[Federal Register: December 20, 2006 (Volume 71, Number 244)]
[Notices]
[Page 76381-76392]
[DOCID:fr20de06-134]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54936; File No. S7-24-89]

Joint Industry Plan; Notice of Filing and Effectiveness of
Amendment No. 18 to the Joint Self-Regulatory Organization Plan
Governing the Collection, Consolidation and Dissemination of Quotation
and Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privileges Basis, Submitted by the
American Stock Exchange LLC, the Boston Stock Exchange, Inc., the
Chicago Stock Exchange, Inc., the Chicago Board Options Exchange, Inc.,
the International Securities Exchange, Inc., the National Association
of Securities Dealers, Inc., the National Stock Exchange, Inc., the
Nasdaq Stock Market LLC, NYSE Arca, Inc., and the Philadelphia Stock
Exchange, Inc.

December 14, 2006.

I. Introduction and Description

    Notice is hereby given that on December 13, 2006, the operating
committee (``Operating Committee'' or ``Committee'') \1\ of the Joint
Self-Regulatory Organization Plan Governing the Collection,
Consolidation, and Dissemination of Quotation and Transaction
Information for Nasdaq-Listed Securities Traded on Exchanges on an
Unlisted Trading Privilege Basis (``Nasdaq/UTP Plan'' or ``Plan'')
filed with the Securities and Exchange Commission (``Commission'') an
amendment to the Plan pursuant to Rule 608 under the Securities
Exchange Act of 1934 (the ``Act'') \2\. This amendment represents
Amendment 18 made to the Plan and reflects the modification of the
Access Section to be consistent with Rule 610 of Regulation NMS.\3\
Amendment 18 was unanimously approved by the Committee on August 17,
2006.\4\ The Commission is publishing this notice of filing and
effectiveness to solicit comments from

interested persons on Amendment No. 18.
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    \1\ The Plan Participants (collectively, ``Participants'') are:
the American Stock Exchange LLC (``Amex''), the Boston Stock
Exchange, Inc. (``BSE''), the Chicago Stock Exchange, Inc.
(``CHX''), the Chicago Board Options Exchange, Inc. (``CBOE''), the
International Securities Exchange, Inc. (``ISE''), the National
Association of Securities Dealers, Inc. (``NASD''), the National
Stock Exchange, Inc. (``NSX''), the Nasdaq Stock Market LLC
(``Nasdaq''), NYSE Arca, Inc. (``NYSEArca''), and the Philadelphia
Stock Exchange, Inc. (``Phlx'').
    \2\ 17 CFR 242.608.
    \3\ 17 CFR 242.610.
    \4\ See letter from Bridget M. Farrell, Chairman, OTC/UTP
Operating Committee, to Nancy M. Morris, Secretary, Commission,
dated December 12, 2006.
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II. Background

    The Plan governs the collection, consolidation, and dissemination
of quotation and transaction information for the Nasdaq Global Market
and Nasdaq Capital Market securities listed on Nasdaq or traded on an
exchange pursuant to unlisted trading privileges (``UTP'').\5\ The Plan
provides for the collection from Plan Participants and the
consolidation and dissemination to vendors, subscribers, and others of
quotation and transaction information in Eligible Securities.\6\
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    \5\ Section 12 of the Act generally requires an exchange to
trade only those securities that the exchange lists, except that
Section 12(f) of the Act permits an exchange to extend UTP to any
security that is listed and registered on a national securities
exchange. Nasdaq began operating as a national securities exchange
for Nasdaq-listed securities on August 1, 2006, see Securities
Exchange Act Release No. 54241 (July 31, 2006), 71 FR 45359 (August
8, 2006).
    \6\ The Plan defines ``Eligible Securities'' as any Nasdaq
Global Market or Nasdaq Capital Market security, as defined in
NASDAQ Rule 4200.
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    The Commission originally approved the Plan on a pilot basis on
June 26, 1990.\7\ The parties did not begin trading until July 12,
1993; accordingly, the pilot period commenced on July 12, 1993. The
pilot approval of the Plan was most recently extended on December 5,
2005.\8\
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    \7\ See Securities Exchange Act Release No. 28146, 55 FR 27917
(July 6, 1990).
    \8\ See Securities Exchange Act Release No. 52886, 70 FR 74059
(December 14, 2005).
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III. Description and Purpose of the Amendment \9\
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    \9\ The complete text of the Plan, as amended by Amendment No.
18, is attached as Exhibit A.
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    Section IX of the Plan, entitled ``Market Access,'' describes the
access requirements that are applicable to the Plan Participants.
Amendment No. 18 eliminates the existing Market Access language and
replaces it with language consistent with Rule 610 of Regulation
NMS.\10\
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    \10\ See 17 CFR 242.610. However, as Amendment No. 18 states,
for Eligible Securities that are displayed by a Participant that
operates an SRO trading facility that is not an NMS Compliant
Facility, the telephone access requirement, which was included in
the Market Access section before this Amendment No. 18 became
effective, will continue to be applicable to the Participant.
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IV. Date of Effectiveness of the Amendment

    The changes set forth in Amendment No. 18 have been designated by
the Participants as involving solely technical or ministerial matters,
and thus are being put into effect upon filing with the Commission
pursuant to Rule 608(b)(3)(iii).\11\ At any time within 60 days of the
filing of any such amendment, the Commission may summarily abrogate the
amendment and require that the amendment be refiled in accordance with
paragraph (a)(1) of Rule 608 under the Act \12\ and reviewed in
accordance with paragraph (b)(2) of Rule 608 under the Act,\13\ if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or the
maintenance of fair and orderly markets, to remove impediments to, and
perfect mechanisms of, a national market system or otherwise in
furtherance of the purposes of the Act.\14\
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    \11\ 17 CFR 242.608(b)(3)(iii).
    \12\ 17 CFR 242.608(a)(1).
    \13\ 17 CFR 242.608(b)(2).
    \14\ 17 CFR 242.608(b)(3)(iii).
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V. Solicitation of Comments

    The Commission seeks general comments on Amendment No. 18.
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposal 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 e-mail to<EMAIL_ADDRESS>Please include

File Number S7-24-89 on the subject line.

Paper Comments

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

All submissions should refer to File Number S7-24-89. This file number
should be included on the subject line if e-mail 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 written statements with respect to the
proposed Plan amendment that are filed with the Commission, and all
written communications relating to the proposed Plan amendment 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 inspection and copying in the Commission's Public
Reference Room. Copies of the filing also will be available for
inspection and copying at the Office of the Secretary of the Committee,
currently located at NYSE Arca, Inc., 100 South Wacker Drive, Suite
1800, Chicago, IL 60606. 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
S7-24-89 and should be submitted on or before January 10, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
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    \15\ 17 CFR 200.30-3(a)(27).
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Exhibit A

    Amendment No. 18; Joint Self-Regulatory Organization Plan Governing
the Collection, Consolidation and Dissemination of Quotation and
Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privilege Basis
    The undersigned registered national securities association and
national securities exchanges (collectively referred to as the
``Participants''), have jointly developed and hereby enter into this
Nasdaq Unlisted Trading Privileges Plan (``Nasdaq UTP Plan'' or
``Plan'').

I. Participants

    The Participants include the following:

A. Participants

    1. American Stock Exchange LLC, 86 Trinity Place, New York, New
York 10006.
    2. Boston Stock Exchange, 100 Franklin Street, Boston,
Massachusetts 02110.
    3. Chicago Stock Exchange, 440 South LaSalle Street, Chicago,
Illinois 60605.
    4. Chicago Board Options Exchange, Inc., 400 South LaSalle Street,
26th Floor, Chicago, Illinois 60605.
    5. International Securities Exchange, Inc., 60 Broad Street, New
York, New York 10004.
    6. National Association of Securities, Dealers, Inc., 1735 K
Street, NW., Washington, DC 20006.
    7. National Stock Exchange, Inc., 440 South LaSalle Street, 26th
Floor, Chicago, Illinois 60605.
    8. NYSE Arca, Inc., 100 South Wacker Drive, Suite 1800, Chicago, IL
60606.
    9. Philadelphia Stock Exchange, 1900 Market Street, Philadelphia,
Pennsylvania 19103.

    10. The Nasdaq Stock Market LLC, 1 Liberty Plaza, 165 Broadway, New
York, NY 10006.

B. Additional Participants

    Any other national securities association or national securities
exchange, in whose market Eligible Securities become traded, may become
a Participant, provided that said organization executes a copy of this
Plan and pays its share of development costs as specified in Section
XIII.

II. Purpose of Plan

    The purpose of this Plan is to provide for the collection,
consolidation and dissemination of Quotation Information and
Transaction Reports in Eligible Securities from the Participants in a
manner consistent with the Exchange Act.
    It is expressly understood that each Participant shall be
responsible for the collection of Quotation Information and Transaction
Reports within its market and that nothing in this Plan shall be deemed
to govern or apply to the manner in which each Participant does so.

