[Federal Register Volume 84, Number 222 (Monday, November 18, 2019)]
[Notices]
[Pages 63689-63693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24872]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87511; File No. SR-NYSE-2019-60]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the Content of the NYSE Best Quote & Trades Data Feed To 
Include Data Feeds From NYSE Chicago BBO and Trades

November 12, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder, \3\ notice is hereby 
given that on November 4, 2019, New York Stock Exchange LLC (``NYSE'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by 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 content of the NYSE Best Quote & 
Trades (``NYSE BQT'') data feed. The proposed rule change is available 
on the Exchange's website at www.nyse.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

[[Page 63690]]

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 content of NYSE BQT to include 
data feeds from the Exchange's affiliate, NYSE Chicago, Inc. (``NYSE 
Chicago''). NYSE Chicago recently filed a proposed rule change to 
establish NYSE Chicago market data feeds, including NYSE Chicago BBO 
(``NYSE Chicago BBO'') and NYSE Chicago Trades (``NYSE Chicago 
Trades'').\4\ The Exchange now proposes to amend the content of the 
NYSE BQT market data feed to include NYSE Chicago BBO and NYSE Chicago 
Trades.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 87389 (October 23, 
2019), 84 FR 57904 (October 29, 2019) (SR-NYSEChicago-2019-15).
---------------------------------------------------------------------------

    The NYSE BQT \5\ data feed currently provides a unified view of 
best bid and offer (``BBO'') and last sale information for the Exchange 
and its affiliates, NYSE Arca, Inc. (``NYSE Arca''), NYSE American LLC 
(``NYSE American'') and NYSE National, Inc. (``NYSE National'') and 
consists of data elements from eight existing market data feeds: NYSE 
Trades,\6\ NYSE BBO,\7\ NYSE Arca Trades,\8\ NYSE Arca BBO,\9\ NYSE 
American Trades,\10\ NYSE American BBO,\11\ NYSE National Trades and 
NYSE National BBO.\12\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 73553 (November 6, 
2014), 79 FR 67491 (November 13, 2014) (Notice of Amendment No. 1 
and Order Granting Accelerated Approval to a Proposed Rule Change, 
as Modified by Amendment No. 1, To Establish the NYSE Best Quote and 
Trades Data Feed).
    \6\ See Securities Exchange Act Release Nos. 59290 (January 23, 
2009), 74 FR 5707 (January 30, 2009) (SR-NYSE-2009-05); and 59606 
(March 19, 2009), 74 FR 13293 (March 26, 2009) (SR-NYSE-2009-04).
    \7\ See Securities Exchange Act Release No. 62181 (May 26, 
2010), 75 FR 31488 (June 3, 2010) (SR-NYSE-2010-30).
    \8\ See Securities Exchange Act Release Nos. 59289 (January 23, 
2009), 74 FR 5711 (January 30, 2009) (SR-NYSEArca-2009-06); and 
59598 (March 18, 2009), 74 FR 12919 (March 25, 2009) (SR-NYSEArca-
2009-05).
    \9\ See Securities Exchange Act Release No. 62188 (May 27, 
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23).
    \10\ See Securities Exchange Act Release No. 62187 (May 27, 
2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
    \11\ See Securities Exchange Act Release No. 62187 (May 27, 
2010), 75 FR 31500 (June 3, 2010) (SR-NYSEAmex-2010-35).
    \12\ See Securities Exchange Act Release No. 83350 (May 31, 
2018), 83 FR 26332 (June 6, 2018) (SR-NYSENAT-2018-09).
---------------------------------------------------------------------------

