Document ID: SEC-2014-1694-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Consolidated Tape Association
Posted Date: 2014-10-07T04:00Z

[Federal Register Volume 79, Number 194 (Tuesday, October 7, 2014)]
[Notices]
[Pages 60536-60544]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23837]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73278; File No. SR-CTA/CQ-2014-03)

Consolidated Tape Association; Notice of Filing and Immediate 
Effectiveness of the Twenty-First Charges Amendment to the Second 
Restatement of the CTA Plan and Twelfth Charges Amendment to the 
Restated CQ Plan

October 1, 2014.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on September 12, 2014, the Consolidated Tape Association (``CTA'') Plan 
and Consolidated Quotation (``CQ'') Plan participants 
(``Participants'') \3\ filed with the Securities and Exchange 
Commission (``Commission'') a proposal to amend the Second Restatement 
of the CTA Plan and Restated CQ Plan (collectively, the ``Plans'').\4\ 
The amendments (``2014 Fee Amendments'') respond to long-term changes 
in data-usage trends. In formulating the proposed fee changes, the 
Participants formed a subcommittee to study the optimum allocation of 
fees among market data users and consulted with the industry 
representatives that sit on the Plans' Advisory Committees and with 
other industry participants. The Participants also met with the 
Securities Industry and Financial Markets Association (``SIFMA'').
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ Each participant executed the proposed amendment. The 
Participants are: BATS Exchange, Inc. (``BATS''), BATS-Y Exchange, 
Inc. (BATS-Y), Chicago Board Options Exchange, Incorporated 
(``CBOE''), Chicago Stock Exchange, Inc. (``CHX''), EDGA Exchange, 
Inc. (``EDGA''), EDGX Exchange, Inc. (``EDGX''), Financial Industry 
Regulatory Authority, Inc. (``FINRA''), International Securities 
Exchange, LLC (``ISE''), NASDAQ OMX BX, Inc. (``Nasdaq BX''), NASDAQ 
OMX PHLX, Inc. (``Nasdaq PSX''), Nasdaq Stock Market LLC 
(``Nasdaq''), National Stock Exchange (``NSX''), New York Stock 
Exchange LLC (``NYSE''), NYSE MKT LLC (``NYSE MKT''), and NYSE Arca, 
Inc. (``NYSE Arca'').
    \4\ See Securities Exchange Act Release Nos. 10787 (May 10, 
1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan 
effective); 15009 (July 28, 1978), 43 FR 34851 (August 7, 1978) 
(temporarily authorizing the CQ Plan); and 16518 (January 22, 1980), 
45 FR 6521 (January 28, 1980) (permanently authorizing the CQ Plan). 
The most recent restatement of both Plans was in 1995. The CTA Plan, 
pursuant to which markets collect and disseminate last sale price 
information for non-NASDAQ listed securities, is a ``transaction 
reporting plan'' under Rule 601 under the Act, 17 CFR 242.601, and a 
``national market system plan'' under Rule 608 under the Act, 17 CFR 
242.608. The CQ Plan, pursuant to which markets collect and 
disseminate bid/ask quotation information for listed securities, is 
a ``national market system plan'' under Rule 608 under the Act, 17 
CFR 242.608.
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    Pursuant to Rule 608(b)(3)(i) under Regulation NMS,\5\ the 
Participants designated the 2014 Fee Amendments as establishing or 
changing a fee or other charge collected on their behalf in connection 
with access to, or use of, the facilities contemplated by the Plans. As 
a result, the 2014 Fee Amendments became effective upon filing with the 
Commission. At any time within 60 days of the filing of the 2014 Fee 
Amendments, the Commission may summarily abrogate the 2014 Fee 
Amendments and require that the 2014 Fee Amendments be refiled in 
accordance with paragraph (a)(1) of Rule 608 and reviewed in accordance 
with paragraph (b)(2) of Rule 608, if it appears to the Commission that 
such action is necessary or appropriate in the public interest, for the 
protection of investors, or the maintenance of fair and orderly 
markets, to remove impediments to, and perfect the mechanisms of, a 
national market system or otherwise in furtherance of the purposes of 
the Act.
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    \5\ 17 CFR 242.608(b)(3)(i).
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    The Commission is publishing this notice to solicit comments from 
interested persons on the proposed 2014 Fee Amendments.

I. Rule 608(a)

A. Purpose of the Amendments

1. In General
    The Participants made significant changes to the fee schedule 
effective as of September 1, 2013.\6\ Those changes compressed the 
long-standing 14-tier Network A device rate schedule into just four 
tiers, consolidated the Plans' eight fee schedules into one, updated 
that fee schedule, and realigned the Plans' charges more closely with 
the services the Plans provide (collectively, the ``2013 Fee 
Changes''). They also complied with industry requests that the 
participants in the several national market system plans strive to 
harmonize fees under those plans. In submitting the 2013 Fee Changes to 
the Commission, the Participants represented that the changes would not 
materially change the revenues that the Participants collect under the 
Plans. However, since the 2013 Fee Changes were implemented in 
September 2013, Network A revenues have declined 5.43 percent and 
Network B revenues have declined 11.13 percent.
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    \6\ See Securities Exchange Act Release No. 70010 (July 19, 
2013), 78 FR 44984 (July 25, 2013) (the ``2013 Fee Amendments'').
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    Prior to the 2013 Fee Changes, the Participants last filed a fee 
structure change in 1986. However, as the 2013 Fee Amendments 
described, significant change has characterized the industry, stemming 
in large measure from technological advances, the advent of trading 
algorithms and automated trading, new investment patterns, new 
securities products, unprecedented levels of trading, decimalization, 
internationalization and developments in portfolio analysis and 
securities research.
    The 2014 Fee Amendments would realign the Plans' charges more 
closely with the ways in which data recipients consume market data 
today. Although professional subscriber display device fees still 
account for a majority of Network A and Network B revenues, the 
industry's reliance on professional subscriber display devices 
continues to decline and the gap between professional subscriber device 
rates and nonprofessional subscriber fees remains large. The proposed 
fee changes would reduce the rates that professional subscribers pay 
for each of their display

