Document ID: SEC-2013-0561-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Consolidated Tape Association Plan and Consolidated Quotation Plan
Posted Date: 2013-03-25T04:00Z

[Federal Register Volume 78, Number 57 (Monday, March 25, 2013)]
[Notices]
[Pages 17946-17952]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06730]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69157; File No. SR-CTA/CQ-2013-01]

Consolidated Tape Association; Notice of Filing and Immediate 
Effectiveness of the Sixteenth Charges Amendment to the Second 
Restatement of the CTA Plan and Eighth Charges Amendment to the 
Restated CQ Plan

March 18, 2013.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on March 11, 2013,\3\ the Consolidated Tape Association (``CTA'') Plan 
and Consolidated Quotation (``CQ'') Plan participants 
(``Participants'') \4\ 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'').\5\ 
The proposal represents the sixteenth charges amendment to the CTA Plan 
(``Sixteenth Charges Amendment to the CTA Plan'') and the eighth 
charges amendment to the CQ Plan (``Eighth Charges Amendment to the CQ 
Plan''), and reflects changes unanimously adopted by the Participants.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ The proposal was originally submitted on January 30, 2013. 
It was resubmitted on February 5, 2013, February 28, 2013, and on 
March 11, 2013.
    \4\ Each participant executed the proposed amendment. The 
Participants are: BATS Exchange, Inc., BATS-Y Exchange, Inc., 
Chicago Board Options Exchange, Incorporated, Chicago Stock 
Exchange, Inc., EDGA Exchange, Inc. (``EDGA''), EDGX Exchange, Inc. 
(``EDGX''), Financial Industry Regulatory Authority, Inc. 
(``FINRA''), International Securities Exchange, LLC, NASDAQ OMX BX, 
Inc. (``Nasdaq BX''), NASDAQ OMX PHLX, Inc. (``Nasdaq PSX''), Nasdaq 
Stock Market LLC, National Stock Exchange, New York Stock Exchange 
LLC (``NYSE''), NYSE MKT LLC (formerly NYSE Amex, Inc.), and NYSE 
Arca, Inc. (``NYSE Arca'').
    \5\ 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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    The purpose of the Sixteenth Charges Amendment to the CTA Plan and 
Eighth Charges Amendment to the CQ Plan (collectively, the 
``Amendments''), is to simplify the Plans' existing market data fee 
schedules by compressing the current 14-tier Network A device rate 
schedule into four tiers, by consolidating the Plans' eight fee 
schedules into one, and by realigning the Plans' charges more closely 
with the services the Plans provide, without materially changing the 
revenues the current fee schedules generate. The Participants' goal is 
to achieve greater simplicity and a reduction of administrative 
burdens.

[[Page 17947]]

    Pursuant to Rule 608(b)(3)(i) under Regulation NMS,\6\ the 
Participants designated the 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 Amendments became effective upon filing with the Commission. At any 
time within 60 days of the filing of the Amendments, the Commission may 
summarily abrogate the Amendments and require that the 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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    \6\ 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 Amendments.

