Document ID: SEC-2011-1893-0001
Agency: sec
Document Type: Notice
Title: Joint Self-Regulatory Organization Plans: Collection, Consolidation and Dissemination of Quotation and Transaction Information for NASDAQ-Listed Securities
Posted Date: 2011-12-07T05:00Z

[Federal Register Volume 76, Number 235 (Wednesday, December 7, 2011)]
[Notices]
[Pages 76455-76457]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31414]

[[Page 76455]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65866; File No. S7-24-89]

Joint Industry Plan; Notice of Filing and Immediate Effectiveness 
of Amendment No. 26 to 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 Submitted by the BATS 
Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, 
Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX 
Exchange, Inc., Financial Industry Regulatory Authority, Inc., 
International Securities Exchange LLC, NASDAQ OMX BX, Inc., NASDAQ OMX 
PHLX LLC, Nasdaq Stock Market LLC, National Stock Exchange, Inc., New 
York Stock Exchange LLC, NYSE Amex, Inc., and NYSE Arca, Inc.

 December 2, 2011.
    Pursuant to Rule 608 of the Securities Exchange Act of 1934 (the 
``Act'') \1\ notice is hereby given that on November 11, 2011, the 
operating committee (``Operating Committee'' or ``Committee'') \2\ of 
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 Privilege Basis (``Nasdaq/UTP Plan'' or ``Plan'') 
filed with the Securities and Exchange Commission (``Commission'') an 
amendment to the Plan.\3\ This amendment represents Amendment No. 26 
(``Amendment'') to the Plan and proposes to harmonize the price 
structures among the U.S. national market system plans by replacing the 
annual administrative fees that the Participants impose in respect of 
real-time data with monthly access fees. Pursuant to Rule 608(b)(3)(i) 
under the Act, the Participants designated the Amendment as 
establishing or changing a fee or other charge collected on behalf of 
all of the participants in connection with access to, or use of, the 
facilities contemplated by the Amendment. As a result, the Amendment 
has been put into effect upon filing with the Commission. At any time 
within 60 days of the filing of the Amendment, the Commission may 
summarily abrogate the Amendment and require that the Amendment 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. The Commission is publishing this notice to 
solicit comments from interested persons.
---------------------------------------------------------------------------

    \1\ 17 CFR 242.608.
    \2\ The Plan Participants (collectively, ``Participants'') are 
the: BATS Exchange, Inc. (``BATS''); BATS Y-Exchange, Inc.(``BATS 
Y''); Chicago Board Options Exchange, Incorporated (``CBOE''); 
Chicago Stock Exchange, Inc. (``CHX''); EDGA Exchange, Inc. 
(``EDGA''); EDGX Exchange, Inc.(``EDGX''); Financial Industry 
Regulatory Authority, Inc. (``FINRA''); International Securities 
Exchange LLC (``ISE''); NASDAQ OMX BX, Inc. (``BX''); NASDAQ OMX 
PHLX LLC (``PHLX''); Nasdaq Stock Market LLC (``Nasdaq''); National 
Stock Exchange, Inc. (``NSX''); New York Stock Exchange LLC 
(``NYSE''); NYSE Amex, Inc. (``NYSEAmex''); and NYSE Arca, Inc. 
(``NYSEArca'').
    \3\ The Plan governs the collection, processing, and 
dissemination on a consolidated basis of quotation information and 
transaction reports in Eligible Securities for each of its 
Participants. This consolidated information informs investors of the 
current quotation and recent trade prices of Nasdaq securities. It 
enables investors to ascertain from one data source the current 
prices in all the markets trading Nasdaq securities. The Plan serves 
as the required transaction reporting plan for its Participants, 
which is a prerequisite for their trading Eligible Securities. See 
Securities Exchange Act Release No. 55647 (April 19, 2007) 72 FR 
20891 (April 26, 2007).
---------------------------------------------------------------------------