[[Page 60537]]

devices. To offset the revenue losses attributable to the reduction in 
professional subscriber device rates, the Participants propose:
     To establish fees for non-display consumption of market 
data;
     to subject firms that receive access to data feeds from 
extranet providers to direct access fees rather than indirect access 
fees;
     to raise the fees payable in respect of firms that receive 
access to data feeds by means of multiple data feeds; and
     to raise the fee payable in respect of per-quote services.
    The 2014 Fee Amendments also move in the direction of harmonizing 
fees between Network A and Network B and of harmonizing fees under the 
Plans with fees under two other national market system plans: The Joint 
Self-Regulatory 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 (the ``Nasdaq/UTP Plan'') and the OPRA Plan. This would reduce 
administrative burdens for broker-dealers and other market data users 
and simplify fee calculations.
    The proposed 2014 Fee Amendments rebalance the fee schedule without 
increasing the overall market data revenue pools generated under the 
Plans in a significant way. The Participants estimate that, assuming no 
change in customer behavior and no attendant diminution of customer 
usage, the 2014 Fee Amendments could increase the market data revenue 
pool for Network A and Network B by approximately two percent.
2. The Proposed Fee Schedule Changes
a. Professional Subscriber Charges
    Data consumption through professional subscriber display devices 
has declined in recent years. Information regarding the magnitude of 
the declines can be found in the Participants' Consolidated Data 
Quarterly Operating Metrics Reports.\7\ Those reports show that Network 
A professional devices declined from 379,885 at the end of the first 
quarter of 2011 to 289,620 devices at the end of the first quarter of 
2014. Similarly, Network B professional devices declined from 286,400 
at the end of the first quarter of 2011 to 215,145 devices at the end 
of the first quarter of 2014. Furthermore, the rise in off-exchange 
trading has meant that a smaller portion of those revenues is allocated 
to exchanges. Largely as a result, since 2008, CTA/UTP market data 
revenue has declined 18 percent from approximately $463 million in 2008 
to $379 million annualized through March of 2014, of which about $317 
million was allocated to exchanges and $62 million to FINRA.
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    \7\ Those reports can be found at http://www.nyxdata.com/CTA.
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    The Participants also note the significant difference between 
monthly professional subscriber device fees and nonprofessional 
subscriber fees. The former currently range from $50 to $20 for Network 
A and are set at $24 for Network B. The latter are set at $1 for both 
Network A and Network B. The Participants propose to reduce that 
significant gap.
    The proposed changes seek to address both concerns. The 
Participants propose to revise the four-tier monthly Network A fee 
structure for the display units of professional subscribers, as 
follows:

------------------------------------------------------------------------
                                             Currently       Proposed
------------------------------------------------------------------------
1. 1-2 devices:.........................          $50.00             $45
2. 3-999 devices:.......................           30.00              27
3. 1,000-9,999 devices:.................           25.00              23
4. 10,000 devices or more:..............           20.00              19
------------------------------------------------------------------------

    The proposed narrowing of the gap between the highest rates and the 
lowest rates would benefit both individuals who have not qualified as 
nonprofessional subscribers and smaller firms. In particular, 
individuals and firms having one or two devices would see their monthly 
Network A rate drop from $50 per device to $45, a 10 percent decrease. 
Firms whose professional subscriber employees use between 3 and 999 
devices would see their monthly Network A rate drop from $30 per device 
to $27, also a 10 percent decrease. Firms whose professional subscriber 
employees use between 1,000 and 9,999 devices would see their monthly 
Network A rate drop from $25 per device to $23, an eight percent 
decrease. Firms whose professional subscriber employees use 10,000 
devices or more would see their monthly Network A rate drop from $20 
per device to $19, a five percent decrease.
    For Network B, the Participants note that the 2013 Fee Changes 
combined separate rates for Network B last sale information and for 
Network B quotation information into a single $24 rate for both 
quotation information and last sale information. They also eliminated 
the differential between members and non-members. For Network B, the 
Participants propose to reduce the monthly Network B professional 
subscriber device rate from $24 to $23, a decrease of more than four 
percent. They note that the Nasdaq/UTP Plan imposes a fee of $20 for 
each device and that the OPRA Plan imposes a fee of $27 for each 
device.
    The Participants anticipate that the revenue losses that would 
result from the decreases in the professional subscriber rates would be 
offset by the other proposed amendments to the fee schedule, perhaps 
resulting in an aggregate revenue increase of approximately two percent 
(assuming no change in customer behavior and no attendant diminution of 
customer usage).
b. Nonprofessional Subscriber Charges
    The 2013 Fee Changes harmonized the treatment of large and small 
firms by applying a $1.00 per month rate in respect of all Network A 
nonprofessional subscribers, regardless of the number of 
nonprofessional subscribers. This harmonized the Network A 
nonprofessional subscriber fee with the Network B nonprofessional 
subscriber fee, as well as the $1.00 nonprofessional subscriber fee 
payable under the Nasdaq/UTP Plan. The fee applicable to 
nonprofessional subscribers under the OPRA Plan is $1.25.
    The Participants propose to retain the monthly $1.00 
nonprofessional subscriber fee for both Network A and Network B because 
they believe it is a reasonable and cost-effective rate for retail 
investors.
c. Non-Display Use Fees
    i. Background. Changes in regulation and advances in technology 
have had an impact on market data usage in recent

[[Page 60538]]

