Document ID: SEC-2009-0674-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change Implementing a Cap on Vendors' Administrative Charges for NYSE OpenBook
Posted Date: 2009-05-15T04:00Z

[Federal Register: May 15, 2009 (Volume 74, Number 93)]
[Notices]               
[Page 22989-22990]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15my09-110]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59898; File No. SR-NYSE-2009-37]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change Implementing a Cap on Vendors' 
Administrative Charges for NYSE OpenBook

May 11, 2009.

I. Introduction

    On March 26, 2009, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to introduce a cap on the monthly charges that 
broker-dealers and vendors are required to pay for their use of NYSE 
OpenBook data for the purposes of administering their provision of NYSE 
OpenBook product offerings. The proposed rule change was published for 
comment in the Federal Register on April 8, 2009.\3\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59681 (April 1, 
2009), 74 FR 16017.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposes to introduce a cap on the monthly charges 
that broker-dealers and vendors are required to pay for their use of 
NYSE OpenBook data for the purposes of administering their provision of 
NYSE OpenBook product offerings. A one-year pilot program to simplify 
and modernize market data administration (the ``Unit of Count Filing'') 
was recently approved for its NYSE OpenBook product packages.\4\ The 
Unit of Count Filing redefined some of the basic ``units of measure'' 
that vendors are required to report to the Exchange and on which the 
Exchange bases its fees for its NYSE OpenBook product packages.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 59544 (March 9, 
2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131).
---------------------------------------------------------------------------

    Under the proposal, the Exchange proposes to establish a maximum 
monthly amount of $1500 (the ``Monthly Maximum'') for entitlements 
consisting of unique individuals within a vendor's organization to whom 
the vendor distributes NYSE OpenBook data for the sole purpose of 
administering the vendor's distribution of NYSE OpenBook services 
externally to the vendor's customers. The Monthly Maximum of $1500 
means that a vendor would have to pay for no more than 25 NYSE OpenBook 
administrative personnel.

III. Discussion and Commission Findings

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\5\ In particular, the Commission finds that the proposal is 
consistent with Section 6(b)(4) of the Act,\6\ which requires 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) 
\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, and not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \5\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission also finds that the proposed rule change is 
consistent with the provisions of Section 6(b)(8) of the Act,\8\ which 
requires that the rules of an exchange not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. Finally, the Commission finds that the proposed rule change 
is consistent with Rule 603(a) of Regulation NMS,\9\ adopted under 
Section 11A(c)(1) of the Act, which requires an exclusive processor 
that distributes information with respect to quotations for or 
transactions in an NMS stock to do so on terms that are fair and 
reasonable and that are not unreasonably discriminatory.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(8).
    \9\ 17 CFR 242.603(a).
    \10\ NYSE is an exclusive processor of NYSE depth-of-book data 
under Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which 
defines an exclusive processor as, among other things, an exchange 
that distributes information with respect to quotations or 
transactions on an exclusive basis on its own behalf.
---------------------------------------------------------------------------

    This proposal would cap the fees for NYSE OpenBook when used by 
vendors for administrative purposes. The Commission has reviewed the 
proposal using the approach set forth in the NYSE Arca Order for non-
core market data fees.\11\ The Commission recently found that NYSE was 
subject to significant competitive forces in setting fees for its 
depth-of-book order data in the Unit of Count Filing.\12\ There are a 
variety of alternative sources of information that impose significant 
competitive pressures on the NYSE in setting the terms for distributing 
its depth-of-book order data. The Commission believes that the 
availability of those alternatives, as well as the NYSE's compelling 
need to attract order flow, imposed significant competitive pressure on 
the NYSE to act equitably, fairly, and reasonably in setting the terms 
of its proposal.
---------------------------------------------------------------------------

    \11\ Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21) (``NYSE 
Arca Order''). In the NYSE Arca Order, the Commission describes in 
great detail the competitive factors that apply to non-core market 
data products. The Commission hereby incorporates by reference the 
data and analysis from the NYSE Arca Order into this order.
    \12\ See Securities Exchange Act Release No. 59544 (March 9, 
2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131).
---------------------------------------------------------------------------

    Because the NYSE was subject to significant competitive forces in 
setting the terms of the proposal, the Commission will approve the 
proposal in the absence of a substantial countervailing basis to find 
that its terms nevertheless fail to meet an applicable requirement of 
the Act or the rules thereunder. An analysis of the proposal does not 
provide such a basis.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-NYSE-2009-37) is hereby 
approved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2).

[[Page 22990]]

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11356 Filed 5-14-09; 8:45 am]

BILLING CODE 8010-01-P