III. Definitions

    A. Current means, with respect to Transaction Reports or Quotation
Information, such Transaction Reports or Quotation Information during
the fifteen (15) minute period immediately following the initial
transmission thereof by the Processor.
    B. Eligible Security means any Nasdaq Global Market or Nasdaq
Capital Market security, as defined in NASDAQ Rule 4200. Eligible
Securities under this Nasdaq UTP Plan shall not include any security
that is defined as an ``Eligible Security'' within Section VII of the
Consolidated Tape Association Plan.
    A security shall cease to be an Eligible Security for purposes of
this Plan if: (i) The security does not substantially meet the
requirements from time to time in effect for continued listing on
Nasdaq, and thus is suspended from trading; or (ii) the security has
been suspended from trading because the issuer thereof is in
liquidation, bankruptcy or other similar type proceedings. The
determination as to whether a security substantially meets the criteria
of the definition of Eligible Security shall be made by the exchange on
which such security is listed provided, however, that if such security
is listed on more than one exchange, then such determination shall be
made by the exchange on which, the greatest number of the transactions
in such security were effected during the previous twelve-month period.
    C. Commission and SEC shall mean the U.S. Securities and Exchange
Commission.
    D. Exchange Act means the Securities Exchange Act of 1934.
    E. Market shall mean (i) When used with respect to Quotation
Information, the NASD in the case of an NASD Participant, or the
Participant on whose floor or through whose facilities the quotation
was disseminated; and (ii) when used with respect to Transaction
Reports, the Participant through whose facilities the transaction took
place or is reported, or the Participant to whose facilities the order
was sent for execution.
    F. NASD means the National Association of Securities Dealers Inc.
    G. NASD Participant means an NASD member that is registered as a
market maker or an electronic communications network or otherwise
utilizes the facilities of the NASD pursuant to applicable NASD rules.
    H. Transaction Reporting System means the System provided for in
the Transaction Reporting Plan filed with and approved by the
Commission pursuant to SEC Rule11Aa3-1, subsequently re-designated as
Rule 601 of Regulation NMS, governing the reporting of transactions in
Nasdaq securities.
    I. UTP Quote Data Feed means the service that provides Subscribers
with the National Best Bid and Offer quotations, size and market center
identifier, as well as the Best Bid and Offer quotations, size and
market center identifier from each individual Participant in Eligible
Securities and, in the case of NASD, the NASD Participant(s) that
constitute NASD's Best Bid and Offer quotations.
    J. Nasdaq System means the automated quotation system operated by
Nasdaq.
    K. UTP Trade Data Feed means the service that provides Vendors and
Subscribers with Transaction Reports.
    L. Nasdaq Security or Nasdaq-listed Security means any security
listed on the Nasdaq Global Market or Nasdaq Capital Market.
    M. News Service means a person that receives Transaction Reports or
Quotation Information provided by the Systems or provided by a Vendor,
on a Current basis, in connection with such person's business of
furnishing such information to newspapers, radio and television
stations and other news media, for publication at least fifteen (15)
minutes following the time when the information first has been
published by the Processor.
    N. OTC Montage Data Feed means the data stream of information that
provides Vendors and Subscribers with quotations and sizes from each
NASD Participant.
    O. Participant means a registered national securities exchange or
national securities association that is a signatory to this Plan.
    P. Plan means this Nasdaq UTP Plan, as from time to time amended
according to its provisions, governing the collection, consolidation
and dissemination of Quotation Information and Transaction Reports in
Eligible Securities.
    Q. Processor means the entity selected by the Participants to
perform the processing functions set forth in the Plan.
    R. Quotation Information means all bids, offers, displayed
quotation sizes, the market center identifiers and, in the case of
NASD, the NASD Participant that entered the quotation, withdrawals and
other information pertaining to quotations in Eligible Securities
required to be collected and made available to the Processor pursuant
to this Plan.
    S. Regulatory Halt means a trade suspension or halt called for the
purpose of dissemination of material news, as described at Section X
hereof or that is called for where there are regulatory problems
relating to an Eligible Security that should be clarified before
trading therein is permitted to continue, including a trading halt for
extraordinary market activity due to system misuse or malfunction under
Section X.E.1. of the Plan (``Extraordinary Market Regulatory Halt'').
    T. Subscriber means a person that receives Current Quotation
Information or Transaction Reports provided by the Processor or
provided by a Vendor, for its own use or for distribution on a non-
Current basis, other than in connection with its activities as a
Vendor.
    U. Transaction Reports means reports required to be collected and
made available pursuant to this Plan containing the stock symbol,
price, and size of the transaction executed, the Market in which the
transaction was executed, and related information, including a buy/
sell/cross indicator and trade modifiers, reflecting completed
transactions in Eligible Securities.
    V. Upon Effectiveness of the Plan means July 12, 1993, the date on
which the Participants commenced publication of Quotation Information
and Transaction Reports on Eligible Securities as contemplated by this
Plan.
    W. Vendor means a person that receives Current Quotation
Information or Transaction Reports provided by the Processor or
provided by a Vendor, in

connection with such person's business of distributing, publishing, or
otherwise furnishing such information on a Current basis to
Subscribers, News Services or other Vendors.

IV. Administration of Plan

A. Operating Committee: Composition

    The Plan shall be administered by the Participants through an
operating committee (``Operating Committee''), which shall be composed
of one representative designated by each Participant. Each Participant
may designate an alternate representative or representatives who shall
be authorized to act on behalf of the Participant in the absence of the
designated representative. Within the areas of its responsibilities and
authority, decisions made or actions taken by the Operating Committee,
directly or by duly delegated individuals, committees as may be
established from time to time, or others, shall be binding upon each
Participant, without prejudice to the rights of any Participant to seek
redress from the SEC pursuant to Rule 608 of Regulation NMS under the
Exchange Act or in any other appropriate forum.
    An Electronic Communications Network, Alternative Trading System,
Broker-Dealer or other securities organization (``Organization'') which
is not a Participant, but has an actively pending Form 1 Application on
file with the Commission to become a national securities exchange, will
be permitted to appoint one representative and one alternate
representative to attend regularly scheduled Operating Committee
meetings in the capacity of an observer/advisor. If the Organization's
Form 1 petition is withdrawn, returned, or is otherwise not actively
pending with the Commission for any reason, then the Organization will
no longer be eligible to be represented in the Operating Committee
meetings. The Operating Committee shall have the discretion, in limited
instances, to deviate from this policy if, as indicated by majority
vote, the Operating Committee agrees that circumstances so warrant.
    Nothing in this section or elsewhere within the Plan shall
authorize any person or organization other than Participants and their
representatives to participate on the Operating Committee in any manner
other than as an advisor or observer, or in any Executive Session of
the Operating Committee.

B. Operating Committee: Authority

    The Operating Committee shall be responsible for:
    1. Overseeing the consolidation of Quotation Information and
Transaction Reports in Eligible Securities from the Participants for
dissemination to Vendors, Subscribers, News Services and others in
accordance with the provisions of the Plan;
    2. Periodically evaluating the Processor;
    3. Setting the level of fees to be paid by Vendors, Subscribers,
News Services or others for services relating to Quotation Information
or Transaction Reports in Eligible Securities, and taking action in
respect thereto in accordance with the provisions of the Plan;
    4. Determining matters involving the interpretation of the
provisions of the Plan;
    5. Determining matters relating to the Plan's provisions for cost
allocation and revenue-sharing; and
    6. Carrying out such other specific responsibilities as provided
under the Plan.

C. Operating Committee: Voting

    Each Participant shall have one vote on all matters considered by
the Operating Committee.
    1. The affirmative and unanimous vote of all Participants entitled
to vote shall be necessary to constitute the action of the Operating
Committee with respect to:
    a. Amendments to the Plan;
    b. Amendments to contracts between the Processor and Vendors,
Subscribers, News Services and others receiving Quotation Information
and Transaction Reports in Eligible Securities;
    c. Replacement of the Processor, except for termination for cause,
which shall be governed by Section V(B) hereof;
    d. Reductions in existing fees relating to Quotation Information
and Transaction Reports in Eligible Securities; and
    e. Except as provided under Section IV(C)(3) hereof, requests for
system changes; and
    f. all other matters not specifically addressed by the Plan.
    2. With respect to the establishment of new fees or increases in
existing fees relating to Quotation Information and Transaction Reports
in Eligible Securities, the affirmative vote of two-thirds of the
Participants entitled to vote shall be necessary to constitute the
action of the Operating Committee.
    3. The affirmative vote of a majority of the Participants entitled
to vote shall be necessary to constitute the action of the Operating
Committee with respect to:
    a. Requests for system changes reasonably related to the function
of the Processor as defined under the Plan. All other requests for
system changes shall be governed by Section IV(C)(1)(e) hereof.
    b. Interpretive matters and decisions of the Operating Committee
arising under, or specifically required to be taken by, the provisions
of the Plan as written;
    c. Interpretive matters arising under Rules 601 and 602 of
Regulation NMS; and
    d. Denials of access (other than for breach of contract, which
shall be handled by the Processor),
    4. It is expressly agreed and understood that neither this Plan nor
the Operating Committee shall have authority in any respect over any
Participant's proprietary systems. Nor shall the Plan or the Operating
Committee have any authority over the collection and dissemination of
quotation or transaction information in Eligible Securities in any
Participant's marketplace, or, in the case of the NASD, from NASD
Participants.

D. Operating Committee: Meetings

    Regular meetings of the Operating Committee may be attended by each
Participant's designated representative and/or its alternate
representative(s), and may be attended by one or more other
representatives of the parties. Meetings shall be held at such times
and locations as shall from time to time be determined by the Operating
Committee.
    Quorum: Any action requiring a vote only can be taken at a meeting
in which a quorum of all Participants is present. For actions requiring
a simple majority vote of all Participants, a quorum of greater than
50% of all Participants entitled to vote must be present at the meeting
before such a vote may be taken. For actions requiring a \2/3\ majority
vote of all Participants, a quorum of at least \2/3\ of all
Participants entitled to vote must be present at the meeting before
such a vote may be taken. For actions requiring a unanimous vote of all
Participants, a quorum of all Participants entitled to vote must be
present at the meeting before such a vote may be taken.
    A Participant is considered present at a meeting only if a
Participant's designated representative or alternate representative(s)
is either in physical attendance at the meeting or is participating by
conference telephone, or other acceptable electronic means.
    Any action sought to be resolved at a meeting must be sent to each
Participant entitled to vote on such matter at least one week prior to
the meeting via electronic mail, regular U.S. or private

mail, or facsimile transmission, provided however that this requirement
may be waived by the vote of the percentage of the Committee required
to vote on any particular matter, under Section C above.
    Any action may be taken without a meeting if a consent in writing,
setting forth the action so taken, is sent to and signed by all
Participant representatives entitled to vote with respect to the
subject matter thereof. All the approvals evidencing the consent shall
be delivered to the Chairman of the Operating Committee to be filed in
the Operating Committee records. The action taken shall be effective
when the minimum number of Participants entitled to vote have approved
the action, unless the consent specifies a different effective date.
    The Chairman of the Operating Committee shall be elected annually
by and from among the Participants by a majority vote of all
Participants entitled to vote. The Chairman shall designate a person to
act as Secretary to record the minutes of each meeting. The location of
meetings shall be rotated among the locations of the principal offices
of the Participants, or such other locations as may from time to time
be determined by the Operating Committee. Meetings may be held by
conference telephone and action may be taken without a meeting if the
representatives of all Participants entitled to vote consent thereto in
writing or other means the Operating Committee deems acceptable.

