[Federal Register Volume 84, Number 247 (Thursday, December 26, 2019)]
[Notices]
[Pages 71025-71037]
[FR Doc No: 2019-27730]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87797; File No. SR-NYSENAT-2019-31]

Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Establish
Fees for the NYSE National Integrated Feed

December 18, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on December 4, 2019, NYSE National, Inc. (``NYSE National'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to establish fees for the NYSE National
Integrated Feed. The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt the NYSE National Proprietary Market
Data Fee Schedule (``Fee Schedule'') and establish the fees for the
NYSE National

Integrated Feed.\3\ In summary, the NYSE National Integrated Feed is a
NYSE National-only market data feed that provides vendors and
subscribers on a real-time basis with a unified view of events, in
sequence, as they appear on the NYSE National matching engine. The NYSE
National Integrated Feed includes depth-of-book order data, last sale
data, security status updates (e.g., trade corrections and trading
halts), and stock summary messages. Because the NYSE National
Integrated Feed has a unified view of events, in sequence, it also
includes information about the Exchange's best bid or offer at any
given time.
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    \3\ The proposed rule change establishing the NYSE National
Integrated Feed was immediately effective on May 31, 2018. See
Securities Exchange Act Release No. 83350 (May 31, 2018), 83 FR
26332 (June 6, 2018) (SR-NYSENAT-2018-09) (``NYSE National
Integrated Feed Product Filing''). The NYSE National Integrated Feed
Product Filing also established the NYSE National BBO and NYSE
National Trades market data feeds.
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    The Exchange currently does not charge any fees for the NYSE
National Integrated Feed market data product.\4\
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    \4\ The Exchange also currently does not charge any fees for the
NYSE National BBO and NYSE National Trades market data products and
proposes to adopt rule text on the Fee Schedule to reflect that
there are no fees charged for NYSE National BBO and NYSE National
Trades market data products.
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Background
    The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS,
the Commission highlighted the importance of market forces in
determining prices and SRO revenues, and also recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \5\
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    \5\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37495, 37499 (June 29, 2005) (S7-10-04) (Final Rule)
(``Regulation NMS Adopting Release'').
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    As the Commission itself recognized, the market for trading
services in NMS stocks has become ``more fragmented and competitive.''
\6\ Equity trading is currently dispersed across 13 exchanges,\7\ 31
alternative trading systems,\8\ and numerous broker-dealer
internalizers and wholesalers, all competing for order flow. Based on
publicly-available information, no single exchange has more than 18%
market share (whether including or excluding auction volume).\9\
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    \6\ See Securities Exchange Act Release No. 51808, 84 FR 5202,
5253 (February 20, 2019) (File No. S7-05-18) (Transaction Fee Pilot
for NMS Stocks Final Rule) (``Transaction Fee Pilot'').
    \7\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at http://markets.cboe.com/us/equities/market_share/. See generally https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
    \8\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of
alternative trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/atslist.htm.
    \9\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at http://markets.cboe.com/us/equities/market_share/.
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    The recent growth of NYSE National's market share demonstrates this
competitive marketplace. Between February 2017 and mid-May 2018, NYSE
National was non-operational, and therefore had 0% of market share. On
May 21, 2018, NYSE National re-launched on its current platform as an
affiliated exchange of New York Stock Exchange, LLC (``NYSE''), NYSE
Arca, Inc. (``NYSE Arca, Inc.''), and NYSE American LLC (``NYSE
American''). Within four months, NYSE National began regularly
executing 1% of consolidated trading volume. By August 2019, NYSE
National began executing approximately 1.5% of consolidated trading
volume on a more regular basis. By October 2019, the Exchange had 1.9%
market share of executed volume of equity trades.\10\
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    \10\ See id.
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    As NYSE National's transaction market share has increased, so has
the value of its market data. For example, in May 2018, when NYSE
National re-launched trading operations, the Exchange had 12 customers
for its NYSE National Integrated Feed. As NYSE National's market share
has increased, the number of subscribers of the NYSE National
Integrated Feed has steadily increased and as of October 2019, the
Exchange has 56 customers that subscribe to the NYSE National
Integrated Feed. In October 2019, customers of the NYSE National
Integrated Feed account for over 99% of the executed trade volume on
the Exchange.
Proposed NYSE National Integrated Feed Fees
    To reflect the value of NYSE National's market data, as correlated
to the Exchange's increased transaction volume market share, the
Exchange proposes to establish the fees listed below for the NYSE
National Integrated Feed, operative on February 3, 2020. The Exchange
proposes to charge fees for the same categories of market data use as
its affiliated exchanges (namely, NYSE, NYSE Arca, and NYSE American)
currently charge. The Exchange believes that adopting the same fee
structure as its affiliated exchanges would reduce administrative
burdens on NYSE National market data subscribers that also currently
subscribe to market data feeds from NYSE, NYSE Arca, or NYSE American.
    1. Access Fee. For the receipt of access to the NYSE National
Integrated Feed, the Exchange proposes to charge $2,500 per month. This
proposed Access Fee would be charged to any data recipient that
receives a data feed of the NYSE National Integrated Feed. Data
recipients that only use display devices to view NYSE National
Integrated Feed market data and do not separately receive a data feed
would not be charged an Access Fee. The proposed Access Fee is charged
only once per firm.
    2. Redistribution Fee. For redistribution of the NYSE National
Integrated Feed, the Exchange proposes to establish a fee of $1,500 per
month. The proposed Redistribution Fee would be charged to any
Redistributors of the NYSE National Integrated Feed, which is defined
to mean a vendor or any person that provides a real-time NYSE National
market data product externally to a data recipient that is not its
affiliate or wholly-owned subsidiary, or to any system that an external
data recipient uses, irrespective of the means of transmission or
access. The proposed Redistribution Fee is charged only once per
Redistributor account.
    3. User Fees. The Exchange proposes to charge a Professional User
Fee (Per User) of $10 per month and a Non-Professional User Fee (Per
User) of $1 per month. These user fees would apply to each display
device that has access to the NYSE National Integrated Feed.
    4. Non-Display Use Fees. The Exchange proposes to establish non-
display fees for the NYSE National Integrated Feed that are based on
the non-display use categories charged by NYSE, NYSE Arca, NYSE
American, the Consolidated Tape Association, and the UTP Plan for non-
display use.\11\ Non-

