80 FR 27210 - Self-Regulatory Organizations; NYSE MKT, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE MKT BBO and NYSE MKT Trades 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 91 (May 12, 2015)

[Federal Register Volume 80, Number 91 (Tuesday, May 12, 2015)]
[Notices]
[Pages 27210-27212]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11373]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74882; File No. SR-NYSEMKT-2015-36]


Self-Regulatory Organizations; NYSE MKT, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the Fees 
for NYSE MKT BBO and NYSE MKT Trades To Add a Late Fee In Connection 
With Failure To Submit the Non-Display Use Declaration

May 6, 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, 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 fees for NYSE MKT BBO and NYSE 
MKT Trades 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 MKT BBO and NYSE 
MKT Trades, as set forth on the NYSE MKT Equities 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 MKT BBO and NYSE MKT Trades in April 2013 and amended those 
fees in September 2014.\4\ The 2013 Non-Display Filing established a 
requirement that data recipients that receive real-time NYSE MKT market 
data subject to Non-Display Use fees submit a declaration with respect 
to their use of non-display data.\5\ In connection with

[[Page 27211]]

the fee changes in the 2014 Non-Display Filing, the Exchange required 
data recipients that receive real-time NYSE MKT 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 MKT 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. 69285 (April 3, 
2013), 78 FR 21172 (April 9, 2013) (SR-NYSEMKT-2013-32)(``2013 Non-
Display Filing'') and 72020 (Sept. 9, 2014), 79 FR 55040 (Sept. 15, 
2014) (SR-NYSEMKT-2014-72)(``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 MKT 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 MKT BBO and NYSE 
MKT Trades, the Exchange needs to have current and accurate information 
about the use of NYSE MKT BBO and NYSE MKT Trades. 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 MKT BBO and NYSE MKT Trades 
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 MKT BBO and NYSE MKT Trades 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 MKT OpenBook and in that filing 
adopted endnote 2, which specifies the effective dates for the Non-
Display Declaration Late Fee as described above. See SR-NYSEMKT-
2015-34.
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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 MKT BBO 
and NYSE MKT Trades, the Exchange needs to have current and accurate 
information about the use of NYSE MKT BBO and NYSE MKT Trades. 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 MKT BBO and NYSE 
MKT Trades 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

[[Page 27212]]

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-NYSEMKT-2015-36 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-NYSEMKT-2015-36. 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 available publicly. All submissions should refer to 
File Number SR-NYSEMKT-2015-36 and should be submitted on or before 
June 2, 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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-11373 Filed 5-11-15; 8:45 am]
 BILLING CODE 8011-01-P