E. Advisory Committee

    (a) Formation. Notwithstanding any other provision of this Plan, an
Advisory Committee to the Plan shall be formed and shall function in
accordance with the provisions set forth in this section.
    (b) Composition. Members of the Advisory Committee shall be
selected for two-year terms as follows:
    (1) Operating Committee Selections. By affirmative vote of a
majority of the Participants entitled to vote, the Operating Committee
shall select at least one representative from each of the following
categories to be members of the Advisory Committee: (i) A broker-dealer
with a substantial retail investor customer base, (ii) a broker-dealer
with a substantial institutional investor customer base, (iii) an
alternative trade system, (iv) a data vendor, and (v) an investor.
    (2) Participant Selections. Each Participant shall have the right
to select one member of the Advisory Committee. A Participant shall not
select any person employed by or affiliated with any participant or its
affiliates or facilities.
    (c) Function. Members of the Advisory Committee shall have the
right to submit their views to the Operating Committee on Plan matters,
prior to a decision by the Operating Committee on such matters. Such
matters shall include, but not be limited to, any new or modified
product, fee, contract, or pilot program that is offered or used
pursuant to the Plan.
    (d) Meetings and Information. Members of the Advisory Committee
shall have the right to attend all meetings of the Operating Committee
and to receive any information concerning Plan matters that is
distributed to the Operating Committee; provided, however, that the
Operating Committee may meet in executive session if, by affirmative
vote of a majority of the Participants entitled to vote, the Operating
Committee determines that an item of Plan business requires
confidential treatment.

V. Selection and Evaluation of the Processor

A. Generally

    The Processor's performance of its functions under the Plan shall
be subject to review by the Operating Committee at least every two
years, or from time to time upon the request of any two Participants
but not more frequently than once each year. Based on this review, the
Operating Committee may choose to make a recommendation to the
Participants with respect to the continuing operation of the Processor.
The Operating Committee shall notify the SEC of any recommendations the
Operating Committee shall make pursuant to the Operating Committee's
review of the Processor and shall supply the Commission with a copy of
any reports that may be prepared in connection therewith.

B. Termination of the Processor for Cause

    If the Operating Committee determines that the Processor has failed
to perform its functions in a reasonably acceptable manner in
accordance with the provisions of the Plan or that its reimbursable
expenses have become excessive and are not justified on a cost basis,
the Processor may be terminated at such time as may be determined by a
majority vote of the Operating Committee.

C. Factors To Be Considered in Termination for Cause

    Among the factors to be considered in evaluating whether the
Processor has performed its functions in a reasonably acceptable manner
in accordance with the provisions of the Plan shall be the
reasonableness of its response to requests from Participants for
technological changes or enhancements pursuant to Section IV(C)(3)
hereof. The reasonableness of the Processor's response to such requests
shall be evaluated by the Operating Committee in terms of the cost to
the Processor of purchasing the same service from a third party and
integrating such service into the Processor's existing systems and
operations as well as the extent to which the requested change would
adversely impact the then current technical (as opposed to business or
competitive) operations of the Processor.

D. Processor's Right to Appeal Termination for Cause

    The Processor shall have the right to appeal to the SEC a
determination of the Operating Committee terminating the Processor for
cause and no action shall become final until the SEC has ruled on the
matter and all legal appeals of right therefrom have been exhausted.

E. Process for Selecting New Processor

    At any time following effectiveness of the Plan, but no later than
upon the termination of the Processor, whether for cause pursuant to
Section IV(C)(1)(c) or V(B) of the Plan or upon the Processor's
resignation, the Operating Committee shall establish procedures for
selecting a new Processor (the ``Selection Procedures''). The Operating
Committee, as part of the process of establishing Selection Procedures,
may solicit and consider the timely comment of any entity affected by
the operation of this Plan. The Selection Procedures shall be
established by a two-thirds majority vote of the Plan Participants, and
shall set forth, at a minimum:
    1. The entity that will:
    (a) Draft the Operating Committee's request for proposal for bids
on a new processor;
    (b) Assist the Operating Committee in evaluating bids for the new
processor; and
    (c) Otherwise provide assistance and guidance to the Operating
Committee in the selection process.
    2. The minimum technical and operational requirements to be
fulfilled by the Processor;
    3. The criteria to be considered in selecting the Processor; and
    4. The entities (other than Plan Participants) that are eligible to
comment on the selection of the Processor.
    Nothing in this provision shall be interpreted as limiting
Participants'

rights under Section IV or Section V of the Plan or other Commission
order.

VI. Functions of the Processor

A. Generally

    The Processor shall collect from the Participants, and consolidate
and disseminate to Vendors, Subscribers and News Services, Quotation
Information and Transaction Reports in Eligible Securities in a manner
designed to assure the prompt, accurate and reliable collection,
processing and dissemination of information with respect to all
Eligible Securities in a fair and non-discriminatory manner. The
Processor shall commence operations upon the Processor's notification
to the Participants that it is ready and able to commence such
operations.

B. Collection and Consolidation of Information

    For as long as Nasdaq is the Processor, the Processor shall be
capable of receiving Quotation Information and Transaction Reports in
Eligible Securities from Participants by the Plan-approved, Processor
sponsored interface, and shall consolidate and disseminate such
information via the UTP Quote Data Feed, the UTP Trade Data Feed, and
the OTC Montage Data Feed to Vendors, Subscribers and News Services.
For so long as Nasdaq is not registered as a national securities
exchange and for so long as Nasdaq is the Processor, the Processor
shall also collect, consolidate, and disseminate the quotation
information contained in NQDS. For so long as Nasdaq is not registered
as a national securities exchange and after Nasdaq is no longer the
Processor for other SIP datafeeds, either Nasdaq or a third party will
act as the Processor to collect, consolidate, and disseminate the
quotation information contained in NQDS.

C. Dissemination of Information

    The Processor shall disseminate consolidated Quotation Information
and Transaction Reports in Eligible Securities via the UTP Quote Data
Feed, the UTP Trade Data Feed, and the OTC Montage Data Feed to
authorized Vendors, Subscribers and News Services in a fair and non-
discriminatory manner. The Processor shall specifically be permitted to
enter into agreements with Vendors, Subscribers and News Services for
the dissemination of quotation or transaction information on Eligible
Securities to foreign (non-U.S.) marketplaces or in foreign countries.
    The Processor shall, in such instance, disseminate consolidated
quotation or transaction information on Eligible Securities from all
Participants.
    Nothing herein shall be construed so as to prohibit or restrict in
any way the right of any Participant to distribute quotation,
transaction or other information with respect to Eligible Securities
quoted on or traded in its marketplace to a marketplace outside the
United States solely for the purpose of supporting an intermarket
linkage, or to distribute information within its own marketplace
concerning Eligible Securities in accordance with its own format. If a
Participant requests, the Processor shall make information about
Eligible Securities in the Participant's marketplace available to a
foreign marketplace on behalf of the requesting Participant, in which
event the cost shall be borne by that Participant.
1. Best Bid and Offer
    The Processor shall disseminate on the UTP Quote Data Feed the best
bid and offer information supplied by each Participant, including the
NASD Participant(s) that constitute NASD's single Best Bid and Offer
quotations, and shall also calculate and disseminate on the UTP Quote
Data Feed a national best bid and asked quotation with size based upon
Quotation Information for Eligible Securities received from
Participants. The Processor shall not calculate the best bid and offer
for any individual Participant, including the NASD.
    The Participant responsible for each side of the best bid and asked
quotation making up the national best bid and offer shall be identified
by an appropriate symbol. If the quotations of more than one
Participant shall be the same best price, the largest displayed size
among those shall be deemed to be the best. If the quotations of more
than one Participant are the same best price and best displayed size,
the earliest among those measured by the time reported shall be deemed
to be the best. A reduction of only bid size and/or ask size will not
change the time priority of a Participant's quote for the purposes of
determining time reported, whereas an increase of the bid size and/or
ask size will result in a new time reported. The consolidated size
shall be the size of the Participant that is at the best.
    If the best bid/best offer results in a locked or crossed
quotation, the Processor shall forward that locked or crossed quote on
the appropriate output lines (i.e., a crossed quote of bid 12, ask
11.87 shall be disseminated). The Processor shall normally cease the
calculation of the best bid/best offer after 6:30 p.m., Eastern Time.
2. Quotation Data Streams
    The Processor shall disseminate on the UTP Quote Data Feed a data
stream of all Quotation Information regarding Eligible Securities
received from Participants. Each quotation shall be designated with a
symbol identifying the Participant from which the quotation emanates
and, in the case of NASD, the NASD Participant(s) that constitute
NASD's Best Bid and Offer quotations. In addition, the Processor shall
separately distribute on the OTC Montage Data Feed the Quotation
Information regarding Eligible Securities from all NASD Participants
from which quotations emanate. The Processor shall separately
distribute NQDS for so long as Nasdaq is not registered as a national
securities exchange and for so long as Nasdaq is the Processor. For so
long as Nasdaq is not registered as a national securities exchange and
after Nasdaq is no longer the Processor for other SIP datafeeds, either
Nasdaq or a third party will act as the Processor to collect,
consolidate, and disseminate the quotation information contained in
NQDS.
3. Transaction Reports
    The Processor shall disseminate on the UTP Trade Data Feed a data
stream of all Transaction Reports in Eligible Securities received from
Participants. Each transaction report shall be designated with a symbol
identifying the Participant in whose Market the transaction took place.

