[Federal Register: June 15, 2004 (Volume 69, Number 114)]
[Notices]
[Page 33437-33438]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn04-112]
[[Page 33437]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49804; File No. SR-NYSE-2004-25]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the New York Stock Exchange,
Inc. Relating to the Listed Company Fee Exclusion for NYSEnet \SM\ Data
June 3, 2004.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 12, 2004, the New York Stock Exchange, Inc. (``NYSE'' or
``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 NYSE. On June 1, 2004, the
NYSE amended the proposed rule change.\3\ The NYSE has designated the
proposed rule change as ``non-controversial'' under Section 19(b)(3)(A)
of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which renders the
proposed rule change effective upon filing with the Commission. 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\ 17 CFR 240.19b-4.
\3\ See letter from Darla C. Stuckey, Corporate Secretary, NYSE,
to Nancy J. Sanow, Assistant Director, Division of Market
Regulation, Commission, dated May 28, 2004 (``Amendment No. 1''). In
Amendment No. 1, the Exchange restated the proposed rule change in
its entirety.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange seeks to improve an information service that it
provides to its listed companies (``NYSEnet'') by adding certain Broker
Volume\SM\, Liquidity Quote\SM\ and OpenBook\SM\ information to the
service.
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 NYSE 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 these statements may be examined at the places specified in
Item IV below. The NYSE has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSEnet is a web-based information service that the Exchange makes
available to NYSE-listed companies. It delivers to a listed company
information regarding the performance of the company's stock, including
market data and real-time quotes relating to that stock,
characteristics of the order flow for the stock, global share ownership
information, and the like.
The Exchange believes that NYSEnet provides a valuable service to
its listed companies. According to the Exchange, NYSEnet provides NYSE-
listed companies with insight into market behavior that enables the
companies to make decisions related to equity and capital, up-to-the-
minute information regarding stock trading and market conditions, the
ability to analyze reports on the performance of the stock of the
company relative to its peers, information and analysis that facilitate
the companies' ability to build a targeted investor relations strategy,
and tools that enable the companies to manage strategically their
investor relations and corporate events.
To make the service even more attractive to listed companies, the
Exchange does not charge its listed companies for receipt of NYSEnet.
Insofar as NYSEnet includes fee-liable market data, such as
consolidated prices and quotes in the company's stock that the markets
make available jointly pursuant to the CTA Plan and the CQ Plan, NYSE
pays the applicable fees to the Consolidated Tape Association, an
association comprised of all the registered securities exchanges and
the NASD (``CTA''), on behalf of its listed companies.
The Exchange has now determined to enhance the NYSEnet service by
adding to the information that NYSEnet makes available to a NYSE-listed
company Broker Volume, Liquidity Quote and OpenBook information
relating to the company's stock.
The Exchange's Broker Volume service provides subscribers with
Exchange-prepared reports of broker share volume information. The
Exchange is proposing to have the NYSEnet service provide a listed
company with reports of broker share volume only in the listed
company's stock.
The Exchange's Liquidity Quote service provides subscribers with
depth-of-market information, including aggregated Exchange trading
interest at a specific price interval below the best bid or above the
best offer. The Exchange is proposing to have the NYSEnet service
provide a listed company with Liquidity Quote information relating only
to the company's stock.
The Exchange's OpenBook service provides subscribers with
information regarding limit orders that Exchange specialists have
received at prices at or below the best bid or at or above the best
offer. The Exchange is proposing to have the NYSEnet service provide a
listed company with OpenBook information relating only to limit orders
for the company's stock.
After it has added Broker Volume, Liquidity Quote and OpenBook
information to NYSEnet, the Exchange wishes to continue to provide the
NYSEnet service to its listed companies without charge. The Commission
has approved fees that the Exchange charges for the receipt of Broker
Volume, Liquidity Quote and OpenBook services (``Exchange Fees'').\6\
As it does for other fee-liable information that the Exchange provides
to listed companies through NYSEnet, the Exchange wishes to pay the
applicable Exchange Fees on behalf of its listed companies.
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\6\ For Broker Volume, see Securities Exchange Act Release Nos.
46847 (November 19, 2002); 67 FR 70799 (November 26, 2002) (SR-NYSE-
2002-61) and 48060 (June 19, 2003); 68 FR 37889 (June 25, 2003) (SR-
NYSE-2003-11); for Liquidity Quote, see Securities Exchange Act
Release No. 47614 (April 2, 2003); 68 FR 17140 (April 8, 2003) (SR-
NYSE-2002-55); for OpenBook, see Securities Exchange Act Release No.
44318 (December 7, 2001); 66 FR 64895 (December 14, 2001) (SR-NYSE-
2001-42).
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Because the Exchange Fees for these services are imposed by and
paid to the Exchange itself,\7\ the Exchange's actual payment of those
fees would mean that one department at the Exchange (Corporate Listings
and Compliance) would merely be paying another department at the
Exchange (Market Data) for a listed company's receipt of information
through NYSEnet. As a consequence, the Exchange would deem that the
fees have been paid on behalf of the listed companies for their receipt
of listed company-related Broker Volume, Liquidity Quote and OpenBook
information through the NYSEnet service.
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\7\ This contrasts with the circumstances under which NYSE pays
the fees for the provision to listed companies of real-time quote
and last sale information, where the fees are ultimately paid not to
the Exchange itself but to the CTA.
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By relieving its listed companies from the obligation to pay those
fees for the
[[Page 33438]]
company-related information that they receive through NYSEnet, the
Exchange believes that it would be enhancing the value of the service
that it provides to its listed companies. In light of the listing fees
that those companies pay to the Exchange, the Exchange believes that it
would be reasonable for the Exchange to bear the fees involved, as it
does in the case of the CTA fees described above.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of the Act,\8\ in general, and furthers the objectives
of Section 6(b)(4),\9\ in particular, in that Section 6(b)(4) requires
that the exchange's rules provide for the equitable allocation of
reasonable dues, fees and other charges among its members and issuers
and other persons using its facilities.
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\8\ 15 U.S.C. 78(f).
\9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed fee change would not impose
any burden on competition that is not necessary or appropriate in the
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 not solicited, and does not intend to solicit,
comments regarding the proposed rule change. 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
Because the foregoing 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 for 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, it
has become effective pursuant to Section 19(b)(3)(A) of the Act \10\
and Rule 19b-4(f)(6) thereunder.\11\ At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate 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.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). The Commission notes that the
Exchange provided written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing
of the proposed rule change.
\12\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change, as
amended, under Section 19(b)(3)(C) of the Act, the Commission
considers the period to commence on June 1, 2004, the date on which
the NYSE filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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The Exchange has requested that the Commission waive the 30-day
operative delay to allow the Exchange to distribute the expanded
NYSEnet information to listed companies as soon as possible. The
Exchange represents that the proposed rule change does not
significantly affect the protection of investors or the public interest
and does not impose any significant burden on competition. The Exchange
notes that the proposed rule change merely notes that specified
services are being provided to listed companies for no additional fee
beyond those that they already pay in annual listing fees to the
Exchange.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to provide NYSE-listed companies
with the expanded NYSEnet information and thereby enhance the value of
services that the NYSE provides to its listed companies.\13\
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\13\ For the purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rules
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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 Number SR-NYSE-2004-25 on the subject line.
Paper comments:
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-NYSE-2004-25. 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 Section, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for inspection and copying at the principal office of the
NYSE. 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-
NYSE-2004-25 and should be submitted on or before July 6, 2004.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-13356 Filed 6-14-04; 8:45 am]
BILLING CODE 8010-01-P