I. Rule 608(a)

A. Description and Purpose of the Amendments

1. In General
    The Participants filed the last significant fee structure change in 
1986. Since then, however, 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, 
internationalization and developments in portfolio analysis and 
securities research.
    Industry representatives who sit on the Plans' Advisory Committee 
have noted these changes and have urged adoption of a modernized, 
simpler, easier to read fee schedule. They have noted the desirability 
of reducing the rate spread inherent in the 14-tier Network A device 
rate structure and the need for reducing administrative burdens. The 
Participants have discussed these goals with those industry 
representatives. The proposed changes respond to the industry 
representatives' comments and seek to establish a simplified pricing 
structure that is consistent with current technology, that reduces 
administrative burdens and that promotes the use of real-time market 
data.
    The 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 transaction reporting plans: the Joint Self-
Regulatory 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 (the ``Nasdaq/UTP Plan'') and the Options Price Reporting 
Authority Plan (``OPRA Plan''). This would reduce administrative 
burdens for broker-dealers and other market data users and simplify fee 
calculations.
    The Amendments also propose to consolidate, simplify and update the 
market data fee schedules under both Plans to arrive at a single, 
consolidated CTA/CQ Fee Schedule. This should make it easier for market 
data users to understand and apply the fee schedule.
    The Participants anticipate that the fee changes would not 
materially change the market data revenues generated under the Plans.
    The text of the proposed Amendments is available on the CTA's Web 
site (http://www.nysedata.com/cta), at the principal office of the CTA, 
and at the Commission's Public Reference Room.
2. The Proposed Fee Schedule Changes
a. Professional Subscriber Charges
i. Network A
    A principal purpose of the proposed fee schedule changes is to 
address the 14-tier fee structure that the Participants have in place 
for Network A professional subscribers. That structure has been in 
place for more than 25 years. Under the tiered structure, a firm 
reports how many display devices its professional subscribers use and 
that number then is used to determine the tier within which the firm 
falls.
    For reporting purposes, a display device is any device capable of 
displaying market data. Where a professional subscriber receives market 
data services from multiple vendors, separate device fees apply for 
each vendor's service. Where a vendor provides market data to a 
professional subscriber by means of multiple applications, separate 
device fees apply for each application.
    At one extreme, the current Network A fee tiered structure imposes 
a monthly charge of $18.75 per device for firms employing professional 
subscribers who use more than 10,000 devices. At the other extreme, it 
imposes a monthly charge of $127.25 per device for a single 
professional subscriber. (For Network A, the rates entitle the 
professional subscriber to receive both Network A last sale information 
under the CTA Plan and Network A quotation information under the CQ 
Plan.)
    Market data users have told the Participants that they find the 14-
tier structure challenging to administer and the $18.75-to-$127.25 
spread between the highest and lowest tiers too wide. The proposed 
changes seek to address both concerns. The Participants propose a new 
four-tier monthly Network A fee structure for the display units of 
professional subscribers, as follows:
    1. 1-2 devices: $50.00.
    2. 3-999 devices: $30.00.
    3. 1,000-9,999 devices: $25.00.
    4. 10,000 devices or more: $20.00.
    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 device would see their monthly Network 
A rate drop from $127.25 to $50, and firms having two devices would see 
their monthly Network A rate drop from $79.50 per device to $50 per 
device. Firms whose professional subscriber employees use between 3 and 
29 devices would also have lower rates.
    On the other hand, larger firms would see higher rates in respect 
of their internal distribution of market data to their employees. For 
example, the rates for firms whose employees use between 750 devices 
and 9,999 devices would rise from $19.75 or $20.75 per device to $25 
per device, and the rates for firms whose employees use more than 
10,000 devices would rise from $18.75 to $20.00.
    Many firms distribute market data to ``Customers'' and pay CTA/CQ 
fees on behalf of those Customers. Those firms should pay less for 
their external distribution to each Customer because the rates that 
they would pay on behalf of each Customer would drop (assuming that the 
firms do not provide service to more than 29 Customer devices). The 
amount of the decrease would depend on the tier into which the Customer 
falls.
    ``Customer'' refers to an individual client of the firm, an 
independent contractor who may be associated with the firm but is not 
an employee of the firm, a trading company that receives market data 
from the firm for use by its traders, and any other corporate, broker-
dealer or other entity to which the firm provides data.
    A firm may only include its own employees in determining the tier 
that

[[Page 17948]]

