81 FR 5158 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending the Fees for NYSE Integrated Feed
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 20 (February 1, 2016)
Federal Register Volume 81, Issue 20 (February 1, 2016)
| Page Range | 5158-5162 | |
| FR Document | 2016-01713 |
[Federal Register Volume 81, Number 20 (Monday, February 1, 2016)] [Notices] [Pages 5158-5162] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-01713] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76973; File No. SR-NYSE-2016-09] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending the Fees for NYSE Integrated Feed January 26, 2016. 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 January 13, 2016, 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- 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 Integrated Feed to establish a multiple data feed fee. 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 Integrated Feed market data product,\4\ as set forth on the NYSE Proprietary Market Data Fee Schedule (``Fee Schedule''). The Exchange proposes to establish the multiple data feed fee. Specifically, the Exchange proposes to establish a new monthly fee, the ``Multiple Data Feed Fee,'' that would apply to data recipients that take a data feed for a market data product in more than two locations. Data recipients taking NYSE Integrated Feed in more than two locations would be charged $200 per additional location per product per month.\5\ No new reporting would be required.\6\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release Nos. 74128 (January 23, 2015), 80 FR 4951 (January 29, 2015) (SR-NYSE-2015-03) (Notice--NYSE Integrated Feed) and 76485 (Nov. 20, 2015), 80 FR 74158 (Nov. 27, 2015) (SR-NYSE-2015-57) (establishing fees for NYSE Integrated Feed). \5\ The text of footnote 6 in Exhibit 5 of this proposed rule change was previously filed under a separate filing. See SR-NYSE- 2016-02 (Proposed Rule Change to Amend the Fees for NYSE OpenBook). \6\ Data vendors currently report a unique Vendor Account Number for each location at which they provide a data feed to a data recipient. The Exchange considers each Vendor Account Number a location. For example, if a data recipient has five Vendor Account Numbers, representing five locations, for the receipt of the NYSE Integrated Feed product, that data recipient will pay the Multiple Data Feed fee with respect to three of the five locations. --------------------------------------------------------------------------- Additionally, the various fees applicable to NYSE Integrated Feed, other than the Multiple Data Feed Fee, became operative on January 1, 2016.\7\ Accordingly, the Exchange proposes to remove text from the Fee Schedule noting that through December 31, 2015, there would be no charge for the fees for NYSE Integrated Feed and text noting that the fees would be applicable from January 1, 2016. The proposed change would provide clarity to subscribers of NYSE Integrated Feed. --------------------------------------------------------------------------- \7\ See Securities Exchange Act Release No. 76485 (November 20, 2015), 80 FR 74158 (November 27, 2015) (SR-NYSE-2015-57). --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(4), (5). --------------------------------------------------------------------------- The fees are also equitable and not unfairly discriminatory because they will apply to all data recipients that choose to subscribe to NYSE Integrated Feed. The Exchange believes that it is reasonable to require data recipients to pay a modest additional fee taking a data feed for a market data product in more than two locations, because such data recipients can derive substantial value from being able to consume the product in as many locations as they want. In addition, there are administrative burdens associated with tracking each location at which a data recipient receives the product. The Multiple Data Feed Fee is designed to encourage data recipients to better manage their requests for additional data feeds and to monitor their usage of data feeds. The proposed fee is designed to apply to data feeds received in more than two locations so that each data recipient can have one primary and one backup data location before having to pay a multiple data feed fee. The Exchange notes that this pricing is consistent with similar pricing adopted in 2013 by the Consolidated Tape Association (``CTA'').\10\ The Exchange also notes that the OPRA Plan imposes a similar charge of $100 per connection for circuit connections in addition to the primary and backup connections.\11\ --------------------------------------------------------------------------- \10\ See Securities Exchange Act Release No. 70010 (July 19, 2013), 78 FR 44984 (July 25, 2013) (SR-CTA/CQ-2013-04). \11\ See ``Direct Access Fee,'' Options Price Reporting Authority Fee Schedule Fee Schedule PRA Plan [sic] at http://www.opradata.com/pdf/fee_schedule.pdf. --------------------------------------------------------------------------- The Exchange notes that NYSE Integrated Feed is entirely optional. The Exchange is not required to make NYSE Integrated Feed available or to offer any specific pricing alternatives to any customers, nor is any firm required to purchase NYSE Integrated Feed. Firms that do purchase NYSE Integrated Feed do so for the primary goals of using it to increase revenues, reduce expenses, and in some instances compete directly with the Exchange (including for order flow); those firms are able to determine [[Page 5159]] for themselves whether NYSE Integrated Feed or any other similar products are attractively priced or not.\12\ --------------------------------------------------------------------------- \12\ See, e.g., Proposing Release on Regulation of NMS Stock Alternative Trading Systems, Securities Exchange Act Release No. 76474 (Nov. 18, 2015) (File No. S7-23-15). See also, ``Brokers Warned Not to Steer Clients' Stock Trades Into Slow Lane,'' Bloomberg Business, December 14, 2015 (Sigma X dark pool to use direct exchange feeds as the primary source of price data). --------------------------------------------------------------------------- Firms that do not wish to purchase NYSE Integrated Feed have a variety of alternative market data products from which to choose,\13\ or if NYSE Integrated Feed does not provide sufficient value to firms as offered based on the uses those firms have or planned to make of it, such firms may simply choose to conduct their business operations in ways that do not use NYSE Integrated Feed or use it at different levels or in different configurations. The Exchange notes that broker-dealers are not required to purchase proprietary market data to comply with their best execution obligations.