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[Federal Register Volume 74, Number 106 (Thursday, June 4, 2009)]
[Notices]
[Pages 26905-26907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13001]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60004; File No. SR-NYSE-2009-42]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving the Proposed Rule Change Implementing NYSE Realtime Reference 
Prices Service on a Permanent Basis

May 29, 2009.

I. Introduction

    On April 16, 2009, the New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') 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 
proposed rule change to establish the NYSE Realtime Reference Prices 
service on a permanent basis and to establish a flat monthly fee for 
that service. The proposed rule change was published for comment in the 
Federal

[[Page 26906]]

Register on April 24, 2009.\3\ The Commission received no comment 
letters on the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59791 (April 20, 
2009), 74 FR 18755.
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II. Description of the Proposal

    The Exchange proposes to establish the NYSE Realtime Reference 
Prices service on a permanent basis and to establish a flat monthly fee 
for that service. The Exchange currently provides this service pursuant 
to a pilot program.\4\ The service allows a vendor to redistribute, on 
a real-time basis last sale prices of transactions that take place on 
the Exchange (``NYSE Realtime Reference Prices''). The Exchange has 
found that the pilot program provides a low-cost service that makes 
real-time prices widely available to casual investors, provides vendors 
with a useful real-time substitute for delayed prices, and relieves 
vendors of administrative burdens. The product is intended to be used 
for reference purposes, rather than as a basis for making trading 
decisions.
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    \4\ See Securities Exchange Act Release Nos. 57966 (June 16, 
2008), 73 FR 35182 (June 20, 2008) (SR-NYSE-2007-04) and 58443 
(August 29, 2008), 73 FR 52436 (September 9, 2008) (SR-NYSE-2008-
79). The Exchange initially proposed to end the pilot program on 
November 1, 2008. The Commission has approved three extensions of 
the end date for the pilot program, which expires on June 30, 2009. 
See Securities Exchange Act Release Nos. 58893 (October 31, 2008), 
73 FR 66093 (November 6, 2008) (SR-NYSE-2008-113); 59185 (December 
30, 2008), 74 FR 749 (January 7, 2009) (SR-NYSE-2008-141); and 59653 
(March 30, 2009), 74 FR 15536 (April 6, 2009) (SR-NYSE-2009-34).
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The Service

    The NYSE Realtime Reference Prices service allows Internet service 
providers, traditional market data vendors, and others (collectively, 
``NYSE-Only Vendors'') to make available NYSE Realtime Reference Prices 
on a real-time basis.\5\ The NYSE Realtime Reference Price information 
includes last sale prices for all securities that trade on the 
Exchange. The product includes only prices, and does not include the 
size of each trade or bid/asked quotations.
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    \5\ The Exchange notes that it will make the NYSE Realtime 
Reference Prices available to vendors no earlier than it makes those 
prices available to the processor under the CTA Plan.
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    As with the pilot program, under the permanent service the Exchange 
will not permit NYSE-Only Vendors to provide NYSE Realtime Reference 
Prices in a context in which a trading or order-routing decision can be 
implemented unless the NYSE-Only Vendor also provides consolidated 
displays of Network A last sale prices available in an equivalent 
manner, as required by Rule 603(c)(1) of Regulation NMS.
    Also, as with the pilot program, the permanent service is intended 
to eliminate certain administrative burdens associated with the 
distribution of real-time CTA prices. Specifically, the permanent 
service would feature the same flat, fixed monthly vendor fee, no user-
based fees, no vendor reporting requirements, and no professional or 
non-professional subscriber agreements.

The Fee

    The Exchange proposes to retain the current $70,000 monthly flat 
access fee for the NYSE Realtime Reference Prices service. For that 
fee, the NYSE-Only Vendor may provide unlimited NYSE Realtime Reference 
Prices to an unlimited number of the NYSE-Only Vendor's subscribers and 
customers. The pilot program does not impose any device or end-user fee 
for the NYSE-Only Vendors' distribution of NYSE Realtime Reference 
Prices and the Exchange is not proposing to add any new fees for the 
permanent service.
    As with the pilot program, the Exchange proposes to require the 
NYSE-Only Vendor to identify the NYSE trade price by placing the text 
``NYSE Data'' in close proximity to the display of each NYSE Realtime 
Reference Price or series of NYSE Realtime Reference Prices, or by 
complying with such other identification requirement as to which NYSE 
may agree. The NYSE-Only Vendor may make NYSE Realtime Reference Prices 
available without having to differentiate between professional 
subscribers and nonprofessional subscribers, without having to account 
for the extent of access to the data, and without having to report the 
number of users.

