Document ID: SEC-2013-0664-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2013-04-08T04:00Z

[Federal Register Volume 78, Number 67 (Monday, April 8, 2013)]
[Notices]
[Pages 20986-20988]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-08096]

[[Page 20986]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69274; File No. SR-NYSEARCA-2013-30]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Establishing the 
NYSE Arca Trades Digital Media Data Feed and a Schedule of the NYSE 
Arca Equities Proprietary Market Data Fees

April 2, 2013.
    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 March 22, 2013, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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 establish the NYSE Arca Trades Digital 
Media data feed and a schedule of the NYSE Arca Equities Proprietary 
Market Data Fees (``Market Data Fee Schedule''). The text of the 
proposed rule change is available on the Exchange's Web site 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to establish the NYSE Arca Trades Digital 
Media data feed and a Market Data Fee Schedule.
Background
    In 2009, the Securities and Exchange Commission (``SEC'' or the 
``Commission'') approved the NYSE Arca Trades data feed and certain 
fees for it.\4\ NYSE Arca Trades is a NYSE Arca-only market data feed 
that allows a vendor to redistribute on a real-time basis the same last 
sale information that the Exchange reports under the Consolidated Tape 
Association (``CTA'') Plan for inclusion in the CTA Plan's consolidated 
data streams and certain other related data elements. Specifically, 
NYSE Arca Trades includes the real-time last sale price, time, size, 
and bid/ask quotations for each security traded on the Exchange and a 
stock summary message. The stock summary message updates every minute 
and includes NYSE Arca's opening price, high price, low price, closing 
price, and cumulative volume for the security.
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    \4\ See Securities Exchange Act Release No. 59598 (Mar. 18, 
2009), 74 FR 12919 (Mar. 25, 2009) (SR-NYSEArca-2009-05).
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    The Exchange currently charges NYSE Arca Trades data feed 
recipients an access fee of $750 per month, and a subscriber fee for 
professional subscribers of $10 per month per device, which may be 
counted, at the election of the vendor based on the number of 
``Subscriber Entitlements'' \5\ (collectively, these fees are referred 
to in this filing as ``NYSE Arca Trades basic fees''). In July 2012, 
the Exchange added a fee for distribution by television broadcasters 
(``Broadcast Fee''), which is $20,000 per month.\6\ The television 
broadcast distribution method differs from the other distribution 
methods in that the data is available in a temporary, view-only mode on 
television screens. NYSE Arca Trades is not offered in a manner to 
facilitate its distribution via Web sites or mobile devices.
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    \5\ See Securities Exchange Act Release No. 62188 (May 27, 
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23).
    \6\ See Securities Exchange Act Release No. 67436 (July 13, 
2012), 77 FR 42529 (July 19, 2012) (SR-NYSEArca-2012-73).
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Proposed Change
    The Exchange proposes to offer a new version of NYSE Arca Trades 
called ``NYSE Arca Trades Digital Media,'' which will include, as with 
NYSE Arca Trades as currently offered, access to the real-time last 
sale price, time, and size for each security traded on the Exchange as 
well as the stock summary message. NYSE Arca Trades Digital Media will 
not, however, include access to the bid/ask quotation that is included 
with the current NYSE Arca Trades product under the NYSE Arca Trades 
basic fees and Broadcast Fee. NYSE Arca Trades will be offered in a new 
manner that will permit market data vendors, television broadcasters, 
Web site and mobile device service providers, and others to distribute 
this data product to their customers for viewing via television, Web 
site, and mobile devices. Vendors will not be permitted to provide NYSE 
Arca Trades Digital Media in a context in which a trading or order 
routing decision can be implemented unless CTA data is available in an 
equivalent manner, must label the products as NYSE Arca-only data, and 
must provide a hyperlinked notice similar to the one provided for CTA 
delayed data.\7\
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    \7\ These are requirements that currently apply to NYSE Arca 
Realtime Reference Prices (``NYSE Arca RRP''), a separate last sale 
product that also is offered for use in a non-trading environment. 
See Securities Exchange Act Release No. 61404 (Jan. 22, 2010), 75 FR 
5363 (Feb. 2, 2010) (SR-NYSEArca-2009-108). The Exchange also 
intends to offer NYSE Arca RRP in the future as NYSE Arca RRP 
Digital Media, but there will be no substantive change to the NYSE 
Arca RRP product elements, only the permitted distribution channels. 
The Exchange will propose pricing for NYSE Arca Trades Digital Media 
and NYSE Arca RRP Digital Media in a separate filing.
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    The Exchange also proposes to establish a Market Data Fee Schedule. 
The market data fees on the proposed Market Data Fee Schedule for NYSE 
Arca Integrated Feed,\8\ NYSE ArcaBook,\9\ NYSE Arca BBO,\10\ NYSE Arca 
Trades,\11\ and NYSE Arca RRP \12\ have been previously filed with the 
Commission. The Exchange is proposing the Market Data Fee Schedule in 
order to provide greater transparency to its customers.
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    \8\ See Securities Exchange Act Release No. 66128 (Jan. 10, 
2012), 77 FR 2331 (Jan. 17, 2012) (SR-NYSEArca-2011-96).
    \9\ See Securities Exchange Act Release No. 63291 (Nov. 9, 
2010), 75 FR 70311 (Nov. 17, 2010) (SR-NYSEArca-2010-97).
    \10\ See Securities Exchange Act Release No. 62188 (May 27, 
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23).
    \11\ See supra notes 4-6.
    \12\ See Securities Exchange Act Release No. 61404 (Jan. 22, 
2010), 75 FR 5363 (Feb. 2, 2010) (SR-NYSEArca-2009-108).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \13\ of 
the

