Document ID: SEC-2009-1778-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex, Inc.
Posted Date: 2009-12-18T05:00Z

[Federal Register: December 18, 2009 (Volume 74, Number 242)]
[Notices]               
[Page 67275-67278]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18de09-105]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61144; File No. SR-NYSEAmex-2009-85]

 
Self-Regulatory Organizations; NYSE Amex, Inc.; Notice of Filing 
of Proposed Rule Change To Establish the NYSE Amex Realtime Reference 
Prices Service

December 10, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on November 30, 2009, the NYSE Amex, Inc. (``NYSE Amex'' or 
``Exchange''), filed with the Securities and Exchange Commission 
``Commission'') the proposed rule change as described in Items I, II, 
and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to establish the NYSE Amex Realtime Reference 
Prices service and to establish a flat monthly fee and a per-query fee 
for that service. The service allows a vendor to redistribute on a 
real-time basis last sale prices of transactions that take place on the 
Exchange (``NYSE Amex Realtime Reference Prices''). The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://www.nyse.com.

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 IV 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
a. The Service
    The NYSE Amex Realtime Reference Prices service will provide a low-
cost service that makes real-time prices widely available to casual 
investors, provides vendors with a useful real-time substitute for 
delayed prices; and relieves vendors of administrative burdens. The 
product responds to the requirements for distribution of real-time last 
sale prices over the Internet for reference purposes, rather than as a 
basis for making trading decisions.
    The NYSE Amex Realtime Reference Prices service will allow Internet 
service providers, traditional market data vendors, and others (``NYSE 
Amex-Only Vendors'') to make available NYSE Amex Realtime Reference 
Prices on a real-time basis.\4\ The NYSE Amex Realtime Reference Price 
information includes last sale prices for all securities that trade on 
the Exchange, updated in real-time. In addition, the product also 
includes open, high and low prices and cumulative volume. The Exchange 
anticipates that it will update these data elements every second, 
though initially it will update them once per minute. The product does 
not include bid/ask quotations or the size of each trade.
---------------------------------------------------------------------------

    \4\ The Exchange notes that it will make the NYSE Amex Realtime 
Reference Prices available to vendors no earlier than it makes those 
prices available to the processor under the CTA and Nasdaq/UTP 
Plans.
---------------------------------------------------------------------------

    The Exchange will not permit NYSE Amex-Only Vendors to provide NYSE 
Amex Realtime Reference Prices in a context in which a trading or 
order-routing decision can be implemented unless the NYSE Amex-Only 
Vendor also provides consolidated displays of Network A last sale 
prices available in an equivalent manner, as Rule 603(c)(1) of 
Regulation NMS requires.
    The service would eliminate some of the administrative burdens 
associated with the distribution of real-time CTA prices. The service 
would feature a flat, fixed monthly vendor fee, no user-based fees, no 
vendor reporting requirements, and no professional or non-professional 
subscriber agreements.

[[Page 67276]]

