80 FR 26975 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE Order Imbalances To Add a Late Fee in Connection With Failure To Submit the Non-Display Use Declaration

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 90 (May 11, 2015)

[Federal Register Volume 80, Number 90 (Monday, May 11, 2015)]
[Notices]
[Pages 26975-26977]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11271]



[[Page 26975]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74872; File No. SR-NYSE-2015-21]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the Fees for NYSE Order Imbalances To Add a Late Fee in 
Connection With Failure To Submit the Non-Display Use Declaration

May 5, 2015.
    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 April 27, 2015, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') 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 fees for NYSE Order Imbalances 
to add a late fee in connection with failure to submit the non-display 
use declaration, operative on May 1, 2015. 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 fees for NYSE Order Imbalances, 
as set forth on the NYSE Proprietary Market Data Fee Schedule (``Fee 
Schedule''), to add a late fee in connection with failure to submit an 
updated non-display use declaration. The proposed change to the Fee 
Schedule would be operative on May 1, 2015.
    The Exchange established the current fees for non-display services 
for NYSE OpenBook, NYSE Trades and NYSE BBO in April 2013 and amended 
those fees and added non-display fees for NYSE Order Imbalances in 
September 2014.\4\ The 2013 Non-Display Filing established a 
requirement that data recipients that receive real-time NYSE market 
data subject to Non-Display Use fees submit a declaration with respect 
to their use of non-display data.\5\ In connection with the fee changes 
in the 2014 Non-Display Filing, the Exchange required data recipients 
that receive real-time NYSE market data subject to Non-Display Use fees 
to complete and submit an updated Non-Display Use Declaration by 
September 1, 2014.\6\ The 2014 Non-Display Filing also established that 
data recipients are required to submit an updated annual Non-Display 
Use Declaration by January 31st of each year beginning in 2016. In 
addition, if a data recipient's use of real-time NYSE market data 
changes at any time after the data recipient submits a Non-Display Use 
Declaration, the data recipient must inform the Exchange of the change 
by completing and submitting at the time of the change an updated 
declaration reflecting the change of use.
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    \4\ See Securities Exchange Act Release Nos. 69278 (April 2, 
2013), 78 FR 20973 (April 8, 2013) (SR-2013-25 [sic]) (``2013 Non-
Display Filing'') and 72923 (Aug. 26, 2014), 79 FR 52079 (Sept. 2, 
2014) (SR-NYSE-2014-43) (``2014 Non-Display Filing'').
    \5\ The non-display fee structure established in the 2013 Non-
Display Filing replaced a monthly reporting obligation with respect 
to non-display devices with the requirement to submit the non-
display use declaration. The Exchange also notes that if a data 
recipient only subscribes to products for which there are no non-
display usage fees, e.g., NYSE Realtime Reference Prices, then no 
declaration is required.
    \6\ The current form of the Non-Display Use Declaration 
reflected the changes to the non-display fees set forth in the 2014 
Non-Display Filing and replaced the NYSE Euronext Non-Display Use 
Declaration established in connection with the 2013 Non-Display 
Filing.
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    The Exchange notes that if a data recipient does not timely submit 
a Non-Display Use Declaration, the Exchange does not have up-to-date 
information about the data recipient's data use and therefore may not 
be charging the correct fees to the data recipient. In order to 
correctly assess fees for the non-display use of NYSE Order Imbalances, 
the Exchange needs to have current and accurate information about the 
use of NYSE Order Imbalances. The failure of data recipients to submit 
the Non-Display Use Declaration on time leads to potentially incorrect 
billing and administrative burdens, including tracking and obtaining 
late Non-Display Use Declarations and correcting customer records in 
connection with late Non-Display Use Declarations. The purpose of the 
proposed late fee is to incent data recipients to submit the Non-
Display Use Declaration promptly to avoid the administrative burdens 
associated with the late submission of Non-Display Use Declarations.
    The Exchange proposes to establish a Non-Display Declaration Late 
Fee of $1,000 per month. The proposed fee would be charged to any data 
recipient that pays an Access Fee for NYSE Order Imbalances that has 
failed to timely complete and submit a Non-Display Use Declaration.
    With respect to the Non-Display Use Declaration that was due by 
September 1, 2014, the Non-Display Declaration Late Fee would apply to 
NYSE Order Imbalances data recipients that have not submitted the Non-
Display Use Declaration by June 30, 2015, and would apply beginning 
July 1, 2015 and for each month thereafter until the data recipient has 
completed and submitted the Non-Display Use Declaration. With respect 
to the annual Non-Display Use Declaration due by January 31st of each 
year beginning in 2016, the Non-Display Declaration Late Fee would 
apply to data recipients that fail to complete and submit the annual 
Non-Display Use Declaration by the January 31st due date, and would 
apply beginning February 1st and for each month thereafter until the 
data recipient has completed and submitted the annual Non-Display Use 
Declaration.\7\ A Non-Display Use Declaration that is clearly 
incomplete would not be considered to have been completed and submitted 
to the Exchange on time.
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    \7\ The Exchange has established the Non-Display Declaration 
Late Fee with respect to NYSE OpenBook. See SR-NYSE-2015-20.
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    In addition to adding the Non-Display Declaration Late Fee for NYSE 
Order Imbalances to the Fee Schedule, the Exchange proposes to add an 
endnote to the Fee Schedule that would specify the effective dates for 
the Non-Display Declaration Late Fee as described above,