D. Closing Reports

    At the conclusion of each trading day, the Processor shall
disseminate a ``closing price'' for each Eligible Security. Such
``closing price'' shall be the price of the last Transaction Report in
such security received prior to dissemination. The Processor shall also
tabulate and disseminate at the conclusion of each trading day the
aggregate volume reflected by all Transaction Reports in Eligible
Securities reported by the Participants.

E. Statistics

    The Processor shall maintain quarterly, semi-annual and annual
transaction and volume statistical counts. The Processor shall, at cost
to the user Participant(s), make such statistics available in a form
agreed upon by the Operating Committee, such as a secure Web site.

VII. Administrative Functions of the Processor

    Subject to the general direction of the Operating Committee, the
Processor shall be responsible for carrying out all

administrative functions necessary to the operation and maintenance of
the consolidated information collection and dissemination system
provided for in this Plan, including, but not limited to, record
keeping, billing, contract administration, and the preparation of
financial reports.

VIII. Transmission of Information to Processor by Participants

A. Quotation Information

    Each Participant shall, during the time it is open for trading be
responsible promptly to collect and transmit to the Processor accurate
Quotation Information in Eligible Securities through any means
prescribed herein.
    Quotation Information shall include:
    1. Identification of the Eligible Security, using the Nasdaq
Symbol;
    2. the price bid and offered, together with size;
    3. the NASD Participant along with the NASD Participant's market
participant identification or Participant from which the quotation
emanates;
    4. identification of quotations that are not firm; and
    5. through appropriate codes and messages, withdrawals and similar
matters.

B. Transaction Reports

    Each Participant shall, during the time it is open for trading, be
responsible promptly to collect and transmit to the Processor
Transaction Reports in Eligible Securities executed in its Market by
means prescribed herein. With respect to orders sent by one Participant
Market to another Participant Market for execution, each Participant
shall adopt procedures governing the reporting of transactions in
Eligible Securities specifying that the transaction will be reported by
the Participant whose member sold the security. This provision shall
apply only to transactions between Plan Participants.
    Transaction Reports shall include:
    1. Identification of the Eligible Security, using the Nasdaq
Symbol;
    2. the number of shares in the transaction;
    3. the price at which the shares were purchased or sold;
    4. the buy/sell/cross indicator;
    5. the Market of execution; and,
    6. through appropriate codes and messages, late or out-of-sequence
trades, corrections and similar matters.
    All such Transaction Reports shall be transmitted to the Processor
within 90 seconds after the time of execution of the transaction.
Transaction Reports transmitted beyond the 90-second period shall be
designated as ``late'' by the appropriate code or message.
    The following types of transactions are not required to be reported
to the Processor pursuant to the Plan:
    1. Transactions that are part of a primary distribution by an
issuer or of a registered secondary distribution or of an unregistered
secondary distribution;
    2. transactions made in reliance on Section 4(2) of the Securities
Act of 1933;
    3. transactions in which the buyer and the seller have agreed to
trade at a price unrelated to the Current Market for the security,
e.g., to enable the seller to make a gift;
    4. odd-lot transactions;
    5. the acquisition of securities by a broker-dealer as principal in
anticipation of making an immediate exchange distribution or exchange
offering on an exchange;
    6. purchases of securities pursuant to a tender offer; and
    7. purchases or sales of securities effected upon the exercise of
an option pursuant to the terms thereof or the exercise of any other
right to acquire securities at a pre-established consideration
unrelated to the Current Market.

C. Symbols for Market Identification for Quotation Information and
Transaction Reports

    The following symbols shall be used to denote the marketplaces:

------------------------------------------------------------------------
               Code                             Participant
------------------------------------------------------------------------
A................................  American Stock Exchange LLC
B................................  Boston Stock Exchange, Inc.
W................................  Chicago Board Options Exchange, Inc.
M................................  Chicago Stock Exchange, Inc.
I................................  International Securities Exchange,
                                    Inc.
D................................  NASD
Q................................  Nasdaq Stock Market LLC
C................................  National Stock Exchange, Inc.
P................................  NYSE Arca, Inc.
X................................  Philadelphia Stock Exchange, Inc.
------------------------------------------------------------------------

    D. Whenever a Participant determines that a level of trading
activity or other unusual market conditions prevent it from collecting
and transmitting Quotation Information or Transaction Reports to the
Processor, or where a trading halt or suspension in an Eligible
Security is in effect in its Market, the Participant shall promptly
notify the Processor of such condition or event and shall resume
collecting and transmitting Quotation Information and Transaction
Reports to it as soon as the condition or event is terminated. In the
event of a system malfunction resulting in the inability of a
Participant or its members to transmit Quotation Information or
Transaction Reports to the Processor, the Participant shall promptly
notify the Processor of such event or condition. Upon receiving such
notification, the Processor shall take appropriate action, including
either closing the quotation or purging the system of the affected
quotations.

IX. Market Access

    Consistent with the state of electronic technology and pursuant to
the requirements of Rule 610 of Regulation NMS, a Participant that
operates an SRO trading facility shall provide for fair and efficient
order execution access to quotations in each Eligible Security
displayed through its trading facility. In the case of a Participant
that operates an SRO display-only quotation facility, trading centers
posting quotations through such SRO display-only quotation facility
must provide for fair and efficient order execution access to
quotations in each Eligible Security displayed through the SRO display-
only quotation facility. A Participant that operates an SRO trading
facility may elect to allow such access to its quotations through the
utilization of private electronic linkages between the Participant and
other trading centers. In the case of a Participant that operates an
SRO display-only quotation facility, trading centers posting quotations
through such SRO display-only quotation facility may elect to allow
such access to their quotations through the utilization of private
electronic linkages between the trading center and SRO trading
facilities of Plan Participants and/or other trading centers.
    In accordance with Regulation NMS, a Participant shall not impose,
or permit to be imposed, any fee or fees for the execution of an order
against a protected quotation of the Participant or of a trading center
posting quotes through a Participant's SRO display-only quotation
facility in an Eligible Security or against any other quotation
displayed by the Participant in an Eligible Security that is the
Participant's displayed best bid or offer for that Eligible Security,
where such fee or fees exceed the limits provided for in Rule 610(c) of
Regulation NMS. As required under Regulation NMS, the terms of access
to a Participant's quotations or of a trading center posting quotes
through a Participant's SRO display-only quotation facility in an
Eligible Security may not be unfairly discriminatory so as to prevent
or inhibit any person from obtaining efficient access to such displayed
quotations through a member

of the Participant or a subscriber of a trading center.
    If quotations in an Eligible Security are displayed by a
Participant that operates an SRO trading facility (or are displayed by
a trading center that posts quotations through an SRO display-only
quotation facility) that complies with the fair and efficient access
requirements of Regulation NMS (an ``NMS Compliant Facility''),
including prior to the compliance date of such access requirements,
that Participant (or trading center posting quotes through an SRO
display-only quotation facility) shall no longer be required to permit
each NASD market participant to have direct telephone access to the
specialist, trading post, market maker and supervisory center in such
Eligible Security that trades on that NMS Compliant Facility. For
quotations in Eligible Securities that are displayed by a Participant
that operates an SRO trading facility that is not an NMS Compliant
Facility, such telephone access requirement will continue to be
applicable to the Participant.

