[Federal Register Volume 79, Number 112 (Wednesday, June 11, 2014)]
[Notices]
[Pages 33605-33607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13556]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72326; File No. SR-NYSEMKT-2014-49]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending the NYSE MKT
BBO Market Data Product Offering
June 5, 2014.
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 May 23, 2014 NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III 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 amend the NYSE MKT BBO market data product
offering. 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 amend the NYSE MKT BBO market data product
offering. In 2010, the Securities and Exchange Commission
(``Commission'') approved the NYSE MKT BBO data feed and certain fees
for it.\4\ NYSE MKT BBO is an NYSE MKT-only market data feed that
distributes on a real-time basis the same best-bid-and-offer
information that the Exchange reports under the Consolidated Quotation
(``CQ'') Plan for inclusion in the CQ Plan's consolidated quotation
information data stream. The data feed includes the best bids and
offers for all securities that are traded on the Exchange and for which
the Exchange reports quotes under the CQ Plan.
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\4\ See Securities Exchange Act Release No. 62187 (May 27,
2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
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The Exchange has determined to add information about security
status, such as whether a security is in a short sale restriction or
retail price improvement indications pursuant to NYSE MKT Rule
107C(j)--Equities, to the NYSE MKT BBO data feed. There will be no
change to the fees for the NYSE MKT BBO feed in connection with this
change.\5\
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\5\ When the security status information is added, NYSE MKT BBO
also will be distributed in a new format, Exchange Data Protocol
(``XDP''). The feed will also include a symbol index mapping message
that will be sent once a day. These two changes do not affect the
real-time data content that is distributed.
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The Exchange expects to offer the current NYSE MKT BBO data product
and the proposed NYSE MKT BBO data product with the added security
status information at the same time for a limited transition period.
After the transition period, the Exchange will offer only the proposed
NYSE MKT BBO with the added security status
[[Page 33606]]
information. The Exchange will announce the transition dates in
advance.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \6\ of the
Act, in general, and furthers the objectives of Section 6(b)(5) \7\ 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that including the additional information in
NYSE MKT BBO will provide vendors and subscribers with a more
comprehensive and higher quality market data product. The NYSE MKT BBO
data feed will help to protect a free and open market by providing
vendors and subscribers with additional choices in receiving
proprietary market data, thus promoting competition and innovation. The
Exchange believes that NYSE MKT BBO offers an alternative to
consolidated data products and proprietary data products offered by
other exchanges.\8\ In addition, the proposal would not permit unfair
discrimination because the product will be available to all of the
Exchange's market data vendors and customers on an equivalent basis.
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\8\ For example, NASDAQ Basic includes market status information
including Stock Directory, Emergency Market Condition event
messages, System Status and Trading Halt information for NASDAQ,
NYSE, NYSE MKT, NYSE Arca and other regional exchange listed issues.
See NASDAQ Rule 7047 and http://www.nasdaqtrader.com/Trader.aspx?id=NASDAQBasic.
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') 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.\9\
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\9\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005) (File No. S7-10-04).
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 believes that offering NYSE MKT BBO with the additional
information reflects innovation in its product offerings and promotes
competition for the provision of market data. The existence of
alternatives to the Exchange's products, including real-time
consolidated data and proprietary data from other exchanges, ensures
that the Exchange is not unreasonably discriminatory because vendors
and subscribers can elect these alternatives.
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. NYSE MKT BBO offers an alternative
to similar products offered by other exchanges,\10\ thus promoting
competition. The existence of numerous alternatives to the Exchange's
products, including real-time consolidated data and proprietary data
from other sources, subjects the Exchange to vigorous competition.
Vendors and subscribers are free to elect these alternatives, purchase
some or all of the underlying data feeds, or choose not to purchase a
specific proprietary data product at all.
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\10\ See supra note 8.
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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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the 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 prior to
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, provided that the self-regulatory
organization has given 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,\13\ the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ The Exchange has satisfied this requirement.
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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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 33607]]
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 [email protected]. Please include
File Number SR-NYSEMKT-2014-49 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2014-49. 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 Section, 100 F Street
NE., Washington, DC 20549-1090, on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be
available for Web site viewing and printing at the NYSE's principal
office and on its Internet Web site at www.nyse.com. 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-NYSEMKT-2014-49 and should
be submitted on or before July 2, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13556 Filed 6-10-14; 8:45 am]
BILLING CODE 8011-01-P