\14\ --------------------------------------------------------------------------- \13\ See NYSE Arca Integrated Feed, http://www.nyxdata.com/Data-Products/NYSEArca-Integrated-History (last visited December 23, 2015) (data feed that provides a unified view of events, in sequence as they appear on the NYSE Arca matching engine, including depth of book, trades, order) and NASDAQ TotalView-ITCH, http://www.nasdaqtrader.com/Trader.aspx?id=Totalview2 (last visited December 23, 2015) (displays the full order book depth for NASDAQ market participants and also disseminates the Net Order Imbalance Indicator (NOII) for the NASDAQ Opening and Closing Crosses and NASDAQ IPO/Halt Cross). \14\ See FINRA Regulatory Notice 15-46, ``Best Execution,'' November 2015. --------------------------------------------------------------------------- The decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010), upheld reliance by the Securities and Exchange Commission (``Commission'') upon the existence of competitive market mechanisms to set reasonable and equitably allocated fees for proprietary market data: In fact, the legislative history indicates that the Congress intended that the market system `evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed' and that the SEC wield its regulatory power `in those situations where competition may not be sufficient,' such as in the creation of a `consolidated transactional reporting system.' Id. at 535 (quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 323). The court agreed with the Commission's conclusion that ``Congress intended that `competitive forces should dictate the services and practices that constitute the U.S. national market system for trading equity securities.' '' \15\ --------------------------------------------------------------------------- \15\ NetCoalition, 615 F.3d at 535. --------------------------------------------------------------------------- As explained below in the Exchange's Statement on Burden on Competition, the Exchange believes that there is substantial evidence of competition in the marketplace for proprietary market data and that the Commission can rely upon such evidence in concluding that the fees established in this filing are the product of competition and therefore satisfy the relevant statutory standards. In addition, the existence of alternatives to these data products, such as consolidated data and proprietary data from other sources, as described below, further ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can select such alternatives. As the NetCoalition decision noted, the Commission is not required to undertake a cost-of-service or ratemaking approach. The Exchange believes that, even if it were possible as a matter of economic theory, cost-based pricing for proprietary market data would be so complicated that it could not be done practically or offer any significant benefits.\16\ --------------------------------------------------------------------------- \16\ The Exchange believes that cost-based pricing would be impractical because it would create enormous administrative burdens for all parties and the Commission to cost-regulate a large number of participants and standardize and analyze extraordinary amounts of information, accounts, and reports. In addition, and as described below, it is impossible to regulate market data prices in isolation from prices charged by markets for other services that are joint products. Cost-based rate regulation would also lead to litigation and may distort incentives, including those to minimize costs and to innovate, leading to further waste. Under cost-based pricing, the Commission would be burdened with determining a fair rate of return, and the industry could experience frequent rate increases based on escalating expense levels. Even in industries historically subject to utility regulation, cost-based ratemaking has been discredited. As such, the Exchange believes that cost-based ratemaking would be inappropriate for proprietary market data and inconsistent with Congress's direction that the Commission use its authority to foster the development of the national market system, and that market forces will continue to provide appropriate pricing discipline. See Appendix C to NYSE's comments to the Commission's 2000 Concept Release on the Regulation of Market Information Fees and Revenues, which can be found on the Commission's Web site at http://www.sec.gov/rules/concept/s72899/buck1.htm. --------------------------------------------------------------------------- For these reasons, the Exchange believes that the proposed fees are reasonable, equitable, and not unfairly discriminatory. 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. The Existence of Actual Competition The market for proprietary data products is currently competitive and inherently contestable because there is fierce competition for the inputs necessary for the creation of proprietary data and strict pricing discipline for the proprietary products themselves. Numerous exchanges compete with one another for listings and order flow and sales of market data itself, providing ample opportunities for entrepreneurs who wish to compete in any or all of those areas, including producing and distributing their own market data. Proprietary data products are produced and distributed by each individual exchange, as well as other entities, in a vigorously competitive market. Indeed, the U.S. Department of Justice (``DOJ'') (the primary antitrust regulator) has expressly acknowledged the aggressive actual competition among exchanges, including for the sale of proprietary market data. In 2011, the DOJ stated that exchanges ``compete head to head to offer real-time equity data products. These data products include the best bid and offer of every exchange and information on each equity trade, including the last sale.'' \17\ --------------------------------------------------------------------------- \17\ Press Release, U.S. Department of Justice, Assistant Attorney General Christine Varney Holds Conference Call Regarding NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. Abandoning Their Bid for NYSE Euronext (May 16, 2011), available at http://www.justice.gov/iso/opa/atr/speeches/2011/at-speech-110516.html; see also Complaint in U.S. v. Deutsche Borse AG and NYSE Euronext, Case No. 11-cv-2280 (DC Dist.) ] 24 (``NYSE and Direct Edge compete head- to-head . . . in the provision of real-time proprietary equity data products.''). --------------------------------------------------------------------------- Moreover, competitive markets for listings, order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products and therefore constrain markets from overpricing proprietary market data. Broker-dealers send their order flow and transaction reports to multiple venues, rather than providing them all to a single venue, which in turn reinforces this competitive constraint. As a 2010 Commission Concept Release noted, the ``current market structure can be described as dispersed and complex'' with ``trading volume . . . dispersed among many highly automated trading centers that compete for order flow in the same stocks'' and ``trading centers offer[ing] a wide range of services that are designed to attract different types of market participants with varying trading [[Page 5160]] needs.'' \18\ More recently, SEC Chair Mary Jo White has noted that competition for order flow in exchange-listed equities is ``intense'' and divided among many trading venues, including exchanges, more than 40 alternative trading systems, and more than 250 broker-dealers.\19\ --------------------------------------------------------------------------- \18\ Concept Release on Equity Market Structure, Securities Exchange Act Release No. 61358 (Jan. 14, 2010), 75 FR 3594 (Jan. 21, 2010) (File No. S7-02-10). This Concept Release included data from the third quarter of 2009 showing that no market center traded more than 20% of the volume of listed stocks, further evidencing the dispersal of and competition for trading activity. Id. at 3598. Data available on ArcaVision show that from June 30, 2013 to June 30, 2014, no exchange traded more than 12% of the volume of listed stocks by either trade or dollar volume, further evidencing the continued dispersal of and fierce competition for trading activity. See https://www.arcavision.com/Arcavision/arcalogin.jsp. \19\ Mary Jo White, Enhancing Our Equity Market Structure, Sandler O'Neill & Partners, L.P. Global Exchange and Brokerage Conference (June 5, 2014) (available on the Commission Web site), citing Tuttle, Laura, 2014, ``OTC Trading: Description of Non-ATS OTC Trading in National Market System Stocks,'' at 7-8. --------------------------------------------------------------------------- If an exchange succeeds in competing for quotations, order flow, and trade executions, then it earns trading