Amended and Restated Plan 

Amendment No. 22 

The undersigned registered national 

securities association and national 

securities exchanges (collectively 

referred to as the ‘‘Participants’’), have 

jointly developed and hereby enter into 

this Nasdaq Unlisted Trading Privileges 

Plan (‘‘Nasdaq UTP Plan’’ or ‘‘Plan’’). 

I. Participants 

The Participants include the 

following: 

A. Participants 

1. BATS Exchange, Inc. 

8050 Marshall Drive 

Lenexa, Kansas 66214 

2. Chicago Board Options Exchange, 

Inc. 

400 South LaSalle Street, 26th Floor 

Chicago, Illinois 60605 

3. Chicago Stock Exchange 

440 South LaSalle Street 

Chicago, Illinois 60605 

4. EDGA Exchange, Inc. 

545 Washington Boulevard 

Sixth Floor 

Jersey City, NJ 07310 

5. EDGX Exchange, Inc. 

545 Washington Boulevard 

Sixth Floor 

Jersey City, NJ 07310 


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6. Financial Industry Regulatory 

Authority, Inc. 

1735 K Street, N.W. 

Washington, D.C. 20006 

7. International Securities Exchange, 

LLC 

60 Broad Street 

New York, New York 10004 

8. NASDAQ OMX BX, Inc. 

One Liberty Plaza 

New York, New York 10006 

9. NASDAQ OMX PHLX, Inc. 

1900 Market Street 

Philadelphia, Pennsylvania 19103 

10. National Stock Exchange, Inc. 

101 Hudson, Suite 1200 

Jersey City, NJ 07302 

11. New York Stock Exchange LLC 

11 Wall Street 

New York, New York 10005 

12. NYSE Amex LLC 

20 Broad Street 

New York, New York 10005 

13. NYSE Arca, Inc. 

100 South Wacker Drive 

Suite 1800 

Chicago, IL 60606 

14. The Nasdaq Stock Market LLC 

1 Liberty Plaza 

165 Broadway 

New York, NY 10006 

B. Additional Participants 

Any other national securities 

association or national securities 

exchange, in whose market Eligible 

Securities become traded, may become 

a Participant, provided that said 

organization executes a copy of this 

Plan, provides to the Processor its 

Projected Processor Capacity 

Requirements, as specified in Exhibit 3, 

and pays its share of development costs 

as specified in Section XIII. 

II. Purpose of Plan 

The purpose of this Plan is to provide 

for the collection, consolidation and 

dissemination of Quotation Information 

and Transaction Reports in Eligible 

Securities from the Participants in a 

manner consistent with the Exchange 

Act. The Participants commenced 

publication of Quotation Information 

and Transaction Reports on Eligible 

Securities as contemplated by this Plan 

on July 12, 1993. 

It is expressly understood that each 

Participant shall be responsible for the 

collection of Quotation Information and 

Transaction Reports within its market 

and that nothing in this Plan shall be 

deemed to govern or apply to the 

manner in which each Participant does 

so. 

III. Definitions 

A. ‘‘Current’’ means, with respect to 

Transaction Reports or Quotation 

Information, such Transaction Reports 

or Quotation Information during the 

fifteen (15) minute period immediately 

following the initial transmission 

thereof by the Processor. 

B. ‘‘Eligible Security’’ means any 

Nasdaq Global Market or Nasdaq Capital 

Market security, as defined in NASDAQ 

Rule 4200. Eligible Securities under this 

Nasdaq UTP Plan shall not include any 

security that is defined as an ‘‘Eligible 

Security’’ within Section VII of the 

Consolidated Tape Association Plan. 

A security shall cease to be an Eligible 

Security for purposes of this Plan if: (i) 

The security does not substantially meet 

the requirements from time to time in 

effect for continued listing on Nasdaq, 

and thus is suspended from trading; or 

(ii) the security has been suspended 

from trading because the issuer thereof 

is in liquidation, bankruptcy or other 

similar type proceedings. The 

determination as to whether a security 

substantially meets the criteria of the 

definition of Eligible Security shall be 

made by the exchange on which such 

security is listed provided, however, 

that if such security is listed on more 

than one exchange then such 

determination shall be made by the 

exchange on which, the greatest number 

of the transactions in such security were 

effected during the previous twelvemonth period. 

C. ‘‘Commission’’ and ‘‘SEC’’ shall 

mean the U.S. Securities and Exchange 

Commission. 

D. ‘‘Exchange Act’’ means the 

Securities Exchange Act of 1934, as 

amended. 

E. ‘‘Market’’ shall mean (i) when used 

with respect to Quotation Information, 

FINRA in the case of a FINRA 

Participant, or the Participant on whose 

floor or through whose facilities the 

quotation was disseminated; and (ii) 

when used with respect to Transaction 

Reports, the Participant through whose 

facilities the transaction took place or is 

reported, or the Participant to whose 

facilities the order was sent for 

execution. 

F. ‘‘FINRA’’ means the Financial 

Industry Regulatory Authority, Inc. 

G. ‘‘FINRA Participant’’ means a 

FINRA member that is registered as a 

market maker or an electronic 

communications network or otherwise 

utilizes the facilities of FINRA pursuant 

to applicable FINRA rules. 

H. ‘‘UTP Quote Data Feed’’ means the 

service that provides Subscribers with 

the National Best Bid and Offer 

quotations, size and market center 

identifier, as well as the Best Bid and 

Offer quotations, size and market center 

identifier from each individual 

Participant in Eligible Securities and, in 

the case of FINRA, the FINRA 

Participant(s) that constitutes FINRA’s 

Best Bid and Offer quotations. 

I. ‘‘Nasdaq System’’ means collectively 

the automated quotation system 

operated by Nasdaq and the system 

provided for in the Transaction 

Reporting Plan filed with and approved 

by the Commission pursuant to SEC 

Rule 11Aa3–1, subsequently redesignated as Rule 601 of Regulation 

NMS, governing the reporting of 

transactions in Nasdaq securities. 

J. ‘‘UTP Trade Data Feed’’ means the 

service that provides Vendors and 

Subscribers with Transaction Reports. 

K. ‘‘Nasdaq Security’’ or ‘‘Nasdaqlisted Security’’ means any security 

listed on the Nasdaq Global Market or 

Nasdaq Capital Market. 

L. ‘‘News Service’’ means a person 

who receives Transaction Reports or 

Quotation Information provided by the 

Nasdaq System or provided by a 

Vendor, on a Current basis, in 

connection with such person’s business 

of furnishing such information to 

newspapers, radio and television 

stations and other news media, for 

publication at least fifteen (15) minutes 

following the time when the 

information first has been published by 

the Processor. 

M. ‘‘OTC Montage Data Feed’’ means 

the data stream of information that 

provides Vendors and Subscribers with 

quotations and sizes from each FINRA 

Participant. 

N. ‘‘Participant’’ means a registered 

national securities exchange or national 

securities association that is a signatory 

to this Plan. 

O. ‘‘Plan’’ means this Nasdaq UTP 

Plan, as from time to time amended 

according to its provisions, governing 

the collection, consolidation and 

dissemination of Quotation Information 

and Transaction Reports in Eligible 

Securities. 

P. ‘‘Processor’’ means the entity 

selected by the Participants to perform 

the processing functions set forth in the 

Plan. 

Q. ‘‘Quotation Information’’ means all 

bids, offers, displayed quotation sizes, 

the market center identifiers and, in the 

case of FINRA, the FINRA Participant 

that entered the quotation, withdrawals 

and other information pertaining to 

quotations in Eligible Securities 

required to be collected and made 

available to the Processor pursuant to 

this Plan. 

R. ‘‘Regulatory Halt’’ means a trade 

suspension or halt called for the 

purpose of dissemination of material 

news, as described at Section X hereof 

or that is called for where there are 

regulatory problems relating to an 


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Eligible Security that should be clarified 

before trading therein is permitted to 

continue, including a trading halt for 

extraordinary market activity due to 

system misuse or malfunction under 

Section X.E.1. of the Plan 

(‘‘Extraordinary Market Regulatory 

Halt’’). 

S. ‘‘Subscriber’’ means a person who 

receives Current Quotation Information 

or Transaction Reports provided by the 

Processor or provided by a Vendor, for 

its own use or for distribution on a nonCurrent basis, other than in connection 

with its activities as a Vendor. 

T. ‘‘Transaction Reports’’ means 

reports required to be collected and 

made available pursuant to this Plan 

containing the stock symbol, price, and 

size of the transaction executed, the 

Market in which the transaction was 

executed, and related information, 

including a buy/sell/cross indicator and 

trade modifiers, reflecting completed 

transactions in Eligible Securities. 

U. ‘‘Vendor’’ means a person who 

receives Current Quotation Information 

or Transaction Reports provided by the 

Processor or provided by a Vendor, in 

connection with such person’s business 

of distributing, publishing, or otherwise 

furnishing such information on a 

Current basis to Subscribers, News 

Services or other Vendors. 

IV. Administration of Plan 

A. Operating Committee: Composition 

The Plan shall be administered by the 

Participants through an operating 

committee (‘‘Operating Committee’’), 

which shall be composed of one 

representative designated by each 

Participant. Each Participant may 

designate an alternate representative or 

representatives who shall be authorized 

to act on behalf of the Participant in the 

absence of the designated 

representative. Within the areas of its 

responsibilities and authority, decisions 

made or actions taken by the Operating 

Committee, directly or by duly 

delegated individuals, committees as 

may be established from time to time, or 

others, shall be binding upon each 

Participant, without prejudice to the 

rights of any Participant to seek redress 

from the SEC pursuant to Rule 608 of 

Regulation NMS under the Exchange 

Act or in any other appropriate forum. 

An Electronic Communications 

Network, Alternative Trading System, 

Broker-Dealer or other securities 

organization (‘‘Organization’’) which is 

not a Participant, but has an actively 

pending Form 1 Application on file 

with the Commission to become a 

national securities exchange, will be 

permitted to appoint one representative 

and one alternate representative to 

attend regularly scheduled Operating 

Committee meetings in the capacity of 

an observer/advisor. If the 

Organization’s Form 1 petition is 

withdrawn, returned, or is otherwise not 

actively pending with the Commission 

for any reason, then the Organization 

will no longer be eligible to be 

represented in the Operating Committee 

meetings. The Operating Committee 

shall have the discretion, in limited 

instances, to deviate from this policy if, 

as indicated by majority vote, the 

Operating Committee agrees that 

circumstances so warrant. 

Nothing in this section or elsewhere 

within the Plan shall authorize any 

person or organization other than 

Participants, their representatives, and 

members of the Advisory Committee to 

participate on the Operating Committee 

in any manner other than as an advisor 

or observer. Only the Participants and 

their representatives as well as 

Commission staff may participate in 

Executive Sessions of the Operating 

Committee. 