b. The Fees
    The Exchange proposes to establish a $10,000 monthly flat fee that 
entitles an NYSE Amex-Only Vendor to receive access to the NYSE Amex 
Realtime Reference Prices datafeed. For that fee, the NYSE Amex-Only 
Vendor may provide unlimited NYSE Amex Realtime Reference Prices to an 
unlimited number of the NYSE Amex-Only Vendor's subscribers and 
customers. The Exchange does not propose to impose any device or end-
user fee for the NYSE Amex-Only Vendors' distribution of NYSE Amex 
Realtime Reference Prices.
    In addition, the Exchange proposes to establish as an alternative 
to the fixed monthly fee a fee of $.004 for each real-time reference 
price that a NYSE Amex-Only Vendor disseminates to its customers. The 
Exchange proposes to limit a NYSE Amex-Only Vendor's exposure under 
this alternative fee by setting $10,000, the same amount as the 
proposed fixed monthly rate, as the maximum fee that an NYSE Amex-Only 
Vendor would have to pay for real-time reference prices that it 
disseminates in any calendar month pursuant to the per-query fee.
    In order to take advantage of the per-query fee, a NYSE Amex-Only 
Vendor must document in its Exhibit A that it has the ability to 
measure accurately the number of queries and must have the ability to 
report aggregate query quantities on a monthly basis.
    The Exchange will impose the per-query fee only on the 
dissemination of real-time reference prices. NYSE Amex-Only Vendors may 
provide delayed data services in the same manner as they do today.
    The per-query charge is imposed on NYSE Amex-Only Vendors, not end-
users, and is payable on a monthly basis. NYSE Amex-Only Vendors may 
elect to disseminate NYSE Amex Realtime Reference Prices pursuant to 
the per-query fee rather than the fixed monthly fee.
c. Justification of Fees
    The proposed flat monthly fee and per-query fee for the NYSE Amex 
Realtime Reference Prices service enable Internet service providers and 
traditional vendors to contribute to the Exchange's operating costs in 
a manner that is appropriate for the distribution of last sale price 
information in the form taken by the proposed service.
    In setting the level of the NYSE Amex Realtime Reference Prices 
fee, the Exchange took into consideration several factors, including:
    (1) The fees that Nasdaq, NYSE and NYSE Arca are charging for 
similar services;
    (2) Consultation with some of the entities that the Exchange 
anticipates will be the most likely to take advantage of the proposed 
service;
    (3) The contribution of market data revenues that the Exchange 
believes is appropriate for entities that are most likely to take 
advantage of the proposed service;
    (4) The contribution that revenues accruing from the proposed fee 
will make to meet the overall costs of the Exchange's operations;
    (5) The savings in administrative and reporting costs that the NYSE 
Amex Realtime Reference Prices service will provide to NYSE Amex-Only 
Vendors; and
    (6) The fact that the proposed fees provide alternatives to 
existing fees under the CTA and Nasdaq/UTP Plans, alternatives that 
vendors will purchase only if they determine that the perceived 
benefits outweigh the cost.
    The Exchange believes that the levels of the fixed monthly fee and 
the per-query fee are consistent with the approach set forth in the 
order by which the Commission approved ArcaBook fees for NYSE Arca.\5\ 
In the ArcaBook Approval Order, the Commission stated that ``when 
possible, reliance on competitive forces is the most appropriate and 
effective means to assess whether the terms for the distribution of 
non-core data are equitable, fair and reasonable, and not unreasonably 
discriminatory.'' \6\ It noted that if significant competitive forces 
apply to a proposal, the Commission will approve it unless a 
substantial countervailing basis exists.
---------------------------------------------------------------------------

    \5\ See Release [sic] No. 59039 (December 2, 2008), 73 FR 74770 
(December 9, 2008) (SR-NYSEArca-2006-21) (the ``ArcaBook Approval 
Order'').
    \6\ Id. at 74771.
---------------------------------------------------------------------------

    NYSE Amex Realtime Reference Prices constitute ``non-core data.'' 
The Exchange does not require a central processor to consolidate and 
distribute the product to the public pursuant to joint-SRO plans. 
Rather, the Exchange distributes the product voluntarily.
    In the case of NYSE Amex Realtime Reference Prices, both of the two 
types of competitive forces that the Commission described in the 
ArcaBook Approval Order are present: The Exchange has a compelling need 
to attract order flow and the product competes with a number of 
alternative products.
    The Exchange must compete vigorously for order flow to maintain its 
share of trading volume. This requires the Exchange to act reasonably 
in setting market data fees for non-core products such as NYSE Amex 
Realtime Reference Prices. The Exchange hopes that NYSE Amex Realtime 
Reference Prices will enable vendors to distribute NYSE Amex last sale 
price data widely among investors, and thereby provide a means for 
promoting the Exchange's visibility in the marketplace.
    In addition to the need to attract order flow, the availability of 
alternatives to NYSE Amex Realtime Reference Prices significantly 
constrain the prices at which the Exchange can market NYSE Amex 
Realtime Reference Prices. All national securities exchanges, the 
several Trade Reporting Facilities of FINRA, and ECNs that produce 
proprietary data, as well as the core data feed, are all sources of 
competition for NYSE Amex Realtime Reference Prices. Currently, the New 
York Stock Exchange, NYSE Arca and the Nasdaq Stock Market offer 
similar services.
    The information available in NYSE Amex Realtime Reference is 
included in the CTA core data feed, which also includes the size of 
trades, as well as last sale information from other markets. Even 
though NYSE Amex Realtime Reference Prices omits size and provides 
prices that are not consolidated with those of other markets, investors 
may select it as a less expensive alternative to the CTA Plan's 
consolidated last sale price services for certain purposes. (Rule 
603(c) of Regulation NMS requires vendors to make the core data feeds 
available to customers when trading and order-routing decisions can be 
implemented.)
d. Administrative Requirements
    The Exchange proposes to require the NYSE Amex-Only Vendor to 
identify the NYSE Amex trade price by placing the text ``NYSE Amex 
Data'' in close proximity to the display of each NYSE Amex Realtime 
Reference Price or series of NYSE Amex Realtime Reference Prices, or by 
complying with such other identification requirement as to which NYSE 
Amex may agree.
    The NYSE Amex-Only Vendor may make NYSE Amex Realtime Reference 
Prices available without having to differentiate between professional 
subscribers and nonprofessional subscribers, without having to account 
for the extent of access to the data, and without having to report the 
number of users.
e. Contracts
    NYSE Amex proposes to allow NYSE Amex-Only Vendors to provide NYSE 
Amex Realtime Reference Prices without requiring the end-users to enter