revenues and increases the value of its proprietary market data products because they will contain greater quote and trade information. Conversely, if an exchange is less successful in attracting quotes, order flow, and trade executions, then its market data products may be less desirable to customers in light of the diminished content and data products offered by competing venues may become more attractive. Thus, competition for quotations, order flow, and trade executions puts significant pressure on an exchange to maintain both execution and data fees at reasonable levels. In addition, in the case of products that are also redistributed through market data vendors, such as Bloomberg and Thompson Reuters, the vendors themselves provide additional price discipline for proprietary data products because they control the primary means of access to certain end users. These vendors impose price discipline based upon their business models. For example, vendors that assess a surcharge on data they sell are able to refuse to offer proprietary products that their end users do not or will not purchase in sufficient numbers. Vendors will not elect to make available NYSE Integrated Feed unless their customers request it, and customers will not elect to pay the proposed fees unless NYSE Integrated Feed can provide value by sufficiently increasing revenues or reducing costs in the customer's business in a manner that will offset the fees. All of these factors operate as constraints on pricing proprietary data products. Joint Product Nature of Exchange Platform Transaction execution and proprietary data products are complementary in that market data is both an input and a byproduct of the execution service. In fact, proprietary market data and trade executions are a paradigmatic example of joint products with joint costs. The decision of whether and on which platform to post an order will depend on the attributes of the platforms where the order can be posted, including the execution fees, data availability and quality, and price and distribution of data products. Without a platform to post quotations, receive orders, and execute trades, exchange data products would not exist. The costs of producing market data include not only the costs of the data distribution infrastructure, but also the costs of designing, maintaining, and operating the exchange's platform for posting quotes, accepting orders, and executing transactions and the cost of regulating the exchange to ensure its fair operation and maintain investor confidence. The total return that a trading platform earns reflects the revenues it receives from both products and the joint costs it incurs. Moreover, an exchange's broker-dealer customers generally view the costs of transaction executions and market data as a unified cost of doing business with the exchange. A broker-dealer will only choose to direct orders to an exchange if the revenue from the transaction exceeds its cost, including the cost of any market data that the broker-dealer chooses to buy in support of its order routing and trading decisions. If the costs of the transaction are not offset by its value, then the broker-dealer may choose instead not to purchase the product and trade away from that exchange. There is substantial evidence of the strong correlation between order flow and market data purchases. For example, in September 2015, more than 80% of the transaction volume on each of NYSE and NYSE's affiliates NYSE Arca, Inc. (``NYSE Arca'') and NYSE MKT LLC (``MKT'') was executed by market participants that purchased one or more proprietary market data products (the 20 firms were not the same for each market). A supra- competitive increase in the fees for either executions or market data would create a risk of reducing an exchange's revenues from both products. Other market participants have noted that proprietary market data and trade executions are joint products of a joint platform and have common costs.\20\ The Exchange agrees with and adopts those discussions and the arguments therein. The Exchange also notes that the economics literature confirms that there is no way to allocate common costs between joint products that would shed any light on competitive or efficient pricing.\21\ --------------------------------------------------------------------------- \20\ See Securities Exchange Act Release No. 72153 (May 12, 2014), 79 FR 28575, 28578 n.15 (May 16, 2014) (SR-NASDAQ-2014-045) (``[A]ll of the exchange's costs are incurred for the unified purposes of attracting order flow, executing and/or routing orders, and generating and selling data about market activity. The total return that an exchange earns reflects the revenues it receives from the joint products and the total costs of the joint products.''). See also Securities Exchange Act Release No. 62907 (Sept. 14, 2010), 75 FR 57314, 57317 (Sept. 20, 2010) (SR-NASDAQ-2010-110), and Securities Exchange Act Release No. 62908 (Sept. 14, 2010), 75 FR 57321, 57324 (Sept. 20, 2010) (SR-NASDAQ-2010-111). \21\ See generally Mark Hirschey, Fundamentals of Managerial Economics, at 600 (2009) (``It is important to note, however, that although it is possible to determine the separate marginal costs of goods produced in variable proportions, it is impossible to determine their individual average costs. This is because common costs are expenses necessary for manufacture of a joint product. Common costs of production--raw material and equipment costs, management expenses, and other overhead--cannot be allocated to each individual by-product on any economically sound basis. . . . Any allocation of common costs is wrong and arbitrary.''). This is not new economic theory. See, e.g., F. W. Taussig, ``A Contribution to the Theory of Railway Rates,'' Quarterly Journal of Economics V(4) 438, 465 (July 1891) (``Yet, surely, the division is purely arbitrary. These items of cost, in fact, are jointly incurred for both sorts of traffic; and I cannot share the hope entertained by the statistician of the Commission, Professor Henry C. Adams, that we shall ever reach a mode of apportionment that will lead to trustworthy results.''). --------------------------------------------------------------------------- Analyzing the cost of market data product production and distribution in isolation from the cost of all of the inputs supporting the creation of market data and market data products will inevitably underestimate the cost of the data and data products because it is impossible to obtain the data inputs to create market data products without a fast, technologically robust, and well-regulated execution system, and system and regulatory costs affect the price of both obtaining the market data itself and creating and distributing market data products. It would be equally misleading, however, to attribute all of an exchange's costs to the market data portion of an exchange's joint products. Rather, all of an exchange's costs are incurred for the unified purposes of attracting order flow, executing and/or routing orders, and generating and selling data about market activity. The total return that an exchange earns reflects the revenues it receives from the joint products and the total costs of the joint products. [[Page 5161]] As noted above, the level of competition and contestability in the market is evident in the numerous alternative venues that compete for order flow, including 11 equities self-regulatory organization (``SRO'') markets, as well as various forms of alternative trading systems (``ATSs''), including dark pools and electronic communication networks (``ECNs''), and internalizing broker-dealers. SRO markets compete to attract order flow and produce transaction reports via trade executions, and two FINRA-regulated Trade Reporting Facilities compete to attract transaction reports from the non-SRO venues. Competition among trading platforms can be expected to constrain the aggregate return that each platform earns from the sale of its joint products, but different trading platforms may choose from a range of possible, and equally reasonable, pricing strategies as the means of recovering total costs. For example, some platforms may choose to pay rebates to attract orders, charge relatively low prices for market data products (or provide market data products free of charge), and charge relatively high prices for accessing posted liquidity. Other platforms may choose a strategy of paying lower rebates (or no rebates) to attract orders, setting relatively high prices for market data products, and setting relatively low prices for accessing posted liquidity. For example, BATS Global Markets (``BATS'') and Direct Edge, which previously operated as ATSs and obtained exchange status in 2008 and 2010, respectively, provided certain market data at no charge on their Web sites in order to attract more order flow, and used revenue rebates from resulting additional executions to maintain low execution charges for their users.