[[Page 26976]]

and to change the numbering for the endnotes that follow as needed.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\8\ in general, and 
Sections 6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it 
provides an equitable allocation of reasonable fees among users and 
recipients of the data and is not designed to permit unfair 
discrimination among customers, issuers, and brokers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4), (5).
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    The Exchange believes that it is reasonable to impose a late fee in 
connection with the submission of the Non-Display Use Declaration. In 
order to correctly assess fees for the non-display use of NYSE Order 
Imbalances, the Exchange needs to have current and accurate information 
about the use of NYSE Order Imbalances. The failure of data recipients 
to submit the Non-Display Use Declaration on time leads to potentially 
incorrect billing and administrative burdens, including tracking and 
obtaining late Non-Display Use Declarations and correcting and 
following up on payments owed in connection with late Non-Display Use 
Declarations. The purpose of the late fee is to incent data recipients 
to submit the Non-Display Use Declaration promptly to avoid the 
administrative burdens associated with the late submission of Non-
Display Use Declarations. The Non-Display Declaration Late Fee is 
equitable and not unfairly discriminatory because it will apply to all 
data recipients that choose to subscribe to the NYSE Order Imbalances 
feed.
    The Non-Display Declaration Late Fee is also consistent with 
similar pricing adopted in 2013 by the Consolidated Tape Association 
(``CTA'').\10\ The CTA imposes a monthly fee of $2,500 for each of 
Network A and Network B for firms that fail to comply with their 
reporting obligations in a timely manner.
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    \10\ See Securities Exchange Act Release No. 70010 (July 19, 
2013), 78 FR 44984 (July 25, 2013) (SR-CTA/CQ-2013-04).
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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. An exchange's ability to 
price its proprietary market data feed products is constrained by 
actual competition for the sale of proprietary market data products, 
the joint product nature of exchange platforms, and the existence of 
alternatives to the Exchange's proprietary data. In addition to being 
able to choose which proprietary data products (if any) to use and how 
to use them, a user can avoid the late fees that are the subject of 
this filing entirely by simply complying with the requisite deadlines.
    In setting the proposed fees, the Exchange considered the 
competitiveness of the market for proprietary data and all of the 
implications of that competition. The Exchange believes that it has 
considered all relevant factors and has not considered irrelevant 
factors in order to establish fair, reasonable, and not unreasonably 
discriminatory fees and an equitable allocation of fees among all 
users. The existence of fierce competition to sell proprietary data 
products and for order flow, as well as numerous alternatives to the 
Exchange's products, including proprietary data from other sources, 
ensures that the Exchange cannot set unreasonable fees, or fees that 
are unreasonably discriminatory, when vendors and subscribers can elect 
these alternatives or choose not to purchase a specific proprietary 
data product if the attendant fees are not justified by the returns 
that any particular vendor or data recipient would achieve through the 
purchase (the returns on use being a particularly important aspect of 
non-display uses of proprietary data).

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 foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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, 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-NYSE-2015-21 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2015-21. 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 will also be available 
for inspection and copying 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

[[Page 26977]]

available publicly. All submissions should refer to File Number SR-
NYSE-2015-21 and should be submitted on or before June 1, 2015.

    For the Commission, by the Division of Trading and Markets, 
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. 2015-11271 Filed 5-8-15; 8:45 am]
 BILLING CODE 8011-01-P