B. Operating Committee: Authority 

The Operating Committee shall be 

responsible for: 

1. Overseeing the consolidation of 

Quotation Information and Transaction 

Reports in Eligible Securities from the 

Participants for dissemination to 

Vendors, Subscribers, News Services 

and others in accordance with the 

provisions of the Plan; 

2. Periodically evaluating the 

Processor; 

3. Setting the level of fees to be paid 

by Vendors, Subscribers, News Services 

or others for services relating to 

Quotation Information or Transaction 

Reports in Eligible Securities, and 

taking action in respect thereto in 

accordance with the provisions of the 

Plan; 

4. Determining matters involving the 

interpretation of the provisions of the 

Plan; 

5. Determining matters relating to the 

Plan’s provisions for cost allocation and 

revenue-sharing; and 

6. Carrying out such other specific 

responsibilities as provided under the 

Plan. 

C. Operating Committee: Voting 

Each Participant shall have one vote 

on all matters considered by the 

Operating Committee. 

1. The affirmative and unanimous 

vote of all Participants entitled to vote 

shall be necessary to constitute the 

action of the Operating Committee with 

respect to: 

a. Amendments to the Plan; 

b. amendments to contracts between 

the Processor and Vendors, Subscribers, 

News Services and others receiving 

Quotation Information and Transaction 

Reports in Eligible Securities; 

c. replacement of the Processor, 

except for termination for cause, which 

shall be governed by Section V(B) 

hereof; 

d. reductions in existing fees relating 

to Quotation Information and 

Transaction Reports in Eligible 

Securities; and 

e. except as provided under Section 

IV(C)(3) hereof, requests for system 

changes; and 

f. all other matters not specifically 

addressed by the Plan. 

2. With respect to the establishment of 

new fees or increases in existing fees 

relating to Quotation Information and 

Transaction Reports in Eligible 

Securities, the affirmative vote of twothirds of the Participants entitled to vote 

shall be necessary to constitute the 

action of the Operating Committee. 

3. The affirmative vote of a majority 

of the Participants entitled to vote shall 

be necessary to constitute the action of 

the Operating Committee with respect 

to: 

a. requests for system changes 

reasonably related to the function of the 

Processor as defined under the Plan. All 

other requests for system changes shall 

be governed by Section IV(C)(1)(e) 

hereof. 

b. interpretive matters and decisions 

of the Operating Committee arising 

under, or specifically required to be 

taken by, the provisions of the Plan as 

written; 

c. interpretive matters arising under 

Rules 601 and 602 of Regulation NMS; 

and 

d. denials of access (other than for 

breach of contract, which shall be 

handled by the Processor), 

4. It is expressly agreed and 

understood that neither this Plan nor 

the Operating Committee shall have 

authority in any respect over any 

Participant’s proprietary systems. Nor 

shall the Plan or the Operating 

Committee have any authority over the 

collection and dissemination of 

quotation or transaction information in 

Eligible Securities in any Participant’s 

marketplace, or, in the case of FINRA, 

from FINRA Participants. 

D. Operating Committee: Meetings 

Regular meetings of the Operating 

Committee may be attended by each 

Participant’s designated representative 

and/or its alternate representative(s), 

and may be attended by one or more 

other representatives of the parties. 

Meetings shall be held at such times and 


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locations as shall from time to time be 

determined by the Operating 

Committee. 

Quorum: Any action requiring a vote 

only can be taken at a meeting in which 

a quorum of all Participants is present. 

For actions requiring a simple majority 

vote of all Participants, a quorum of 

greater than 50% of all Participants 

entitled to vote must be present at the 

meeting before such a vote may be 

taken. For actions requiring a 2/3rd 

majority vote of all Participants, a 

quorum of at least 2/3rd of all 

Participants entitled to vote must be 

present at the meeting before such a 

vote may be taken. For actions requiring 

a unanimous vote of all Participants, a 

quorum of all Participants entitled to 

vote must be present at the meeting 

before such a vote may be taken. 

A Participant is considered present at 

a meeting only if a Participant’s 

designated representative or alternate 

representative(s) is either in physical 

attendance at the meeting or is 

participating by conference telephone, 

or other acceptable electronic means. 

Any action sought to be resolved at a 

meeting must be sent to each Participant 

entitled to vote on such matter at least 

one week prior to the meeting via 

electronic mail, regular U.S. or private 

mail, or facsimile transmission, 

provided however that this requirement 

may be waived by the vote of the 

percentage of the Committee required to 

vote on any particular matter, under 

Section C above. 

Any action may be taken without a 

meeting if a consent in writing, setting 

forth the action so taken, is sent to and 

signed by all Participant representatives 

entitled to vote with respect to the 

subject matter thereof. All the approvals 

evidencing the consent shall be 

delivered to the Chairman of the 

Operating Committee to be filed in the 

Operating Committee records. The 

action taken shall be effective when the 

minimum number of Participants 

entitled to vote have approved the 

action, unless the consent specifies a 

different effective date. 

The Chairman of the Operating 

Committee shall be elected annually by 

and from among the Participants by a 

majority vote of all Participants entitled 

to vote. The Chairman shall designate a 

person to act as Secretary to record the 

minutes of each meeting. The location 

of meetings shall be rotated among the 

locations of the principal offices of the 

Participants, or such other locations as 

may from time to time be determined by 

the Operating Committee. 

Meetings may be held by conference 

telephone and action may be taken 

without a meeting if the representatives 

of all Participants entitled to vote 

consent thereto in writing or other 

means the Operating Committee deems 

acceptable. 

E. Advisory Committee 

(a) Formation. Notwithstanding any 

other provision of this Plan, an 

Advisory Committee to the Plan shall be 

formed and shall function in accordance 

with the provisions set forth in this 

section. 

(b) Composition. Members of the 

Advisory Committee shall be selected 

for two year terms as follows: 

(1) Operating Committee Selections. 

By affirmative vote of a majority of the 

Participants entitled to vote, the 

Operating Committee shall select at 

least one representative from each of the 

following categories to be members of 

the Advisory Committee: (i) A brokerdealer with a substantial retail investor 

customer base, (ii) a broker-dealer with 

a substantial institutional investor 

customer base, (iii) an alternative trade 

system, (iv) a data vendor, and (v) an 

investor. 

(2) Participant Selections. Each 

Participant shall have the right to select 

one member of the Advisory Committee. 

A Participant shall not select any person 

employed by or affiliated with any 

participant or its affiliates or facilities. 

(c) Function. Members of the 

Advisory Committee shall have the right 

to submit their views to the Operating 

Committee on Plan matters, prior to a 

decision by the Operating Committee on 

such matters. Such matters shall 

include, but not be limited to, any new 

or modified product, fee, contract, or 

pilot program that is offered or used 

pursuant to the Plan. 

(d) Meetings and Information. 

Members of the Advisory Committee 

shall have the right to attend all 

meetings of the Operating Committee 

and to receive any information 

concerning Plan matters that is 

distributed to the Operating Committee; 

provided, however, that the Operating 

Committee may meet in executive 

session if, by affirmative vote of a 

majority of the Participants entitled to 

vote, the Operating Committee 

determines that an item of Plan business 

requires confidential treatment. 

V. Selection and Evaluation of the 

Processor 

A. Generally 

The Processor’s performance of its 

functions under the Plan shall be 

subject to review by the Operating 

Committee at least every two years, or 

from time to time upon the request of 

any two Participants but not more 

frequently than once each year. Based 

on this review, the Operating Committee 

may choose to make a recommendation 

to the Participants with respect to the 

continuing operation of the Processor. 

The Operating Committee shall notify 

the SEC of any recommendations the 

Operating Committee shall make 

pursuant to the Operating Committee’s 

review of the Processor and shall supply 

the Commission with a copy of any 

reports that may be prepared in 

connection therewith. 

B. Termination of the Processor for 

Cause 

If the Operating Committee 

determines that the Processor has failed 

to perform its functions in a reasonably 

acceptable manner in accordance with 

the provisions of the Plan or that its 

reimbursable expenses have become 

excessive and are not justified on a cost 

basis, the Processor may be terminated 

at such time as may be determined by 

a majority vote of the Operating 

Committee. 

C. Factors To Be Considered in 

Termination for Cause 

Among the factors to be considered in 

evaluating whether the Processor has 

performed its functions in a reasonably 

acceptable manner in accordance with 

the provisions of the Plan shall be the 

reasonableness of its response to 

requests from Participants for 

technological changes or enhancements 

pursuant to Section IV(C)(3) hereof. The 

reasonableness of the Processor’s 

response to such requests shall be 

evaluated by the Operating Committee 

in terms of the cost to the Processor of 

purchasing the same service from a 

third party and integrating such service 

into the Processor’s existing systems 

and operations as well as the extent to 

which the requested change would 

adversely impact the then current 

technical (as opposed to business or 

competitive) operations of the 

Processor. 

D. Processor’s Right To Appeal 

Termination for Cause 

The Processor shall have the right to 

appeal to the SEC a determination of the 

Operating Committee terminating the 

Processor for cause and no action shall 

become final until the SEC has ruled on 

the matter and all legal appeals of right 

therefrom have been exhausted. 

E. Process for Selecting New Processor 

At any time following effectiveness of 

the Plan, but no later than upon the 

termination of the Processor, whether 

for cause pursuant to Section IV(C)(1)(c) 

or V(B) of the Plan or upon the 


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Processor’s resignation, the Operating 

Committee shall establish procedures 

for selecting a new Processor (the 

‘‘Selection Procedures’’). The Operating 

Committee, as part of the process of 

establishing Selection Procedures, may 

solicit and consider the timely comment 

of any entity affected by the operation 

of this Plan. The Selection Procedures 

shall be established by a two-thirds 

majority vote of the Plan Participants, 

and shall set forth, at a minimum: 

1. The entity that will: 

(a) draft the Operating Committee’s 

request for proposal for bids on a new 

processor; 

(b) assist the Operating Committee in 

evaluating bids for the new processor; 

and 

(c) otherwise provide assistance and 

guidance to the Operating Committee in 

the selection process. 

2. the minimum technical and 

operational requirements to be fulfilled 

by the Processor; 

3. the criteria to be considered in 

selecting the Processor; and 

4. the entities (other than Plan 

Participants) that are eligible to 

comment on the selection of the 

Processor. 

Nothing in this provision shall be 

interpreted as limiting Participants’ 

rights under Section IV or Section V of 

the Plan or other Commission order. 

VI. Functions of the Processor 

A. Generally 

The Processor shall collect from the 

Participants, and consolidate and 

disseminate to Vendors, Subscribers and 

News Services, Quotation Information 

and Transaction Reports in Eligible 

Securities in a manner designed to 

assure the prompt, accurate and reliable 

collection, processing and 

dissemination of information with 

respect to all Eligible Securities in a fair 

and non-discriminatory manner. The 

Processor shall commence operations 

upon the Processor’s notification to the 

Participants that it is ready and able to 

commence such operations. 