\22\ In this environment, there is no economic basis for regulating maximum prices for one of the joint products in an industry in which suppliers face competitive constraints with regard to the joint offering. --------------------------------------------------------------------------- \22\ This is simply a securities market-specific example of the well-established principle that in certain circumstances more sales at lower margins can be more profitable than fewer sales at higher margins; this example is additional evidence that market data is an inherent part of a market's joint platform. --------------------------------------------------------------------------- Existence of Alternatives The large number of SROs, ATSs, and internalizing broker-dealers that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO, ATS, and broker-dealer is currently permitted to produce and sell proprietary data products, and many currently do, including but not limited to the Exchange, NYSE MKT, NYSE Arca, NASDAQ OMX, BATS, and Direct Edge. The fact that proprietary data from ATSs, internalizing broker- dealers, and vendors can bypass SROs is significant in two respects. First, non-SROs can compete directly with SROs for the production and sale of proprietary data products. By way of example, BATS and NYSE Arca both published proprietary data on the Internet before registering as exchanges. Second, because a single order or transaction report can appear in an SRO proprietary product, a non-SRO proprietary product, or both, the amount of data available via proprietary products is greater in size than the actual number of orders and transaction reports that exist in the marketplace. With respect to NYSE Integrated Feed, competitors offer close substitute products.\23\ Because market data users can find suitable substitutes for most proprietary market data products, a market that overprices its market data products stands a high risk that users may substitute another source of market data information for its own. --------------------------------------------------------------------------- \23\ See note 13, supra. --------------------------------------------------------------------------- Those competitive pressures imposed by available alternatives are evident in the Exchange's proposed pricing. In addition to the competition and price discipline described above, the market for proprietary data products is also highly contestable because market entry is rapid and inexpensive. The history of electronic trading is replete with examples of entrants that swiftly grew into some of the largest electronic trading platforms and proprietary data producers: Archipelago, Bloomberg Tradebook, Island, RediBook, Attain, TrackECN, BATS Trading and Direct Edge. As noted above, BATS launched as an ATS in 2006 and became an exchange in 2008, while Direct Edge began operations in 2007 and obtained exchange status in 2010. In determining the proposed changes to the fees for NYSE Integrated Fed, 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 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. Finally, the Exchange believes that the proposed rule change, with respect to the removal of text from the Fee Schedule, is consistent with the provisions of section 6 of the Act,\24\ in general, and with section 6(b)(5) of the Act \25\ in particular, in that the proposal 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 regulating, clearing, settling, processing information with respect to, and 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. Specifically, NYSE believes that the change will promote these goals by providing clarity and consistency to the Fee Schedule and will benefit participants as they would be informed to the pricing applicable for NYSE Integrated Feed. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78f. \25\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- 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) \26\ of the Act and subparagraph (f)(2) of Rule 19b-4 \27\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \26\ 15 U.S.C. 78s(b)(3)(A). \27\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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 [[Page 5162]] Commission takes such action, the Commission shall institute proceedings under section 19(b)(2)(B) \28\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \28\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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 CommentsUse 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-2016-09 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-2016-09. 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 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 available publicly. All submissions should refer to File Number SR-NYSE-2016-09 and should be submitted on or before February 22, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\29\ --------------------------------------------------------------------------- \29\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-01713 Filed 1-29-16; 8:45 am] BILLING CODE 8011-01-P
![5158 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Notices
not edit personal identifying and basis for, the proposed rule change 2. Statutory Basis
information from submissions. You and discussed any comments it received The Exchange believes that the
should submit only information that on the proposed rule change. The text proposed rule change is consistent with
you wish to make available publicly. All of those statements may be examined at the provisions of section 6 of the Act,8
submissions should refer to File the places specified in Item IV below. in general, and sections 6(b)(4) and
Number SR–NYSEArca–2015–110 and The Exchange has prepared summaries, 6(b)(5) of the Act,9 in particular, in that
should be submitted on or before set forth in sections A, B, and C below, it provides an equitable allocation of
February 16, 2016. of the most significant parts of such reasonable fees among users and
For the Commission, by the Division of statements. recipients of the data and is not
Trading and Markets, pursuant to delegated designed to permit unfair
authority.69 A. Self-Regulatory Organization’s discrimination among customers,
Robert W. Errett, Statement of the Purpose of, and the issuers, and brokers.
Deputy Secretary. Statutory Basis for, the Proposed Rule The fees are also equitable and not
[FR Doc. 2016–01714 Filed 1–29–16; 8:45 am]
Change unfairly discriminatory because they
BILLING CODE 8011–01–P 1. Purpose will apply to all data recipients that
choose to subscribe to NYSE Integrated
The Exchange proposes to amend the Feed.