years. Automated and algorithmic trading has proliferated, the numbers 
of quotes and trades have increased significantly and data feeds have 
become exponentially faster. As a result, data feeds have increased in 
value and non-display devices consume large amounts of data. Some 
firms' business models incorporate data feeds into black boxes and 
application programming interfaces that apply trading algorithms to the 
data without widespread data access by the firm's employees. These 
firms pay little for data usage beyond access fees, yet their data 
access and usage is critical to their businesses. They can process the 
data far more quickly than any human being looking at a terminal. 
Today, such devices are responsible for a majority of trading. The use 
of market data for purposes of electronic trading systems provides 
great value to firms and allows them to generate considerable profit. 
Yet that usage contributes little to market data revenues.
    Non-display uses of data for non-trading purposes benefits data 
recipients by allowing users to automate functions, to achieve greater 
speed and accuracy, and to reduce costs of labor. While some non-
trading uses do not directly generate revenues, they can substantially 
reduce a data recipient's costs by automating many functions. Those 
functions can be carried out in a more efficient and accurate manner, 
with reduced errors and labor costs. The use of an annual declaration 
for reporting purposes, as described below, would alleviate the burden 
of counting devices used for non-trading purposes.
    As a result, the Participants have determined that the 
establishment of fees for non-display uses of data, along with a 
reduction in the device fees assessed on professional subscribers, 
would provide an equitable allocation of fees to the industry, would 
facilitate the administration of non-display uses of market data and 
would equitably reflect the value of non-display and display data 
usage. The Participants believe that the proposed fees reflect the 
value of the data that they provide. They note that non-display fees 
have become commonplace in the industry. Several exchanges impose them 
for non-display use of their proprietary data products, as does the 
OPRA Plan.
    ii. Definition of Non-Display Use. For purposes of the proposed 
fees, non-display use refers to accessing, processing or consuming 
real-time Network A or Network B quotation information or last sale 
price information, whether delivered via direct and/or redistributor 
data feeds, for a purpose other than in support of a data recipient's 
display or further internal or external redistribution. It does not 
include the use of such data to create and use derived data.
    iii. Categories of Non-Display Use. The Participants propose to 
recognize three categories of non-display uses of market data.
     Category 1 applies when a data recipient makes non-display 
uses of real time market data on its own behalf.
     Category 2 applies when a data recipient makes non-display 
uses of real time market data on behalf of its clients.
     Category 3 applies when a data recipient makes non-display 
uses of real time market data for the purpose of internally matching 
buy and sell orders within an organization.
    Matching of buy and sell orders includes matching customer orders 
on a data recipient's own behalf and/or on behalf of its clients. 
Category 3 includes, but is not restricted to, use in trading 
platform(s), such as exchanges, alternative trading systems (``ATSs''), 
broker crossing networks, broker crossing systems not filed as ATSs, 
dark pools, multilateral trading facilities, and systematic 
internalization systems.
    iv. Examples of Non-Display Uses of Market Data. Examples of Non-
Display Use are, but are not limited to:
     Trading in any asset class
     Automated order or quote generation and/or order pegging
     Price referencing for algorithmic trading
     Price referencing for smart order routing
     Operations control programs
     Investment analysis
     Order verification
     Surveillance programs
     Risk management
     Compliance
     Portfolio Valuation
    As mentioned above, the proposed non-display fees do not apply to 
the creation and use of derived data.
    v. Non-Display Use Fees. For each of the three categories of non-
display uses:
    (a) The Participants under the CTA Plan propose to impose monthly 
fees of $2000 for the non-display use of Network A last sale price 
information and $1000 for the non-display use of Network B last sale 
price information; and
    (b) the Participants under the CQ Plan propose to impose monthly 
fees of $2000 for the non-display use of Network A quotation 
information and $1000 for the non-display use of Network B quotation 
information.
    The fees apply to each of a data feed recipient's accounts with the 
Participants that uses market data for non-display purposes. The 
Participants would invoice data feed recipients that make non-display 
uses of real-time market data on a monthly basis.
    For Category 1 and Category 2 non-display uses of data, the fee 
applies in respect of each market data product (i.e., Network A last 
sale price information, Network A quotation information, Network A last 
sale price information and Network B quotation information). The fees 
for Category 1 and Category 2 amount to enterprise licenses for the 
non-display uses that fall within those categories. Only one Category 1 
or Category 2 fee applies regardless of the number of non-display uses 
of data the firm makes within that category. For instance, if a firm 
uses Network A quotation information to analyze investments for its own 
portfolio, to value that portfolio, to verify the firm's proprietary 
orders and to run compliance programs for the firm, the firm would pay 
only one Category 1 fee in respect of Network A last sale price 
information. Similarly, if a firm uses Network A last sale price 
information to analyze investments for customers, to verify customer 
orders, to surveil the market it conducts for customers, to provide 
risk management services to customers and to value its customers' 
portfolios, the firm would pay only one Category 2 Network A fee in 
respect of Network A last sale price information.
    For Category 3, the fees apply for each of the firm's platforms and 
for each market data product that each such platform uses. If a firm 
uses Network A quotation information solely to operate a dark pool for 
its customers' orders and makes no other non-display use of market 
data, it would pay a Category 3 fee in respect of Network A quotation 
information (and no other non-display fee for that information). If 
that firm also uses Network A quotation information to operate an ATS, 
but still makes no other non-display uses of quotation information, it 
would pay two Category 3 fees in respect of Network A quotation 
information (and no other non-display fee for that information).
    A firm may use data for one, two or all three categories and 
thereby subject itself to the non-display fees for each category. For 
example, if a broker-dealer uses Network A quotation information to run 
compliance programs for the firm (Category 1), to surveil the market it 
conducts for customers (Category 2), and to operate an ATS that matches 
buy and sell orders (Category 3), then the firm would be required to 
pay the Network A quotation information non-display use fee in respect 
of all three categories. If, in addition to the ATS, the firm also 
operates a broker crossing system not registered as an ATS, then

[[Page 60539]]

two Category 3 fees would apply. (That is, a firm must count each 
platform that uses data for Category 3 non-display purposes.) The non-
display fees would apply separately in respect of each market data 
product that the broker-dealer uses for non-display purposes (i.e., 
Network A last sale price information, Network A quotation information, 
Network A last sale price information and Network B quotation 
information).
    vi. Administrative Requirements for Non-Display Uses. In response 
to feedback received from SIFMA, the Participants seek to minimize the 
administrative burden attendant to non-display use fees and, therefore, 
have determined not to impose a monthly reporting requirement. Instead, 
the Participants would require each recipient of a real-time data feed 
to make an annual declaration of its non-display use to the 
Participants. They would require each data feed recipient to complete 
and submit the declaration upon its initial receipt of a data feed 
under the CTA Plan or the CQ Plan. In addition, if a data feed 
recipient's use of data changes at any time after the data feed 
recipient submits its declaration or annual confirmation or update, the 
Participants would require the data feed recipient to update its 
declaration at the time of the change to reflect the change of use. The 
Participants believe that use of the declaration would keep 
administrative burdens at a minimum. The Participants reserve the 
rights:
    (a) To audit data feed recipients' non-display use of market data 
in accordance with the terms of their market data agreements with 
vendors and others; and
    (b) to charge non-display use fees to data feed recipients that do 
not report any display activity, and do not return a completed 
declaration in accordance with the requirements specified above.
d. Per-Query Charges
    Previously, Network A and Network B imposed identical three-tiered 
per-query rates as follows:

1 to 20 million quotes....................  $.0075 each
20 to 40 million quotes...................  $.005 each
Over 40 million quotes....................  $.0025 each
 