X. Regulatory Halts

    A. Whenever, in the exercise of its regulatory functions, the
Listing Market for an Eligible Security determines that a Regulatory
Halt is appropriate pursuant to Section III.S, the Listing Market will
notify all other Participants pursuant to Section X.E and all other
Participants shall also halt or suspend trading in that security until
notification that the halt or suspension is no longer in effect. The
Listing Market shall immediately notify the Processor of such
Regulatory Halt as well as notice of the lifting of a Regulatory Halt.
The Processor, in turn, shall disseminate to Participants notice of the
Regulatory Halt (as well as notice of the lifting of a regulatory halt)
through the UTP Quote Data Feed. This notice shall serve as official
notice of a regulatory halt for purposes of the Plan only, and shall
not substitute or otherwise supplant notice that a Participant may
recognize or require under its own rules. Nothing in this provision
shall be read so as to supplant or be inconsistent with a Participant's
own rules on trade halts, which rules apply to the Participant's own
members. The Processor will reject any quotation information or
transaction reports received from any Participant on an Eligible
Security that has a Regulatory Halt in effect.
    B. Whenever the Listing Market determines that an adequate
publication or dissemination of information has occurred so as to
permit the termination of the Regulatory Halt then in effect, the
Listing Market shall promptly notify the Processor and each of the
other Participants that conducts trading in such security pursuant to
Section X.F. Except in extraordinary circumstances, adequate
publication or dissemination shall be presumed by the Listing Market to
have occurred upon the expiration of one hour after initial publication
in a national news dissemination service of the information that gave
rise to the Regulatory Halt.
    C. Except in the case of a Regulatory Halt, the Processor shall not
cease the dissemination of quotation or transaction information
regarding any Eligible Security. In particular, it shall not cease
dissemination of such information because of a delayed opening,
imbalance of orders or other market-related problems involving such
security. During a regulatory halt, the Processor shall collect and
disseminate Transaction Information but shall cease collection and
dissemination of all Quotation Information.
    D. For purposes of this Section X, ``Listing Market'' for an
Eligible Security means the Participant's Market on which the Eligible
Security is listed. If an Eligible Security is dually listed, Listing
Market shall mean the Participant's Market on which the Eligible
Security is listed that also has the highest number of the average of
the reported transactions and reported share volume for the preceding
12-month period. The Listing Market for dually-listed Eligible
Securities shall be determined at the beginning of each calendar
quarter.
    E. For purposes of coordinating trading halts in Eligible
Securities, all Participants are required to utilize the national
market system communication media (``Hoot-n-Holler'') to verbally
provide real-time information to all Participants. Each Participant
shall be required to continuously monitor the Hoot-n-Holler system
during market hours, and the failure of a Participant to do so at any
time shall not prevent the Listing Market from initiating a Regulatory
Halt in accordance with the procedures specified herein.
    1. The following procedures shall be followed when one or more
Participants experiences extraordinary market activity in an Eligible
Security that is believed to be caused by the misuse or malfunction of
systems operated by or linked to one or more Participants.
    a. The Participant(s) experiencing the extraordinary market
activity or any Participant that becomes aware of extraordinary market
activity will immediately use best efforts to notify all Participants
of the extraordinary market activity utilizing the Hoot-n-Holler
system.
    b. The Listing Market will use best efforts to determine whether
there is material news regarding the Eligible Security. If the Listing
Market determines that there is non-disclosed material news, it will
immediately call a Regulatory Halt pursuant to Section X.E.2.
    c. Each Participant(s) will use best efforts to determine whether
one of its systems, or the system of a direct or indirect participant
in its market, is responsible for the extraordinary market activity.
    d. If a Participant determines the potential source of
extraordinary market activity pursuant to Section X.1.c., the
Participant will use best efforts to determine whether removing the
quotations of one or more direct or indirect market participants or
barring one or more direct or indirect market participants from
entering orders will resolve the extraordinary market activity.
Accordingly, the Participant will prevent the quotations from one or
more direct or indirect market participants in the affected Eligible
Securities from being transmitted to the Processor.
    e. If the procedures described in Section X.E.1.a.-d. do not
rectify the situation, the Participant(s) experiencing extraordinary
market activity will cease transmitting all quotations in the affected
Eligible Securities to the Processor.
    f. If the procedures described in Section X.E.1.a-e do not rectify
the situation within five minutes of the first notification through the
Hoot-n-Holler system, or if Participants agree to call a halt sooner
through unanimous approval among those Participants actively trading
impacted Eligible Securities, the Listing Market may determine based on
the facts and circumstances, including available input from
Participants, to declare an Extraordinary Market Regulatory Halt in the
affected Eligible Securities. Simultaneously with the notification of
the Processor to suspend the dissemination of quotations across all
Participants, the Listing Market must verbally notify all Participants
of the trading halt utilizing the Hoot-n-Holler system.
    g. Absent any evidence of system misuse or malfunction, best
efforts will be used to ensure that trading is not halted across all
Participants.
    2. If the Listing Market declares a Regulatory Halt in
circumstances other than pursuant to Section X.E.1.f., the Listing
Market must, simultaneously with the notification of the Processor to
suspend the dissemination of quotations across all Participants,
verbally notify

all Participants of the trading halt utilizing the Hoot-n-Holler
system.
    F. If the Listing Market declares a Regulatory Halt, trading will
resume according to the following procedures:
    1. Within 15 minutes of the declaration of the halt, all
Participants will make best efforts to indicate via the Hoot-n-Holler
their intentions with respect to canceling or modifying transactions.
    2. All Participants will disseminate to their members information
regarding the canceled or modified transactions as promptly as
possible, and in any event prior to the resumption of trading.
    3. After all Participants have met the requirements of Section
X.F.1-2, the Listing Market will notify the Participants utilizing the
Hoot-n-Holler and the Processor when trading may resume. Upon receiving
this information, Participants may commence trading pursuant to Section
X.A.

XI. Hours of Operation

    A. Quotation Information may be entered by Participants as to all
Eligible Securities in which they make a market between 9:30 a.m. and 4
p.m. Eastern Time (``ET'') on all days the Processor is in operation.
Transaction Reports shall be entered between 9:30 a.m. and 4:01:30 p.m.
ET by Participants as to all Eligible Securities in which they execute
transactions between 9:30 a.m. and 4 p.m. ET on all days the Processor
is in operation.
    B. Participants that execute transactions in Eligible Securities
outside the hours of 9:30 a.m. ET and 4 p.m., ET, shall be required to
report such transactions as follows:
    (i) Transactions in Eligible Securities executed between 4 a.m. and
9:29:59 a.m. ET and between 4:00:01 and 8 p.m. ET, shall be designated
as ``.T'' trades to denote their execution outside normal market hours;
    (ii) transactions in Eligible Securities executed after 8 p.m. and
before 12 a.m. (midnight) shall be reported to the Processor between
the hours of 4 a.m. and 8 p.m. ET on the next business day (T+1), and
shall be designated ``as/of'' trades to denote their execution on a
prior day, and be accompanied by the time of execution;
    (iii) transactions in Eligible Securities executed between 12 a.m.
(midnight) and 4 a.m. ET shall be transmitted to the Processor between
4 a.m. and 9:30 a.m. ET, on trade date, shall be designated as ``.T''
trades to denote their execution outside normal market hours, and shall
be accompanied by the time of execution;
    (iv) transactions reported pursuant to this provision of the Plan
shall be included in the calculation of total trade volume for purposes
of determining net distributable operating revenue, but shall not be
included in the calculation of the daily high, low, or last sale.
    C. Late trades shall be reported in accordance with the rules of
the Participant in whose Market the transaction occurred and can be
reported between the hours of 4 a.m. and 8 p.m.
    D. The Processor shall collect, process and disseminate Quotation
Information in Eligible Securities at other times between 4 a.m. and
9:30 a.m. ET, and after 4 p.m. ET, when any Participant or Nasdaq
market participant is open for trading, until 8 p.m. ET (the
``Additional Period''); provided, however, that the best bid and offer
quotation will not be disseminated before 4 a.m. or after 8 p.m. ET.
Participants that enter Quotation Information or submit Transaction
Reports to the Processor during the Additional Period shall do so for
all Eligible Securities in which they enter quotations.

XII. Undertaking by All Participants

    The filing with and approval by the Commission of this Plan shall
obligate each Participant to enforce compliance by its members with the
provisions thereof. In all other respects not inconsistent herewith,
the rules of each Participant shall apply to the actions of its members
in effecting, reporting, honoring and settling transactions executed
through its facilities, and the entry, maintenance and firmness of
quotations to ensure that such occurs in a manner consistent with just
and equitable principles of trade.

XIII. Financial Matters

A. Development Costs

    Any Participant becoming a signatory to this Plan after June 26,
1990, shall, as a condition to becoming a Participant, pay to the other
Plan Participants a proportionate share of the aggregate development
costs previously paid by Plan Participants to the Processor, which
aggregate development costs totaled $439,530, with the result that each
Participant's share of all development costs is the same.
    Each Participant shall bear the cost of implementation of any
technical enhancements to the Nasdaq system made at its request and
solely for its use, subject to reapportionment should any other
Participant subsequently make use of the enhancement, or the
development thereof.

B. Cost Allocation and Revenue Sharing

    The provisions governing cost allocation and revenue sharing among
the Participants are set forth in Exhibit 1 to the Plan.

C. Maintenance of Financial Records

    The Processor shall maintain records of revenues generated and
development and operating expenditures incurred in connection with the
Plan. In addition, the Processor shall provide the Participants with:
(a) A statement of financial and operational condition on a quarterly
basis; and (b) an audited statement of financial and operational
condition on an annual basis.

XIV. Indemnification

    Each Participant agrees, severally and not jointly, to indemnify
and hold harmless each other Participant, Nasdaq, and each of its
directors, officers, employees and agents (including the Operating
Committee and its employees and agents) from and against any and all
loss, liability, claim, damage and expense whatsoever incurred or
threatened against such persons as a result of any Transaction Reports,
Quotation Information or other information reported to the Processor by
such Participant and disseminated by the Processor to Vendors. This
indemnity agreement shall be in addition to any liability that the
indemnifying Participant may otherwise have. Promptly after receipt by
an indemnified Participant of notice of the commencement of any action,
such indemnified Participant will, if a claim in respect thereof is to
be made against an indemnifying Participant, notify the indemnifying
Participant in writing of the commencement thereof; but the omission to
so notify the indemnifying Participant will not relieve the
indemnifying Participant from any liability which it may have to any
indemnified Participant. In case any such action is brought against any
indemnified Participant and it promptly notifies an indemnifying
Participant of the commencement thereof, the indemnifying Participant
will be entitled to participate in, and, to the extent that it may
wish, jointly with any other indemnifying Participant similarly
notified, to assume and control the defense thereof with counsel chosen
by it. After notice from the indemnifying Participant of its election
to assume the defense thereof, the indemnifying Participant will not be
liable to such indemnified Participant for any legal or other expenses
subsequently incurred by such indemnified Participant in connection
with the defense thereof but

the indemnified Participant may, at its own expense, participate in
such defense by counsel chosen by it without, however, impairing the
indemnifying Participant's control of the defense. The indemnifying
Participant may negotiate a compromise or settlement of any such
action, provided that such compromise or settlement does not require a
contribution by the indemnified Participant.

XV. Withdrawal

    Any Participant may withdraw from the Plan at any time on not less
than 30 days prior written notice to each of the other Participants.
Any Participant withdrawing from the Plan shall remain liable for, and
shall pay upon demand, any fees for equipment or services being
provided to such Participant pursuant to the contract executed by it or
an agreement or schedule of fees covering such then in effect.
    A withdrawing Participant shall also remain liable for its
proportionate share, without any right of recovery, of administrative
and operating expenses, including start-up costs and other sums for
which it may be responsible pursuant to Section XIV hereof. Except as
aforesaid, a withdrawing Participant shall have no further obligation
under the Plan or to any of the other Participants with respect to the
period following the effectiveness of its withdrawal.