SECURITIES AND EXCHANGE fees for NYSE Integrated Feed market The Exchange believes that it is
COMMISSION data product,4 as set forth on the NYSE reasonable to require data recipients to
Proprietary Market Data Fee Schedule pay a modest additional fee taking a
[Release No. 34–76973; File No. SR–NYSE– data feed for a market data product in
2016–09] (‘‘Fee Schedule’’). The Exchange
proposes to establish the multiple data more than two locations, because such
Self-Regulatory Organizations; New data recipients can derive substantial
feed fee. Specifically, the Exchange
York Stock Exchange LLC; Notice of value from being able to consume the
proposes to establish a new monthly fee,
Filing and Immediate Effectiveness of product in as many locations as they
the ‘‘Multiple Data Feed Fee,’’ that
a Proposed Rule Change Amending want. In addition, there are
would apply to data recipients that take administrative burdens associated with
the Fees for NYSE Integrated Feed a data feed for a market data product in tracking each location at which a data
January 26, 2016. more than two locations. Data recipients recipient receives the product. The
Pursuant to section 19(b)(1) 1 of the taking NYSE Integrated Feed in more Multiple Data Feed Fee is designed to
Securities Exchange Act of 1934 (the than two locations would be charged encourage data recipients to better
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 $200 per additional location per product manage their requests for additional
notice is hereby given that, on January per month.5 No new reporting would be data feeds and to monitor their usage of
13, 2016, New York Stock Exchange required.6 data feeds. The proposed fee is designed
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed Additionally, the various fees to apply to data feeds received in more
with the Securities and Exchange applicable to NYSE Integrated Feed, than two locations so that each data
Commission (the ‘‘Commission’’) the other than the Multiple Data Feed Fee, recipient can have one primary and one
proposed rule change as described in became operative on January 1, 2016.7 backup data location before having to
Items I, II, and III below, which Items Accordingly, the Exchange proposes to pay a multiple data feed fee. The
have been prepared by the self- remove text from the Fee Schedule Exchange notes that this pricing is
regulatory organization. The noting that through December 31, 2015, consistent with similar pricing adopted
Commission is publishing this notice to in 2013 by the Consolidated Tape
there would be no charge for the fees for
solicit comments on the proposed rule Association (‘‘CTA’’).10 The Exchange
NYSE Integrated Feed and text noting
change from interested persons. also notes that the OPRA Plan imposes
that the fees would be applicable from a similar charge of $100 per connection
I. Self-Regulatory Organization’s January 1, 2016. The proposed change for circuit connections in addition to the
Statement of the Terms of Substance of would provide clarity to subscribers of primary and backup connections.11
the Proposed Rule Change NYSE Integrated Feed. The Exchange notes that NYSE
The Exchange proposes to amend the Integrated Feed is entirely optional. The
fees for NYSE Integrated Feed to 4 See Securities Exchange Act Release Nos. 74128
Exchange is not required to make NYSE
(January 23, 2015), 80 FR 4951 (January 29, 2015) Integrated Feed available or to offer any
establish a multiple data feed fee. The (SR–NYSE–2015–03) (Notice—NYSE Integrated
proposed rule change is available on the Feed) and 76485 (Nov. 20, 2015), 80 FR 74158 (Nov. specific pricing alternatives to any
Exchange’s Web site at www.nyse.com, 27, 2015) (SR–NYSE–2015–57) (establishing fees for customers, nor is any firm required to
at the principal office of the Exchange, NYSE Integrated Feed). purchase NYSE Integrated Feed. Firms
5 The text of footnote 6 in Exhibit 5 of this
and at the Commission’s Public that do purchase NYSE Integrated Feed
proposed rule change was previously filed under a
Reference Room. separate filing. See SR–NYSE–2016–02 (Proposed
do so for the primary goals of using it
Rule Change to Amend the Fees for NYSE to increase revenues, reduce expenses,
II. Self-Regulatory Organization’s OpenBook). and in some instances compete directly
Statement of the Purpose of, and 6 Data vendors currently report a unique Vendor
with the Exchange (including for order
Statutory Basis for, the Proposed Rule Account Number for each location at which they flow); those firms are able to determine
Change provide a data feed to a data recipient. The
Exchange considers each Vendor Account Number
In its filing with the Commission, the 8 15 U.S.C. 78f(b).
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a location. For example, if a data recipient has five
9 15 U.S.C. 78f(b)(4), (5).
self-regulatory organization included Vendor Account Numbers, representing five
statements concerning the purpose of, locations, for the receipt of the NYSE Integrated 10 See Securities Exchange Act Release No. 70010
Feed product, that data recipient will pay the (July 19, 2013), 78 FR 44984 (July 25, 2013) (SR–
Multiple Data Feed fee with respect to three of the CTA/CQ–2013–04).
69 17 CFR 200.30–3(a)(12). five locations. 11 See ‘‘Direct Access Fee,’’ Options Price
1 15 U.S.C. 78s(b)(1). 7 See Securities Exchange Act Release No. 76485 Reporting Authority Fee Schedule Fee Schedule
2 15 U.S.C. 78a.
(November 20, 2015), 80 FR 74158 (November 27, PRA Plan [sic] at http://www.opradata.com/pdf/
3 17 CFR 240.19b–4. 2015) (SR–NYSE–2015–57). fee_schedule.pdf.
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![Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Notices 5159
for themselves whether NYSE Integrated the Exchange believes that there is the sale of proprietary market data
Feed or any other similar products are substantial evidence of competition in products, the joint product nature of
attractively priced or not.12 the marketplace for proprietary market exchange platforms, and the existence of
Firms that do not wish to purchase data and that the Commission can rely alternatives to the Exchange’s
NYSE Integrated Feed have a variety of upon such evidence in concluding that proprietary data.
alternative market data products from the fees established in this filing are the
which to choose,13 or if NYSE Integrated The Existence of Actual Competition
product of competition and therefore
Feed does not provide sufficient value satisfy the relevant statutory standards. The market for proprietary data
to firms as offered based on the uses In addition, the existence of alternatives products is currently competitive and
those firms have or planned to make of to these data products, such as inherently contestable because there is
it, such firms may simply choose to consolidated data and proprietary data fierce competition for the inputs
conduct their business operations in from other sources, as described below, necessary for the creation of proprietary
ways that do not use NYSE Integrated further ensures that the Exchange data and strict pricing discipline for the
Feed or use it at different levels or in cannot set unreasonable fees, or fees proprietary products themselves.
different configurations. The Exchange that are unreasonably discriminatory, Numerous exchanges compete with one
notes that broker-dealers are not when vendors and subscribers can another for listings and order flow and
required to purchase proprietary market select such alternatives. sales of market data itself, providing
data to comply with their best execution As the NetCoalition decision noted, ample opportunities for entrepreneurs
obligations.14 the Commission is not required to who wish to compete in any or all of
The decision of the United States undertake a cost-of-service or those areas, including producing and
Court of Appeals for the District of ratemaking approach. The Exchange distributing their own market data.
