Document ID: SEC-2019-1095-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2019-08-01T04:00Z

[Federal Register Volume 84, Number 148 (Thursday, August 1, 2019)]
[Notices]
[Pages 37702-37704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16365]

[[Page 37702]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86492; File No. SR-NYSE-2019-42]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Discontinue the NYSE Alerts Market Data Product Offering

July 26, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on July 22, 2019, New York Stock Exchange LLC (``NYSE'' or the 
``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 prepared by the Exchange. 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\ 15 U.S.C. 78a.
    \3\ 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 discontinue the NYSE Alerts market data 
product offering. The proposed rule change is available on the 
Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at 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, 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
    The Exchange proposes to discontinue the NYSE Alerts market data 
product offering. In 2004, pursuant to Securities and Exchange 
Commission approval, the Exchange adopted the NYSE Alerts market data 
product.\4\
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    \4\ See Securities Exchange Act Release No. 50844 (Dec. 13, 
2004), 69 FR 76806 (Dec. 22, 2004) (SR-NYSE-2004-53) (Order Granting 
Approval to Proposed Rule Change and Amendment Nos. 1 and 2 Relating 
to a Fee for the NYSE Alerts Datafeed); see also Securities Exchange 
Act Release No. 50639 (November 5, 2004), 69 FR 65488 (November 12, 
2004) (Notice of Filing of Proposed Rule Change and Amendment Nos. 1 
and 2 by New York Stock Exchange, Inc. Relating to a Fee for the 
NYSE Alerts Datafeed).
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    The NYSE Alerts market data product provides, on a real-time basis, 
the following categories of information for NYSE-listed securities 
only: MOC Market Imbalances, Delayed Openings/Trading Halts, ITS Pre-
Opening Indications/Trading Range Indications, Trading Collar Messages 
and Circuit Breaker Messages.\5\ Each of these categories of 
information is currently available on one or more of the Exchange's 
other proprietary market data products, as follows:
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    \5\ Id.
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     MOC Market Imbalances information is available in the NYSE 
Order Imbalances feed and the NYSE Integrated Feed;
     Delayed Openings/Trading Halts information is available in 
the NYSE BBO feed, NYSE Trades feed, NYSE Order Imbalances feed, and 
the NYSE Integrated Feed;
     ITS Preopening Indications/Trading Range Indications is 
available in the NYSE BBO feed, NYSE Trades feed, NYSE Order Imbalances 
feed, and the NYSE Integrated Feed;
     Trading Collar Messages information is available in the 
NYSE BBO feed, NYSE Trades feed, NYSE Order Imbalances feed, and the 
NYSE Integrated Feed; and
     Circuit Breaker Messages information is available in the 
NYSE BBO feed, NYSE Trades feed, NYSE Order Imbalances feed, and the 
NYSE Integrated Feed.
    The Exchange is undergoing a multi-phase transition to the Pillar 
trading platform that began in April 2018, when the Exchange introduced 
trading of UTP Securities on the Pillar trading platform.\6\ Because 
the NYSE Alerts product relates to information for Exchange-listed 
securities, information about UTP Securities was not added to the NYSE 
Alerts market data product. The Exchange next plans to transition 
Exchange-listed securities to the Pillar trading platform.\7\ In 
connection with this transition, in December 2018, the Exchange 
announced that it would permanently discontinue the NYSE Alerts market 
data product once the Exchange's transition to Pillar begins,\8\ which 
is anticipated to occur on August 5, 2019.\9\ The Exchange provided 
additional notices to alert subscribers of the planned discontinuation 
of NYSE Alerts.\10\ The Exchange now plans to continue offering the 
NYSE Alerts market data product for any symbols that have not yet 
transitioned to Pillar. Accordingly, NYSE Alerts will continue to be 
available for those Exchange-listed securities that have not 
transitioned to Pillar. The Exchange anticipates that the migration of 
Exchange-listed securities will be complete by August 22, 2019,\11\ at 
which time the Exchange will fully discontinue the NYSE Alerts product.
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    \6\ The Exchange began trading UTP Securities on the Pillar 
trading platform on April 9, 2018. See also Securities Exchange Act 
Release No. 82945 (March 26, 2018), 83 FR 13553 (March 29, 2018) 
(SR-NYSE-2017-36) (Order approving trading rules to support trading 
of UTP Securities on the Pillar trading platform).
    \7\ The Exchange has announced that, subject to rule approvals, 
it will begin transitioning Exchange-listed securities to Pillar on 
August 5, 2019, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse/Revised_Pillar_Migration_Timeline.pdf. See also 
Securities Exchange Act Release No. 85962 (May 29, 2019), 84 FR 
26188 (June 5, 2019) (SR-NYSE-2019-05) (Order approving rules to 
support the transition of Exchange-listed securities to Pillar).
    \8\ See https://www.nyse.com/trader-update/history#110000115870.
    \9\ See https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Pillar_Tape_A_Migration_Schedule_June_2019.pdf.
    \10\ See https://www.nyse.com/trader-update/history#110000132804. See also https://www.nyse.com/trader-update/history#110000140572.
    \11\ See supra note 9.
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    There are currently 34 subscribers of NYSE Alerts, all of whom 
currently subscribe to at least one or more of the Exchange's other 
market data products. As noted above, each of those other products 
includes the information that is found in NYSE Alerts. More 
specifically, of the 34 subscribers, 11 currently subscribe to NYSE 
Order Imbalances feed; 2 currently subscribe to NYSE Integrated Feed; 3 
currently subscribe to NYSE Order Imbalances feed and NYSE Integrated 
Feed; 6 currently subscribe to NYSE BBO feed and NYSE Order Imbalances 
feed; 1 currently subscribes to NYSE BBO feed and NYSE Integrated feed; 
and 11 currently subscribe to NYSE Order Imbalances feed, NYSE 
Integrated Feed and NYSE BBO feed. No subscriber currently subscribes 
to NYSE Alerts only. As a result, the discontinuation of NYSE Alerts 
will not have any impact to current subscribers because each currently 
subscribes to one or more of the Exchange's other market data products 
that includes the content that is available on NYSE Alerts.