    The 2013 Fee Changes modified the Network A and Network B per-query 
rate structure by replacing a three-tier structure with the same one-
tier rate as the Nasdaq/UTP Plan and the OPRA Plan imposes: $.005 for 
each inquiry for both Network A and Network B. Effective June 1, 2013, 
the Participants in the OPRA Plan increased their per-query fee to 
$0.0075.\8\ In addition, the Participants understand that the 
Participants in the Nasdaq/UTP Plan are contemplating a similar 
increase to $0.0075 per query.
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    \8\ See Securities Exchange Act Release No. 69448 (April 25, 
2013), 78 FR 25500 (May 1, 2013).
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    The Participants believe that increasing the per-query fee to 
$0.0075 would harmonize the per-query fees under the national market 
system plans and would contribute toward restoring a more appropriate 
balance of fees in recognition of the declining significance of 
revenues derived from professional subscriber device fees. The increase 
in revenues resulting from the proposed increase in the per-query fees 
would represent an appropriate contribution for that service to 
covering the overall costs of the Participants in collecting, 
processing and distributing market data under the Plans. As before, a 
vendor's per-query fee exposure for any nonprofessional subscriber is 
limited to $1.00 per month (i.e., the nonprofessional subscriber rate.) 
At $0.0075 per query, a vendor would need to receive fewer query 
requests from a nonprofessional subscriber before it hits the monthly 
nonprofessional subscriber cap of $1.00.
e. Access Fees
    Access fees are charged to those who obtain Network A and Network B 
data feeds. Consistent with current practice, within each of a firm's 
billable accounts, the Participants only charge one access fee for last 
sale information and one access fee for quotation information, 
regardless of the number of data feeds that the firm receives for that 
account. The Participants are not proposing to modify the current rates 
for direct and indirect access. However, the Participants are proposing 
to amend the application of those rates to firms that receive access to 
data feeds from extranet providers.
    The Participants under the Nasdaq/UTP Plan historically have deemed 
a firm that receives access to data feeds from an extranet provider to 
receive direct access to the data feeds and have therefore subjected 
those firms to direct access charges. In contrast, the Participants 
under the Plans historically have deemed a firm that receives access to 
data feeds from an extranet provider to receive indirect access to the 
data feeds and have therefore subjected those firms to indirect access 
charges.
    The Participants have reviewed this disparity and have determined 
that the nature of extranet access is closer to direct access than to 
indirect access. Extranet access to the facilities by which the 
Participants make market data available provides substantially the same 
benefits as does direct access to those facilities and provides 
advantages and incremental value relative to traditional means of 
indirect access. As a result, the Participants believe that subjecting 
firms that receive extranet access to direct access fees rather than 
indirect access fees would be fair and reasonable.
    The Participants estimate the revenues resulting from this change 
would have only a small impact on total Network A and Network B 
revenues. However, it would make for a more equitable allocation of 
access fees among data feed recipients.
f. Multiple Data Feed Charges
    The 2013 Fee Changes established new monthly fees for firms that 
take more than one primary data feed and one backup data feed, as 
follows:
$50 for Network A last sale information data feeds
$50 for Network A quotation information data feeds
$50 for Network B last sale information data feeds
$50 for Network B quotation information data feeds.
    For both last sale and bid-ask data feeds, the charge applies to 
each data feed that a data recipient receives in excess of the data 
recipient's receipt of one primary data feed and one backup data feed. 
The fees do not necessitate any additional reporting obligations. The 
fees encourage firms to better manage their requests for additional 
data feeds and to monitor their usage of data feeds.
    The Participants have now had experience with the new fees and an 
opportunity to assess the value that additional data feeds add to the 
business models of data feed recipients. As part of the process of 
rebalancing market data fees in a way that deemphasizes revenues from 
professional subscriber device fees, the Participants have determined 
to propose raising the four multiple access feed fees from $50 to $200. 
The Participants note that the installation and maintenance of data 
feed lines come at a cost. Increasing the fees for multiple access 
feeds data feed lines would encourage firms to choose their lines more 
selectively and to seek greater efficiency in their consumption of 
data.
3. Impact of the Proposed Fee Changes
    As with any reorganization of a fee schedule, these changes may 
result in some data recipients paying higher total market data fees and 
in others paying lower total market data fees. The

[[Page 60540]]

Participants have assessed the loss in revenues that the reduction in 
professional subscriber device rates would generate on the one hand 
and, on the other hand, the gain in revenues that the non-display use 
fees, the increases in the per-query fees and multiple access feed 
fees, and the change in characterization of extranet access would 
generate. The Participants estimate that the net result of the changes 
could increase the market data revenue pool for Network A and Network B 
by approximately two percent, assuming no change in customer behavior 
and no attendant diminution of customer usage. Of course, the absence 
of prior experience with non-display use fees makes estimates of future 
revenues particularly uncertain. A more specific breakdown of the 
impact of the proposed fee changes on revenues under the Plans is as 
follows:
     If current usage levels remain the same, the decline in 
professional subscriber device rates would decrease revenues by 
approximately five percent.
     Because the Non-Display Use fees would be new, it is 
difficult to estimate the impact they would have on revenues. A best 
guess is that they would raise revenues by approximately four percent.
     If current usage levels remain the same, the increase in 
the per-query fee would raise revenues by approximately one percent. 
That estimate includes as a mitigating factor the failure to gain a 
certain portion of the revenue increase because the per-query fees fall 
under the Plans' enterprise caps.
     If current usage levels remain the same, the change 
relating to extranet access to data feeds would raise revenues by 
approximately seven-tenths of a percent.
     If current usage levels remain the same, the increases in 
the multiple data feed charges would raise revenues by approximately 
one percent. That estimate excludes the potential reduction in data 
feeds that would result insofar as the charges cause firms to make more 
efficient use of data feeds.
    The Participants note that the fee changes would contribute to 
stemming the significant loss of revenues under the Plans in recent 
years as a result of large multi-year declines in display devices that 
professional subscribers use. Furthermore, the rise in off-exchange 
trading has meant that a smaller portion of those revenues have been 
allocated to exchanges. Since 2008, CTA/UTP market data revenue has 
declined 18 percent from approximately $463 million in 2008 to $379 
million annualized through March of 2014. For these reasons, the 
Participants believe that the 2014 Fee Amendments would help to stem 
the tide of declining revenues caused by trends in the use of display 
devices by professional subscribers.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of the Amendments

    Pursuant to Rule 608(b)(3)(i) under Regulation NMS, the 
Participants have designated the 2014 Fee Amendments as establishing or 
changing fees and are submitting the 2014 Fee Amendments for immediate 
effectiveness. The Participants anticipate implementing the proposed 
fee changes on January 1, 2015, after giving notice to data recipients 
and end users of the 2014 Fee Amendments.
    The Participants note that they have vetted the 2014 Fee Amendments 
with the representatives that sit on the Advisory Committee and have 
modified certain aspects of the amendments based on the Advisory 
Committee's recommendations.