XVI. Modifications to Plan

    The Plan may be modified from time to time when authorized by the
agreement of all of the Participants, subject to the approval of the
SEC or which otherwise becomes effective pursuant to Section 11A of the
Act and Rule 608 of Regulation NMS.

XVII. Applicability of Securities Exchange Act of 1934

    The rights and obligations of the Participants and of Vendors, News
Services, Subscribers and other persons contracting with Participant in
respect of the matters covered by the Plan shall at all times be
subject to any applicable provisions of the Act, as amended, and any
rules and regulations promulgated thereunder.

XVIII. Operational Issues

    A. Each Participant shall be responsible for collecting and
validating quotes and last sale reports within their own system prior
to transmitting this data to the Processor.
    B. Each Participant may utilize a dedicated Participant line into
the Processor to transmit trade and quote information in Eligible
Securities to the Processor. The Processor shall accept from Exchange
Participants input for only those issues that are deemed Eligible
Securities.
    C. The Processor shall consolidate trade and quote information from
each Participant and disseminate this information on the Processor's
existing vendor lines.
    D. The Processor shall perform gross validation processing for
quotes and last sale messages in addition to the collection and
dissemination functions, as follows:
    1. Basic Message Validation
    (a) The Processor may validate format for each type of message, and
reject non-conforming messages.
    (b) Input must be for an Eligible Security.
    2. Logging Function--The Processor shall return all Participant
input messages that do not pass the validation checks (described above)
to the inputting Participant, on the entering Participant line, with an
appropriate reject notation. For all accepted Participant input
messages (i.e., those that pass the validation check), the information
shall be retained in the Processor system.

XIX. Headings

    The section and other headings contained in this Plan are for
reference purposes only and shall not be deemed to be a part of this
Plan or to affect the meaning or interpretation of any provisions of
this Plan.

XX. Counterparts

    This Plan may be executed by the Participants in any number of
counterparts, no one of which need contain the signature of all
Participants. As many such counterparts as shall together contain all
such signatures shall constitute one and the same instrument.

XXI. Depth of Book Display

    The Operating Committee has determined that the entity that
succeeds Nasdaq as the Processor should have the ability to collect,
consolidate, and disseminate quotations at multiple price levels beyond
the best bid and best offer from any Participant that voluntarily
chooses to submit such quotations while determining that no Participant
shall be required to submit such information. The Operating Committee
has further determined that the costs of developing, collecting,
processing, and disseminating such depth of book data shall be borne
exclusively by those Participants that choose to submit this
information to the Processor, by whatever allocation those Participants
may choose among themselves. The Operating Committee has determined
further that the primary purpose of the Processor is the collection,
processing and dissemination of best bid, best offer and last sale
information (``core data''), and as such, the Participants will adopt
procedures to ensure that such functionality in no way hinders the
collecting, processing and dissemination of this core data.
    Therefore, implementing the depth of book display functionality
will require a plan amendment that addresses all pertinent issues,
including:
    (1) Procedures for ensuring that the fully-loaded cost of the
collection, processing, and dissemination of depth-of-book information
will be tracked and invoiced directly to those Plan Participants that
voluntarily choose to send that data, voluntarily, to the Processor,
allocating in whatever manner those Participants might agree; and
    (2) Necessary safeguards the Processor will take to ensure that its
processing of depth-of-book data will not impede or hamper, in any way,
its core Processor functionality of collecting, consolidating, and
disseminating National Best Bid and Offer data, exchange best bid and
offer data, and consolidated last sale data.
    Upon approval of a Plan amendment implementing depth of book
display, this article of the Plan shall be automatically deleted.
    In witness whereof, this Plan has been executed as of the--------
day of --------, 200--, by each of the Signatories hereto.

American Stock Exchange LLC
By:--------------------------------------------------------------------

Boston Stock Exchange, Inc.
By:--------------------------------------------------------------------
Chicago Stock Exchange, Inc.
By:--------------------------------------------------------------------
Chicago Board Options Exchange, Inc.
By:--------------------------------------------------------------------
International Securities Exchange, Inc.
By:--------------------------------------------------------------------
NASD
By:--------------------------------------------------------------------
National Stock Exchange, Inc.
By:--------------------------------------------------------------------
NYSE Arca, Inc.
By:--------------------------------------------------------------------

Philadelphia Stock Exchange, Inc.
By:--------------------------------------------------------------------

The Nasdaq Stock Market LLC
By:--------------------------------------------------------------------

Exhibit 1

    1. Each Participant eligible to receive revenue under the Plan will
receive an annual payment for each calendar year to be determined by
multiplying (i) That

Participant's percentage of total volume in Nasdaq securities reported
to the Processor for that calendar year by (ii) the total distributable
net operating income (as defined below) for that calendar year. In the
event that total distributable net operating income is negative, each
Participant eligible to receive revenue under the Plan will receive an
annual bill for each calendar year to be determined according to the
same formula (described in this paragraph) for determining annual
payments to eligible Participants.
    2. A Participant's percentage of total volume in Nasdaq securities
will be calculated by taking the average of (i) The Participant's
percentage of total trades in Nasdaq securities reported to the
Processor for the year and (ii) the Participant's percentage of total
share volume in Nasdaq securities reported to the Processor for the
year (trade/volume average). For any given year, a Participant's
percentage of total trades shall be calculated by dividing the total
number of trades that that Participant reports to the Processor for
that year by the total number of trades in Nasdaq securities reported
to the Processor for the year. A Participant's total share volume shall
be calculated by multiplying the total number of trades in Nasdaq
securities in that year that that Participant reports to the Processor
by the number of shares for each such trade. Unless otherwise stated in
this agreement, a year shall run from January 1 to December 31 and
quarters shall end on March 31, June 30, September 30, and December 31.
Processor shall endeavor to provide Participants with written estimates
of each Participant's percentage of total volume within five business
days of month end.
    3. For purposes of this Exhibit 1, net distributable operating
income for any particular calendar year shall be calculated by adding
all revenues from the UTP Quote Data Feed, the UTP Trade Data Feed, and
the OTC Montage Data Feed including revenues from the dissemination of
information respecting Eligible Securities to foreign marketplaces
(collectively, ``the Data Feeds''), and subtracting from such revenues
the costs incurred by the Processor, set forth below, in collecting,
consolidating, validating, generating, and disseminating the Data
Feeds. These costs include, but are not limited to, the following:
    a. The Processor costs directly attributable to creating OTC
Montage Data Feed, including:
    1. Cost of collecting Participant quotes into the Processor's quote
engine;
    2. Cost of processing quotes and creating OTC Montage Data Feed
messages within the Processor's quote engine;
    3. Cost of the Processor's communication management subsystem that
distributes OTC Montage Data Feed to the market data vendor network for
further distribution.
    b. The costs directly attributable to creating the UTP Quote Data
Feed, including:
    1. The costs of collecting each Participant's best bid, best offer,
and aggregate volume into the Processor's quote engine and, in the case
of NASD, the costs of identifying the NASD Participant(s) that
constitute NASD's Best Bid and Offer quotations;
    2. Cost of calculating the national best bid and offer price within
the Processor's quote engine;
    3. Cost of creating the UTP Quote Data Feed message within the
Processor's quote engine;
    4. Cost of the Processor's communication management subsystem that
distributes the UTP Quote Data Feed to the market data vendors'
networks for further distribution.
    c. The costs directly attributable to creating the UTP Trade Data
Feed, including:
    1. The costs of collecting each Participant's last sale and volume
amount into the Processor's quote engine
    2. Cost of determining the appropriate last sale price and volume
amount within the Processor's trade engine;
    3. Cost of utilizing the Processor's trade engine to distribute the
UTP Trade Data Feed for distribution to the market data vendors.
    4. Cost of the Processor's communication management subsystem that
distributes the UTP Trade Data Feed to the marker data vendors'
networks for further distribution.
    d. The additional costs that are shared across all Data Feeds,
including:
    1. Telecommunication Operations costs of supporting the Participant
lines into the Processor's facilities;
    2. Telecommunications Operations costs of supporting the external
market data vendor network;
    3. Data Products account management and auditing function with the
market data vendors;
    4. Market Operations costs to support symbol maintenance, and other
data integrity issues;
    5. Overhead costs, including management support of the Processor,
Human Resources, Finance, Legal, and Administrative Services.
    e. Processor costs excluded from the calculation of net
distributable operating income include trade execution costs for
transactions executed using a Nasdaq service and trade report
collection costs reported through a Nasdaq service, as such services
are market functions for which Participants electing to use such
services pay market rate.
    f. For the purposes of this provision, the following definitions
shall apply:
    1. ``Quote engine'' shall mean the Nasdaq's NT or Tandem system
that is operated by Nasdaq to collect quotation information for
Eligible Securities;
    2. ``Trade engine'' shall mean the Nasdaq Tandem system that is
operated by Nasdaq for the purpose of collecting last sale information
in Eligible Securities.
    4. At the time a Participant implements a Processor-approved
electronic interface with the Processor, the Participant will become
eligible to receive revenue.
    5. Processor shall endeavor to provide Participants with written
estimates of each Participant's quarterly net distributable operating
income within 45 calendar days of the end of the quarter, and estimated
quarterly payments or billings shall be made on the basis of such
estimates. All quarterly payments or billings shall be made to each
eligible Participant within 45 days following the end of each calendar
quarter in which the Participant is eligible to receive revenue,
provided that each quarterly payment or billing shall be reconciled
against a Participant's cumulative year-to-date payment or billing
received to date and adjusted accordingly, and further provided that
the total of such estimated payments or billings shall be reconciled at
the end of each calendar year and, if necessary, adjusted by March 31st
of the following year. Interest shall be included in quarterly payments
and in adjusted payments made on March 31st of the following year. Such
interest shall accrue monthly during the period in which revenue was
earned and not yet paid and will be based on the 90-day Treasury bill
rate in effect at the end of the quarter in which the payment is made.
Monthly interest shall start accruing 45 days following the month in
which it is earned and accrue until the date on which the payment is
made.
    In conjunction with calculating estimated quarterly and reconciled
annual payments under this Exhibit 1, the Processor shall submit to the
Participants a quarterly itemized statement setting forth the basis
upon which net operating income was calculated, including a quarterly
itemized statement of the Processor costs set forth in Paragraph 3 of
this Exhibit. Such Processor costs and Plan revenues shall be adjusted
annually

based solely on the Processor's quarterly itemized statement audited
pursuant to Processor's annual audit. Processor shall pay or bill
Participants for the audit adjustments within thirty days of completion
of the annual audit. By majority vote of the Operating Committee, the
Processor shall engage an independent auditor to audit the Processor's
costs or other calculation(s), the cost of which audit shall be shared
equally by all Participants. The Processor agrees to cooperate fully in
providing the information necessary to complete such audit.