B. Collection and Consolidation of 

Information 

For as long as Nasdaq is the Processor, 

the Processor shall be capable of 

receiving Quotation Information and 

Transaction Reports in Eligible 

Securities from Participants by the Planapproved, Processor sponsored 

interface, and shall consolidate and 

disseminate such information via the 

UTP Quote Data Feed, the UTP Trade 

Data Feed, and the OTC Montage Data 

Feed to Vendors, Subscribers and News 

Services. 

C. Dissemination of Information 

The Processor shall disseminate 

consolidated Quotation Information and 

Transaction Reports in Eligible 

Securities via the UTP Quote Data Feed, 

the UTP Trade Data Feed, and the OTC 

Montage Data Feed to authorized 

Vendors, Subscribers and News Services 

in a fair and non-discriminatory 

manner. The Processor shall specifically 

be permitted to enter into agreements 

with Vendors, Subscribers and News 

Services for the dissemination of 

quotation or transaction information on 

Eligible Securities to foreign (non-U.S.) 

marketplaces or in foreign countries. 

The Processor shall, in such instance, 

disseminate consolidated quotation or 

transaction information on Eligible 

Securities from all Participants. 

Nothing herein shall be construed so 

as to prohibit or restrict in any way the 

right of any Participant to distribute 

quotation, transaction or other 

information with respect to Eligible 

Securities quoted on or traded in its 

marketplace to a marketplace outside 

the United States solely for the purpose 

of supporting an intermarket linkage, or 

to distribute information within its own 

marketplace concerning Eligible 

Securities in accordance with its own 

format. If a Participant requests, the 

Processor shall make information about 

Eligible Securities in the Participant’s 

marketplace available to a foreign 

marketplace on behalf of the requesting 

Participant, in which event the cost 

shall be borne by that Participant. 

1. Best Bid and Offer 

The Processor shall disseminate on 

the UTP Quote Data Feed the best bid 

and offer information supplied by each 

Participant, including the FINRA 

Participant(s) that constitutes FINRA’s 

single Best Bid and Offer quotations, 

and shall also calculate and disseminate 

on the UTP Quote Data Feed a national 

best bid and asked quotation with size 

based upon Quotation Information for 

Eligible Securities received from 

Participants. The Processor shall not 

calculate the best bid and offer for any 

individual Participant, including 

FINRA. 

The Participant responsible for each 

side of the best bid and asked quotation 

making up the national best bid and 

offer shall be identified by an 

appropriate symbol. If the quotations of 

more than one Participant shall be the 

same best price, the largest displayed 

size among those shall be deemed to be 

the best. If the quotations of more than 

one Participant are the same best price 

and best displayed size, the earliest 

among those measured by the time 

reported shall be deemed to be the best. 

A reduction of only bid size and/or ask 

size will not change the time priority of 

a Participant’s quote for the purposes of 

determining time reported, whereas an 

increase of the bid size and/or ask size 

will result in a new time reported. The 

consolidated size shall be the size of the 

Participant that is at the best. 

If the best bid/best offer results in a 

locked or crossed quotation, the 

Processor shall forward that locked or 

crossed quote on the appropriate output 

lines (i.e., a crossed quote of bid 12, ask 

11.87 shall be disseminated). The 

Processor shall normally cease the 

calculation of the best bid/best offer 

after 6:30 p.m., Eastern Time. 

2. Quotation Data Streams 

The Processor shall disseminate on 

the UTP Quote Data Feed a data stream 

of all Quotation Information regarding 

Eligible Securities received from 

Participants. Each quotation shall be 

designated with a symbol identifying 

the Participant from which the 

quotation emanates and, in the case of 

FINRA, the FINRA Participant(s) that 

constitutes FINRA’s Best Bid and Offer 

quotations. In addition, the Processor 

shall separately distribute on the OTC 

Montage Data Feed the Quotation 

Information regarding Eligible Securities 

from all FINRA Participants from which 

quotations emanate. 

3. Transaction Reports 

The Processor shall disseminate on 

the UTP Trade Data Feed a data stream 

of all Transaction Reports in Eligible 

Securities received from Participants. 

Each transaction report shall be 

designated with a symbol identifying 

the Participant in whose Market the 

transaction took place. 

D. Closing Reports 

At the conclusion of each trading day, 

the Processor shall disseminate a 

‘‘closing price’’ for each Eligible 

Security. Such ‘‘closing price’’ shall be 

the price of the last Transaction Report 

in such security received prior to 

dissemination. The Processor shall also 

tabulate and disseminate at the 

conclusion of each trading day the 

aggregate volume reflected by all 

Transaction Reports in Eligible 

Securities reported by the Participants. 

E. Statistics 

The Processor shall maintain 

quarterly, semi-annual and annual 

transaction and volume statistical 

counts. The Processor shall, at cost to 

the user Participant(s), make such 

statistics available in a form agreed 


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upon by the Operating Committee, such 

as a secure Web site. 

F. Capacity Planning 

1. The Processor shall provide 

computer and communications facility 

capacity in accordance with a capacity 

planning process set forth in Exhibit 3, 

which process may be modified by the 

Operating Committee from time to time, 

requiring a simple majority vote. 

2. The Processor shall establish 

information barriers to ensure that 

information revealed by any Plan 

Participant to the Processor during the 

capacity planning process is not shared 

with any other Plan Participant, 

including Nasdaq, other than 

information that is aggregated for all 

Plan Participants. 

3. Plan Participants shall cooperate 

fully in the capacity planning process 

including complying with all 

requirements set forth in Exhibit 3. 

VII. Administrative Functions of the 

Processor 

Subject to the general direction of the 

Operating Committee, the Processor 

shall be responsible for carrying out all 

administrative functions necessary to 

the operation and maintenance of the 

consolidated information collection and 

dissemination system provided for in 

this Plan, including, but not limited to, 

record keeping, billing, contract 

administration, and the preparation of 

financial reports. 

VIII. Transmission of Information to 

Processor by Participants 

A. Quotation Information 

Each Participant shall, during the 

time it is open for trading be responsible 

promptly to collect and transmit to the 

Processor accurate Quotation 

Information in Eligible Securities 

through any means prescribed herein. 

Quotation Information shall include: 

1. identification of the Eligible 

Security, using the Nasdaq Symbol; 

2. the price bid and offered, together 

with size; 

3. the FINRA Participant along with 

the FINRA Participant’s market 

participant identification or Participant 

from which the quotation emanates; 

4. identification of quotations that are 

not firm; and 

5. through appropriate codes and 

messages, withdrawals and similar 

matters. 

B. Transaction Reports 

Each Participant shall, during the 

time it is open for trading, be 

responsible promptly to collect and 

transmit to the Processor Transaction 

Reports in Eligible Securities executed 

in its Market by means prescribed 

herein. With respect to orders sent by 

one Market to another Market for 

execution, each Participant shall adopt 

procedures governing the reporting of 

transactions in Eligible Securities 

specifying that the transaction will be 

reported by the Participant whose 

member sold the security. This 

provision shall apply only to 

transactions between Participants. 

Transaction Reports shall include: 

1. Identification of the Eligible 

Security, using the Nasdaq Symbol; 

2. the number of shares in the 

transaction; 

3. the price at which the shares were 

purchased or sold; 

4. the buy/sell/cross indicator; 

5. the Market of execution; and, 

6. through appropriate codes and 

messages, late or out-of-sequence trades, 

corrections and similar matters. 

All such Transaction Reports shall be 

transmitted to the Processor within 90 

seconds after the time of execution of 

the transaction. Transaction Reports 

transmitted beyond the 90-second 

period shall be designated as ‘‘late’’ by 

the appropriate code or message. 

The following types of transactions 

are not required to be reported to the 

Processor pursuant to the Plan: 

1. Transactions that are part of a 

primary distribution by an issuer or of 

a registered secondary distribution or of 

an unregistered secondary distribution; 

2. transactions made in reliance on 

Section 4(2) of the Securities Act of 

1933; 

3. transactions in which the buyer and 

the seller have agreed to trade at a price 

unrelated to the current market for the 

security, e.g., to enable the seller to 

make a gift; 

4. odd-lot transactions; 

5. the acquisition of securities by a 

broker-dealer as principal in 

anticipation of making an immediate 

exchange distribution or exchange 

offering on an exchange; 

6. purchases of securities pursuant to 

a tender offer; and 

7. purchases or sales of securities 

effected upon the exercise of an option 

pursuant to the terms thereof or the 

exercise of any other right to acquire 

securities at a pre-established 

consideration unrelated to the current 

market. 

C. Symbols for Market Identification for 

Quotation Information and Transaction 

Reports 

The following symbols shall be used 

to denote the marketplaces: 

CODE PARTICIPANT 

A ....................... NYSE Amex LLC. 

CODE PARTICIPANT 

Z ....................... BATS Exchange, Inc. 

B ....................... NASDAQ OMX BX, Inc. 

W ...................... Chicago Board Options Exchange, Inc. 

M ...................... Chicago Stock Exchange, 

Inc. 

I ........................ International Securities Exchange, LLC. 

D ....................... Financial Industry Regulatory Authority, Inc. 

Q ...................... Nasdaq Stock Market LLC. 

C ....................... National Stock Exchange, 

Inc. 

N ....................... New York Stock Exchange 

LLC. 

P ....................... NYSE Arca, Inc. 

X ....................... Nasdaq OMX PHLX, Inc. 

D. Whenever a Participant determines 

that a level of trading activity or other 

unusual market conditions prevent it 

from collecting and transmitting 

Quotation Information or Transaction 

Reports to the Processor, or where a 

trading halt or suspension in an Eligible 

Security is in effect in its Market, the 

Participant shall promptly notify the 

Processor of such condition or event 

and shall resume collecting and 

transmitting Quotation Information and 

Transaction Reports to it as soon as the 

condition or event is terminated. In the 

event of a system malfunction resulting 

in the inability of a Participant or its 

members to transmit Quotation 

Information or Transaction Reports to 

the Processor, the Participant shall 

promptly notify the Processor of such 

event or condition. Upon receiving such 

notification, the Processor shall take 

appropriate action, including either 

closing the quotation or purging the 

system of the affected quotations. 

IX. Market Access 

Pursuant to the requirements of Rule 

610 of Regulation NMS, a Participant 

that operates an SRO trading facility 

shall provide for fair and efficient order 

execution access to quotations in each 

Eligible Security displayed through its 

trading facility. In the case of a 

Participant that operates an SRO 

display-only quotation facility, trading 

centers posting quotations through such 

SRO display-only quotation facility 

must provide for fair and efficient order 

execution access to quotations in each 

Eligible Security displayed through the 

SRO display-only quotation facility. A 

Participant that operates an SRO trading 

facility may elect to allow such access 

to its quotations through the utilization 

of private electronic linkages between 

the Participant and other trading 

centers. In the case of a Participant that 

operates an SRO display-only quotation 

facility, trading centers posting 


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quotations through such SRO displayonly quotation facility may elect to 

allow such access to their quotations 

through the utilization of private 

electronic linkages between the trading 

center and SRO trading facilities of 

Participants and/or other trading 

centers. 