Contracts

    As with the pilot program, NYSE proposes to allow NYSE-Only Vendors 
to provide NYSE Realtime Reference Prices without requiring the end-
users to enter into contracts for the benefit of the Exchange. Instead, 
the Exchange proposes to require NYSE-Only Vendors to provide a readily 
visible hyperlink that will send the end-user to a warning notice about 
the end-user's receipt and use of market data. The notice would be 
similar to the notice that vendors provide today when providing CTA 
delayed data services.
    The Exchange will require NYSE-Only Vendors to enter into the form 
of ``vendor'' agreement into which the CTA and CQ Plans require 
recipients of the Network A datafeeds to enter (the ``Network A Vendor 
Form''). The Network A Vendor Form will authorize the NYSE-Only Vendor 
to provide the NYSE Realtime Reference Prices service to its 
subscribers and customers. The Exchange will supplement the Network A 
Vendor Form with an Exhibit C that will provide terms and conditions 
that are unique to the NYSE Realtime Reference Prices service.

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\6\ In 
particular, it is consistent with Section 6(b)(4) of the Act,\7\ which 
requires that the rules of a national securities exchange provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other parties using its facilities, 
and Section 6(b)(5) of the Act,\8\ which requires, among other things, 
that the rules of a national securities exchange be designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system and, in general, to protect investors and the public interest, 
and not be designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposed rule change is 
consistent with the provisions of Section 6(b)(8) of the Act,\9\ which 
requires that the rules of an exchange not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. Finally, the Commission finds that the proposed rule change 
is consistent with Rule 603(a) of Regulation NMS,\10\ adopted under 
Section 11A(c)(1) of the Act, which requires an exclusive processor 
that distributes information with respect to quotations for or 
transactions in an NMS stock to do so on terms that are fair and 
reasonable and that are not unreasonably discriminatory.\11\
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    \9\ 15 U.S.C. 78f(b)(8).
    \10\ 17 CFR 242.603(a).
    \11\ NYSE is an exclusive processor of the NYSE Realtime 
Reference Prices service under Section 3(a)(22)(B) of the Act, 15 
U.S.C. 78c(a)(22)(B), which defines an exclusive processor as, among 
other things, an exchange that distributes information with respect 
to quotations or transactions on an exclusive basis on its own 
behalf.

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[[Page 26907]]

    This proposal would make permanent the NYSE Realtime Reference 
Prices service and make permanent the $70,000 flat monthly fee for that 
service.\12\ The Commission has reviewed the proposal using the 
approach set forth in the NYSE Arca Order for non-core market data 
fees.\13\ There are a variety of alternative sources of information 
that impose significant competitive pressures on NYSE in setting the 
terms for distributing the NYSE Realtime Reference Prices service. The 
Commission believes that the availability of those alternatives, as 
well as NYSE's compelling need to attract order flow, imposed 
significant competitive pressure on NYSE to act equitably, fairly, and 
reasonably in setting the terms of its proposal.
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    \12\ See supra note 4.
    \13\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21) (``NYSE 
Arca Order''). In the NYSE Arca Order, the Commission describes the 
competitive factors that apply to non-core market data products. The 
Commission hereby incorporates by reference the data and analysis 
from the NYSE Arca Order into this order. In addition, the 
Commission notes that it recently found that NYSE was subject to 
competitive forces when setting the terms of its NYSE OpenBook 
nonprofessional subscriber fee. See Securities Exchange Act Release 
No. 59544 (March 9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-
2008-131).
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    Because NYSE was subject to significant competitive forces in 
setting the terms of the proposal, the Commission will approve the 
proposal in the absence of a substantial countervailing basis to find 
that its terms nevertheless fail to meet an applicable requirement of 
the Act or the rules thereunder. An analysis of the proposal does not 
provide such a basis.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-NYSE-2009-42), be, and it 
hereby is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13001 Filed 6-3-09; 8:45 am]
BILLING CODE 8010-01-P
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