[Federal Register: January 30, 2009 (Volume 74, Number 19)]
[Notices]
[Page 5707-5709]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30ja09-106]
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-59290; File No. SR-NYSE-2009-05]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Introduce a Pilot Program for NYSE Trades
January 23, 2009.
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 January 16, 2009, the 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 NYSE. NYSE has designated
the proposed rule change as
[[Page 5708]]
constituting a non-controversial rule change under Rule 19b-4(f)(6)
under the Act,\3\ which renders the proposal 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\ 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 proposes to establish a pilot program to introduce its
NYSE Trades service at no charge. NYSE Trades is a new NYSE-only market
data service that allows a vendor to redistribute on a real-time basis
the same last sale information that NYSE reports to the Consolidated
Tape Association (``CTA'') for inclusion in CTA's consolidated data
stream and certain other related data elements (``NYSE Last Sale
Information'').
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
a. The Service. The Exchange proposes to establish a pilot program
to introduce NYSE Trades, a new service pursuant to which it will allow
vendors, broker-dealers and others (``NYSE-Only Vendors'') to make
available NYSE Last Sale Information on a real-time basis.\4\ The
Exchange will not impose any fees for the receipt and use of NYSE
Trades, whether on vendors or subscribers, during the pilot period.
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\4\ The Exchange notes that it will make the NYSE Last Sale
Information available to vendors no earlier than it makes its last
sale information available to the processor under the CTA Plan.
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Contemporaneously with the proposed rule change, the Exchange
submitted a proposed rule change that seeks to establish a $1500 per
month access fee for the receipt and redistribution of the NYSE Trades
datafeed(s) and a $15 per month device fee for the end-use of NYSE
Trades' NYSE Last Sale Information (the ``NYSE Trades Fee Filing'').
The Exchange would not commence to impose those fees until the later of
Commission approval of the NYSE Trades Fee Filing and the end of the
pilot period.
NYSE Last Sale Information would include last sale information for
all securities that are traded on the Exchange. Currently, the Exchange
trades only Network A Securities.
The Exchange will make NYSE Last Sale Information available through
its new NYSE Trades service at the same time as it provides last sale
information to the processor under the CTA Plan. In addition to the
information that the Exchange provides to CTA, NYSE Last Sale
Information will also include a unique sequence number that the
Exchange assigns to each trade and that allows an investor to track the
context of the trade through such other Exchange market data products
as NYSE OpenBook[supreg] and NYSE Info Tools[supreg].
The Exchange developed NYSE Trades primarily at the request of
traders who are very latency sensitive. The latency difference between
accessing last sales through the NYSE datafeed or through the CTA
datafeed can be measured in tens of milliseconds. The Exchange
anticipates that demand for the product will derive primarily from
investors and broker-dealers who desire to use NYSE Trades to power
certain trading algorithms or smart order routers. The free access to
NYSE Trades during the pilot period will enable investors to determine
whether NYSE Trades provides value to their business models and will
enable the Exchange to make the service available during the time
required to obtain approval for the fees.
b. Administrative Requirements. During the pilot period, the
Exchange will require NYSE-Only Vendors to enter into the form of
``vendor'' agreement into which the CTA Plan requires recipients of the
Network A last sale prices information datafeeds to enter (the
``Network A Vendor Form''). The Network A Vendor Form will authorize
the NYSE-Only Vendor to provide the NYSE Trades service to its
subscribers and customers.
The Network A Participants drafted the Network A Vendor Form as a
one-size-fits-all form to capture most categories of market data
dissemination. It is sufficiently generic to accommodate NYSE Trades.
The Network A Vendor Form has been in use in substantially the same
form since 1990.\5\
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\5\ See Release Nos. 34-28407 (September 10, 1990), and 34-49185
(February 4, 2004).
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Similarly, the Exchange will require professional and non-
professional subscribers to NYSE Trades to undertake to comply with the
same contract, reporting, payment, and other administrative
requirements as to which the Network A Participants subject them in
respect of Network A last sale information under the CTA Plan.
c. Duration of Pilot Program. The Exchange proposes to commence the
pilot program shortly after submitting the proposed rule change to the
Commission. The Exchange proposes to conduct the pilot test for 90 days
from its commencement date.
If, at the end of the pilot period, the Commission has not yet
acted on the NYSE Trades Fee Filing, the Exchange will assess its
experience with NYSE Trades and determine whether to extend or modify
the pilot program.
2. Statutory Basis
The bases under the Act for the proposed rule change are the
requirements under Section 6(b)(5) that the rules of an exchange be
designed to promote just and equitable principles of trade and not to
permit unfair discrimination between customers, issuers, brokers or
dealers.
The pilot program would benefit investors by providing a free
alternative to the last sale price information that they receive under
the CTA Plan.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in 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 discussed the pilot program with those entities
that the Exchange believes would be the most likely to take advantage
of the proposed NYSE Last Sale Information service by becoming NYSE-
Only Vendors. While those entities have not submitted formal, written
comments on the proposal, the Exchange has incorporated some of their
ideas into the proposal and the proposed rule change reflects their
input. The Exchange has not received any unsolicited written comments
from members or other interested parties.
[[Page 5709]]
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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6). 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.
NYSE has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \8\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \9\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. NYSE requests that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay \10\ is consistent with the
protection of investors and the public interest because such waiver
will allow the Exchange to immediately provide additional information
to investors at no cost. Therefore, the Commission designates the
proposal operative upon filing.
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\8\ 17 CFR 240.19b-4(f)(6).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 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 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.
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-2009-05 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-NYSE-2009-05. 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 Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such 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 publicly available. All
submissions should refer to File Number SR-NYSE-2009-05 and should be
submitted on or before February 20, 2009.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-1981 Filed 1-29-09; 8:45 am]
BILLING CODE 8011-01-P