[FR Doc. E6-21708 Filed 12-19-06; 8:45 am]

BILLING CODE 8011-01-P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D. C., 20460 ENVIRONMENTAL FATE AND EFFECTS DIVISION OFFICE OF PESTICIDE PROGRAMS February 4, 2002 PC Code: 114402 Chemical: Sodium Acifluorfen Related Chemical: Lactofen ( PC Code 128888) DP Barcode: D278403 TO: Betty Shackleford, PM 53 Christina Scheltema, PM Team Reviewer Special Review and Reregistration Branch ( 7508C)

FROM: James Goodyear, Ph. D., Biologist Environmental Risk Branch 3 Environmental Fate and Effects Division ( 7507C)

THRU: Kevin Costello, Acting Branch Chief Environmental Risk Branch 3 Environmental Fate and Effects Division ( 7507C)

RE: Response to the ecological effects portion of BASF's " 60 day comments" on the draft RED on Sodium Acifluorfen posted to the Public Docket OPP 34241.

EFED has reviewed the ecological effects portion of BASF's " 60 day comments" on the Environmental Risk Assessment for the reregistration of the herbicide sodium acifluorfen. Our response is attached. 2 ECOLOGICAL EFFECTS ISSUES BASF Comments. Refutation of EFED's assumptions of a 30 day foliar dissipation half life and treated fields providing 100% of the diet of birds and mammals.

EPA states that it has performed a screening level assessment and a higher tier modeling assessment of the risk that acifluorfen may pose to birds and concludes that there may be a chronic risk to birds that eat short grass and to insects after the use of the compound on peanuts, soybeans, or rice. BASF has submitted a study ( MRID 440911 01) entitled " Foliar Dislodgable Residues of Blazer on Soybeans" which reports a half life of less than one day on the treated plants and no detectable residues after 3 5 days. A more realistic assessment that includes a 7 day halflife and a smaller fraction of the diet obtained from the treated field would result in Risk Quotients below EPA's Level of Concern.

EFED Response: While the results of MRID 440911 01 are of interest, they are not useful in developing a foliar dissipation half life. The authors stated the following: ". . . in a study of this type it is impossible to determine if the residues have actually dissipated or if they have been rendered non dislodgable by some other process ( e. g., binding). The term dissipation in this report is meant to express only the reduction of dislodgable residues with time."

The Agency does not possess BASF's reference to unnamed preliminary guidance by the EU in which a 7 day half life in various media is discussed the Agency can not address the findings. EFED will retain the assumption of a 30 day half life, even though the work of Willis and McDowell ( 1987) suggests a default half life of 35 days appropriate.

Sodium acifluorfen will be applied after the emergence of weeds as well as the crop. They serve birds and mammals as food, cover, and as a source of invertebrates. EFED did acknowledge the uncertainty associated with risk to vertebrates in the original assessment.

In light of some of BASF's comments a series of ELL fate runs were made with the lowest application rate ( 0.25 lbs a. i./ A) and half lives of 3 5 days based on the dislodgable residues as suggested by the registrant and 7 days based on the uncited results from the EU. Since the chronic NOAEC for birds is 20 ppm, even a single application yields RQs of 3 and 1.7 on short grass and broadleaves/ small insects respectively. These RQs exceed the chronic LOC of 1 ranging from 2 days for ( broadleaves) or 5 days for short grass ( with a 3 day halflife and 48 days for short grass ( for the default of 30 days). See the attached spreadsheet outputs. In conclusion, because the chronic LOC is still exceeded, no changes will be made to the original risk assessment. 1 Anuran amphibian species have been the focus of many phototoxicity studies ( Zage et al.,, 1998; Hatch and Burton, 1998; Walker et al., 1998) and protocols for standard toxicity tests have also been published ( ASTM, 1994). In nature, amphibians may be exposed to acifluorfen and its degradation products through run off and spray drift or through seepage discharge of contaminated groundwater. They are also known to inhabit shallow water bodies that would be exposed to high levels of solar radiation. Therefore, amphibians may exhibit lightinduced toxic effects.

3 BASF Comments: Chronic risk to aquatic animals in natural wavelength light. " The Agency states that it is uncertain about the chronic risk of acifluorfen to freshwater and estuarine animals. However, based on the data set submitted and reviewed for acifluorfen, EPA, in chapter 3 of the preliminary risk assessment (` Integrated Environment Risk Characterization'), clearly states that no chronic risk is anticipated."

EFED Response. The Agency has referred to a 20 fold toxicity difference in LOAEC between two fish early life stage studies on the rainbow trout ( MRID 449632 01; D261358. DER. WPD)) for carfentrazone ethyl ( another phototoxic herbicide) as justification for concern for the potential increased risk posed by acifluorfen to aquatic organisms being exposed to natural sunlight. BASF has questioned the risk potential of acifluorfen. Although EFED recognizes that if the assumed factor ( more accurately a 14 fold factor) would not significantly increase the risk of aquatic organisms exposed to acifluorfen, unless a study is conducted there is uncertainty as to the degree of potential risk.

EFED will require that an aquatic phototoxicity study be conducted. A fish early life stage study or an amphibian study using tadpoles are possibilities1. The choice of an experimental subject and the protocol should be submitted for review and agreement by both parties prior to study initiation.

The following are some of the areas to be addressed:

Endpoints Behavioral observations should be made in addition to measurements of mortality, growth, weight, morphology, and appearance. Ideally, measurements of protoporphyrin and heme concentrations in the blood and protox activity in the liver of each test organisms should be made.

Light sources Artificial light may be preferred to natural light that will vary in different regions and seasons as well as with weather. If artificial light is used, the light should resemble full, natural sunlight as closely as possible. No matter what the light source, the duration and intensity of UV and visible light should be reported at all wavelengths ( 200 800 nanometers).

Dark, light, and positive controls As this study is intended to identify potential effects of light on LDPH toxicity, an appropriate study protocol should include a dark, or low light, 4 control group. Another group that is not exposed to chemicals but exposed to full light should be included ( a full light control). In addition to the dark and light controls, a positive control group using protoporphyrin IX would be useful.

Dosing A range finding study should be conducted under defined low light conditions to identify an LC50 value and lower dose levels expected to be similar to controls. Doses used in the phototoxicity study should not be expected to result in significant mortality in low light controls. Dissolved concentrations of the test chemical should be confirmed by an appropriate analytical method.

Exposure chambers and light filters Chambers should allow UV and visible light to penetrate. Any filters should be cured under the study light for 72 hours prior to study initiation to ensure consistent transmittance.

BASF Comments: Risk of acifluorfen to nontarget terrestrial plants. " The Agency states that it is uncertain about the risk of acifluorfen to nontarget terrestrial plants. BASF agrees . . . BASF is willing to work with the Agency to further define the risk."

EFED Response: The registrant acknowledges that additional studies are needed. Since the original studies ( MRID 449632 01 ) were performed with a highly diluted end use product much of the test material may have run off as it was applied. Therefore, using the end use product, both tier II seedling emergence ( 123 1) and vegetative vigor ( 123 2) studies should be repeated. 5 REFERENCES American Society for Testing and Materials. 1994. Standard guide for conducting the frog embryo teratogenesis assay Xenopus. E 1439 91. In Annual Book of ASTM Standards, Vol 11.5, pp. 825 835. Philadelphia, PA.

Hatch, A. C. and G. A. Burton, Jr., 1998. Effects of photoinduced toxicity of fluoranthene on amphibian embryos and larvae. Environmental Toxicology and Chemistry 17: 1777 1785.

Walker, S. E., D. H. Taylor, and J. T. Oris. 1998. Behavioral and histopathological effects of fluoranthene on bullfrog larvae ( Rana catesbeiana). Environ. Toxicol. Chem. 17: 734 739.

Willis, G. H. and L. L. McDowell. 1987. Pesticide persistence on foliage. Reviews of Environmental Contamination and Toxicology, v. 100. Springer Verlag, New York.

Zaga, A., E. E. Little, C. F. Rabeni, and M. R. Ellersieck. 1998. Photoenhanced toxicity of a carbamate insecticide to early life stage anuran amphibians. Environmental Toxicology and Chemistry 17: 2543  2553.