In accordance with Regulation NMS, 

a Participant shall not impose, or permit 

to be imposed, any fee or fees for the 

execution of an order against a protected 

quotation of the Participant or of a 

trading center posting quotes through a 

Participant’s SRO display-only 

quotation facility in an Eligible Security 

or against any other quotation displayed 

by the Participant in an Eligible Security 

that is the Participant’s displayed best 

bid or offer for that Eligible Security, 

where such fee or fees exceed the limits 

provided for in Rule 610(c) of 

Regulation NMS. As required under 

Regulation NMS, the terms of access to 

a Participant’s quotations or of a trading 

center posting quotes through a 

Participant’s SRO display-only 

quotation facility in an Eligible Security 

may not be unfairly discriminatory so as 

to prevent or inhibit any person from 

obtaining efficient access to such 

displayed quotations through a member 

of the Participant or a subscriber of a 

trading center. 

X. Regulatory Halts 

A. Whenever, in the exercise of its 

regulatory functions, the Listing Market 

for an Eligible Security determines that 

a Regulatory Halt is appropriate 

pursuant to Section III.S, the Listing 

Market will notify all other Participants 

pursuant to Section X.E and all other 

Participants shall also halt or suspend 

trading in that security until notified 

that the halt or suspension is no longer 

in effect. The Listing Market shall 

immediately notify the Processor of 

such Regulatory Halt as well as provide 

notice that a Regulatory Halt has been 

lifted. The Processor, in turn, shall 

disseminate to Participants notice of the 

Regulatory Halt (as well as notice of the 

lifting of a Regulatory Halt through the 

UTP Quote Data Feed. This notice shall 

serve as official notice of a Regulatory 

Halt for purposes of the Plan only, and 

shall not substitute or otherwise 

supplant notice that a Participant may 

recognize or require under its own rules. 

Nothing in this provision shall be read 

so as to supplant or be inconsistent with 

a Participant’s own rules on trade halts, 

which rules apply to the Participant’s 

own members. The Processor will reject 

any quotation information or transaction 

reports received from any Participant on 

an Eligible Security that has a 

Regulatory Halt in effect. 

B. Whenever the Listing Market 

determines that adequate publication or 

dissemination of information has 

occurred so as to permit the termination 

of the Regulatory Halt then in effect, the 

Listing Market shall promptly notify the 

Processor and each of the other 

Participants that conducts trading in 

such security pursuant to Section X.F. 

Except in extraordinary circumstances, 

adequate publication or dissemination 

shall be presumed by the Listing Market 

to have occurred upon the expiration of 

one hour after initial publication in a 

national news dissemination service of 

the information that gave rise to the 

Regulatory Halt. 

C. Except in the case of a Regulatory 

Halt, the Processor shall not cease the 

dissemination of quotation or 

transaction information regarding any 

Eligible Security. In particular, it shall 

not cease dissemination of such 

information because of a delayed 

opening, imbalance of orders or other 

market-related problems involving such 

security. During a Regulatory Halt, the 

Processor shall collect and disseminate 

Transaction Information but shall cease 

collection and dissemination of all 

Quotation Information. 

D. For purposes of this Section X, 

‘‘Listing Market’’ for an Eligible Security 

means the Participant’s Market on 

which the Eligible Security is listed. If 

an Eligible Security is dually listed, 

Listing Market shall mean the 

Participant’s Market on which the 

Eligible Security is listed that also has 

the highest number of the average of the 

reported transactions and reported share 

volume for the preceding 12-month 

period. The Listing Market for duallylisted Eligible Securities shall be 

determined at the beginning of each 

calendar quarter. 

E. For purposes of coordinating 

trading halts in Eligible Securities, all 

Participants are required to utilize the 

national market system communication 

media (‘‘Hoot-n-Holler’’) to provide realtime information to all Participants. 

Each Participant shall be required to 

continuously monitor the Hoot-n-Holler 

system during market hours, and the 

failure of a Participant to do so at any 

time shall not prevent the Listing 

Market from initiating a Regulatory Halt 

in accordance with the procedures 

specified herein. 

1. The following procedures shall be 

followed when one or more Participants 

experiences extraordinary market 

activity in an Eligible Security that is 

believed to be caused by the misuse or 

malfunction of systems operated by or 

linked to one or more Participants. 

a. The Participant(s) experiencing the 

extraordinary market activity or any 

Participant that becomes aware of 

extraordinary market activity will 

immediately use best efforts to notify all 

Participants of the extraordinary market 

activity utilizing the Hoot-n-Holler 

system. 

b. The Listing Market will use best 

efforts to determine whether there is 

material news regarding the Eligible 

Security. If the Listing Market 

determines that there is undisclosed 

material news, it will immediately call 

a Regulatory Halt pursuant to Section 

X.E.2. 

c. Each Participant(s) will use best 

efforts to determine whether one of its 

systems, or the system of a direct or 

indirect participant in its market, is 

responsible for the extraordinary market 

activity. 

d. If a Participant determines the 

potential source of extraordinary market 

activity pursuant to Section X.1.c., the 

Participant will use best efforts to 

determine whether removing the 

quotations of one or more direct or 

indirect market participants or barring 

one or more direct or indirect market 

participants from entering orders will 

resolve the extraordinary market 

activity. Accordingly, the Participant 

will prevent the quotations from one or 

more direct or indirect market 

participants in the affected Eligible 

Securities from being transmitted to the 

Processor. 

e. If the procedures described in 

Section X.E.1.a.–d. do not rectify the 

situation, the Participant(s) 

experiencing extraordinary market 

activity will cease transmitting all 

quotations in the affected Eligible 

Securities to the Processor. 

f. If the procedures described in 

Section X.E.1.a–e do not rectify the 

situation within five minutes of the first 

notification through the Hoot-n-Holler 

system, or if Participants agree to call a 

halt sooner through unanimous 

approval among those Participants 

actively trading impacted Eligible 

Securities, the Listing Market may 

determine based on the facts and 

circumstances, including available 

input from Participants, to declare an 

Extraordinary Market Regulatory Halt in 

the affected Eligible Securities. 

Simultaneously with the notification of 

the Processor to suspend the 

dissemination of quotations across all 

Participants, the Listing Market must 

notify all Participants of the trading halt 

utilizing the Hoot-n-Holler system. 

g. Absent any evidence of system 

misuse or malfunction, best efforts will 

be used to ensure that trading is not 

halted across all Participants. 

2. If the Listing Market declares a 

Regulatory Halt in circumstances other 


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than pursuant to Section X.E.1.f., the 

Listing Market must, simultaneously 

with the notification of the Processor to 

suspend the dissemination of quotations 

across all Participants, notify all 

Participants of the trading halt utilizing 

the Hoot-n-Holler system. 

F. If the Listing Market declares a 

Regulatory Halt, trading will resume 

according to the following procedures: 

1. Within 15 minutes of the 

declaration of the halt, all Participants 

will make best efforts to indicate via the 

Hoot-n-Holler their intentions with 

respect to canceling or modifying 

transactions. 

2. All Participants will disseminate to 

their members information regarding the 

canceled or modified transactions as 

promptly as possible, and in any event 

prior to the resumption of trading. 

3. After all Participants have met the 

requirements of Section X.F.1–2, the 

Listing Market will notify the 

Participants utilizing the Hoot-n-Holler 

and the Processor when trading may 

resume. Upon receiving this 

information, Participants may 

commence trading pursuant to Section 

X.A. 

XI. Hours of Operation 

A. Quotation Information may be 

entered by Participants as to all Eligible 

Securities in which they make a market 

between 9:30 a.m. and 4 p.m. Eastern 

Time (‘‘ET’’) on all days the Processor is 

in operation. Transaction Reports shall 

be entered between 9:30 a.m. and 

4:01:30 p.m. ET by Participants as to all 

Eligible Securities in which they 

execute transactions between 9:30 a.m. 

and 4 p.m. ET on all days the Processor 

is in operation. 

B. Participants that execute 

transactions in Eligible Securities 

outside the hours of 9:30 a.m. ET and 

4 p.m. ET, shall report such transactions 

as follows: 

(i) transactions in Eligible Securities 

executed between 4 a.m. and 9:29:59 

a.m. ET and between 4:01 p.m. and 8 

p.m. ET, shall be designated as ‘‘.T’’ 

trades to denote their execution outside 

normal market hours; 

(ii) transactions in Eligible Securities 

executed after 8 p.m. and before 12 a.m. 

(midnight) shall be reported to the 

Processor between the hours of 4 a.m. 

and 8 p.m. ET on the next business day 

(T+1), and shall be designated ‘‘as/of’’ 

trades to denote their execution on a 

prior day, and be accompanied by the 

time of execution; 

(iii) transactions in Eligible Securities 

executed between 12 a.m. (midnight) 

and 4 a.m. ET shall be transmitted to the 

Processor between 4 a.m. and 9:30 a.m. 

ET, on trade date, shall be designated as 

‘‘.T’’ trades to denote their execution 

outside normal market hours, and shall 

be accompanied by the time of 

execution; 

(iv) transactions reported pursuant to 

this provision of the Plan shall be 

included in the calculation of total trade 

volume for purposes of determining net 

distributable operating revenue, but 

shall not be included in the calculation 

of the daily high, low, or last sale. 

C. Late trades shall be reported in 

accordance with the rules of the 

Participant in whose Market the 

transaction occurred and can be 

reported between the hours of 4 a.m. 

and 8 p.m. 

D. The Processor shall collect, process 

and disseminate Quotation Information 

in Eligible Securities at other times 

between 4 a.m. and 9:30 a.m. ET, and 

after 4 p.m. ET, when any Participant or 

FINRA Participant is open for trading, 

until 8 p.m. ET (the ‘‘Additional 

Period’’); provided, however, that the 

national best bid and offer quotation 

will not be disseminated before 4 a.m. 

or after 8 p.m. ET. Participants that 

enter Quotation Information or submit 

Transaction Reports to the Processor 

during the Additional Period shall do so 

for all Eligible Securities in which they 

enter quotations. 

XII. Undertaking by All Participants 

The filing with and approval by the 

Commission of this Plan shall obligate 

each Participant to enforce compliance 

by its members with the provisions 

thereof. In all other respects not 

inconsistent herewith, the rules of each 

Participant shall apply to the actions of 

its members in effecting, reporting, 

honoring and settling transactions 

executed through its facilities, and the 

entry, maintenance and firmness of 

quotations to ensure that such occurs in 

a manner consistent with just and 

equitable principles of trade. 

XIII. Financial Matters 

A. Development Costs 

Any Participant becoming a signatory 

to this Plan after June 26, 1990, shall, as 

a condition to becoming a Participant, 

pay to the other Plan Participants a 

proportionate share of the aggregate 

development costs previously paid by 

Plan Participants to the Processor, 

which aggregate development costs 

totaled $439,530, with the result that 

each Participant’s share of all 

development costs is the same. 