display use would mean accessing, processing, or consuming the NYSE
National Integrated Feed, delivered directly or through a
Redistributor, for a purpose other than in support of a data
recipient's display or further internal or external redistribution
(``Non-Display Use''). Non-Display Use would include trading uses such
as high frequency or algorithmic trading as well as any trading in any
asset class, automated order or quote generation and/or order pegging,
price referencing for algorithmic trading or smart order routing,
operations control programs, investment analysis, order verification,
surveillance programs, risk management, compliance, and portfolio
management.
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    \11\ See Endnote 1 to the NYSE Proprietary Market Data Fees,
available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Fee_Schedule.pdf; Endnote 1 to the NYSE Arca
Equites Proprietary Market Data Fees, available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_Arca_Equities_Fee_Schedule.pdf; Endnote 1 to the NYSE American
LLC Equities Proprietary Market Data Fees, available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_American_Equities_Market_Data_Fee_Schedule.pdf; Endnote 8 to
the Schedule of Market Data Charges for the Consolidated Tape
Association, available here: https://www.ctaplan.com/publicdocs/ctaplan/notifications/trader-update/Schedule%20Of%20Market%20Data%20Charges%20-%20January%201,%202015.pdf; and Non-Display Usage Fees as set forth
in the UTP Plan Fee Schedule and Non-Display Policy, available here:
http://utpplan.com/DOC/Datapolicies.pdf. See, e.g., Securities
Exchange Act Release Nos. 69278 (April 2, 2013), 78 FR 20973 (April
8, 2013) (SR-NYSE-2013-25) and 72923 (Aug. 26, 2014), 79 FR 52079
(Sept. 2, 2014) (SR-NYSE-2014-43).
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    The Exchange proposes three categories of Non-Display Use of the
NYSE National Integrated Feed and related fees applicable to each
category. One, two, or three categories of Non-Display Use may apply to
a data recipient.
     As proposed, the Category 1 Fee would be $5,000 per month
and would apply when a data recipient's Non-Display Use of the NYSE
National Integrated Feed is on its own behalf, not on behalf of its
clients.
     As proposed, Category 2 Fees would be $5,000 per month and
would apply to a data recipient's Non-Display Use of the NYSE National
Integrated Feed on behalf of its clients.
     As proposed, Category 3 Fees would be $5,000 per month and
would apply to a data recipient's Non-Display Use of the NYSE National
Integrated Feed for the purpose of internally matching buy and sell
orders within an organization, including matching customer orders for a
data recipient's own behalf and/or on behalf of its clients. This
category would apply to Non-Display Use in trading platforms, such as,
but not restricted to, alternative trading systems (``ATSs''), broker
crossing networks, broker crossing systems not filed as ATSs, dark
pools, multilateral trading facilities, exchanges and systematic
internalization systems. A data recipient will be charged $5,000 per
month for each platform on which it uses the Non-Display data
internally to match buy and sell orders, up to a cap of $15,000 per
month; even if the data recipient uses the NYSE National Integrated
Feed for more than three platforms, it will not pay more than $15,000
for such Category 3 use per month.
    The Exchange proposes to adopt the description of the three non-
display use categories in the Fee Schedule in proposed endnote 1 on the
Fee Schedule.\12\
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    \12\ See Fee Schedule, proposed endnote 1.
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    Data recipients that receive the NYSE National Integrated Feed for
Non-Display Use would be required to complete and submit a Non-Display
Use Declaration before they would be authorized to receive the feed. A
firm subject to Category 3 Fees would be required to identify each
platform that uses the NYSE National Integrated Feed for a Category 3
Non-Display Use basis, such as ATSs and broker crossing systems not
registered as ATSs, as part of the Non-Display Use Declaration.
    5. Non-Display Use Declaration Late Fee. Data recipients that
receive the NYSE National Integrated Feed for Non-Display Use would be
required to complete and submit a Non-Display Use Declaration before
