Document ID: SEC-2009-0035-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2009-01-07T05:00Z

[Federal Register: January 7, 2009 (Volume 74, Number 4)]
[Notices]               
[Page 755-757]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ja09-69]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59184; File No. SR-NYSEArca-2008-143]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change To 
Extend the Pilot Program for NYSE Arca Realtime Reference Prices 
Service

December 30, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 30, 2008, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons, and is approving the 
proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the expiration date of its pilot 
program for the NYSE Arca Realtime Reference Prices service until March 
31, 2009. There is no new rule text.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item III below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In File No. SR-NYSEArca-2008-96, the Exchange established a pilot 
program that allows the Exchange to test the viability of a new NYSE 
Arca-only market data service that allows a vendor to redistribute on a 
real-time basis last sale prices of transactions that take place on the 
Exchange (``NYSE Arca Realtime Reference Prices'') and to establish a 
flat monthly fee for that service. The Commission approved that pilot 
program on August 29, 2008.\3\
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    \3\ See Securities Exchange Act Release No. 58444 (August 29, 
2008), 73 FR 51872 (September 5, 2008) (SR-NYSEArca-2008-96).
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    The Exchange intends for the NYSE Arca Realtime Reference Prices 
service to accomplish three goals:
    1. To provide a low-cost service that will make real-time prices 
widely available to millions of casual investors;
    2. To provide vendors with a real-time substitute for delayed 
prices; and
    3. To relieve vendors of administrative burdens.

This pilot program is similar to pilot programs that the Nasdaq Stock 
Market, Inc. (``Nasdaq'') \4\ and the New York Stock Exchange, LLC 
(``NYSE'') \5\ have established.
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    \4\ See Securities Exchange Act Release Nos. 57965 (June 16, 
2008), 73 FR 35178 (June 20, 2008) (SR-NASDAQ-2006-060); 57973 (June 
16, 2008), 73 FR 35430 (June 23, 2008) (SR-NASDAQ-2008-050).
    \5\ See Securities Exchange Act Release No. 57966 (June 16, 
2008), 73 FR 35182 (June 20, 2008) (SR-NYSE-2007-04).
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    The pilot program allows internet service providers, traditional 
market data vendors, and others (``NYSE Arca-Only Vendors'') to make 
available NYSE Arca Realtime Reference Prices on a real-time basis.\6\ 
The NYSE Arca Realtime Reference Price information includes last sale 
prices for all securities that trade on the Exchange. It includes only 
prices, and not the size of each trade and not bid/asked quotations.
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    \6\ The Exchange notes that it will make the NYSE Arca 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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    It features a flat, fixed monthly vendor fee, no user-based fees, 
no vendor reporting requirements, and no professional or non-
professional subscriber agreements.

[[Page 756]]

    The Exchange established November 1, 2008 as the end date for the 
pilot program. The Exchange then extended that end date to December 31, 
2008.\7\ The Exchange now seeks to extend that end date to March 31, 
2009. Prior to the end of the pilot period, the Exchange will assess 
its experience with the product and either will submit a proposed rule 
change that seeks to extend or modify the pilot program or to make it 
permanent, or it will announce publicly that it does not seek to extend 
the pilot program beyond the program's termination date.
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    \7\ See Securities Exchange Act Release No. 58895 (October 31, 
2008), 73 FR 66956 (November 12, 2008) (SR-NYSEArca-2008-122).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \8\ that an exchange have rules that 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members and other persons using its facilities and 
the requirements under Section 6(b)(5) \9\ that the rules of an 
exchange be designed to promote just and equitable principles of trade 
and not to permit unfair discrimination between customers, issuers, 
brokers or dealers.
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    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the pilot program benefits investors by 
facilitating their prompt access to widespread, free, real-time pricing 
information contained in the NYSE Arca Realtime Reference Prices 
service. Extending the pilot program will extend those benefits while 
the Exchange assesses the service.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that this proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not received any unsolicited written comments from 
members or other interested parties.

III. 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2008-143 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2008-143. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying 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-NYSEArca-2008-143 and should be submitted on or before 
January 28, 2009.

IV. Commission's Findings and Order Granting Accelerated Approval of a 
Proposed Rule Change

    The Commission finds that the proposed rule change, to extend the 
pilot program for three months, is consistent with the requirements of 
the Act and the rules and regulations thereunder applicable to a 
national securities exchange.\10\ In particular, it is consistent with 
Section 6(b)(4) of the Act,\11\ 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,\12\ 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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    \10\ 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).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 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,\13\ 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,\14\ 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.\15\
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    \13\ 15 U.S.C. 78f(b)(8).
    \14\ 17 CFR 242.603(a).
    \15\ NYSE Arca is an exclusive processor of its last sale data 
under Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which 
defines an exclusive processor as, among other things, an exchange 
that distributes data on an exclusive basis on its own behalf.
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    The Commission approved the fee for NYSE Arca Realtime Reference 
Prices for a pilot period which runs until December 31, 2008.\16\ The 
Commission notes that the Exchange proposes to extend the pilot program 
for three months. The Exchange proposes no other changes to the 
existing pilot program.
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    \16\ See supra notes 3 and 7.
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    On December 2, 2008, the Commission issued an approval order 
(``Order'') that sets forth a market-based approach for analyzing 
proposals by self-regulatory organizations to impose fees for ``non-
core'' market data products, such as NYSE Arca Realtime Reference 
Prices.\17\ The Commission believes that NYSE Arca's proposal to

[[Page 757]]

temporarily extend the pilot program is consistent with the Act for the 
reasons noted in the Order.\18\ The Commission believes that approving 
NYSE Arca's proposal to temporarily extend the pilot program that 
imposes a fee for NYSE Arca Realtime Reference Prices for an additional 
three months will be beneficial to investors and in the public 
interest, in that it is intended to allow continued broad public 
dissemination of increased real-time pricing information. In addition, 
extending the pilot program for an additional three months will allow 
NYSE Arca, consistent with its representation,\19\ to file, the public 
to comment on, and the Commission to analyze consistent with the Order 
and in light of Section 19(b) of the Act, a proposal to permanently 
approve the fee for NYSE Arca Realtime Reference Prices.
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    \17\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (Order Setting Aside Action by 
Delegated Authority and Approving Proposed Rule Change Relating to 
NYSE Arca Data).
    \18\ See supra notes 3 and 7.
    \19\ The Exchange represents that it intends to file a proposal 
seeking permanent approval of NYSE Arca Realtime Reference Prices. 
Telephone conversation between Ronald Jordan, Executive Vice 
President, Market Data Services, NYSE Euronext, and John Roeser, 
Assistant Director, Division of Trading and Markets, Commission, on 
December 30, 2008.
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    The Commission finds good cause for approving the proposed rule 
change before the thirtieth day after the date of publication of notice 
of filing thereof in the Federal Register. Accelerating approval of 
this proposal is expected to benefit investors by continuing to 
facilitate their access to widespread, free, real-time pricing 
information contained in NYSE Arca Realtime Reference Prices. 
Therefore, the Commission finds good cause, consistent with Section 
19(b)(2) of the Act,\20\ to approve the proposed rule change on an 
accelerated basis to extend the operation of the pilot until March 31, 
2009.
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    \20\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSEArca-2008-143) is hereby approved 
on an accelerated basis until March 31, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E9-8 Filed 1-6-09; 8:45 am]

BILLING CODE 8011-01-P