Each Participant shall bear the cost of 

implementation of any technical 

enhancements to the Nasdaq System 

made at its request and solely for its use, 

subject to reapportionment should any 

other Participant subsequently make use 

of the enhancement, or the development 

thereof. 

B. Cost Allocation, Revenue Sharing, 

and Fees 

The provisions governing cost 

allocation and revenue sharing among 

the Participants are set forth in Exhibit 

1 to the Plan. The provisions governing 

fees applicable to Quotation Information 

and Transaction Reports disseminated 

pursuant to the Plan are set forth in 

Exhibit 2 to the Plan. 

C. Maintenance of Financial Records 

The Processor shall maintain records 

of revenues generated and development 

and operating expenditures incurred in 

connection with the Plan. In addition, 

the Processor shall provide the 

Participants with: (a) A statement of 

financial and operational condition on a 

quarterly basis; and (b) an audited 

statement of financial and operational 

condition on an annual basis. 

XIV. Indemnification 

Each Participant agrees, severally and 

not jointly, to indemnify and hold 

harmless each other Participant, Nasdaq 

(in its capacity as Processor), and each 

of its directors, officers, employees and 

agents (including the Operating 

Committee and its employees and 

agents) from and against any and all 

loss, liability, claim, damage and 

expense whatsoever incurred or 

threatened against such persons as a 

result of any Transaction Reports, 

Quotation Information or other 

information reported to the Processor by 

such Participant and disseminated by 

the Processor to Vendors. This 

indemnity agreement shall be in 

addition to any liability that the 

indemnifying Participant may otherwise 

have. 

Promptly after receipt by an 

indemnified Participant of notice of the 

commencement of any action, such 

indemnified Participant will, if a claim 

in respect thereof is to be made against 

an indemnifying Participant, notify the 

indemnifying Participant in writing of 

the commencement thereof; but the 

omission to so notify the indemnifying 

Participant will not relieve the 

indemnifying Participant from any 

liability which it may have to any 

indemnified Participant. In case any 

such action is brought against any 

indemnified Participant and it promptly 

notifies an indemnifying Participant of 

the commencement thereof, the 

indemnifying Participant will be 

entitled to participate in, and, to the 

extent that it may wish, jointly with any 

other indemnifying Participant similarly 


srobinson on DSKHWCL6B1PROD with NOTICES
59764 Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 

notified, to assume and control the 

defense thereof with counsel chosen by 

it. After notice from the indemnifying 

Participant of its election to assume the 

defense thereof, the indemnifying 

Participant will not be liable to such 

indemnified Participant for any legal or 

other expenses subsequently incurred 

by such indemnified Participant in 

connection with the defense thereof but 

the indemnified Participant may, at its 

own expense, participate in such 

defense by counsel chosen by it 

without, however, impairing the 

indemnifying Participant’s control of 

the defense. The indemnifying 

Participant may negotiate a compromise 

or settlement of any such action, 

provided that such compromise or 

settlement does not require a 

contribution by the indemnified 

Participant. 

XV. Withdrawal 

Any Participant may withdraw from 

the Plan at any time on not less than 30 

days prior written notice to each of the 

other Participants. Any Participant 

withdrawing from the Plan shall remain 

liable for, and shall pay upon demand, 

any fees for equipment or services being 

provided to such Participant pursuant to 

the contract executed by it or an 

agreement or schedule of fees covering 

such then in effect. 

A withdrawing Participant shall also 

remain liable for its proportionate share, 

without any right of recovery, of 

administrative and operating expenses, 

including start-up costs and other sums 

for which it may be responsible 

pursuant to Section XIV hereof. Except 

as aforesaid, a withdrawing Participant 

shall have no further obligation under 

the Plan or to any of the other 

Participants with respect to the period 

following the effectiveness of its 

withdrawal. 

XVI. Modifications to the Plan 

The Plan may be modified from time 

to time when authorized by the 

agreement of all of the Participants, 

subject to the approval of the SEC or 

when such modification otherwise 

becomes effective pursuant to Section 

11A of the Exchange Act and Rule 608 

of Regulation NMS. 

XVII. Applicability of Securities 

Exchange Act of 1934 

The rights and obligations of the 

Participants and of Vendors, News 

Services, Subscribers and other persons 

contracting with Participant in respect 

of the matters covered by the Plan shall 

at all times be subject to any applicable 

provisions of the Exchange Act and any 

rules and regulations promulgated 

thereunder. 

XVIII. Operational Issues 

A. Each Participant shall be 

responsible for collecting and validating 

quotes and last sale reports within its 

own system prior to transmitting this 

data to the Processor. 

B. Each Participant may utilize a 

dedicated Participant line into the 

Processor to transmit trade and quote 

information in Eligible Securities to the 

Processor. The Processor shall accept 

from Exchange Participants input for 

only those issues that are deemed 

Eligible Securities. 

C. The Processor shall consolidate 

trade and quote information from each 

Participant and disseminate this 

information on the Processor’s existing 

vendor lines. 

D. The Processor shall perform gross 

validation processing for quotes and last 

sale messages in addition to the 

collection and dissemination functions, 

as follows: 

1. Basic Message Validation 

(a) The Processor may validate format 

for each type of message, and reject 

nonconforming messages. 

(b) Input must be for an Eligible 

Security. 

2. Logging Function—The Processor 

shall return all Participant input 

messages that do not pass the validation 

checks (described above) to the 

inputting Participant, on the entering 

Participant line, with an appropriate 

reject notation. For all accepted 

Participant input messages (i.e., those 

that pass the validation check), the 

information shall be retained in the 

Processor system. 

XIX. Headings 

The section and other headings 

contained in this Plan are for reference 

purposes only and shall not be deemed 

to be a part of this Plan or to affect the 

meaning or interpretation of any 

provisions of this Plan. 

XX. Counterparts 

This Plan may be executed by the 

Participants in any number of 

counterparts, no one of which need 

contain the signature of all Participants. 

As many such counterparts as shall 

together contain all such signatures 

shall constitute one and the same 

instrument. 

IN WITNESS WHEREOF, this Plan 

has been executed as of the __ day of 

______, 2010, by each of the Signatories 

hereto. 

NYSE AMEX LLC 

BY: llllllllllllllll

NASDAQ OMX BX, INC. 

BY: llllllllllllllll

CHICAGO BOARD OPTIONS 

EXCHANGE, INC. 

BY: llllllllllllllll

EDGX EXCHANGE, INC. 

BY: llllllllllllllll

INTERNATIONAL SECURITIES 

EXCHANGE, LLC 

BY: llllllllllllllll

NEW YORK STOCK EXCHANGE LLC 

BY: llllllllllllllll

NASDAQ OMX PHLX, INC. 

BY: llllllllllllllll

BATS EXCHANGE, INC. 

BY: llllllllllllllll

CHICAGO STOCK EXCHANGE, INC. 

BY: llllllllllllllll

EDGA EXCHANGE, INC. 

BY: llllllllllllllll

FINRA 

BY: llllllllllllllll

NATIONAL STOCK EXCHANGE, INC. 

BY: llllllllllllllll

NYSE ARCA, INC. 

BY: llllllllllllllll

THE NASDAQ STOCK MARKET LLC 

BY: llllllllllllllll

Exhibit 1 

1. Each Participant eligible to receive 

revenue under the Plan will receive an 

annual payment for each calendar year 

that is equal to the sum of the 

Participant’s Trading Shares and 

Quoting Shares, as defined below, in 

each Eligible Security for the calendar 

year. In the event that total net 

distributable operating income (as 

defined below) is negative, each 

Participant eligible to receive revenue 

under the Plan will receive an annual 

bill for each calendar year to be 

determined according to the same 

formula (described in this paragraph) for 

determining annual payments to eligible 

Participants. Unless otherwise stated in 

this agreement, a year shall run from 

January 1 to December 31 and quarters 

shall end on March 31, June 30, 

September 30, and December 31. 

Processor shall endeavor to provide 

Participants with written estimates of 

each Participant’s percentage of total 

volume within five business days of 

month end. 

2. Security Income Allocation. The 

Security Income Allocation for an 

Eligible Security shall be determined by 

multiplying (i) the ‘‘net distributable 

operating income’’ of this Nasdaq UTP 

Plan for the calendar year by (ii) the 

Volume Percentage for such Eligible 

Security (the ‘‘initial allocation’’), and 

then adding or subtracting any amounts 

specified in the reallocation set forth 

below. The Volume Percentage for an 


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5All costs associated with collecting, 

consolidating, validating, generating, and 

disseminating the FINRA OTC Data are borne 

directly by FINRA and not the Plan and the 

Participants. Such costs are established in and 

subject to a separate bilateral contractual agreement 

between FINRA and the Processor (acting as 

FINRA’s vendor in this capacity). The Processor is 

responsible for insuring that no costs associated 

with the FINRA OTC Data are incorporated with the 

costs incurred by the Processor on behalf of the 

UTP Plan. 

Eligible Security shall be determined by 

dividing (A) the square root of the dollar 

volume of transaction reports 

disseminated by the Processor in such 

Eligible Security during the calendar 

year by (B) the sum of the square roots 

of the dollar volume of transaction 

reports disseminated by the Processor in 

each Eligible Security during the 

calendar year. If the initial allocation of 

net distributable operating income in 

accordance with the Volume Percentage 

of an Eligible Security equals an amount 

greater than $4.00 multiplied by the 

total number of qualified transaction 

reports in such Eligible Security during 

the calendar year, the excess amount 

shall be subtracted from the initial 

allocation for such Eligible Security and 

reallocated among all Eligible Securities 

in direct proportion to the dollar 

volume of transaction reports 

disseminated by the Processor in 

Eligible Securities during the calendar 

year. A transaction report with a dollar 

volume of $5000 or more shall 

constitute one qualified transaction 

report. A transaction report with a 

dollar volume of less than $5000 shall 

constitute a fraction of a qualified 

transaction report that equals the dollar 

volume of the transaction report divided 

by $5000. 

3. Trading Share. The Trading Share 

of a Participant in an Eligible Security 

shall be determined by multiplying (i) 

an amount equal to fifty percent of the 

Security Income Allocation for the 

Eligible Security by (ii) the Participant’s 

Trade Rating in the Eligible Security. A 

Participant’s Trade Rating in an Eligible 

Security shall be determined by taking 

the average of (A) the Participant’s 

percentage of the total dollar volume of 

transaction reports disseminated by the 

Processor in the Eligible Security during 

the calendar year, and (B) the 25 

Participant’s percentage of the total 

number of qualified transaction reports 

disseminated by the Processor in the 

Eligible Security during the calendar 

year. 

