Document ID: SEC-2008-0774-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-06-04T04:00Z

[Federal Register: June 4, 2008 (Volume 73, Number 108)]
[Notices]               
[Page 31905-31907]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04jn08-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57861; File No. SR-NYSE-2008-42]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Enhance Its NYSE OpenBook Product Offerings

May 23, 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 May 16, 2008, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the Exchange. 
The Exchange has designated the proposed rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the Act 
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed rule 
change effective upon filing with the Commission. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to enhance its NYSE OpenBook[reg] product 
offerings to offer additional separate data feeds containing NYSE 
quotations and order imbalance information. The text of the proposed 
rule change is available at http://www.nyse.com, the Exchange, and the 
Commission's Public Reference Room.

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

    In its filing with the Commission, NYSE 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 these statements may be examined at the places specified in 
Item IV below. NYSE has prepared summaries, set forth in Sections A, B, 
and C below, of the most significant aspects of such statements.

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

1. Purpose
    NYSE OpenBook responds to the desire of some market participants 
for depth-of-market data. It is a compilation of limit order data that 
the Exchange provides to market data vendors, broker-dealers, private 
network providers and other entities (collectively, ``Vendors'') 
through a data feed. For every limit price, NYSE OpenBook includes the 
aggregate order volume.
    NYSE OpenBook is a packaged suite of data feed products. In 
addition to the current NYSE OpenBook data feed (``NYSE OpenBook 
Realtime''), for no additional charge, the Exchange makes available to 
NYSE OpenBook recipients a separate data feed containing NYSE 
quotations (``NYSE BestQuote'').\5\ NYSE BestQuote allows customers to 
see additional market interest that is not displayed in the NYSE limit 
order book and that, therefore, is not available in NYSE OpenBook.
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    \5\ NYSE added NYSE BestQuote to the NYSE OpenBook Realtime 
package in October 2006. See Securities Exchange Act Release No. 
54594 (October 12, 2006), 71 FR 61819 (October 19, 2006) (SR-NYSE-
2006-81).
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    This proposed rule change:
    i. Responds to a demand for a newly enhanced version of the NYSE 
OpenBook product to be called NYSE OpenBook Ultra, which provides 
order-level detail; and
    ii. Adds to NYSE OpenBook a new category of information: 
information regarding order imbalances prior to the market opening and 
closing auctions (``Order Imbalance Information'').
    (1) NYSE OpenBook Ultra. The Exchange makes NYSE OpenBook Realtime 
available on a snapshot basis, with updates distributed in real-time at 
intervals of one second. Pursuant to this proposed rule change, the 
Exchange proposes to make available an enhanced NYSE OpenBook service 
that would update NYSE OpenBook information upon receipt of each 
displayed limit order (``NYSE OpenBook Ultra''). NYSE OpenBook Ultra 
responds to the desire of some market participants for real-time depth-
of-book data on an order-by-order basis. In addition, NYSE OpenBook 
Ultra will improve upon NYSE OpenBook Realtime by adding information 
regarding the changes in limit order interest, by providing more 
precise timestamp resolution (microseconds) and by providing an easy-
to-read format that is optimized for speed and recoverability.
    The Exchange will continue to support NYSE OpenBook Realtime and 
will offer NYSE OpenBook Ultra as an optional alternative without 
additional or different fees or terms. However, the Exchange 
anticipates that it will reassess its pricing for NYSE OpenBook, and 
may restructure or modify the charges applicable to the NYSE OpenBook 
Realtime and NYSE OpenBook Ultra packages. The Exchange will submit any 
proposed new or modified fees to the Commission as proposed rule 
changes and will not impose any new or modified charges on data feed 
recipients and end-users prior to Commission approval.
    (2) Order Imbalance Information. Order Imbalance Information is a 
data feed of real-time order imbalances that accumulate prior to the 
opening of trading on the Exchange and prior to the close of trading on 
the Exchange. These orders are subject to execution at the market's 
opening or closing price, as the case may be, and represent issues that 
are likely to be of particular trading interest at the opening or 
closing.
    The Exchange plans to distribute information about these imbalances 
in real-time at specified intervals prior to the opening and closing 
auctions. Initially, the Exchange proposes to make order imbalance 
information available at the following intervals:
    For opening order imbalances:

[[Page 31906]]

     Every five minutes between 8:30 a.m. Eastern Time (``ET'') 
and 9 a.m. ET.
     Every one minute between 9 a.m. ET and 9:20 a.m. ET.
     Every 15 seconds between 9:20 a.m. ET and the opening (or 
9:35 a.m. ET if the opening is delayed).
    For closing order imbalances:
     Every fifteen seconds between 3:40 p.m. ET and 3:50 p.m. 
ET.
     Every five seconds between 3:50 p.m. ET and 4 p.m. ET.
    Order Imbalance Information will also include the imbalance 
information that the Exchange is required to disseminate under NYSE 
Rule 123C(5), as well as automated real-time streaming order imbalance 
information at specified intervals.
    The Exchange proposes to make Order Imbalance Information available 
as part of the NYSE OpenBook package at no additional charge.
    (3) Fees. Currently, an end-user of NYSE OpenBook pays (or its 
Vendor pays on its behalf) the monthly per-terminal NYSE OpenBook 
device fee of $60. A NYSE OpenBook data feed recipient pays a monthly 
$5,000 access fee for NYSE OpenBook, plus the per-terminal fee if the 
data feed recipient also displays the data.
    For the moment, the Exchange proposes to permit data feed 
recipients and end-users to receive and use NYSE OpenBook Ultra, 
including Order Imbalance Information and NYSE BestQuote, for no 
additional charge. That is, the same $5,000 access fee and $60 per-
terminal fee will apply. This will allow current NYSE OpenBook 
recipients to sample the proposed enhanced version of NYSE OpenBook for 
the same fees that they pay today.
    (4) Contracts. As with OpenBook Realtime, the Exchange proposes to 
make NYSE OpenBook Ultra (including Order Imbalance Information and 
NYSE BestQuote) available under the same contracting arrangement that 
the Commission has approved for the receipt and use of market data 
under the CTA and CQ Plans. That arrangement contemplates that each 
data feed recipient enter into the Commission-approved standard form of 
``Agreement for Receipt and Use of Market Data'' that Network A uses 
for data redistributors and other parties that use the data for 
purposes other than interrogation.\6\ Exhibit A to each of those 
agreements would need to be updated to reflect the receipt and use of 
NYSE OpenBook Ultra data. The arrangement also requires an end-user of 
the information (other than a data feed recipient) to enter into a 
Commission-approved Network A professional subscriber or a 
nonprofessional subscriber agreement, as the case may be.
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    \6\ The Participants in the CTA and CQ Plans first submitted the 
Consolidated Vendor Form to the Commission for immediate 
effectiveness in 1990. See Securities Exchange Act Release No. 28407 
(September 6, 1990), 55 FR 37276 (September 10, 1990) (File No. 4-
281). The Commission approved a revised version of it in 1996 in 
conjunction with the participants' restatement of the CTA and CQ 
Plans. See Securities Exchange Act Release No. 37191 (May 9, 1996), 
61 FR 24842 (May 16, 1996) (File No. SR-CTA/CQ-96-1).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \7\ that the rules of an 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.
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    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition 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

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay set forth in Rule 19b-
4(f)(6)(iii) under the Act, which would make the rule change operative 
upon filing.
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    \10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing 
of the proposed rule change, or such shorter time as designated by 
the Commission. NYSE has satisfied the pre-filing notice 
requirement.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver would immediately allow the Exchange to disseminate 
this supplemental information prior to the execution of the opening and 
closing transactions on the NYSE. Accordingly, the Commission 
designates the proposal to be operative upon filing with the 
Commission.\11\
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    \11\ For purposes only of waiving the 30-day operative delay of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2008-42 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2008-42. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your

[[Page 31907]]

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, 100 F Street, NE., Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the NYSE. 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-NYSE-2008-42 and should be submitted on or before June 
25, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-12235 Filed 6-3-08; 8:45 am]

BILLING CODE 8010-01-P