D. Development and Implementation Phases

    Please see Item I(C) above.

E. Analysis of Impact on Competition

    The proposed amendments do not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Exchange Act. The proposed fee changes reflect the Participants' 
views that it is appropriate to rebalance the allocation of market data 
fees and to meet the changing trends in the ways in which the industry 
uses market data. The proposed fee changes comport with the 
proliferation of the use of data for dark pools and other non-display 
trading applications. They recognize industry changes that have evolved 
as a result of numerous technological advances, the advent of trading 
algorithms and automated trading, different investment patterns, a 
plethora of new securities products, unprecedented levels of trading, 
decimalization, internationalization and developments in portfolio 
analysis and securities research.
    In addition, the 2014 Fee Amendments would simplify firms' 
administrative burdens by harmonizing the Plans' fee structures with 
those under the Nasdaq/UTP Plan and the OPRA Plan and would impose only 
a minimal administrative burden on the use of data for non-display 
purposes.
    The Participants note that the list of exchanges that have 
previously implemented non-display use fees includes the London Stock 
Exchange, Nasdaq BX, Nasdaq PSX, Nasdaq, NYSE, NYSE MKT LLC and NYSE 
Arca. They note that the OPRA Plan imposes non-display use fees and 
that they understand that the Participants in the Nasdaq/UTP Plan 
anticipate doing so shortly.
    The Participants hope that the reductions in rates for professional 
subscriber display devices would foster the widespread availability of 
real-time market data. At the same time, the new fees for non-display 
uses of market data would allow those who make non-display uses of data 
to make appropriate contributions to the costs of collecting, 
processing and redistributing the data. In addition, the proposed fee 
changes would cause Network A and Network B fees to sync more closely 
with fees payable under the Nasdaq/UTP Plan and the OPRA Plan. The 
proposed reductions in the professional subscriber device fees would 
allow those fees to compare even more favorably with the professional 
subscriber device fees payable under those other Plans and with the 
professional subscriber device fees charged by the largest stock 
exchanges around the world. The proposed non-display use fees compare 
favorably with the comparable fees that the Participants understand the 
Participants in the Nasdaq/UTP Plan intend to establish and with the 
non-display use fees that individual exchanges charge for their 
proprietary products. The proposed increase in the per-query fees would 
harmonize those fees with the per-query fees paid under the OPRA Plan 
and the comparable fee that the Participants understand the 
Participants in the Nasdaq/UTP Plan intend to set.
    As a result, the 2014 Fee Amendments would promote consistency in 
price structures among the national market system plans, as well as 
consistency with the preponderance of other market data providers. This 
would make market data fees easier to administer. In the Participants' 
view, the proposed fee schedule would rebalance the allocation of 
market data fees to meet the changing trends in the ways in which the 
industry uses market data and allow each category of data recipient and 
data user (i.e., professional subscribers vs. nonprofessional 
subscribers, non-display firms vs. registered representative firms, 
large firms vs. small firms and redistributors vs. end users) to 
contribute an appropriate amount for its receipt and use of market data 
under the Plans. The proposed fee schedule would provide for an 
equitable

[[Page 60541]]

allocation of dues, fees, and other charges among broker-dealers, 
vendors, end users and others receiving and using market data made 
available under the Plans by recalibrating the fees to more closely 
correspond to the different benefits different categories of users 
derive from their different uses of the market data made available 
under the Plans.
    The Participants estimate that the 2014 Fee Amendments would allow 
more than 19,000 firms to pay less for Network A data and for Network B 
data than they do now, with most firms paying saving up to $500 per 
month for each network. The Participants predict that approximately 300 
firms would pay more for Network A data, with most of those firms 
paying between $500 and $1000 per month. They predict that 
approximately 275 firms would pay more for Network B data, with most of 
those firms paying between $1000 and $5000 per month. A small number of 
outliers exist and the impact on them would be more significant. Within 
each category of data recipient and data user, the Participants propose 
to apply the revised fee schedule uniformly (including members of the 
Participant markets and non-members). The Participants do not believe 
that the proposed fee changes introduce terms that are unreasonably 
discriminatory. The Participants note that fees under the CTA and CQ 
Plan compare very favorably with the fees that individual exchanges 
charge for their proprietary data products.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, the Plans

    Not applicable.

G. Approval by Sponsors in Accordance With Plan

    The Participants have approved the 2014 Fee Amendments in 
accordance with Section XII(b)(iii) of the CTA Plan and Section 
IX(b)(iii) of the CQ Plan.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    Please see Item I(A) above.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