4. Quoting Share. The Quoting Share 

of a Participant in an Eligible Security 

shall be determined by multiplying (A) 

an amount equal to fifty percent of the 

Security Income Allocation for the 

Eligible Security by (B) the Participant’s 

Quote Rating in the Eligible Security. A 

Participant’s Quote Rating in an Eligible 

Security shall be determined by 

dividing (A) the sum of the Quote 

Credits earned by the Participant in 

such Eligible Security during the 

calendar year by (B) the sum of the 

Quote Credits earned by all Participants 

in such Eligible Security during the 

calendar year. A Participant shall earn 

one Quote Credit for each second of 

time (with a minimum of one full 

second) multiplied by dollar value of 

size that an automated best bid (offer) 

transmitted by the Participant to the 

Processor during regular trading hours 

is equal to the price of the national best 

bid (offer) in the Eligible Security and 

does not lock or cross a previously 

displayed automated quotation. An 

automated bid (offer) shall have the 

meaning specified in Rule 600 of 

Regulation NMS of the Act for an 

‘‘automated quotation.’’ The dollar value 

of size of a quote shall be determined by 

multiplying the price of a quote by its 

size. 

5. For purposes of this Exhibit 1, net 

distributable operating income for any 

particular calendar year shall be 

calculated by adding all revenues from 

the UTP Quote Data Feed, the UTP 

Trade Data Feed, and the OTC Montage 

Data Feed including revenues from the 

dissemination of information respecting 

Eligible Securities to foreign 

marketplaces, and also including FINRA 

quotation data and last sale information 

for securities classified as OTC Equity 

Securities under FINRA’s Rule 6400 

Series (the ‘‘FINRA OTC Data’’) 

(collectively, ‘‘the Data Feeds’’), and 

subtracting from such revenues 6.25% 

to compensate FINRA for the FINRA 

OTC Data, after which are subtracted the 

costs incurred by the Processor, set forth 

below, in collecting, consolidating, 

validating, generating, and 

disseminating the Data Feeds. These 

costs include,5 but are not limited to, 

the following: 

a. The Processor costs directly 

attributable to creating OTC Montage 

Data Feed, including: 

1. cost of collecting Participant quotes 

into the Processor’s quote engine; 

2. cost of processing quotes and 

creating OTC Montage Data Feed 

messages within the Processor’s quote 

engine; 

3. cost of the Processor’s 

communication management subsystem 

that distributes OTC Montage Data Feed 

to the market data vendor network for 

further distribution. 

b. The costs directly attributable to 

creating the UTP Quote Data Feed, 

including: 

1. the costs of collecting each 

Participant’s best bid, best offer, and 

aggregate volume into the Processor’s 

quote engine and, in the case of FINRA, 

the costs of identifying the FINRA 

Participant(s) that constitute FINRA’s 

Best Bid and Offer quotations; 

2. cost of calculating the national best 

bid and offer price within the 

Processor’s quote engine; 

3. cost of creating the UTP Quote Data 

Feed message within the Processor’s 

quote engine; 

4. cost of the Processor’s 

communication management subsystem 

that distributes the UTP Quote Data 

Feed to the market data vendors’ 

networks for further distribution. 

c. The costs directly attributable to 

creating the UTP Trade Data Feed, 

including: 

1. the costs of collecting each 

Participant’s last sale and volume 

amount into the Processor’s quote 

engine; 

2. cost of determining the appropriate 

last sale price and volume amount 

within the Processor’s trade engine; 

3. cost of utilizing the Processor’s 

trade engine to distribute the UTP Trade 

Data Feed for distribution to the market 

data vendors; 

4. cost of the Processor’s 

communication management subsystem 

that distributes the UTP Trade Data 

Feed to the marker data vendors’ 

networks for further distribution. 

d. The additional costs that are shared 

across all Data Feeds, including: 

1. telecommunication Operations 

costs of supporting the Participant lines 

into the Processor’s facilities; 

2. Telecommunications Operations 

costs of supporting the external market 

data vendor network; 

3. Data Products account management 

and auditing function with the market 

data vendors; 

4. Market Operations costs to support 

symbol maintenance, and other data 

integrity issues; 

5. overhead costs, including 

management support of the Processor, 

Human Resources, Finance, Legal, and 

Administrative Services; and 

6. Costs of establishing and 

supporting the Security Income 

Allocation System. 

e. Processor costs excluded from the 

calculation of net distributable 

operating income include trade 

execution costs for transactions 

executed using a Nasdaq service and 

trade report collection costs reported 

through a Nasdaq service, as such 

services are market functions for which 

Participants electing to use such 

services pay market rate. 

f. For the purposes of this provision, 

the following definitions shall apply: 


srobinson on DSKHWCL6B1PROD with NOTICES
59766 Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 

1. ‘‘quote engine’’ shall mean the 

Nasdaq’s NT or Tandem system that is 

operated by Nasdaq to collect quotation 

information for Eligible Securities; 

2. ‘‘trade engine’’ shall mean the 

Nasdaq Tandem system that is operated 

by Nasdaq for the purpose of collecting 

last sale information in Eligible 

Securities. 

6. At the time a Participant 

implements a Processor-approved 

electronic interface with the Processor, 

the Participant will become eligible to 

receive revenue. 

7. Processor shall endeavor to provide 

Participants with written estimates of 

each Participant’s quarterly net 

distributable operating income within 

45 calendar days of the end of the 

quarter, and estimated quarterly 

payments or billings shall be made on 

the basis of such estimates. All quarterly 

payments or billings shall be made to 

each eligible Participant within 45 days 

following the end of each calendar 

quarter in which the Participant is 

eligible to receive revenue, provided 

that each quarterly payment or billing 

shall be reconciled against a 

Participant’s cumulative year-to-date 

payment or billing received to date and 

adjusted accordingly, and further 

provided that the total of such estimated 

payments or billings shall be reconciled 

at the end of each calendar year and, if 

necessary, adjusted by March 31st of the 

following year. Interest shall be 

included in quarterly payments and in 

adjusted payments made on March 31st 

of the following year. Such interest shall 

accrue monthly during the period in 

which revenue was earned and not yet 

paid and will be based on the 90-day 

Treasury bill rate in effect at the end of 

the quarter in which the payment is 

made. Monthly interest shall start 

accruing 45 days following the month in 

which it is earned and accrue until the 

date on which the payment is made. 

In conjunction with calculating 

estimated quarterly and reconciled 

annual payments under this Exhibit 1, 

the Processor shall submit to the 

Participants a quarterly itemized 

statement setting forth the basis upon 

which net operating income was 

calculated, including a quarterly 

itemized statement of the Processor 

costs set forth in Paragraph 3 of this 

Exhibit. Such Processor costs and Plan 

revenues shall be adjusted annually 

based solely on the Processor’s quarterly 

itemized statement audited pursuant to 

Processor’s annual audit. Processor shall 

pay or bill Participants for the audit 

adjustments within thirty days of 

completion of the annual audit. By 

majority vote of the Operating 

Committee, the Processor shall engage 

an independent auditor to audit the 

Processor’s costs or other calculation(s), 

the cost of which audit shall be shared 

equally by all Participants. The 

Processor agrees to cooperate fully in 

providing the information necessary to 

complete such audit. 

Exhibit 2 

Fees for UTP Services 

(a) Level 1 Service 

The charge for each interrogation 

device receiving UTP Level 1 Service is 

$20.00 per month. This Service includes 

the following data: 

(1) Inside bid/ask quotations 

calculated for securities listed in The 

Nasdaq Stock Market; 

(2) Last sale information on Nasdaqlisted securities. 

UTP Level 1 Service also includes 

FINRA OTC Data. 

(b) Non-Professional Services 

(1) The charge for distribution of UTP 

Level 1 Service to a non-professional 

subscriber shall be $1.00 per 

interrogation device per month. 

(2) A ‘‘non-professional’’ is a natural 

person who is neither: 

(A) Registered or qualified in any 

capacity with the Commission, the 

Commodities Futures Trading 

Commission, any state securities 

agency, any securities exchange or 

association or any commodities or 

futures contract market or association; 

(B) Engaged as an ‘‘investment 

adviser’’ as that term is defined in 

Section 202(a)(11) of the Investment 

Advisors Act of 1940 (whether or not 

registered or qualified under that Act); 

nor 

(C) Employed by a bank or other 

organization exempt from registration 

under federal or state securities laws to 

perform functions that would require 

registration or qualification if such 

functions were performed for an 

organization not so exempt. 

(c) Automated Voice Response Service 

Fee 

The monthly charge for distribution of 

UTP Level 1 Service through automated 

voice response services shall be $21.25 

for each voice port. 

(d) Per Query Fee 

The charge for distribution of UTP 

Level 1 Service through a per query 

system shall be $.005 per query. 

(e) Cable Television Ticker Fee 

The monthly charge for distribution of 

UTP Level 1 Service through a cable 

television distribution system shall be 

as set forth below: 

First 10 million Subscriber Households.$2.00 per 1,000 

households. 

Next 10 million Subscriber Households.1.00 per 1,000 

households. 

For Subsequent Subscriber Households.0.50 per 1,000 

households. 

(f) Annual Administrative Fees 

The annual administrative fee to be 

paid by distributor for access to UTP 

Level 1 Service shall be as set forth 

below: 

Delayed distributor ...................... $250 

0–999 real-time terminals ........... 500 

1,000–4,999 real-time terminals 1,250 

5,000–9,999 real-time terminals 2,250 

10,000+ real-time terminals ........ 3,750 

Exhibit 3 

UTP Capacity Planning Process 

This document sets forth a capacity 

planning process for the Processor and 

includes certain procedures to facilitate 

that process. The capacity planning 

process will be done on a semi-annual 

basis and will cover the then current 

six-month period and each of the next 

two six-month periods, with each sixmonth period commencing on January 

1st and July 1st, as appropriate (referred 

to collectively as the ‘‘Capacity Planning 

Period’’), provided however that, 

notwithstanding the foregoing, the first 

Capacity Planning Period shall cover the 

then current six-month period and each 

of the next two six-month periods. 

All information specified in this 

document that is required to be 

submitted by each of the Participants to 

the Processor, by the Processor to each 

of the Participants, and by the Operating 

Committee to the Processor, shall be 

submitted within the time frames set 

forth in the capacity planning process 

calendar attached hereto as Attachment 

1, which may be modified from time to 

time by the Operating Committee. 

Projected Processor Capacity 

Requirements 

Each Participant’s ‘‘Projected 

Processor Capacity Requirements’’ shall 

consist of the following two 

components: 

1. The projected peak quote/trade 

messages per second for such 

Participant calculated on a 5-second 

peak (the ‘‘Projected Peak 5-second 

MPS’’); and 

2. The projected peak total quote/ 

trade transactions per day for such 

Participant. 

Each Participant’s projected 

requirements for both of these 

components shall include whatever 

buffer factor the Participant deems 

adequate for its needs and shall reflect 

the Participant’s anticipated 

requirements as of the beginning of each 


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Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 59767 

six-month period in the applicable 

Capacity Planning Period. 