    NYSE BBO, NYSE Arca BBO, NYSE American BBO and NYSE National BBO 
are existing data feeds that distribute on a realtime basis the same 
BBO information that NYSE, NYSE Arca, NYSE American and NYSE National, 
respectively, report under the Consolidated Quotation (``CQ'') Plan for 
inclusion in the CQ Plan's consolidated quotation information data 
stream. NYSE Trades, NYSE Arca Trades, NYSE American Trades and NYSE 
National Trades are existing data feeds that distribute on a real-time 
basis the same last sale information that NYSE, NYSE Arca, NYSE 
American and NYSE National, respectively, report under the Consolidated 
Tape Association (``CTA'') Plan for inclusion in the CTA Plan's 
consolidated data streams.
    The NYSE BQT data feed has three channels: One channel for the last 
sale data (the ``last sale channel''); another channel for the BBO data 
(the ``best quotes channel''); and a third channel for consolidated 
volume data (the ``consolidated volume channel'').
    The last sale channel provides an aggregation of the same data that 
is currently available through NYSE Trades, NYSE Arca Trades, NYSE 
American Trades and NYSE National Trades. With this proposed rule 
change, the last sale channel would also include data available through 
NYSE Chicago Trades.
    The best quotes channel provides the NYSE BQT BBO, which is the 
best quote from among the NYSE BBO, NYSE Arca BBO, NYSE American BBO 
and NYSE National BBO based on the following criteria, in order:
     Price: The exchange with the highest bid or the lowest 
offer has overall priority;
     Size: The largest size takes precedence when multiple 
exchanges submit the same bid and/or offer price; and
     Time: The earliest time takes precedence when multiple 
exchanges submit the same bid and/or offer price with the same sizes.
    With this proposed rule change, the best quotes channel would also 
include data available through NYSE Chicago BBO.
    For each security, the best quotes channel would only include one 
best bid and one best offer from among the five exchanges. The NYSE BQT 
BBO would be marked with a market center ID identifying the exchange 
from which the BBO originated.
    The consolidated volume channel carries consolidated volume for all 
listed equities in a manner consistent with the requirements for 
redistributing such data as set forth in the securities information 
processor plans.
    As it does today, NYSE BQT would also provide related data elements 
for NYSE Chicago, such as trade and security status updates (e.g., 
trade corrections and trading halts).
    The Exchange believes that NYSE BQT would continue to provide high-
quality, comprehensive last sale and BBO data for the Exchange, NYSE 
Arca, NYSE American, NYSE National and now, NYSE Chicago, in a unified 
view and would respond to subscriber demand for such a product.
    The NYSE BQT data feed is offered in a capacity similar to that of 
a vendor. The Exchange, NYSE Arca, NYSE American, NYSE National and 
NYSE Chicago are the exclusive distributors of the 10 BBO and Trades 
feeds \13\ from which certain data elements is taken to create the NYSE 
BQT. By contrast, the Exchange would not be the exclusive distributor 
of the aggregated and consolidated information that composes the NYSE 
BQT data feed. Other vendors would be able, if they chose, to create a 
data feed with the same information included in NYSE BQT, and to 
distribute it to clients with no greater latency than the Exchange 
would be able to distribute NYSE BQT.
---------------------------------------------------------------------------

    \13\ These other data feeds are offered pursuant to pre-existing 
and already effective rules filed with the Commission; those rules 
will not be altered by this filing.
---------------------------------------------------------------------------

    With respect to latency, the Exchange, NYSE American, NYSE Arca, 
NYSE National and NYSE Chicago are located in the same data center in 
Mahwah, New Jersey. The system creating and supporting the NYSE BQT 
data feed would need to obtain the 10 underlying data feeds from these 
five exchanges before it could aggregate and consolidate information to 
create NYSE BQT and then distribute it to end users. NYSE BQT 
distributes this data feed through SFTI and market data vendors. The 
Exchange also offers third parties access to its data center through 
co-location. Accordingly, a competing market data vendor co-located in 
the Exchange's Mahwah, New Jersey facility offering a similar competing 
product would similarly need to obtain the 10 underlying data feeds.

[[Page 63691]]

    The path for distribution by the Exchange of this data is not 
faster than a vendor that independently creates an NYSE BQT-like 
product could distribute its own product. As such, the NYSE BQT data 
feed is a data product that a competing vendor could create and sell 
without being in a disadvantaged position relative to the Exchange. In 
recognition that the Exchange is the source of its own market data and 
is affiliated with NYSE Arca, NYSE American, NYSE National and NYSE 
Chicago, the Exchange represents that the source of the market data it 
uses to create NYSE BQT is the same as the source available to other 
vendors.
    The NYSE BQT data feed is designed so that the Exchange would not 
have a competitive advantage over a competing vendor with respect to 
the speed of access to the 10 underlying data feeds. Likewise, the NYSE 
BQT data feed would not have a speed advantage vis-[agrave]-vis 
competing vendors co-located in the data center with respect to access 
to end user customers, whether those end users are also co-located or 
not. As such, a market data vendor could perform the aggregation and 
consolidation function in the Mahwah facility and redistribute a 
competing product from that location to similarly situated customers on 
a level playing field with respect to the speed that the Exchange could 
create and redistribute the NYSE BQT data feed.
    With respect to cost, the Exchange will file a separate rule filing 
to amend the fees for NYSE BQT. To ensure that vendors could continue 
to compete with the Exchange by creating the same product as NYSE BQT 
and selling it to their clients, the Exchange would continue to charge 
its clients for the NYSE BQT feed an amount that represents the cost to 
a market data vendor to obtain the underlying data feeds, plus an 
access fee to perform an aggregation and consolidation function that 
the Exchange performs in creating NYSE BQT. The Exchange believes that 
a competing vendor could create and offer a product similar to the 
proposed NYSE BQT data feed at a similar cost. For these reasons, the 
Exchange continues to believe that vendors could readily offer a 
product similar to NYSE BQT on a competitive basis.
    This proposed change to NYSE BQT will not be operative until NYSE 
Chicago has established the NYSE Chicago BBO and NYSE Chicago Trades 
and any related fees via a proposed rule change and NYSE Chicago has 
transitioned trading to the Pillar trading platform.\14\
---------------------------------------------------------------------------