1. In General
    The Participants took a number of factors into account in deciding 
to propose the amendments. To begin, the Participants' market data 
staffs communicate on an on-going basis with all sectors of their 
constituencies and assess and analyze the different broker/dealer and 
investor business models. They have expertise in the information needs 
of the Participants' constituents and used their experience and 
judgment to form recommendations regarding the 2014 Fee Changes, vetted 
those recommendations with constituents and revised those 
recommendations based on the vetting process.
    Most significantly, the Participants discussed the recommendations 
with their Advisory Committee. The CTA and CQ Plans require the 
Advisory Committee to include, at a minimum, a broker-dealer with a 
substantial retail investor customer base, a broker-dealer with a 
substantial institutional investor customer base, an alternative 
trading system, a data vendor, and an investor. Advisory Committee 
members attend and participate in meetings of the Participants and 
receive meeting materials. At several meetings of CTA and the CQ Plan's 
Operating Committee, Advisory Committee members gave valuable input 
into the formulation of the 2014 Fee Amendments.
    In reassessing and rebalancing market data fees as proposed in the 
amendments, the Participants took a number of factors into account in 
addition to the views of its constituents, including:
    (A) Crafting fee changes that will not have a significant impact on 
total revenues generated under the Plans;
    (B) setting fees that compare favorably with fees that the biggest 
exchanges around the globe and the Nasdaq/UTP Plan and the OPRA Plan 
charge for similar services;
    (C) setting fees that allow each category of market data recipient 
and user to contribute market data revenues that the Participants 
believe is appropriate for that category;
    (D) crafting fee changes that appropriately differentiate between 
constituents in today's environment (e.g., professional subscribers vs. 
nonprofessional subscribers, non-display firms vs. registered 
representative firms, large firms vs. small firms, and redistributors 
vs. end users); and
    (E) crafting fees that reduce the administrative burdens of data 
recipients.
2. An Overview of the Fairness and Reasonableness of Market Data Fees 
and Revenues Under the Plans
    a. The 2014 Fee Changes Will Have No Impact on Most Individual 
Investors. The vast majority of nonprofessional subscribers (i.e., 
individual investors) receive market data from their brokers and 
vendors. Network A and Network B impose their nonprofessional 
subscriber fees on the brokers and vendors (rather than the investors) 
and set those fees so low that most brokers and vendors absorb the 
fees, meaning that the vast majority of individual investors do not pay 
for market data. The Participants anticipate that the changes to the 
per-query fee would not have a significant impact on the willingness of 
broker-dealers to continue to pay the fee on behalf of their customers. 
The Fee Changes will thus have no impact on most individual investors.
    b. The 2014 Fee Changes Take into Account Customer Feedback. The 
Fee Changes are fair and reasonable because they offer a resolution to 
the call by industry participants for a simplified, updated fee 
schedule that harmonizes with fee schedules under other national market 
system plans and reduces administrative burdens, a resolution that 
industry representatives on the Plans' Advisory Committee have warmly 
embraced. And, the Fee Changes do so in a manner that is approximately 
revenue neutral.
    c. Long-Term Trend of Rate Reduction. The existing constraints on 
fees for core market data under the Plans have generally succeeded in 
reducing market data rates over time. For example, when the effects of 
inflation are taken into account, the average monthly rate payable for 
a Network A professional subscriber device has consistently and 
dramatically fallen in real terms over the past 25 years. When 
inflation is taken into account, the average monthly cost of a Network 
A professional device was:
     $25.00 in 1987.
     $21.73 in 1990.
     $18.63 in 1995.
     $16.89 in 2000.
     $14.54 in 2005.
     $13.02 in 2010.
     $12.37 in 2013.
    Also of interest is that NYSE charged approximately $25 per month 
for the NYSE ticker service in the 1880's.
    d. Explosion of Data. Although the device fees have fallen after 
taking inflation into account, the amount of data message traffic that 
data users receive by subscribing has skyrocketed, as has the speed at 
which the data is transmitted.
    i. Significant Improvements in Latency. The Participants have made 
numerous investments to improve system speed and capacity, investments 
that are often overlooked by the industry. The Participants regularly 
monitor and review the performance of

[[Page 60542]]

their securities information processor (``SIP'') and make performance 
statistics available publicly on a quarterly basis. Information can be 
found in the Participants' Consolidated Data Quarterly Operating 
Metrics Reports.\9\ They make investments to upgrade technology, 
upgrades that enable the SIP to collect and disseminate the data ever 
more quickly, even as the number of quotes and trades continues to 
rise. The Participants will make future investments to handle the 
expected continued rise in message traffic, and at even faster data 
dissemination speeds.
---------------------------------------------------------------------------

    \9\ Those reports can be found at http://www.nyxdata.com/CTA.
---------------------------------------------------------------------------

    The information below shows that customers are getting the quote 
and trade data feeds faster, as the latency of consolidated tape quote 
and trade feeds has improved significantly in recent years. Average 
quote feed latency declined from 800 milliseconds at the end of 2006 to 
0.4 milliseconds in June 2014 and average trade feed latency declined 
from about one second at the end of 2006 to 0.5 milliseconds in June 
2014, as shown below. Latency is measured from the time a message 
received from a Participant is time-stamped by the system, to the time 
that processing the message is completed.
    Average Quote Latency for Network A/B:
     About 800 milliseconds at the end of 2006.
     About 20 milliseconds at the end of 2008.
     About 2.5 milliseconds at the end of 2010.
     Under 1 millisecond at the end of 2011.
     Under 1 millisecond at the end of 2012.
     About 0.6 millisecond in April 2013.
     About 0.4 millisecond in June 2014.
    Average Trade Latency for Network A/B:
     About 1 second at the end of 2006.
     About 50 milliseconds at the end of 2008.
     About 2.7 milliseconds at the end of 2010.
     Under 1 millisecond at the end of 2011.
     Under 1 millisecond at the end of 2012.
     About 0.4 millisecond in April 2013.
     About 0.5 millisecond in June 2014.
    ii. New Data Added to Consolidated Feeds. The Participants have 
continually enhanced the consolidated feeds. The enhancements provide 
significant value. They are critical to the industry in that they 
permit data users to do such things as view new markets and implement 
new regulation. Below is a list of the more significant recent 
enhancements, including the addition of new Participants, new 
indicators, new sales conditions, new reason codes and dedicated test 
symbols.
    CTS/CQS New/Reactivated Participants:

 NASDAQ OMX--Reactivation February 2007
     BATS--Activation April 2008
 NASDAQ OMX BX (formerly the Boston Stock Exchange)--
Reactivation January 2009
     BATS Y--Activation October 2010
     Direct Edge A--Activation July 2010
     Direct Edge X--Activation July 2010
 NASDAQ OMX PSX (formerly the Philadelphia Stock Exchange)--
Reactivation October 2010
     FINRA--Reactivation February 2014

    CTS/CQS New Indicators:

 New CTS/CQS indicator to identify Primary Listing Market--
January 2007
 New CTS Trade-Through Exempt indicator--January 2007
 New CTS/CQS Trade Reporting Facility indicator--February 2007
 New CTS Negative Index Value indicator--September 2007
 New CTS Consolidated High/Low/Last Price indicator `H'--High/
Low--July 2007
 New CTS Participant Open/High/Low/Last Price Indicator codes--
July 2007
    [cir] `L'--Open/Last
    [cir] `M'--Open/High/Low
    [cir] `N'--Open/High/Last
    [cir] `O'--Open/Low/Last
    [cir] `P'--High/Low
    [cir] `Q'--High/Low/Last
 New CTS/CQS Short Sale restriction indicator--February 2011
 New CQS SIP-generated message identifier indicator--February 
2013 (denote that CQS was the originator of the Quote message, e.g., 
republished quotes, closing quote, price bands)
 New CTS/CQS Limit Up/Limit Down indicator fields and codes--
February 2013 (Dedicated Test Symbols), April 2013 (Phase I production 
symbol rollout commencement). The processor calculates and distributes 
the Limit Up/Limit Down price bands.
 New CTS/CQS Limit Up/Limit Down Phase 1--May 2013; Phase 2A--
August 2013; Phase 2B--February 2014
 New CQS ``Retail Interest Indicator'' field--March 2012
 New CTS/CQS ``Market-Wide Circuit Breaker'' messages--April 
2013