Each Participant shall submit to the 

Processor in writing, which may include 

email, an ‘‘initial’’ set of Projected 

Processor Capacity Requirements as of 

the beginning of each six-month period 

in the applicable Capacity Planning 

Period. Once the Processor receives the 

initial Projected Processor Capacity 

Requirements from all the Participants, 

the Processor will aggregate both 

components—the Projected Peak 5- 

second MPS and the projected peak 

total transactions per day—to determine 

the initial Projected Processor Capacity 

Requirements for all Participants. The 

Processor will notify each Participant in 

writing, which may include email, of (a) 

the aggregate initial Projected Processor 

Capacity Requirements; and (b) the 

percentage of the aggregate initial 

Projected Peak 5-second MPS that is 

attributable to such Participant. 

Once each Participant receives the 

foregoing information, each such 

Participant shall submit to the Processor 

in writing, which may include email, its 

final Projected Processor Capacity 

Requirements. The Processor will then 

notify each Participant in writing, 

which may include email, of: (a) The 

aggregate final Projected Processor 

Capacity Requirements; and (b) the 

percentage of the aggregate final 

Projected Peak 5-second MPS that is 

attributable to such Participant. 

The Processor will not disclose to any 

Participant the initial or final individual 

capacity projections of any other 

Participant or the percentage of the Peak 

5-second MPS attributable to any other 

Participant. 

In the event that a Participant fails to 

notify the Processor of its final Projected 

Processor Capacity Requirements within 

the required time frame, then such 

Participant’s final Projected Processor 

Capacity Requirements for: (a) Each sixmonth period for which the required 

notice was not given on a timely basis 

shall be deemed to be the same as that 

for the latest six-month period covered 

by the Participant’s most recent final 

Projected Processor Capacity 

Requirements provided to the Processor 

within the required time frame; and (b) 

each six-month period for which the 

required notice was previously given on 

a timely basis shall remain the same. 

Processor System Capacity Changes 

The Processor shall, on a semi-annual 

basis, determine and inform each 

Participant in writing, which may 

include email, of the total amount of the 

then-current system capacity available 

for each of the two capacity 

components—the Peak 5-second MPS 

and the peak total transactions per day 

(referred to as ‘‘Total System Capacity’’). 

The Projected Processor Capacity 

Requirements for all Participants shall 

be referred to as the ‘‘Base Capacity.’’ 

The amount, if any, by which Total 

System Capacity exceeds Base Capacity, 

shall be referred to as ‘‘Excess Capacity.’’ 

The amount, if any, by which Total 

System Capacity is less than the Base 

Capacity shall be referred to as ‘‘Deficit 

Capacity.’’ At the time that the Processor 

notifies each Participant of the initial 

and final aggregate Projected Processor 

Capacity Requirements, the Processor 

shall also determine, based on such 

initial and final capacity projections, 

respectively, and inform each 

Participant in writing, which may 

include email, of, the amount of any 

projected Excess Capacity and/or any 

projected Deficit Capacity at the 

beginning of each six-month period in 

the applicable Capacity Planning 

Period. 

On a semi-annual basis, the Operating 

Committee shall determine and advise 

the Processor in writing, which may 

include email, of any changes (i.e., 

increases or decreases) that it proposes 

be made to the Total System Capacity, 

including any required ancillary 

systems and network capacity changes 

(‘‘System Capacity Changes’’); provided, 

however, that any System Capacity 

Changes must result in the Total System 

Capacity meeting or exceeding Base 

Capacity. The Processor will develop a 

written proposal for System Capacity 

Changes and submit it to the Operating 

Committee, which proposal will include 

the timeframe and estimated costs for 

implementing the System Capacity 

Changes. If the Processor’s proposal is 

accepted, such acceptance will be set 

forth in the minutes of the applicable 

Operating Committee meeting. The 

Processor will then implement such 

System Capacity Changes. Such System 

Capacity Changes implemented by the 

Processor may, in the Processor’s 

discretion reasonably exercised and 

with the prior approval of the Operating 

Committee, result in creating some 

additional amount of Excess Capacity. 

Emergency Capacity Planning Process 

In addition to the semi-annual 

capacity planning process described 

above, the Processor may recommend to 

the Operating Committee emergency 

planning cycles (‘‘EPC’’) as may be 

reasonably necessary. The Processor 

shall submit a recommendation to the 

Operating Committee detailing the EPC 

request and required timeframe for 

response, via e-mail. The Operating 

Committee, at an emergency meeting if 

necessary, shall determine whether to 

approve the request. 

Payment For Services 

Each Participant’s ‘‘Proportionate 

Share’’ shall be the percentage of the 

final Projected Peak 5-second MPS for 

all Participants that is attributable to 

such Participant. A Participant’s 

Proportionate Share shall remain in 

effect until the next System Capacity 

Change is implemented, provided, 

however, that such Proportionate Share 

may change from time to time in 

accordance with the provisions set forth 

in the following two Sections of this 

Exhibit. The cost for such services shall 

be such Participant’s Proportionate 

Share of the cost of the services 

rendered by the Processor to all 

Participants, unless otherwise agreed to 

by the Processor and the Operating 

Committee. Each Participant shall be 

entitled to use its Proportionate Share of 

the Base Capacity and the Excess 

Capacity, if any, at no additional cost. 

If, however, the report(s) generated by 

the Processor setting forth daily system 

activity for Participants shows that a 

Participant’s actual Peak 5-second MPS 

exceeds such Participant’s Proportionate 

Share of the Base Capacity and the 

Excess Capacity, if any (e.g., via 

dynamic throttling), such Participant 

may be required, in accordance with the 

provisions set forth in Attachment 2, 

which may be modified from time to 

time by the Operating Committee, to: (a) 

Pay a penalty to the Processor in the 

amount set forth in Attachment 2; and 

(b) increase its capacity projections in 

the next Capacity Planning Period to 

reflect at least such actual Peak 5- 

second MPS. Any such penalty shall be 

divided and distributed to each of the 

other Participants in accordance with 

their Proportionate Shares. 

Purchase Of Capacity 

Without limiting the generality of the 

foregoing, a Participant may increase its 

Proportionate Share of the Base 

Capacity by purchasing all or a portion 

of the ‘‘Available Base Capacity’’ (as 

such term is defined in Item 1, below) 

and/or Excess Capacity, if any 

(collectively with ‘‘Available Base 

Capacity,’’ hereinafter referred to as 

‘‘Capacity’’), subject to the following: 

1. A Participant wishing to purchase 

Capacity shall advise the Processor in 

writing of the amount of Capacity 

(expressed as UTP 5-second MPS) it 

wishes to purchase. A Participant shall 

only be entitled to purchase Capacity 

(and such request shall only be filled) if, 

and to the extent that: 

a. There are any currently outstanding 

unfilled request(s) from other 


srobinson on DSKHWCL6B1PROD with NOTICES
59768 Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 

Participant(s) to decrease Base Capacity 

(referred to as ‘‘Available Base 

Capacity’’); and/or 

b. There is Excess Capacity. 

Furthermore, all requests to purchase 

Capacity shall be filled first through any 

Available Base Capacity, and second 

through any Excess Capacity. All 

Participant requests to purchase 

Capacity shall be filled on a ‘‘first come, 

first served’’ basis. 

2. Within two (2) trading days of 

receipt of such notice, the Processor 

shall confirm the request directly with 

such Participant. The Processor shall fill 

the request if, and to the extent that, 

there is sufficient Available Base 

Capacity and/or Excess Capacity. The 

Processor shall then notify all 

Participants in writing of: 

a. The amount of Available Base 

Capacity and/or Excess Capacity that 

remains, if any; and/or 

b. The amount by which any 

Participant request(s) to increase 

Capacity remains unfilled. 

3. A Participant’s request to increase 

Capacity shall remain outstanding until 

filled, or cancelled by such Participant, 

or the next System Capacity Change, 

whichever occurs first. Whenever a 

request is cancelled, the Processor shall 

then notify all Participants in writing 

whether, and the extent to which, any 

Participant request(s) to increase 

Capacity remain in effect. 

4. The Processor will not disclose to 

any other Participant the Participant(s) 

that have requested purchasing, and/or 

that have purchased, Capacity. 

5. Whenever a Participant purchases 

Available Base Capacity such 

Participant’s Proportionate Share of the 

Base Capacity shall be increased 

accordingly, effective on the first trading 

day that the Processor implements the 

requisite technical changes to reflect the 

changes in such Participant’s Base 

Capacity. As of such date, the costs 

associated, for that Participant, shall be 

increased to the extent of the resulting 

increase in that Participant’s 

Proportionate Share. The Processor shall 

notify such Participant of its new 

Proportionate Share and the effective 

date of such change. 

6. Whenever a Participant purchases a 

portion (or all) of the Excess Capacity, 

such Participant’s Proportionate Share 

of the Base Capacity shall be increased 

accordingly, effective on the first trading 

day that the Processor implements the 

requisite technical changes to reflect the 

changes in such Participant’s Base 

Capacity. As of such date: 

a. The costs allocated to that 

Participant shall be increased to the 

extent of the resulting increase in that 

Participant’s Proportionate Share; and 

b. There shall be a corresponding 

reduction in: 

i. Each of the other Participants’ 

Proportionate Share of the Base 

Capacity; and 

ii. The costs allocated to the other 

Participants shall be decreased, to the 

extent of the resulting decrease in each 

such Participant’s Proportionate Share. 

The Processor shall notify each 

Participant of its new Proportionate 

Share and the effective date of such 

change. 

Reduction of Base Capacity 

Without limiting the generality of the 

foregoing, a Participant may be entitled 

to decrease its Proportionate Share by 

reducing its Base Capacity, subject to 

the following: 

1. A Participant wishing to reduce its 

Base Capacity shall advise the Processor 

in writing of the amount of its Base 

Capacity it wishes to decrease (which 

decrease shall be expressed as UTP 5- 

second MPS). A Participant shall only 

be entitled to decrease its Base Capacity 

(and such request shall only be filled) if, 

and to the extent that, there are any 

currently outstanding unfilled requests 

from other Participant(s) to increase 

Capacity. All Participant requests to 

decrease Base Capacity shall be filled on 

a ‘‘first come, first served’’ basis. 

2. Within two (2) trading days of 

receipt of such notice, the Processor 

shall confirm the request directly with 

such Participant. The Processor shall fill 

the request if, and to the extent that, 

there are any currently outstanding 

unfilled requests from other 

Participant(s) to increase Capacity. The 

Processor shall then notify all 

Participants in writing of: 

a. The amount of Available Base 

Capacity that remains, if any; and/or 

b. The amount by which any 

Participant request(s) to decrease Base 

Capacity remain unfilled. 

3. A Participant’s request to decrease 

Base Capacity shall remain outstanding 

until filled, or cancelled by such 

Participant, or the next System Capacity 

Change, whichever occurs first. 

Whenever a request is cancelled, the 

Processor shall then notify all 

Participants in writing whether, and the 

extent to which, any Participant 

request(s) to decrease Base Capacity 

remain in effect. 