[[Page 67277]]

into contracts for the benefit of the Exchange.
    Instead, the Exchange proposes to require NYSE Amex-Only Vendors to 
provide a readily visible hyperlink that will send the end-user to a 
warning notice about the end-user's receipt and use of market data. The 
notice would be similar to the notice that vendors provide today when 
providing CTA delayed data services.
    The Exchange will require NYSE Amex-Only Vendors to enter into the 
form of ``vendor'' agreement into which the CTA and CQ Plans require 
recipients of the Network A datafeeds to enter (the ``Network A Vendor 
Form''). The Network A Vendor Form will authorize the NYSE Amex-Only 
Vendor to provide the NYSE Amex Realtime Reference Prices service to 
its subscribers and customers.
    The Network A Participants drafted the Network A Vendor Form as a 
one-size-fits-all form to capture most categories of market data 
dissemination. It is sufficiently generic to accommodate NYSE Amex 
Realtime Reference Prices. The Commission has approved the Network A 
Vendor Form.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release Nos. 28407 (September 6, 
1990), 55 FR 37276 (September 10, 1990) (File No. 4-281); 49185 
(February 4, 2004), 69 FR 6704 (February 11, 2004) (SR-CTA/CQ-2003-
01).
---------------------------------------------------------------------------

    The Exchange will supplement the Network A Vendor Form with an 
Exhibit C that will provide above-described terms and conditions that 
are unique to the NYSE Amex Realtime Reference Prices service. The 
proposed Exhibit C is attached to the proposed rule change as Exhibit 
5. The supplemental Exhibit C terms and conditions would govern:
     The restriction against providing the service in the 
context of a trading or order routing service;
     The replacement of end-user agreements with a hyperlink to 
a notice;
     The substance of the notice; and
     The ``NYSE Amex Data'' labeling requirement.
2. Statutory Basis
    The bases under the Securities Exchange Act of 1934 (the ``Act'') 
for the proposed rule change are 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule change would benefit investors by facilitating 
their prompt access to widespread, free, real-time pricing information 
contained in the NYSE Amex Realtime Reference Prices service. In 
addition, the Exchange believes that the proposed fee would allow 
entities that provide market data to large numbers of investors, which 
are the entities most likely to take advantage of the proposed service, 
to make an appropriate contribution towards meeting the overall costs 
of the Exchange's operations.
    The Exchange notes that its proposed fee compares favorably with 
the fees that Nasdaq, NYSE and NYSE Arca are charging for similar 
services. Because the proposed fee is substantially lower than those of 
Nasdaq, NYSE and NYSE Arca, it offers any vendor that wishes to provide 
its customers with a single market's data (as opposed to a more 
expensive consolidated data service) a less expensive alternative to 
Nasdaq, NYSE and NYSE Arca.

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

    NYSE Amex Realtime Reference Prices proposes to provide an 
alternative to existing fees and does not alter or rescind any existing 
fees. In addition, it amounts to a competitive response to the products 
that Nasdaq, NYSE and NYSE Arca have commenced to make available. For 
those reasons, the Exchange does not believe that the 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 discussed the proposed rules change with those 
entities that the Exchange believes would be the most likely to take 
advantage of the proposed NYSE Amex Realtime Reference Prices service 
by becoming NYSE Amex-Only Vendors. While those entities have not 
submitted formal, written comments on the proposal, the Exchange has 
incorporated some of their ideas into the proposal and the proposed 
rule change reflects their input. The Exchange has not received any 
unsolicited written comments from members or other interested parties.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 No. SR-NYSEAmex-2009-85 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2009-85. 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 such 
filing also will be available for

[[Page 67278]]

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-NYSEAmex-2009-85 and should 
be submitted on or before January 8, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30079 Filed 12-17-09; 8:45 am]

BILLING CODE 8011-01-P