applies to it. It may not include in that determination any Customer to 
which it provides market data or the employees of any Customer. The 
rate applicable to each Customer is separately determined based on the 
tier into which the Customer falls. The Amendments propose to add a 
footnote (proposed footnote 2) to explain this. This explanation seeks 
to prevent efforts to misuse the tiered rate structure. For the same 
reason, the Amendments also propose to eliminate the reference to a 
firm's officers and partners as authorized internal distributees of the 
firm.
    Together with the other proposed amendments to the fee schedule, 
the Participants anticipate that the changes to the Network A 
professional subscriber tiered fee structure would not result in a 
material change in overall revenues under the Plans.
ii. Network B
    Professional subscribers currently pay one amount for Network B 
last sale information and a separate amount for Network B quotation 
information. Firms that are members of a Participant currently pay 
slightly less than non-members. A member pays $27.25 per month per 
device to receive both last sale and quotation information for Network 
B and a non-member pays $30.20. Network B is the only network that 
still distinguishes between members and non-members.
    To simplify Network B professional subscriber rates and to remove 
the differential, the Participants propose a single monthly rate of 
$24.00 per device, applicable to both members and non-members.
    The $24.00 Network B rate would amount to a savings for most 
nonprofessional subscribers, the majority of which currently receive 
both last sale and quotation information. Network B has a small number 
of data recipients who receive last sale information or quotation 
information, but not both. The change would amount to a fee increase 
for them. The Network B Participants note that Network A and the 
Participants in the Nasdaq/UTP Plan and the OPRA Plan have not charged 
separately for last sale information and quotation information for many 
years.
    The Participants believe that a single fee for Network B devices 
would prove administratively efficient for data users and the network 
administrators. They note that the Nasdaq/UTP Plan imposes a single fee 
of $20 for each device and that the OPRA Plan imposes a single fee 
(currently $25) for each device.
iii. Broker-Dealer Enterprise Maximums
    Currently, the monthly broker-dealer enterprise maximums are at 
$660,000 per month for Network A and $500,000 per month for Network B. 
For that amount, the enterprise maximums allow a broker-dealer to 
provide last sale and quotation information to an unlimited number of 
its own employees and the brokerage account customers its 
nonprofessional subscribers. The Plans provide that the amounts of the 
broker-dealer enterprise maximums increase each calendar year by an 
amount equal to the percentage increase in the annual composite share 
volume for the preceding calendar year, subject to a maximum annual 
increase of five percent.
    The Participants propose to modify the means for determining the 
increase in the broker-dealer enterprise maximums. Under the proposal, 
the Participants may increase the broker-dealer enterprise maximums for 
Network A and Network B by the affirmative vote of not less than two-
thirds of the Participants, provided, however, that they may not 
increase either network's enterprise maximum by more than four percent 
for any calendar year. The Participants may elect not to increase the 
fee for any calendar year.
    This proposed means for determining the increase in the broker-
dealer enterprise maximums would reduce the amount of any one year's 
permissible increase from five percent to four percent and would better 
reflect inflation than does the current means. The maximum four percent 
increase is consistent with the average cost of living adjustment 
(``COLA'') as published by the Social Security Administration for the 
past 38 years.
    The Participants have not increased the Network A broker-dealer 
enterprise maximum for more than five years. They have not increased 
the Network B broker-dealer enterprise maximum since they first adopted 
it in 1999. They propose to increase the amount of both networks' 
enterprise maximums for 2013. As a result, the monthly Network A 
broker-dealer enterprise maximum would increase to $686,400 and the 
monthly Network B broker-dealer enterprise maximum would increase to 
$520,000. These changes would not take effect until the implementation 
date for the other charges set forth in these Amendments. The number of 
firms reaching the enterprise caps is minimal and these firms may 
benefit from proposed fee reductions in other areas.
b. Nonprofessional Subscriber Charges
    Currently, a firm pays $1.00 per month in respect of its first 
250,000 Network A nonprofessional subscribers and $0.50 for Network A 
nonprofessional subscribers in excess of 250,000. A firm pays $1.00 per 
month for each of its Network B nonprofessional subscribers, regardless 
of how many such subscribers a firm has.
    The Participants propose to harmonize the treatment of large and 
small firms by applying the $1.00 per month rate in respect of all 
Network A nonprofessional subscribers, regardless of the number of 
nonprofessional subscribers. This would also harmonize 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 note that the number of firms that have more than 250,000 
Network A nonprofessional subscribers is very small.
c. Per-Query Charges
    Currently, Network A and Network B impose 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 Participants propose to modify their per-query rate structure 
by replacing the three-tier structure with the same one rate as the 
Nasdaq/UTP Plan and the OPRA Plan imposes: $.005 for each inquiry for 
both Network A and Network B.
    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.)
    The single rate would simplify per-query calculations. It would 
also harmonize the Network A and Network B per-query fees with the 
Nasdaq/UTP Plan and the OPRA Plan per-query fees.
d. Access Fees
    Current and proposed access fees for direct access to last sale 
prices are as follows:

Current Fees:
    Network A: $1,000.00
    Network B: $350.00
Proposed Fees:
    Network A: $1,250.00
    Network B: $750.00
    Current and proposed access fees for indirect access to last sale 
prices are as follows:

[[Page 17949]]