4. The Processor will not disclose to 

any other Participant the Participant(s) 

that have requested decreasing, and/or 

that have decreased, Base Capacity. 

Whenever a Participant reduces its 

Base Capacity pursuant to this Section, 

such Participant’s Proportionate Share 

of the Base Capacity shall be decreased 

accordingly, effective on the first trading 

day that the Processor implements the 

requisite technical changes to reflect the 

changes in such Participant’s Base 

Capacity. As of such date, the costs 

associated, for that Participant, shall be 

decreased to the extent of the resulting 

decrease in that Participant’s 

Proportionate Share. The Processor shall 

notify such Participant of its new 

Proportionate Share and the effective 

date of such change. 

ATTACHMENT 1 

PROCESSOR CAPACITY PLANNING PROCESS CALENDAR

[Approximately 3.5 Calendar Months] 

Step No. Description 

Duration 

(trading 

days) 

Start date End date 

1 ......................... The Processor requests initial capacity projections from Participants via email.1 1st trading day in 3rd month of applicable Capacity Planning Period.1st trading day in 3rd month of applicable Capacity Planning Period. 

2 ......................... Participants submit initial capacity 

projections to the Processor via 

email.

10 


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Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 59769 

PROCESSOR CAPACITY PLANNING PROCESS CALENDAR—Continued 

[Approximately 3.5 Calendar Months] 

Step No. Description 

Duration 

(trading 

days) 

Start date End date 

3 ......................... The Processor advises each Participant of initial capacity projections for all Participants, current 

system capacity, and any projected Excess and/or Deficit Capacity, via email.

5 

4 ......................... Participants submit final capacity 

projections to the Processor via 

email.

15 

5 ......................... The Processor advises each Participant of final capacity projections for all Participants, current 

system capacity, and any projected Excess and/or Deficit Capacity, via email.

5 

6 ......................... At a meeting of the Operating 

Committee at which the Processor is present, the Operating 

Committee will determine and 

then advise the Processor in 

writing (i.e., by minutes of such 

meeting) of any System Capacity Changes.

5 

7 ......................... The Processor submits a proposal 

to the Operating Committee for 

System Capacity Changes, including estimated timeframes 

and costs for implementing 

them, via e-mail.

The Processor will notify each Participant via email of: (a) the aggregate final Projected Processor Capacity Requirements; 

and (b) the percentage of the 

aggregate final Projected Peak 

5-second MPS that is attributable to such Participant.

20 

8 ......................... At a meeting of the Operating 

Committee at which the Processor is present, the Operating 

Committee will decide and then 

advise the Processor in writing 

(i.e., by minutes of such meeting) if it accepts the Processor’s 

proposal for System Capacity 

Changes.

10 

ATTACHMENT 2 

UTP CAPACITY PROCESS—PENALTIES FOR EXCEEDING PROPORTIONATE SHARE

Scenario Description Penalty Increase projections 

Participant System 

Problem/Recovery.

Participant’s actual peak 5-second MPS exceeds its Proportionate Share for 30 consecutive seconds artificially (e.g., due to 

draining of queued data following a system 

recovery).

None ................................................................ No. 

Occasional (inconsistent).Participant’s actual peak 5-second MPS exceeds its Proportionate Share for 30 consecutive seconds on no more than 2 days 

during a month.

None ................................................................ No. 


srobinson on DSKHWCL6B1PROD with NOTICES
59770 Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 

UTP CAPACITY PROCESS—PENALTIES FOR EXCEEDING PROPORTIONATE SHARE—Continued 

Scenario Description Penalty Increase projections 

Regular ........................ Participant’s actual peak 5-Second MPS exceeds its Proportionate Share for 30 consecutive seconds on each of 3 or more 

days during a month.

Participant’s penalty will be calculated and 

billed according to the following formula:.

• (Total MPS in Excess) × (Penalty MPS 

$ Rate).

To find the Total MPS in Excess for any 

month:.

1. Determine which days during the 

month (‘‘Days in Excess’’) the Participant exceeded its proportionate share 

of MPS for 30 or more consecutive 

seconds (each, a ‘‘Period in Excess’’), 

whether it did so once or multiple 

times on any day; 

2. For each Day in Excess during a 

month, determine that day’s ‘‘Highest 

Period in Excess’’; and 

3. Add the Participant’s MPS in excess 

of its Proportionate Share for each 

Day in Excess’ Highest Period in Excess.

A day’s ‘‘Highest Period in Excess’’ refers to 

the Period in Excess during which the Participant exceeded its Proportionate Share 

of MPS by more than it did during the 

day’s other Periods in Excess. 

To find the Penalty MPS $ Rate for any 

month, multiply twice the current monthly 

MPS $ rate by the percentage of trading 

days during the month that were Days in 

Excess; that is: (2 × current monthly MPS 

$ rate) × (# Days in Excess/# trading days 

in the month).

Yes—to be determined 

Notes: 

1. The Processor reports containing daily/monthly/quarterly activity by Participant will be used to determine if any of the above penalty criteria 

have been met. 

2. The Processor will notify a Participant in the event it has been assessed a penalty. 

3. Participant penalties will be distributed to the other Participants based on each Participant’s Proportionate Share. 

4. Reports provided by the Processor to the Participants will include the total monthly costs, that Participant’s Proportionate Share, any penalties to be paid by that Participant, any redistribution of penalties paid by other Participant(s) and the number of Participants who paid penalties 

broken down by Quote and Trade separately. 

• Participant’s Monthly Costs are Total Monthly Costs multiplied by Participant’s Proportionate Share. 

UTP Capacity Planning 

Participant Projected Processor 

Capacity Requirements—Input 

Document 

Participant Name: llllllllll

Initial Projected Requirements: 

Period beginning: 

Projected peak 5 second MPS Projected peak total daily 

transactions 

UTP Quote UTP Trade UTP Quote UTP Trade 

Approved By: llllllllllll

Date Submitted: lllllllllll

Final Projected Requirements: 

Period beginning: 

Projected peak 5 second MPS Projected peak total daily 

transactions 

UTP Quote UTP Trade UTP Quote UTP Trade 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 59771 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 62664 

(Aug. 9, 2010), 75 FR 49542 (Aug. 13, 2010) (SR– 

FINRA–2010–037). 

4The exception for ‘‘actively traded’’ securities in 

Rule 101 of Regulation M applies to securities with 

an ADTV value, as defined in Rule 100 of 

Regulation M, of at least $1 million and are issued 

by an issuer whose common equity securities have 

a public float value of at least $150 million, 

provided, however, that such securities are not 

issued by the distribution participant or an affiliate 

of the distribution participant. 17 CFR 

242.101(c)(1). 

5 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

6 15 U.S.C. 78o–3(b)(6). 

7 15 U.S.C. 78s(b)(2). 

Period beginning: 

Projected peak 5 second MPS Projected peak total daily 

transactions 

UTP Quote UTP Trade UTP Quote UTP Trade 

Approved By: llllllllllll

Date Submitted: lllllllllll

[FR Doc. 2010–24225 Filed 9–27–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62970; File No. SR–FINRA– 

2010–037] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving the 

Proposed Rule Change To Amend 

FINRA Rule 5190 (Notification 

Requirements for Offering 

Participants) 

September 22, 2010. 

I. Introduction 

On July 27, 2010, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) (f/k/a National Association of 

Securities Dealers, Inc. (‘‘NASD’’)) filed 

with the Securities 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 proposal to amend 

FINRA Rule 5190 (Notification 

Requirements for Offering Participants) 

relating to the notice requirements 

applicable to distributions of ‘‘actively 

traded’’ securities, as defined under 

Regulation M. This proposal was 

published for comment in the Federal 

Register on August 13, 2010.3 The 

Commission received no comments 

regarding the proposal. This order 

approves this proposed rule change. 

II. Description of the Proposed Rule 

Change 

FINRA Rule 5190 imposes certain 

notice requirements on FINRA members 

participating in distributions of listed 

and unlisted securities and is designed 

to ensure that FINRA receives pertinent 

distribution-related information from its 

members in a timely fashion to facilitate 

its Regulation M surveillance program. 

Rule 5190(d) sets forth the notice 

requirements applicable to distributions 

of securities that are considered 

‘‘actively traded’’ and thus are not 

subject to a restricted period under Rule 

101 of Regulation M.4 In connection 

with such distributions, pursuant to 

Rule 5190(d)(1), FINRA members are 

required to provide written notice to 

FINRA of the member’s determination 

that no restricted period applies and the 

basis for such determination. FINRA 

members must provide such notice at 

least one business day prior to the 

pricing of the distribution, unless later 

notification is necessary under specific 

circumstances. Rule 5190(d)(2) requires 

that, upon pricing a distribution of an 

‘‘actively traded’’ security, FINRA 

members provide written notice to 

FINRA along with pricing-related 

information such as the offering price, 

the last sale before the distribution, and 

the pricing basis. Notice of pricing must 

be provided no later than the close of 

business the next business day 

following the pricing of the distribution, 

unless later notification is necessary 

under specific circumstances. 

FINRA proposed to amend Rule 

5190(d) to require that notice under 

subparagraphs (1) and (2) be provided at 

the same time, specifically no later than 

the close of business the next business 

day following the pricing of the 

distribution. While the timing of notice 

under subparagraph (1) would change, 

the information required would not 

change. Thus, pursuant to the proposed 

rule change, FINRA members will be 

required to provide a single notice after 

pricing of the distribution and will be 

required to provide all of the same 

information that they provide today. 

FINRA has determined that it will be 

sufficient for members to provide notice 

of their determination that no restricted 

period applies following the pricing of 

the distribution. FINRA clarified that 

the proposed rule change will not 

impact FINRA’s Regulation M 

surveillance program. 

In its filing, FINRA stated that a 

significant number of distributions of 

‘‘actively traded’’ securities evolve 

quickly after the market close and are 

priced overnight before the next trading 

session. Thus, FINRA believes that its 

members frequently do not have 

sufficient advance knowledge of their 

participation in the distribution to 

provide notice to FINRA at least one 

business day prior to pricing and in 

such instances are unable to comply 

with the express terms of Rule 

5190(d)(1). FINRA then must make a 

determination whether later notification 

was necessary under the circumstances, 

in accordance with the rule. FINRA has 

stated that the proposed rule change 

will clarify members’ notice obligations 

in the context of such distributions. 

FINRA represented that the proposed 

rule change will be effective on the date 

of Commission approval. 

III. Discussion and Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act, and the rules and regulations 

thereunder that are applicable to a 

national securities association.5 In 

particular, the Commission believes that 

the proposed rule change is consistent 

with the provisions of Section 15A(b)(6) 

of the Act,6 which requires, among other 

things, that FINRA rules 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. The proposed rule 

change will streamline FINRA member 

obligations and continue FINRA’s 

surveillance program regarding 

Regulation M to protect investors. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,7 that the 

proposed rule change (File No. SR– 

FINRA–2010–037) be, and hereby is, 

approved. 


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