[[Page 20987]]

Act, in general, and furthers the objectives of Section 6(b)(5) \14\ of 
the Act, in particular, in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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 it is not designed to permit unfair discrimination 
among customers, brokers, or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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    The Exchange is offering the NYSE Arca Trades Digital Media data 
product in recognition of the demand for a more seamless and easier-to-
administer data distribution model that takes into account the expanded 
variety of media and communication devices that investors utilize 
today. For example, a television broadcaster could display the NYSE 
Arca Trades Digital Media data during market-related television 
programming and on its Web site and allow its viewers to view the data 
via their mobile devices, creating a more seamless distribution model 
that will allow investors more choice in how they receive and view 
market data. Because the product is intended for use in a non-trading 
environment, the Exchange will not include a bid/ask quotation as a 
product element. Market participants that still wish to obtain bid/ask 
quotations can do so by paying the NYSE Arca Trades basic fees. The 
Exchange believes that establishing the Market Data Fee Schedule will 
provide greater transparency for the Exchange's customers.
    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations 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 Exchange believes 
that the data products proposed herein are precisely the sort of market 
data products that the Commission envisioned when it adopted Regulation 
NMS. 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 broker-dealers 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.\15\
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    \15\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability 
of exchanges to sell their own data, Regulation NMS advanced the goals 
of the Act and the principles reflected in its legislative history.
    The Exchange further notes that the existence of alternatives to 
the Exchange's products, including real-time consolidated data, free 
delayed consolidated data, and proprietary data from other sources, 
ensures that the Exchange is not unreasonably discriminatory because 
vendors and subscribers can elect these alternatives.
    The proposed data product will remove impediments to and help 
perfect a free and open market by permitting the Exchange's last sale 
data to be more widely distributed, thereby benefiting users of the 
data. In addition, the proposal would not permit unfair discrimination 
because the product will be available to all of the Exchange's vendors 
and customers on an equivalent basis.

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 market for proprietary 
data products is currently competitive and inherently contestable 
because there is fierce competition for the inputs necessary to the 
creation of proprietary data. Numerous exchanges compete with each 
other for listings, trades, and market data itself, providing virtually 
limitless opportunities for entrepreneurs who wish to produce and 
distribute their own market data. This proprietary data is produced by 
each individual exchange, as well as other entities (such as 
internalizing broker-dealers and various forms of alternative trading 
systems, including dark pools and electronic communication networks), 
in a vigorously competitive market. It is common for market 
participants to further and exploit this competition by sending their 
order flow and transaction reports to multiple markets, rather than 
providing them all to a single market.

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

    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) \16\ of the Act and Rule 19b-4(f)(6) 
thereunder.\17\
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\18\ 
However, Rule 19b-4(f)(6)(iii) \19\ 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. The Exchange believes that 
the proposed rule change will make the Exchange's last sale data more 
widely available through more distribution channels, which will enable 
investors to better monitor trading activity on the Exchange, and 
thereby serve the public interest. The Exchange also notes that other 
exchanges already offer similar products, and thus believes that the 
Exchange's proposed products will enhance competition. The Exchange 
believes that expanding distribution channels and offering a new 
version of the product for use in a non-trading environment will 
benefit investors. The Commission believes that permitting the Exchange 
to offer this product without delay is consistent with the protection 
of investors and the public interest. Accordingly, the Commission

[[Page 20988]]

designates the proposed rule change to be operative upon filing.\20\
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    \18\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
The Exchange has satisfied this requirement.
    \19\ Id.
    \20\ For the 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.

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-NYSEARCA-2013-30 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 SR-NYSEARCA-2013-30. 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 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 Web site 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; 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-NYSEARCA-2013-30 and should 
be submitted on or before April 29, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-08096 Filed 4-5-13; 8:45 am]
BILLING CODE 8011-01-P