I. Rule 608(a)

A. Purpose of the Amendments

    The Participants propose to harmonize the price structures among 
the U.S. national market system plans by replacing the annual 
administrative fees that the Participants impose in respect of real-
time data with monthly access fees. The proposed Nasdaq/UTP Plan access 
fees are similar to those that the Network A and Network B Participants 
impose under the CTA and CQ Plans and that the OPRA Participants impose 
under the OPRA Plan.
    The Participants propose to establish the monthly fee for access to 
UTP Level 1 real-time data feeds at $1,500 for direct access and at 
$500 for indirect access.
    The Participants propose to impose the direct access fee on parties 
that receive access to any one or more UTP Level 1 real-time data feeds 
by means of a linkage or interface directly with the Plan's Securities 
Information Processor (Nasdaq) via an extranet or other connection that 
Nasdaq has approved. The Participants propose to impose the indirect 
access fee on parties that receive ``indirect access'' to any one or 
more UTP Level 1 real-time data feeds by means of a data feed service 
that a third-party data feed provider makes available. Distributors 
receiving access both directly and indirectly shall be liable only for 
direct access fees.
    The references to ``data feeds'' would include the receipt of data 
in an uncontrolled format. The data recipient is responsible for the 
telecommunications facilities necessary to access data.
    Currently, the Participants impose the following annual 
administrative fee on distributors for access to UTP Level 1 Service:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Delayed distributor..........................................       $250
0-999 real-time terminals....................................        500
1,000-4,999 real-time terminals..............................      1,250
5,000-9,999 real-time terminals..............................      2,250
10,000+ real-time terminals..................................      3,750
------------------------------------------------------------------------

    The Participants propose to replace each of the real-time 
administrative fees with the access fees. As a result, the Participants 
propose to delete the real-time annual administrative fees from the fee 
schedule. The $250 annual administrative fee that the Participants 
impose on delayed distributors would remain in effect.
    The Participants project that replacing the annual administrative 
fees with monthly access fees would increase annual revenues received 
under the Nasdaq/UTP Plan approximately five percent for 2012.
    From an administrative perspective, the administrator under the 
Nasdaq/UTP Plan would require parties with direct or indirect access to 
UTP Level 1 real-time data feeds to enter into the same market data 
agreements that they are required to enter into today.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    The Participants have manifested their approval of the proposed 
Amendment by means of their execution of the Amendment. The 
Participants propose to make the rate changes effective for calendar 
year 2012.

D. Development and Implementation Phases

    Not applicable.

E. Analysis of Impact on Competition

    The proposed Amendment does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The access fees amount to a competitive response to the access 
fees that the

[[Page 76456]]

Participants in the CTA, CQ and OPRA Plans impose. The proposed monthly 
access fees and the monthly access fees that currently apply under 
those other national market system plans compare as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                 Proposed under
                                              Network A         Network B           OPRA         NASDAQ/UTP Plan
----------------------------------------------------------------------------------------------------------------
Direct Access:
    Last Sale...........................            $1,000              $350  ................  ................
    Bid/Ask.............................             1,100               400  ................  ................
                                         -----------------------------------------------------------------------
        Total...........................             2,100               750         \4\ 2,500             1,500
----------------------------------------------------------------------------------------------------------------
Indirect Access:
    Last Sale...........................               500               200  ................  ................
    Bid/Ask.............................               700               250  ................  ................
                                         -----------------------------------------------------------------------
        Total...........................             1,200               450               600               500
----------------------------------------------------------------------------------------------------------------

    The Participants in the CTA and CQ Plans have imposed access fees 
since the Commission declared the plans effective in the 1970s. Those 
fees went unchanged from the rates initially adopted in the 1970s until 
2009, when the Participants in those Plans raised them to the levels 
indicated above. The CTA and CQ Plan Participants coupled raising those 
fees with eliminating program classification charges, stating that the 
net result would be approximately revenue neutral. In its approval 
order,\5\ the Commission found that the replacement of the program 
classification charges with the hike in the access fees is consistent 
with Rule 608(b)(2) of the Act. It stated that:
---------------------------------------------------------------------------

    \4\ The total OPRA Plan direct access fee of $2,500 consists of 
a $1,000 monthly direct access fee and a $1,500 monthly 
redistribution fee that OPRA imposes on vendors that distribute OPRA 
data to any person, whether on a real-time or delayed basis.
    \5\ See Securities Exchange Act Release No. 61226 (December 22, 
2009); 74 FR 68893 (December 29, 2009) (SR-CTA/CQ-2009-02).