Columbia Circuit in NetCoalition v. believes that, even if it were possible as Proprietary data products are produced
SEC, 615 F.3d 525 (D.C. Cir. 2010), a matter of economic theory, cost-based and distributed by each individual
upheld reliance by the Securities and pricing for proprietary market data exchange, as well as other entities, in a
Exchange Commission (‘‘Commission’’) would be so complicated that it could vigorously competitive market. Indeed,
upon the existence of competitive not be done practically or offer any the U.S. Department of Justice (‘‘DOJ’’)
market mechanisms to set reasonable significant benefits.16 (the primary antitrust regulator) has
and equitably allocated fees for For these reasons, the Exchange expressly acknowledged the aggressive
proprietary market data: believes that the proposed fees are actual competition among exchanges,
In fact, the legislative history indicates that reasonable, equitable, and not unfairly including for the sale of proprietary
the Congress intended that the market system discriminatory. market data. In 2011, the DOJ stated that
‘evolve through the interplay of competitive exchanges ‘‘compete head to head to
forces as unnecessary regulatory restrictions B. Self-Regulatory Organization’s offer real-time equity data products.
are removed’ and that the SEC wield its Statement on Burden on Competition These data products include the best bid
regulatory power ‘in those situations where The Exchange does not believe that and offer of every exchange and
competition may not be sufficient,’ such as the proposed rule change will impose information on each equity trade,
in the creation of a ‘consolidated
any burden on competition that is not including the last sale.’’ 17
transactional reporting system.’
necessary or appropriate in furtherance Moreover, competitive markets for
Id. at 535 (quoting H.R. Rep. No. 94– of the purposes of the Act. An listings, order flow, executions, and
229 at 92 (1975), as reprinted in 1975 exchange’s ability to price its transaction reports provide pricing
U.S.C.C.A.N. 323). The court agreed proprietary market data feed products is discipline for the inputs of proprietary
with the Commission’s conclusion that constrained by actual competition for data products and therefore constrain
‘‘Congress intended that ‘competitive markets from overpricing proprietary
forces should dictate the services and 16 The Exchange believes that cost-based pricing
market data. Broker-dealers send their
practices that constitute the U.S. would be impractical because it would create order flow and transaction reports to
national market system for trading enormous administrative burdens for all parties and
the Commission to cost-regulate a large number of multiple venues, rather than providing
equity securities.’ ’’ 15 them all to a single venue, which in turn
participants and standardize and analyze
As explained below in the Exchange’s extraordinary amounts of information, accounts, reinforces this competitive constraint.
Statement on Burden on Competition, and reports. In addition, and as described below, it As a 2010 Commission Concept Release
is impossible to regulate market data prices in
12 See, e.g., Proposing Release on Regulation of isolation from prices charged by markets for other noted, the ‘‘current market structure can
NMS Stock Alternative Trading Systems, Securities services that are joint products. Cost-based rate be described as dispersed and complex’’
Exchange Act Release No. 76474 (Nov. 18, 2015) regulation would also lead to litigation and may with ‘‘trading volume . . . dispersed
(File No. S7–23–15). See also, ‘‘Brokers Warned Not distort incentives, including those to minimize among many highly automated trading
to Steer Clients’ Stock Trades Into Slow Lane,’’ costs and to innovate, leading to further waste.
Bloomberg Business, December 14, 2015 (Sigma X Under cost-based pricing, the Commission would centers that compete for order flow in
dark pool to use direct exchange feeds as the be burdened with determining a fair rate of return, the same stocks’’ and ‘‘trading centers
primary source of price data). and the industry could experience frequent rate offer[ing] a wide range of services that
13 See NYSE Arca Integrated Feed, http:// increases based on escalating expense levels. Even are designed to attract different types of
www.nyxdata.com/Data-Products/NYSEArca- in industries historically subject to utility
Integrated-History (last visited December 23, 2015) regulation, cost-based ratemaking has been market participants with varying trading
(data feed that provides a unified view of events, discredited. As such, the Exchange believes that
in sequence as they appear on the NYSE Arca cost-based ratemaking would be inappropriate for 17 Press Release, U.S. Department of Justice,
matching engine, including depth of book, trades, proprietary market data and inconsistent with Assistant Attorney General Christine Varney Holds
order) and NASDAQ TotalView-ITCH, http:// Congress’s direction that the Commission use its Conference Call Regarding NASDAQ OMX Group
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www.nasdaqtrader.com/Trader.aspx?id=Totalview2 authority to foster the development of the national Inc. and IntercontinentalExchange Inc. Abandoning
(last visited December 23, 2015) (displays the full market system, and that market forces will continue Their Bid for NYSE Euronext (May 16, 2011),
order book depth for NASDAQ market participants to provide appropriate pricing discipline. See available at http://www.justice.gov/iso/opa/atr/
and also disseminates the Net Order Imbalance Appendix C to NYSE’s comments to the speeches/2011/at-speech-110516.html; see also
Indicator (NOII) for the NASDAQ Opening and Commission’s 2000 Concept Release on the Complaint in U.S. v. Deutsche Borse AG and NYSE
Closing Crosses and NASDAQ IPO/Halt Cross). Regulation of Market Information Fees and Euronext, Case No. 11–cv–2280 (DC Dist.) ¶ 24
14 See FINRA Regulatory Notice 15–46, ‘‘Best
Revenues, which can be found on the Commission’s (‘‘NYSE and Direct Edge compete head-to-head . . .
Execution,’’ November 2015. Web site at http://www.sec.gov/rules/concept/ in the provision of real-time proprietary equity data
15 NetCoalition, 615 F.3d at 535. s72899/buck1.htm. products.’’).
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![5160 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Notices
needs.’’ 18 More recently, SEC Chair fees. All of these factors operate as executions are joint products of a joint
Mary Jo White has noted that constraints on pricing proprietary data platform and have common costs.20 The
competition for order flow in exchange- products. Exchange agrees with and adopts those
listed equities is ‘‘intense’’ and divided discussions and the arguments therein.