[[Page 37703]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\12\ in general, and 
Sections 6(b)(4) and 6(b)(5) of the Act,\13\ in particular, in that it 
provides an equitable allocation of reasonable fees among users and 
recipients of the data and is not designed to permit unfair 
discrimination among customers, issuers, and brokers.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4), (5).
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    The Exchange believes that discontinuing NYSE Alerts at the end of 
the migration of NYSE-listed securities to the Pillar trading platform 
would remove impediments to and perfect a free and open market by 
streamlining the Exchange's market data product offerings to include 
those for which there has been more demand and would provide vendors 
and subscribers with a simpler and more standardized suite of market 
data products. The proposal to discontinue NYSE Alerts would be 
applicable to all member organizations and does not unfairly 
discriminate between customers, issuers, brokers or dealers.
    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations (``SROs'') and broker-dealers increased authority and 
flexibility to offer new and unique market data to consumers of such 
data. It was believed that this authority would expand the amount of 
data available to users and consumers of such data and also spur 
innovation and competition for the provision of market data. The 
Commission concluded that Regulation NMS--by lessening regulation of 
the market in proprietary data--would itself further the Act's goals of 
facilitating efficiency and competition:

[E]fficiency is promoted when brokerdealers who do not need the data 
beyond the prices, sizes, market center identifications of the NBBO 
and consolidated last sale information are not required to receive 
(and pay for) such data. The Commission also believes that 
efficiency is promoted when broker-dealers may choose to receive 
(and pay for) additional market data based on their own internal 
analysis of the need for such data.\14\
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    \14\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005) (File No. S7-10-04).

    The Exchange believes that the discontinuation of a market data 
product for which there is little or no demand and that is redundant of 
other market data products available, as is the case with NYSE Alerts, 
is a direct example of efficiency because it acknowledges that 
investors and the public have indicated that they have little or no use 
for certain information and allows the Exchange to dedicate resources 
to developing products (including through innovations of existing 
products and entirely new products) that provide information for which 
there is more of an expressed need. More specifically, NYSE Alerts was 
initially introduced to complement NYSE OpenBook, which was introduced 
in 2001. Over time, as the Exchange introduced additional products and 
has added the content currently available in NYSE Alerts to additional 
market data products, the information in NYSE Alerts has become 
obsolete or redundant. This is demonstrated by the fact that all 
current subscribers to NYSE Alerts already subscribe to an alternate 
NYSE market data product that has the same or similar content. In 
addition, the Exchange provided significant advance notice to market 
data subscribers of this discontinuation.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange notes that it 
operates in a highly competitive market in which other exchanges are 
free to offer similar products. Additionally, because all current 
subscribers already subscribe to an alternate NYSE market data product, 
there has been little or no demand for NYSE Alerts and therefore, the 
Exchange's proposed discontinuance will not harm competition.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, 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 and Rule 19b-
4(f)(6)(iii) thereunder.
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    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\18\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \17\ Id.
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange has stated that it plans to begin the transition 
of Exchange-listed securities to the Pillar trading platform on August 
5, 2019, and to stop providing NYSE Alerts for securities as they 
transition to Pillar. The Exchange would, however, continue to offer 
the NYSE Alerts market data product for any securities that have not 
yet transitioned to Pillar, and the Exchange does not propose to fully 
discontinue the NYSE Alerts product until the migration of Exchange-
listed securities to Pillar is complete. Further, the Exchange 
represents that all the current subscribers of NYSE Alerts also 
subscribe to an alternate NYSE market data product that includes the 
same content provided by NYSE Alerts.\19\ The Commission believes that 
waiver of the 30-day operative delay period is consistent with the 
protection of investors and the public interest and designates the 
proposed rule change operative upon filing.\20\
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    \19\ See supra note 5 and accompanying text.
    \20\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 15 U.S.C. 78s(b)(2)(B).

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[[Page 37704]]

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 email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2019-42 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-NYSE-2019-42. 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 website (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 website 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 filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2019-42 and should be submitted on 
or before August 22, 2019.
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    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-16365 Filed 7-31-19; 8:45 am]
BILLING CODE 8011-01-P