    \14\ NYSE Chicago has announced that, subject to rule approvals, 
it will transition to trading on Pillar on November 4, 2019. See 
Trader Update, available here: https://www.nyse.com/publicdocs/nyse/notifications/trader-update/NYSEChicago_Migration_update_9.4.pdf.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \15\ of the Act (``Act''), in general, and furthers 
the objectives of Section 6(b)(5) \16\ of the Act, in particular, in 
that it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest, and it is not 
designed to permit unfair discrimination among customers, brokers, or 
dealers. This proposal is in keeping with those principles in that it 
promotes increased transparency through the dissemination of the NYSE 
BQT market data feed to those interested in receiving it.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The NYSE BQT data feed is a product that relies on the Exchange's 
receipt of underlying data, which is available to all market 
participants, before it can aggregate and consolidate information to 
create the NYSE BQT; this is a process that a vendor could also 
perform. Accordingly, the Exchange is not the only distributor of the 
NYSE BQT data feed.
    The Exchange believes that the proposed rule change is consistent 
with Rule 603 of Regulation NMS,\17\ which provides that any national 
securities exchange that distributes information with respect to 
quotations for or transactions in an NMS stock do so on terms that are 
not unreasonably discriminatory. In adopting Regulation NMS, the 
Commission granted self-regulatory organizations (``SROs'') and broker 
dealers increased authority and flexibility to offer new and unique 
market data to consumers of such data. It was believed that this 
authority would expand the amount of data available to users and 
consumers of such data and also spur innovation and competition for the 
provision of market data.
---------------------------------------------------------------------------

    \17\ 17 CFR 242.603.
---------------------------------------------------------------------------

    The Exchange further notes that the existence of alternatives to 
the Exchange's product, including real-time consolidated data, free 
delayed consolidated data, and proprietary data from other sources, as 
well as the continued availability of the Exchange's separate data 
feeds, ensures that the Exchange is not unreasonably discriminatory 
because vendors and subscribers can elect these alternatives as their 
individual business cases warrant. Additionally, the Exchange has taken 
into consideration its affiliated relationship with NYSE Arca, NYSE 
American, NYSE National and NYSE Chicago in its design of the NYSE BQT 
data feed to assure that similarly situated competing vendors would be 
able to offer a similar product on the same terms as the Exchange, both 
from the perspective of latency and cost.
    The Exchange believes that NYSE BQT offers an alternative to the 
use of consolidated data products and proprietary data products such as 
NASDAQ Basic and NLS Plus. NASDAQ Basic, which is offered by The NASDAQ 
Stock Market, Inc. (``NASDAQ'') provides best bid and offer and last 
sale information for all U.S. exchange-listed securities (including 
NYSE and its affiliates) based on liquidity within NASDAQ, as well as 
trades reported to the FINRA/NASDAQ Trade Reporting Facility (``TRF''), 
including NASDAQ last sale, NASDAQ BBO, NASDAQ opening and closing 
prices, and other market status information.\18\ Further, NLS Plus 
provides all trade data from NASDAQ, the FINRA/NASDAQ TRF, NASDAQ BX, 
and NASDAQ PSX, as well as consolidated volume information as part of 
each trade message.\19\
---------------------------------------------------------------------------