Joint Product Nature of Exchange
among many trading venues, including The Exchange also notes that the
Platform
exchanges, more than 40 alternative economics literature confirms that there
trading systems, and more than 250 Transaction execution and proprietary is no way to allocate common costs
broker-dealers.19 data products are complementary in that between joint products that would shed
If an exchange succeeds in competing market data is both an input and a any light on competitive or efficient
for quotations, order flow, and trade byproduct of the execution service. In pricing.21
executions, then it earns trading fact, proprietary market data and trade Analyzing the cost of market data
revenues and increases the value of its executions are a paradigmatic example product production and distribution in
proprietary market data products of joint products with joint costs. The isolation from the cost of all of the
because they will contain greater quote decision of whether and on which inputs supporting the creation of market
and trade information. Conversely, if an platform to post an order will depend data and market data products will
exchange is less successful in attracting on the attributes of the platforms where inevitably underestimate the cost of the
quotes, order flow, and trade the order can be posted, including the data and data products because it is
executions, then its market data execution fees, data availability and impossible to obtain the data inputs to
products may be less desirable to quality, and price and distribution of create market data products without a
customers in light of the diminished data products. Without a platform to fast, technologically robust, and well-
content and data products offered by post quotations, receive orders, and regulated execution system, and system
competing venues may become more execute trades, exchange data products and regulatory costs affect the price of
attractive. Thus, competition for would not exist. both obtaining the market data itself and
quotations, order flow, and trade The costs of producing market data creating and distributing market data
executions puts significant pressure on include not only the costs of the data products. It would be equally
an exchange to maintain both execution distribution infrastructure, but also the misleading, however, to attribute all of
and data fees at reasonable levels. costs of designing, maintaining, and an exchange’s costs to the market data
In addition, in the case of products operating the exchange’s platform for portion of an exchange’s joint products.
that are also redistributed through posting quotes, accepting orders, and Rather, all of an exchange’s costs are
market data vendors, such as Bloomberg executing transactions and the cost of incurred for the unified purposes of
and Thompson Reuters, the vendors regulating the exchange to ensure its fair attracting order flow, executing and/or
themselves provide additional price operation and maintain investor routing orders, and generating and
discipline for proprietary data products confidence. The total return that a selling data about market activity. The
because they control the primary means trading platform earns reflects the total return that an exchange earns
of access to certain end users. These revenues it receives from both products reflects the revenues it receives from the
vendors impose price discipline based and the joint costs it incurs. joint products and the total costs of the
upon their business models. For Moreover, an exchange’s broker- joint products.
example, vendors that assess a dealer customers generally view the
surcharge on data they sell are able to costs of transaction executions and 20 See Securities Exchange Act Release No. 72153
refuse to offer proprietary products that market data as a unified cost of doing (May 12, 2014), 79 FR 28575, 28578 n.15 (May 16,
business with the exchange. A broker- 2014) (SR–NASDAQ–2014–045) (‘‘[A]ll of the
their end users do not or will not exchange’s costs are incurred for the unified
purchase in sufficient numbers. Vendors dealer will only choose to direct orders purposes of attracting order flow, executing and/or
will not elect to make available NYSE to an exchange if the revenue from the routing orders, and generating and selling data
Integrated Feed unless their customers transaction exceeds its cost, including about market activity. The total return that an
request it, and customers will not elect the cost of any market data that the exchange earns reflects the revenues it receives
from the joint products and the total costs of the
to pay the proposed fees unless NYSE broker-dealer chooses to buy in support joint products.’’). See also Securities Exchange Act
Integrated Feed can provide value by of its order routing and trading Release No. 62907 (Sept. 14, 2010), 75 FR 57314,
sufficiently increasing revenues or decisions. If the costs of the transaction 57317 (Sept. 20, 2010) (SR–NASDAQ–2010–110),
reducing costs in the customer’s are not offset by its value, then the and Securities Exchange Act Release No. 62908
(Sept. 14, 2010), 75 FR 57321, 57324 (Sept. 20,
business in a manner that will offset the broker-dealer may choose instead not to 2010) (SR–NASDAQ–2010–111).
purchase the product and trade away 21 See generally Mark Hirschey, Fundamentals of
18 Concept Release on Equity Market Structure, from that exchange. There is substantial Managerial Economics, at 600 (2009) (‘‘It is
Securities Exchange Act Release No. 61358 (Jan. 14, evidence of the strong correlation important to note, however, that although it is
2010), 75 FR 3594 (Jan. 21, 2010) (File No. S7–02– possible to determine the separate marginal costs of
10). This Concept Release included data from the
between order flow and market data
goods produced in variable proportions, it is
third quarter of 2009 showing that no market center purchases. For example, in September impossible to determine their individual average
traded more than 20% of the volume of listed 2015, more than 80% of the transaction costs. This is because common costs are expenses
stocks, further evidencing the dispersal of and volume on each of NYSE and NYSE’s necessary for manufacture of a joint product.
competition for trading activity. Id. at 3598. Data Common costs of production—raw material and
available on ArcaVision show that from June 30,
affiliates NYSE Arca, Inc. (‘‘NYSE
equipment costs, management expenses, and other
2013 to June 30, 2014, no exchange traded more Arca’’) and NYSE MKT LLC (‘‘MKT’’) overhead—cannot be allocated to each individual
than 12% of the volume of listed stocks by either was executed by market participants by-product on any economically sound basis. . . .
trade or dollar volume, further evidencing the that purchased one or more proprietary Any allocation of common costs is wrong and
continued dispersal of and fierce competition for arbitrary.’’). This is not new economic theory. See,
market data products (the 20 firms were
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trading activity. See https://www.arcavision.com/ e.g., F. W. Taussig, ‘‘A Contribution to the Theory
Arcavision/arcalogin.jsp. not the same for each market). A supra- of Railway Rates,’’ Quarterly Journal of Economics
19 Mary Jo White, Enhancing Our Equity Market competitive increase in the fees for V(4) 438, 465 (July 1891) (‘‘Yet, surely, the division
Structure, Sandler O’Neill & Partners, L.P. Global either executions or market data would is purely arbitrary. These items of cost, in fact, are
Exchange and Brokerage Conference (June 5, 2014) create a risk of reducing an exchange’s jointly incurred for both sorts of traffic; and I cannot
(available on the Commission Web site), citing share the hope entertained by the statistician of the
Tuttle, Laura, 2014, ‘‘OTC Trading: Description of revenues from both products. Commission, Professor Henry C. Adams, that we
Non-ATS OTC Trading in National Market System Other market participants have noted shall ever reach a mode of apportionment that will
Stocks,’’ at 7–8. that proprietary market data and trade lead to trustworthy results.’’).