    CTS Sale Conditions:

 New CTS Sale Condition `V'--Stock-Option Trade indicator--
January 2008
 New CTS Sale Condition `4'--Derivatively Priced Trade 
indicator--April 2008
 New CTS Sale Condition `O'--Market Center Opening Trade--
September 2007
 New CTS Sale Condition `Q'--Market Center Official Open 
Trade--September 2007
 New CTS Sale Condition `M'--Market Center Official Close 
Trade--September 2007
 Redefined CTS Sale Condition `H' from Intraday Trade Detail to 
Price Variation Trade--September 2007
 New CTS Sale Condition `X'--Cross Trade--September 2007
 Redefined CTS Sale Condition `I'--Odd Lot Trade--scheduled for 
implementation in December 2013
 New CTS Sale Condition `9'--Official Consolidated Last as per 
Listing Market--scheduled for implementation in December 2013

    Regulatory/Non-Regulatory Halts Reasons:

 ``Non-Regulatory'' Trading Halt Reasons
 CTS/CQS indicator `Y' to denote `Sub-Penny Trading'--August 
2007
 ``Regulatory'' Trading Halt Reasons
 CTS/CQS indicator `M' to denote `Volatility Trading Pause'--
June 2010

    Other:

 CTS/CQS Dedicated ``Test'' symbols--October 2010
    iii. Significant Improvements in System Throughput, Measured by 
Messages Per Second. Investments in hardware and software have 
increased processing power and enabled the systems to handle increasing 
throughput levels. This is measured by peak capacity messages per 
second and is monitored by looking at actual peak messages per second. 
SIP throughput continues to increase in order to push out the 
increasing amounts of real-time quote and trade data.
    Given the constant rise in peak messages, the SIP significantly 
increased system capacity. As shown below, the system could handle peak 
quotes per second of 11,250 in 2006 and 3.25 million in July 2014, an 
increase of more than 25,000 percent. The Participants have a target of 
handling 4 million peak quotes per second by January 2015. The capacity 
for trades per second increased from 2,500 in 2006

[[Page 60543]]

to 650,000 in July 2014, an increase of more than 25,000 percent. The 
Participants have a target of handling 700,000 trades per second by 
January 2015.\10\
---------------------------------------------------------------------------

    \10\ To better manage the rise in message traffic, the 
Participants anticipate that capacity planning will move from 
measuring messages per second to measuring messages per millisecond.
---------------------------------------------------------------------------

    Supported Quotes per Second Capacity for Network A/B:
 11,250 in 2006.
 120,000 in 2008.
 500,000 in 2010.
 1,500,000 in 2011.
 2,500,000 in 2012.
 3,000,000 in 2013.
 3,250,000 in July 2014.
 4,000,000 targeted for September 2014.
    Actual Peak Quotes per Second for Network A/B:
 8,673 in 2006.
 88,249 in 2008.
 308,705 in 2010.
 580,870 in 2011.
 567,321 in 2012.
 574,891 through April 2013.
 558,520 year-to-date through June 2014.
    Supported Trades per Second Capacity:
 2,500 in 2006.
 20,000 in 2008.
 100,000 in 2010.
 300,000 in 2011.
 500,000 in 2012.
 600,000 in 2013.
 650,000 in July 2014.
 1,000,000 targeted for September 2014.
    Actual Peak Trades per Second for Network A/B:
 2,240 in 2006.
 15,058 in 2008.
 49,570 in 2010.
 77,841 in 2011.
 80,747 in 2012.
 91,120 in 2013.
 111,774 year-to-date through June 2014.
    e. Vendor Fees. Fees imposed by data vendors (which the Commission 
does not regulate), rather than the fees imposed under the national 
market system plans or by national securities exchanges, account for a 
significant majority of the global market data fees incurred by the 
financial industry.\11\ Market data vendors may apply significant 
administration mark-up fees on top of exchange market data fees. These 
mark-ups are not regulated and there is limited transparency into how 
the rates are applied. These mark-ups do not result in any additional 
revenues for the Participants; the vendors alone profit from them.
---------------------------------------------------------------------------

    \11\ See, for example, ``A Research Study'' published by 
Atradia. It can be found at the Software and Information Industry 
Association Web site at www.siia.net.
---------------------------------------------------------------------------