    \18\ See NASDAQ Basic, available at http://www.nasdaqtrader.com/Trader.aspx?id=NASDAQBasic.
    \19\ See NLS Plus, available at http://www.nasdaqtrader.com/Trader.aspx?id=NLSplus.
---------------------------------------------------------------------------

    Cboe Global Markets, Inc. (``Cboe'') also offers a market data 
product that provides a unified view of the aggregated quote and trade 
updates for all the Cboe equity exchanges.\20\ The Exchange believes 
that NYSE BQT offers a competitive alternative to the two existing 
NASDAQ products and the Cboe product.
---------------------------------------------------------------------------

    \20\ See https://markets.cboe.com/us/equities/market_data_products/bats_one/. The Cboe One Premium Feed also 
includes five levels of aggregate depth information for all four 
Cboe equity exchanges.
---------------------------------------------------------------------------

    In addition, this proposal would not permit unfair discrimination 
because NYSE BQT will continue to be available to all of the Exchange's 
customers through SFTI and market data vendors on an equivalent basis. 
In addition, any customer that wished to continue to be able to 
purchase one or more of the

[[Page 63692]]

individual underlying data feeds would be able to do so.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\21\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act. The Exchange believes that the proposed rule 
change will enhance competition because it would enable the Exchange to 
include NYSE Chicago BBO and NYSE Chicago Trades as part of NYSE BQT, 
thereby enabling it to better compete with market data products offered 
by NASDAQ and Cboe.\22\ As noted above, the Exchange already offers 
NYSE BQT and this proposed rule change simply amends the content of the 
current market data product to include data elements from two 
additional data feeds from the Exchange's affiliate, NYSE Chicago. 
Although the Exchange, NYSE Arca, NYSE American, NYSE National and NYSE 
Chicago are the exclusive distributors of the ten BBO and Trades feeds 
from which certain data elements are taken to create NYSE BQT, the 
Exchange would not be the exclusive distributor of the aggregated and 
consolidated information that would compose the amended NYSE BQT data 
feed. Vendors would be able, if they chose, to create a data feed with 
the same information as NYSE BQT and distribute it to their clients on 
a level-playing field with respect to latency and cost as compared to 
the Exchange's product.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b)(8).
    \22\ See supra notes 18-20.
---------------------------------------------------------------------------

    With respect to latency, the Exchange, NYSE Arca, NYSE American, 
NYSE National and NYSE Chicago are located in the same data center in 
Mahwah, New Jersey. The system creating and supporting the NYSE BQT 
data feed would need to obtain the ten underlying data feeds from the 
five exchanges before it could aggregate and consolidate information to 
create NYSE BQT and then distribute it to end users. Likewise, a 
competing market data vendor co-located at the Exchange's Mahwah, New 
Jersey facility could perform the aggregation and consolidation 
function in the Mahwah facility and redistribute a competing product 
from that location to similarly situated customers on a level-playing 
field with respect to the speed that the Exchange could create and 
redistribute the NYSE BQT data feed.
    The Exchange believes that NYSE BQT will continue to promote 
competition among exchanges by offering an alternative to NASDAQ Basic, 
NLS Plus and Cboe One Feed.\23\ For these reasons, the Exchange 
believes that NYSE BQT will continue to promote, rather than 
unnecessarily or inappropriately burden, competition for market data 
products that are offered in the capacity as a vendor and are not core 
exchange market data products.
---------------------------------------------------------------------------

    \23\ See supra notes 18-20.
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \24\ and Rule 19b-4(f)(6) thereunder.\25\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\26\
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4(f)(6).
    \26\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to 
give the Commission written notice of the Exchange's intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the 
date of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Commission has determined to waive 
this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \27\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\28\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
waiver of the operative delay would allow the Exchange to provide an 
amended NYSE BQT market data feed that will include NYSE Chicago data 
feeds immediately upon the launch of NYSE Chicago, and will further 
allow the Exchange to compete with similar Nasdaq and Cboe market data 
products on a timely basis. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest, and designates the proposed rule change as 
operative upon filing.\29\
---------------------------------------------------------------------------

    \27\ 17 CFR 240.19b-4(f)(6).
    \28\ 17 CFR 240.19b-4(f)(6)(iii).
    \29\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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) \30\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \30\ 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 Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2019-60 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2019-60. 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 website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule

[[Page 63693]]

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 website 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. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSE-2019-60 and should be submitted on or before December 9, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24872 Filed 11-15-19; 8:45 am]
 BILLING CODE 8011-01-P