    The Commission believes that eliminating program classification 
charges and replacing them with separate fees for the receipt of 
Network A and Network B market data are fair and reasonable and 
provide for an equitable allocation of dues, fees, and other charges 
among vendors, data recipients and other persons using CTA Network A 
and Network B facilities.\6\
---------------------------------------------------------------------------

    \6\ Id.

    The Participants believe that the same holds true for the Nasdaq/
UTP Plan's proposal. The proposed access fees compare favorably to 
those currently imposed under the CTA, CQ and OPRA Plans, including 
those approved by the Commission less than two years ago. The Nasdaq/
UTP Plan Participants do not impose the program classification charges 
that the CTA and CQ Plan Participants eliminated. In addition to the 
favorable comparability of the Nasdaq/UTP Plan Participants' proposed 
access fees, the Plan's other charges also compare favorably to their 
CTA, CQ and OPRA Plan counterparts. These include device charges, 
charges for nonprofessional subscriber services, per-query fees, and 
television ticker fees.
    In addition to the CTA, CQ and OPRA Plans, many individual 
exchanges around the world impose access fees for the receipt of market 
data feeds. On the other hand, few exchanges impose annual 
administrative fees.
    As a result, this Amendment promotes consistency in price 
structures among the national market system plans, as well as 
consistency with the preponderance of other market data providers. It 
would make access fees easier to administer and enable data recipients 
to compare their charges under the respective national market system 
plans more easily. It would make for a more straightforward and 
streamlined administrative process for both the network administrator 
and the vendors.
    Access fees allow those who gain access to the Plan's data feeds to 
contribute an appropriate amount for their receipt of market data under 
the Plan. They provide for an equitable allocation of dues, fees, and 
other charges among data feed customers, end users and others receiving 
and using market data made available under the Plan.
    The Participants propose to impose the access fees uniformly on all 
vendors that receive UTP Level 1 real-time data in a data feed/
uncontrolled format (including members of the Participant markets and 
non-members). The Participants do not believe that the proposed plan 
Amendment introduces terms that are unreasonably discriminatory for the 
purposes of Section 11A(c)(1)(D) of the Act.

F. Written Understanding or Agreements relating to Interpretation of, 
or Participation in, Plan

    The Participants have no written understandings or agreements 
relating to interpretation of the Plan as a result of the Amendment.

G. Approval by Sponsors in Accordance with Plan

    Each of the Plan's Participants has executed a written Amendment to 
the Plan.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    See Item A(1) above.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    The Participants believe that the level of the access fee allows 
vendors to contribute an appropriate amount for their receipt and use 
of market data under the Plan. The access fees amount to a competitive 
response to the access fees that the Participants in the CTA, CQ and 
OPRA Plans impose.
    The Participants believe that the proposed access fees are fair and 
reasonable and provide for an equitable allocation of dues, fees, and 
other charges among vendors, data recipients and other persons using 
the Participants' facilities.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

[[Page 76457]]

II. Rule 601(a)

A. Reporting Requirements

    Not applicable.

B. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

C. Manner of Consolidation

    Not applicable.

D. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

E. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

F. Terms of Access to Transaction Reports

    Not applicable.

G. Identification of Marketplace of Execution

    Not Applicable.

III. Solicitation of Comments

    The Commission seeks general comments on Amendment No. 26. 
Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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 S7-24-89 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 S7-24-89. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of 
the submission, all written statements with respect to the proposed 
Plan amendment that are filed with the Commission, and all written 
communications relating to the proposed Plan amendment 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 on official business days between the hours of 10 a.m. 
and 3 p.m. Copies of the filing also will be available for Web site 
viewing and printing at the Office of the Secretary of the Committee, 
currently located at the CBOE, 400 S. LaSalle Street, Chicago, IL 
60605. 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 S7-24-
89 and should be submitted on or December 28, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(27).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31414 Filed 12-6-11; 8:45 am]
BILLING CODE 8011-01-P