Current Fees:
    Network A: $500.00
    Network B: $200.00
Proposed Fees:
    Network A: $750.00
    Network B: $400.00
    Current and proposed access fees for direct access to quotation 
information are as follows:

Current Fees:
    Network A: $1,100.00
    Network B: $400.00
Proposed Fees:
    Network A: $1,750.00
    Network B: $1,250.00
    Current and proposed access fees for indirect access to quotation 
information are as follows:

Current Fees:
    Network A: $700.00
    Network B: $250.00
Proposed Fees:
    Network A: $1,250.00
    Network B: $600.00
    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 believe that increases in these fees are fair 
and reasonable because today's data feeds provide significant 
incremental value in comparison to the data feeds that the Participants 
provided when they first set the access fees.
    For example, the data feeds contain a vastly larger number of last 
sale prices and bids and offers. The growth in Exchange Traded Products 
has contributed to a significant increase in Network B activity. The 
data feeds also contain far more information beyond prices and quotes, 
such as the national best bid and offer (``NBBO''), short sale 
restriction indications, circuit breaker tabs, retail price improvement 
indications, and, coming soon, limit up/limit down information. In 
addition to the vast increase in content, there has been significant 
improvement in the latency of the data feeds.
    Further, data feeds have become more valuable, as recipients now 
use them to perform a far larger array of non-display functions. Some 
firms even base their business models on the incorporation of data 
feeds into black boxes and application programming interfaces that 
apply trading algorithms to the data, but that do not require 
widespread data access by the firm's employees. As a result, these 
firms pay little for data usage beyond access fees, yet their data 
access and usage is critical to their businesses.
    The Participants estimate the revenues resulting from the revised 
access fees would increase total Network A and Network B by six 
percent, but this increase would be largely offset by an estimated five 
percent decrease in total revenues resulting from the revised 
professional subscriber device fees and an estimated two percent 
decrease resulting from the revised quote usage fees. The majority of 
customers taking data feeds are also benefiting from lower professional 
subscriber fees and/or lower quote-usage fees.
    CTA and CQ data feeds include a full consolidated data set of last 
sale and quotation information across all exchanges and FINRA's Trade 
Reporting Facilities. In contrast, the data feeds found in the 
proprietary data products of individual exchanges contain a far more 
limited set of data. The following chart compares access fees for the 
receipt of last sale information and quotation information:

Proposed CTA Network A:
    Direct Access: $3,000
    Indirect Access: $2,000
Proposed CQ Network B:
    Direct Access: $2,000
    Indirect Access: $1,000
NYSE: $5,000
Nasdaq: $2,000
Nasdaq BX: $1,000
Nasdaq PSX: $1,000
NYSE Arca: $750
EDGA: $500
EDGX: $500
e. Data Redistribution Charges
    The Participants propose to establish a new monthly charge of 
$1,000 for the redistribution of Network A last sale price information 
and/or Network A quotation information and a similar $1,000 monthly 
charge for the redistribution of Network B last sale price information 
and/or Network B quotation information. This will not necessitate any 
additional reporting obligations.
    The redistribution charges would apply to any entity that makes 
last sale information or quotation information available to any other 
entity or to any person other than its own employees, irrespective of 
the means of transmission or access. That is, all firms that 
redistribute market data outside of their organization would be 
required to pay the redistribution fee. The fee would not apply to a 
firm whose receipt, use and distribution of market data are limited to 
its own employees in a controlled environment.
    The proposed redistribution charge harmonizes CTA/CQ fees with OPRA 
Plan fees, which impose a redistribution charge on every vendor that 
redistributes OPRA data to any person. OPRA's redistribution fee is 
$1,500 per month (or $650 for an internet-only service). Redistribution 
fees are also common for exchange proprietary data products.
    Revenues from the redistribution charge along with the access fees 
would help to offset anticipated decreases in revenues resulting from 
the proposed changes to the professional subscriber device fees. 
Vendors base their business models on procuring data from exchanges and 
turning around and redistributing that data to their subscribers. The 
costs that market data vendors incur for acquiring their inventory 
(i.e., CTA/CQ market data) are very low, sometimes amounting only to 
their payment of access fees. The proposed redistribution charges would 
require them to contribute somewhat more, relative to the end-user 
community.
f. Television Broadcast Charges
    The Participants do not propose to make any changes to current 
television broadcast charges. In the case of Network A, the 
Participants do not propose to change the maximum amount payable for 
television broadcasts. However, the Plans provide for an annual 
increase to that maximum amount. The Network A Participants in some 
years have elected not to apply the annual increase. The Network A 
Participants propose to codify the practice of voting to waive a 
calendar year's maximum increase by adding footnote language to that 
effect.
g. Multiple Data Feed Charges
    The Participants propose to establish a new monthly fee for firms 
that take more than one primary data feed and one backup data feed. 
(This will not necessitate any additional reporting obligations.) The 
fee would be 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, this charge would apply 
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.
    To date, the Participants have not required data recipients that 
receive