    f. Declining Unit Purchase Costs for Customers. Despite 
consolidated tape investments in new data items, additional capacity 
demands and latency improvements, data users' unit purchase costs for 
trade and quote data has declined significantly, increasing the value 
of the data they receive from their subscriptions. The amount of quote 
and trade data messages has increased significantly while fees have 
remained unchanged, as shown below for the 2006 to 2013 timeframe.
     Average purchase cost of Network A quotes: The average 
number of quotes per day increased over 530 percent during this 
timeframe, rising from 44.2 million in 2006 to 281.6 million in 2013. 
As a result, the average unit purchase cost of a quote for a customer 
incurring a monthly Network A indirect access fee of $700 declined 
approximately 84 percent during this period, falling from $0.0000158 in 
2006 to $0.0000025 in 2013.
     Average purchase cost of Network B quotes: The average 
number of quotes per day increased over 1850 percent, rising from 7.0 
million in 2006 to 129.5 million in 2013. As a result, the average unit 
purchase cost of a trade for a customer incurring a monthly Network A 
indirect access fee of $250 declined an estimated 95 percent during 
this period, falling from $0.0000357 in 2006 to $0.0000019 in 2013.
     Average purchase cost of Network A trades: The average 
number of trades per day increased over 73 percent, rising from 8.1 
million in 2006 to 14.0 million in 2013. As a result, the average unit 
purchase cost of a quote for a customer incurring a monthly Network B 
indirect access fee of $500 declined an estimated 42 percent during 
this period, falling from $0.0000617 in 2006 to $0.0000357 in 2013.
     Average purchase cost of Network B trades: The average 
number of trades per day increased 296 percent, rising from 659,337 in 
2006 to 2.61 million in 2013. As a result, the average unit purchase 
cost of a trade for a customer incurring a monthly Network B indirect 
access fee of $200 declined an estimated 75 percent during this period, 
falling from $0.000303 in 2006 to $0.000077 in 2013.
3. Increase in Costs
    The direct costs that the Plans incur for the services of the 
securities information processor and network administrators to process 
the data and administer the networks, as well as the cumulative total 
of the indirect costs that each Participant incurs in producing and 
collecting its data, have increased substantially since the 
Participants last restructured their fees in 1986.
    Since 1987, the first full year for which the 14-tier fee structure 
was in effect, the direct costs of the securities information processor 
and the network administrators have increased 99 percent, or 2.59 
percent per year when compounded on an annual basis. When taken over 27 
years, this annual increase in direct costs is likely to exceed the 
estimated two percent increase in revenues that the Participants 
estimate the 2014 Fee Amendments will produce (especially once 
decreased customer usage as a result of the 2014 Fee Amendments is 
taken into account) as a percentage and to approximately match the 
increase in revenues that the Participants estimate the 2014 Fee 
Amendments will produce. Further, the Participants estimate that the 
increase in the direct costs of the securities information processor 
and the network administrators over the past year will slightly exceed 
the increase in revenues that the Participants estimate the 2014 Fee 
Amendments will produce (exclusive of decreased usage as a result of 
the 2014 Fee Amendments).
    With respect to indirect costs, the Commission has previously noted 
that ``any attempt to calculate the precise cost of market information 
presents severe practical difficulties.'' \12\ In commenting on the 
1999 Concept Release, NYSE summarized many of the ``severe practical 
difficulties'' attendant to each Participant's calculation of its data 
production and collection costs and we incorporate that discussion 
here.\13\ In 1987, the indirect costs of the Participants would have 
included the data production and collection costs of seven national 
securities exchanges \14\ and one national securities association \15\. 
In 2014, that calculation would have to include the data production and 
collection costs of the 15 Participants, including 14 national 
securities exchanges and the Alternative Display Facility and two Trade 
Reporting Facilities that FINRA, the

[[Page 60544]]

lone national securities association, maintains.
---------------------------------------------------------------------------

    \12\ See SEC 1999 Concept Release on ``Regulation of Market 
Information Fees and Revenues'' (the ``1999 Concept Release''). It 
can be found at http://www.sec.gov/rules/concept/34-42208.htm.
    \13\ See footnote 11 of letter from James E. Buck, Senior Vice 
President and Secretary, NYSE, April 10, 2000. It can be found at 
http://www.sec.gov/rules/concept/s72899/buck1.htm
    \14\ American Stock Exchange, Inc., Boston Stock Exchange, Inc., 
Cincinnati Stock Exchange, Inc., Midwest Stock Exchange, Inc., New 
York Stock Exchange, Inc., Pacific Stock Exchange, Inc., and 
Philadelphia Stock Exchange, Inc.,
    \15\ National Association of Securities Dealers, Inc.
---------------------------------------------------------------------------

4. Adequate Constraints on Fees
    Constituent boards, customer control and regulatory mechanisms 
constrain fees for core market data now just as they have since 
Congress established the fair-and-reasonable standard in 1975.
    With respect to Network A and Network B, NYSE typically takes the 
lead on pricing proposals, vetting new proposals with the other 
Participants, various users, and trade and industry groups, and making 
modifications which improve or reevaluate the original concept. 
Proposals are then taken to each Participant for approval. But there 
are significant market data user and regulatory constraints on NYSE's 
ability to simply impose price changes.
    The governing body of each Participant consists of representatives 
of constituent firms and a large quotient of independent directors. The 
Participants' constituent board members have the ultimate say on 
whether CTA and the CQ Plan Operating Committee should submit fee 
proposals to the Commission and whether the costs of operating the 
markets and the costs of the market data function are fairly allocated 
among market data users. That is, the users of market data and non-
industry representatives who sit on Participant boards get to determine 
whether to support market data fee proposals. They also get to 
determine how the various types of data users should pay their fair 
share and they make decisions about funding technical infrastructure 
investments needed to receive, process and safe-store the orders, 
quotations and trade reports that give rise to the data.
    Constituent Board members are the Participants' market data 
customers. When a critical mass of them voices a point of view, they 
can direct the Participants how to act. This is exactly what has 
happened here.
    This cost-allocation-by-consensus process also is buttressed by the 
Commission's own review and public comment procedures, which also 
operate as an additional constraint on pricing.
    Also, developments in technology make possible another important 
constraint on market data prices for core data: There is nothing to 
prevent one or more vendors, broker-dealers or other entities from 
gathering prices and quotes across all Participants and creating a 
consolidated data stream that would compete with the Plans' data 
streams. The technology to consolidate multiple, disparate data streams 
is readily available, and other markets have already begun introducing 
products that compete with core data (such as Nasdaq Basic).\16\
---------------------------------------------------------------------------

    \16\ In a context in which a trading or order-routing decision 
can be implemented, Regulation NMS Rule 603(c)(1) prevents a broker, 
dealer or securities information processor from providing a display 
of market data unless it also provides a consolidated display, such 
as the consolidated displays made available under the Plans. Yet, 
despite this rule, the Participants have seen reductions of customer 
activity at the same time that competing non-consolidated products 
have seen increases.
---------------------------------------------------------------------------

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 601(a) (Solely in Its Application to the Amendments to the CTA 
Plan)

A. Equity Securities for Which Transaction Reports Shall be Required by 
the Plan

    Not applicable.

B. Reporting Requirements

    Please see Item I(A)(2)(c)(vi).

C. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

D. Manner of Consolidation

    Not applicable.

E. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

F. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not Applicable.

G. Terms of Access to Transaction Reports

    Please see Item I(A).

H. Identification of Marketplace of Execution

    Not Applicable.

III. Solicitation of Comments

    The Commission seeks general comments on CTA/CQ-2014-03. 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 email to rule-comments@sec.gov. Please include 
File Number CTA/CQ-2014-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
All submissions should refer to File Number CTA/CQ-2014-03. This file 
number should be included on the subject line if email 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 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 10:00 
a.m. and 3:00 p.m. Copies of the Amendments also will be available for 
inspection and copying at the principal office of CTA. 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 CTA/CQ-2014-03 and should be 
submitted on or before October 28, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(27).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23837 Filed 10-6-14; 8:45 am]
BILLING CODE 8011-01-P