[Federal Register Volume 88, Number 166 (Tuesday, August 29, 2023)]
[Notices]
[Pages 59551-59552]
[FR Doc No: 2023-18550]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98206]

Order Granting Application of NYSE National, Inc. for a Limited
Exemption From Rule 602 of Regulation NMS for Its Retail Liquidity
Program

August 23, 2023.
    By letter dated August 18, 2023 (the ``Application''),\1\ NYSE
National, Inc. (``NYSE National'' or the ``Exchange'') requests a
limited exemption from the requirements of Rule 602 of Regulation NMS
\2\ (the ``Quote Rule'') for its planned dissemination of a Retail
Liquidity Identifier (``RLI'') that would contain certain information
regarding non-displayed Retail Price Improvement Orders (``RPI
Orders'') pursuant to the NYSE National's Retail Liquidity Program (the
``Program'').\3\
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    \1\ See Letter from Hope M. Jarkowski, General Counsel, New York
Stock Exchange to Vanessa Countryman, Secretary, Commission, dated
August 18, 2023.
    \2\ 17 CFR 242.602.
    \3\ See Securities Exchange Act Release No. 98169 (August 18,
2023) (Notice of Filing and Immediate Effectiveness of Proposed Rule
Change to Amend Rule 7.44) (``Notice'').
---------------------------------------------------------------------------

    The purpose of the Program is to attract retail order flow to the
Exchange by allowing ETP Holders to provide potential price improvement
to retail investor orders (``Retail Orders'') \4\ in the form of an RPI
Order. An RPI Order is defined as ``an MPL Order that is eligible to
trade only with incoming Retail Orders submitted by an RMO.'' \5\ An
MPL or Mid-Point Liquidity Order is defined as ``[a] Limit Order to buy
(sell) that is not displayed and does not route, with a working price
at the lower (higher) of the midpoint of the [protected bid and
protected offer] PBBO or its limit price.'' \6\
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    \4\ NYSE National Rule 7.44(a)(3) defines a Retail Order as ``an
agency order or a riskless principal order that meets the criteria
of FINRA Rule 5320.03 that originates from a natural person and is
submitted by an RMO provided that no change is made to the terms of
the order with respect to price or side of market and that the order
does not originate from a trading algorithm or other computerized
methodology.''
    \5\ NYSE National Rule 7.44(a)(3). This section of the NYSE
National Rule also defines an RMO or Retail Member Organization as
``an ETP Holder that is approved by the Exchange under this rule to
submit Retail Orders.'' RMOs would be able to submit a Retail Order
to the Exchange, which interacts, to the extent possible, with
available contra-side RPI orders and may interact with other
liquidity on the Exchange, depending on the Retail Order's
instructions. The segmentation in the Program would allow retail
order flow to receive potential price improvement. See Notice at 2.
    \6\ NYSE National Rule 7.31(d)(3).
---------------------------------------------------------------------------

    When there is an RPI Order in a particular security that is
eligible to trade at the midpoint of the PBBO, the Exchange would
disseminate the RLI through proprietary data feeds and through the
Consolidated Quotation System or the UTP Quote Data Feed, as
applicable.\7\ The RLI would reflect the symbol for the particular
security and the side (buy or sell) of the RPI interest but would not
include the price or size of the RPI interest.\8\
---------------------------------------------------------------------------

    \7\ NYSE National Rule 7.44(e).
    \8\ Id.
---------------------------------------------------------------------------

    When the Commission adopted the Quote Rule (then Rule 11Ac1-1) it
sought to facilitate the establishment of a comprehensive composite
quotation system across market centers as an integral component of a
national market system.\9\ The Quote Rule requires national securities
exchanges and national securities associations to, among other things,
collect, process, and make available to vendors the best bid, the best
offer, and aggregate quotation sizes for each subject security listed
or admitted to unlisted trading privileges that is communicated on any
national securities exchange by any responsible broker or dealer.\10\
Regulation NMS defines a ``bid'' or ``offer'' as the bid price or the
offer price communicated by a member of a national securities exchange
or member of a national securities association to any broker or dealer,
or to any customer, at which it is willing to buy or sell one or more
round lots of an NMS security, as either principal or agent, but shall
not include indications of interest.
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    \9\ See Securities Exchange Act Release No. 14415 (January 26,
1978), 43 FR 4342 (February 1, 1978). Regulation NMS redesignated
Rule 11Ac1-1 as Regulation NMS Rule 602, but left the substance of
the rule largely intact. See Securities Exchange Act Release No.
51808 (June 9, 2005), 70 FR 37496, 37570 (June 29, 2005) (File No.
S7-10-04).
    \10\ See 17 CFR 242.602(a)(1). The Quote Rule further provides
that nothing shall preclude any national securities exchange from
making available to vendors indications of interest or bids and
offers for a subject security at any time such exchange is not
required to do so. See 17 CFR 242.602(a)(4).
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    Other exchanges that operate retail liquidity programs also
disseminate retail liquidity identifiers in order to attract retail
order flow.\11\ NYSE National's RLI would serve a similar purpose to
the identifiers currently disseminated by other exchanges operating
retail liquidity programs,\12\ including one that likewise indicates
the availability of potentially price-improving interest at the
midpoint,\13\ as it would inform market participants about the
availability of potential price improvement opportunities for Retail
Orders The NYSE National RLI will indicate the availability of RPI
Orders priced at the midpoint, which can potentially benefit retail
investors by offering price improvement opportunities. NYSE National's
Program, like other exchanges' retail liquidity programs, allows for
the limited segmentation of retail order flow for the express purpose
of allowing NYSE National to compete with other exchanges and off-
exchange market makers to provide price improvement to retail
customers, thus ensuring that retail customers can benefit from the
willingness of liquidity providers to give their orders better prices.
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    \11\ See, e.g., Cboe BYX Exchange, Inc. Rule 11.24(e); Nasdaq
BX, Inc. Rule 4780(e); Investors Exchange LLC (``IEX'') Rule Rule
11.232(f); New York Stock Exchange LLC Rule 7.44(j). The Commission
previously granted IEX an exemption from the Quote Rule in
connection with the dissemination of a similar liquidity indicator
pursuant to its retail price improvement program. See Securities
Exchange Act Release No. 93217 (September 30, 2021), 86 FR 55663
(October 6, 2021) (Order Granting Application of Investors Exchange
LLC for a Limited Exemption from Rule 602 of Regulation NMS for its
Retail Price Improvement Program).
    \12\ See e.g., Cboe BYX Exchange, Inc. Rule 11.24(e); Nasdaq BX,
Inc. Rule 4780(e); and New York Stock Exchange LLC Rule 7.44(j).
    \13\ See, e.g., IEX Rule 11.232(f); and New York Stock Exchange
LLC Rule 7.44(j).
---------------------------------------------------------------------------

    Under Rule 602(d) of Regulation NMS, the Commission may exempt from
the provisions of the Quote Rule, either unconditionally or on
specified terms and conditions, a national securities exchange (among
others) if it determines that such exemption is consistent with the
public interest, the protection of investors and the removal of
impediments to and perfection of the mechanism of a national market
system.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 242.602(d).
---------------------------------------------------------------------------

    The Commission hereby grants the Exchange a limited exemption from
the Quote Rule to operate the Program and disseminate the RLI without
having to include RPI Order interest in NYSE National's best bid or
offer. For the reasons discussed below, the Commission has determined
that it is consistent with the public interest, the protection of
investors and the removal of impediments to and perfection of the
mechanism of a national market system to provide a limited exemption
from Rule 602 of Regulation NMS with respect to NYSE National's RLI
disseminated under the Program.
    In light of the opportunity for retail customers to obtain
potentially substantial price improvement at midpoint prices under NYSE
National's Program, and in the interests of facilitating the ability of
NYSE National to compete to be able to provide that opportunity to
Retail Orders in the limited context of the Program, providing a
limited exemption should promote competition between

exchanges and between NYSE National and off-exchange market makers.
    Broad dissemination of the RLI through the Consolidated Quotation
System or the UTP Quote Data Feed, as applicable, should benefit retail
customers by providing broker-dealers that route Retail Orders with
limited supplemental information about the availability of price
improvement opportunities for Retail Orders under the Program.\15\ To
the extent the RLI is successful in attracting Retail Orders to the
Program, the increased competition should benefit retail customers by
providing a mechanism through which they can receive the better prices
for their orders from willing liquidity providers. This exemption also
should benefit market participants that seek the opportunity to
interact directly with Retail Orders, as any liquidity provider may
submit RPI Orders to provide better prices to retail customers on the
Exchange. Quotations that Rule 602 requires to be included in an
exchange's best bid and offer are used to establish the national best
bid and offer for an NMS stock and are eligible for protection against
trade-throughs under Rule 611 of Regulation NMS.\16\ Such quotations
therefore must be accessible to all market participants on terms that
are not unfair or unreasonably discriminatory. In contrast, access to
RPI Order interest is limited to Retail Orders because many market
participants may be willing to offer liquidity to retail investors at
better prices than they would be willing to offer all market
participants. RPI Order interest thereby can benefit retail investors
by giving them an opportunity to receive better prices on exchanges,
but it is unsuitable for other purposes, including establishing a
national best bid and offer and eligibility for Rule 611 protection.
---------------------------------------------------------------------------

    \15\ The RLI will not reveal the presence of other midpoint
interest. Non-displayed midpoint interest could be present on NYSE
National outside of the Program, and Retail Orders will be able to
trade with that interest.
    \16\ See 17 CFR 242.611.
---------------------------------------------------------------------------

    Accordingly, it is ordered, pursuant to Rule 602(d) of Regulation
NMS, that NYSE National is exempt from Rule 602 of Regulation NMS with
respect to NYSE National's Program specifically concerning the
dissemination of the RLI to advertise the presence of RPI Order
interest under the Program without including RPI Orders in the
Exchange's quotation. This exemption is conditioned on the Exchange
continuing to conduct the Program substantially as described in the
Exchange's request for exemptive relief and the current applicable
Exchange rules, including the dissemination of the RLI through the
Consolidated Quotation System or the UTP Quote Data Feed, as
applicable. Any changes thereto may cause the Commission to reconsider
this exemption. The foregoing exemption is subject to modification or
revocation at any time if the Commission determines that such action is
necessary or appropriate in furtherance of the purposes of the Exchange
Act.

    For the Commission, by the Division of Trading and Markets
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(28).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-18550 Filed 8-28-23; 8:45 am]
BILLING CODE 8011-01-P