[[Page 17950]]

multiple data feeds to pay any more than data recipients that receive 
one primary and one back up data feed. The Participants believe that it 
is appropriate to have them do so. The Participants note that the OPRA 
Plan imposes a charge of $100 per connection for circuit connections in 
addition to the primary and backup connections.
h. Late/Clearly Erroneous Reporting Charges
    The Participants propose to establish a new monthly fee for firms 
that fail to comply with their reporting obligations in a timely 
manner. The charge is $2500 for each network. The charge would not be 
assessed until a firm fails to report its data usage and entitlements 
for more than three months. A report is not considered to have been 
provided if the report is clearly incomplete or inaccurate, such as a 
report that fails to report all data products or a report for which the 
reporting party did not make a good faith effort to assure the accuracy 
of data usage and entitlements.
    The late reporting charges would be assessed for each month in 
which there is a failure to provide a network's required data-usage 
report, commencing with reporting failures lasting more than three 
months from the date on which the report is first due. By way of 
example, if a network's data-usage report is due on May 31, the charge 
would commence to apply as of September 1 and would appear on the 
market data invoice for September. The network administrator would 
assess the charge as of September 1, and would continue to assess the 
charge each month until the network administrator receives the firm's 
complete and accurate data-usage report.
    The purpose of the charges is to provide incentives to those firms 
that are delinquent in reporting their data-usage activity and to place 
them on a level playing field with compliant firms.
i. Network B Ticker Charge
    As part of the process of simplifying the fee structure, the 
Participants have determined to eliminate the Network B ticker charge. 
This would harmonize Network B rates with those of Network A (which 
phased out its ticker charge many years ago), and with the Nasdaq/UTP 
Plan and the OPRA Plan, neither of which imposes a ticker charge.
3. Impact of the Proposed Fee Changes
    As with any reorganization of a fee schedule, some data recipients 
may pay higher total market data fees and others may pay less. On 
balance, if customer usage were to remain the same, the Participants 
estimate that the fee changes would increase consolidated tape revenue 
for Network A and Network B by no more than 2.9 percent. Customer usage 
trends, however, have declined year-over-year since 2008, including 
declines in access feeds, professional and nonprofessional subscribers, 
and quote usage. This has led to a significant decline in revenues 
generated under the Plans. (More information on these declines can be 
found in the Participants' Consolidated Data Quarterly Operating 
Metrics Reports. Those reports can be found at http://www.nyxdata.com/CTA.) Additionally, broker-dealers increasingly have reported their 
executions to FINRA's Trade Reporting Facilities (``TRFs''). Because 
the TRFs re-allocate a portion of their consolidated tape revenues back 
to their broker-dealer customers, this significant and growing share of 
trading reduces the consolidated tape revenues remaining with the 
markets. For these reasons, the Participants believe that the proposed 
fee changes would not result in a material increase in overall revenues 
under the Plans.
4. Changes to the Form of the CTA/CQ Fee Schedule
    The Amendments propose to simplify, consolidate, and update the 
market data fee schedules under both Plans to arrive at a single, 
consolidated CTA/CQ Fee Schedule that sets forth the applicable charges 
from time to time in effect under both Plans. The Participants propose 
to set forth the CTA/CQ Fee Schedule in Exhibit E to the CTA Plan. It 
would replace the eight CTA/CQ fee schedules currently in effect: 
Schedules A-1 through A-4 of Exhibit E to the CTA Plan and Schedules A-
1 through A-4 of Exhibit E to the CQ Plan. As a result, Exhibit E to 
the CTA Plan would contain the entire CTA/CQ Fee Schedule and Exhibit E 
to the CQ Plan would be eliminated.
    The simplifications and updates that the consolidated CTA/CQ Fee 
Schedule proposes include the following:
     Adopting changes that make fee-disclosure more 
transparent, such as the addition of descriptions of what constitutes 
internal and external distribution;
     removing the Network B communications facilities and line 
splitter charges, which no longer apply;
     removing outdated footnotes that no longer apply;
     posting the amounts of the broker/dealer enterprise charge 
and the maximum television broadcast charge on the CTA Web site 
(although the amounts would also remain on the CTA/CQ Fee Schedule);
     granting the Participants the authority to waive the 
annual increase for any calendar year for the Network A and Network B 
broker-dealer enterprise charges and the Network A maximum television 
broadcast charge; and
     changing references to the ``high speed line'' to read 
``output feed.''