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![5162 Federal Register / Vol. 81, No. 20 / Monday, February 1, 2016 / Notices
Commission takes such action, the 2016–09 and should be submitted on or terms for six years after the merger (the
Commission shall institute proceedings before February 22, 2016. first two in an easily accessible place).
under section 19(b)(2)(B) 28 of the Act to For the Commission, by the Division of The average annual burden of meeting
determine whether the proposed rule Trading and Markets, pursuant to delegated the requirements of rule 17a–8 is
change should be approved or authority.29
estimated to be 7 hours for each fund.
disapproved. Robert W. Errett, The Commission staff estimates that
IV. Solicitation of Comments Deputy Secretary. each year approximately 766 funds rely
[FR Doc. 2016–01713 Filed 1–29–16; 8:45 am] on the rule. The estimated total average
Interested persons are invited to
submit written data, views, and
BILLING CODE 8011–01–P annual burden for all respondents
arguments concerning the foregoing, therefore is 5,362 hours.
including whether the proposed rule SECURITIES AND EXCHANGE The average cost burden of preparing
change is consistent with the Act. COMMISSION a report by an independent evaluator in
Comments may be submitted by any of a merger with an unregistered entity is
the following methods: Proposed Collection; Comment estimated to be $15,000. The average net
Request cost burden of obtaining approval of a
Electronic Comments
Upon Written Request, Copies Available merger transaction by a majority of a
• Use the Commission’s Internet fund’s outstanding voting securities is
comment form (http://www.sec.gov/ From: Securities and Exchange
Commission, Office of FOIA Services, estimated to be $100,000. The
rules/sro.shtml); or Commission staff estimates that each
100 F Street NE., Washington, DC
• Send an email to rule-comments@ year approximately 0 mergers with
20549–2736.
sec.gov. Please include File Number SR– unregistered entities occur and
NYSE–2016–09 on the subject line. Extension:
Rule 17a–8; SEC File No. 270–225, OMB approximately 15 funds hold
Paper Comments Control No. 3235–0235. shareholder votes that would not
• Send paper comments in triplicate Notice is hereby given that pursuant otherwise have held a shareholder vote.
to Brent J. Fields, Secretary, Securities to the Paperwork Reduction Act of 1995 The total annual cost burden of meeting
and Exchange Commission, 100 F Street (44 U.S.C. 3501–3520), the Securities these requirements is estimated to be
NE., Washington, DC 20549–1090. and Exchange Commission (the $1,500,000.
All submissions should refer to File ‘‘Commission’’) is soliciting comments The estimates of average burden hours
Number SR–NYSE–2016–09. This file on the collection of information and average cost burdens are made
number should be included on the summarized below. The Commission solely for the purposes of the Paperwork
subject line if email is used. To help the plans to submit this existing collection Reduction Act, and are not derived from
Commission process and review your of information to the Office of a comprehensive or even a
comments more efficiently, please use Management and Budget for extension representative survey or study. An
only one method. The Commission will and approval.
Rule 17a–8 (17 CFR 270.17a–8) under agency may not conduct or sponsor, and
post all comments on the Commission’s a person is not required to respond to,
the Investment Company Act of 1940
Internet Web site (http://www.sec.gov/ a collection of information unless it
(the ‘‘Act’’) (15 U.S.C. 80a) is entitled
rules/sro.shtml). Copies of the displays a currently valid OMB control
‘‘Mergers of affiliated companies.’’ Rule
submission, all subsequent number.
17a–8 exempts certain mergers and
amendments, all written statements
similar business combinations Written comments are requested on:
with respect to the proposed rule (‘‘mergers’’) of affiliated registered
change that are filed with the (a) Whether the collection of
investment companies (‘‘funds’’) from information is necessary for the proper
Commission, and all written prohibitions under section 17(a) of the
communications relating to the performance of the functions of the
Act (15 U.S.C. 80a–17(a)) on purchases Commission, including whether the
proposed rule change between the and sales between a fund and its
Commission and any person, other than information has practical utility; (b) the
affiliates. The rule requires fund accuracy of the Commission’s estimate
those that may be withheld from the directors to consider certain issues and
public in accordance with the of the burdens of the collection of
to record their findings in board
provisions of 5 U.S.C. 552, will be information; (c) ways to enhance the
minutes. The rule requires the directors
available for Web site viewing and of any fund merging with an quality, utility, and clarity of the
printing in the Commission’s Public unregistered entity to approve information collected; and (d) ways to
Reference Room, 100 F Street NE., procedures for the valuation of assets minimize the burden of the collection of
Washington, DC 20549 on official received from that entity. These information on respondents, including
business days between the hours of procedures must provide for the through the use of automated collection
10:00 a.m. and 3:00 p.m. Copies of the preparation of a report by an techniques or other forms of information
filing also will be available for independent evaluator that sets forth the technology. Consideration will be given
inspection and copying at the principal fair value of each such asset for which to comments and suggestions submitted
office of the Exchange. All comments market quotations are not readily in writing within 60 days of this
received will be posted without change; available. The rule also requires a fund publication.
the Commission does not edit personal being acquired to obtain approval of the
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identifying information from Please direct your written comments
merger transaction by a majority of its to Pamela Dyson, Director/Chief
submissions. You should submit only outstanding voting securities, except in
information that you wish to make Information Officer, Securities and
certain situations, and requires any
available publicly. All submissions Exchange Commission, C/O Remi
surviving fund to preserve written
should refer to File Number SR–NYSE– records describing the merger and its Pavlik-Simon, 100 F Street NE.,
Washington, DC 20549; or send an email
28 15 U.S.C. 78s(b)(2)(B). 29 17 CFR 200.30–3(a)(12). to: PRA_Mailbox@sec.gov.
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Document Created: 2016-01-30 01:17:14
Document Modified: 2016-01-30 01:17:14
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 5158 |
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