B. Additional Information Required by Rule 608(a)

1. Governing or Constituent Documents
    Not applicable.
2. Implementation of the Amendments
    The Participants anticipate implementing the proposed fee changes 
in 2013, after giving notice to data recipients and end users of the 
proposed fee changes.
3. Development and Implementation Phases
    See Item I(B)(2) above.
4. 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 Act. The proposed fee changes respond to the suggestions of 
industry representatives and reflect the Participants' own views that 
it is appropriate to establish a simplified pricing structure that is 
consistent with current technology, that reduces administrative burdens 
and that promotes the use of real-time market data.
    The Participants have not significantly revised the CTA and CQ 
market data fee schedules in many years. They adopted the 14-tier 
Network A professional subscriber rate structure in 1986 and that 
structure has changed very little ever since. Numerous technological 
advances, the advent of trading algorithms and automated trading, 
different investment patterns, a plethora of new securities products, 
unprecedented levels of trading, internationalization and developments 
in portfolio analysis and securities research warrant the revision.
    In general, the proposed fee changes would cause Network A fees to 
sync more closely with Network B fees and 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 fees would compare reasonably 
with the fees payable under those other Plans.
    As a result, these Amendments promote consistency in price 
structures among the national market system

[[Page 17951]]

plans, as well as consistency with the preponderance of other market 
data providers. This would make market data fees easier to administer. 
It would enable data recipients to compare their charges under the 
respective national market system plans more easily. It also would make 
for a more straightforward and streamlined administrative process for 
both the network administrator and market data users.
    In the Participants' view, the proposed fee schedule would allow 
each category of data recipient and data user to contribute an 
appropriate amount for their receipt and use of market data under the 
Plans. The proposed fee schedule would provide for an equitable 
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.
    The Participants propose to apply the revised fee schedule 
uniformly to all constituents (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.
5. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan
    Not applicable.
6. Approval by Sponsors in Accordance with Plan
    In accordance with Section XII(b)(iii) of the CTA Plan and Section 
IX(b)(iii) of the CQ Plan, each of the Participants has approved the 
rate changes.
7. Description of Operation of Facility Contemplated by the Proposed 
Amendments
    Not applicable.
a. Terms and Conditions of Access
    See Item I(A) above.
b. Method of Determination and Imposition, and Amount of, Fees and 
Charges
    The Participants took a number of factors into account in deciding 
to propose the Amendments.
    Most significantly, they listened to the information needs and 
suggestions of industry representatives. In particular, the 
Participants received input from members of 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. Members of the 
Advisory Committee gave valuable input that the Participants used in 
crafting the proposed fee changes.
    The Participants also took into consideration a number of other 
factors 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 participants 
in 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., large firms vs. small firms; 
redistributors vs. end users); and
    (E) crafting a fee schedule that is easy to read and use and 
minimizes administrative burdens.
c. Method of Frequency of Processor Evaluation
    Not applicable.
d. 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

    Not applicable.

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

    See Item I(A) above.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed 
Amendments to the CTA Plan are 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 SR-CTA/CQ-2013-01 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-CTA/CQ-2013-01. 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 Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the Amendments that are filed with 
the Commission, and all written communications relating to the 
Amendments 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, 100 F Street NE., Washington, DC 
20549, 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 the 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

[[Page 17952]]

submissions should refer to File Number SR-CTA/CQ-2013-01 and should be 
submitted on or before April 15, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(27).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06730 Filed 3-22-13; 8:45 am]
BILLING CODE 8011-01-P