they would be authorized to receive the feed. NYSE National Integrated
Feed data recipients would be required to submit, by December 31 of
each year, the Non-Display Use Declaration. The requirement to submit a
Non-Display Use Declaration would apply to all real-time NYSE National
data feed product recipients. The Exchange proposes to charge a Non-
Display Use Declaration Late Fee of $1,000 per month to any data
recipient that pays an Access Fee for the NYSE National Integrated Feed
that has failed to timely complete and submit a Non-Display Use
Declaration. Specifically, with respect to the Non-Display Use
Declaration due by December 31 of each year, the Non-Display Use
Declaration Late Fee would apply to data recipients that fail to
complete and submit the Non-Display Use Declaration by the December 31
due date, and would apply beginning January 1 and for each month
thereafter until the data recipient has completed and submitted the
annual Non-Display Use Declaration. The proposed Non-Display Use
Declaration Late Fee would be set forth in endnote 2 on the Fee
Schedule. Proposed endnote 2 would provide that a data recipient that
pays an Access Fee and that fails to timely complete and submit a Non-
Display Use Declaration must pay the Non-Display Use Declaration Late
Fee.\13\ Proposed endnote 2 to the Fee Schedule would also provide that
the annual Non-Display Use Declaration would be due by December 31 of
each year. Finally, proposed endnote 2 would provide that the Non-
Display Use Declaration Late Fee would apply to data recipients that
fail to complete and submit the annual Non-Display Use Declaration by
the December 31 due date, and would apply beginning January 1 of each
year and for each month thereafter until the data recipient has
completed and submitted the annual Non-Display Use Declaration.
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    \13\ See Fee Schedule, proposed endnote 2.
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    In addition, if a data recipient's use of the NYSE National
Integrated Feed data changes at any time after the data recipient
submits a Non-Display Use Declaration, the data recipient must inform
the Exchange of the change by completing and submitting at the time of
the change an updated declaration reflecting the change of use.
    6. Multiple Data Feed Fee. The Exchange proposes to establish a
monthly fee, the ``Multiple Data Feed Fee,'' that would apply to data
recipients that take a data feed for a market data product in more than
two locations. Data recipients taking the NYSE National Integrated Feed
in more than two locations would be charged $200 per additional
location per month. No new reporting would be required.\14\
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    \14\ Data vendors currently report a unique Vendor Account
Number for each location at which they provide a data feed to a data
recipient. The Exchange considers each Vendor Account Number a
location. For example, if a data recipient has five Vendor Account
Numbers, representing five locations, for the receipt of the NYSE
National Integrated Feed product, that data recipient will pay the
Multiple Data Feed fee with respect to three of the five locations.
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    7. Fee Waiver for Federal Agencies. The Exchange proposes to adopt
rule text in the Fee Schedule with respect to Federal agencies that
subscribe to the NYSE National Integrated Feed. The proposed rule would
provide that market data fees would not apply to any Federal agency for
their use of NYSE National real-time proprietary market data products.
The term ``Federal agency'' as used in the Fee Schedule would include
all Federal agencies subject to the Federal Acquisition Regulation
(FAR),\15\ as well as any Federal agency not subject to FAR that has
promulgated its own procurement rules.\16\ More specifically, the
Exchange proposes to specify that access fees, professional user fees
and non-display

fees would not apply to Federal agencies for those products to which
those fees apply.\17\ The proposed fee waiver is designed to allow the
Exchange to provide Federal agencies with NYSE National real-time
proprietary market data products at no cost in support of Federal
agencies' regulatory responsibilities. With the adoption of the
proposed fee waiver, the Exchange is not waiving any other contractual
rights, and all Federal agencies that subscribe to NYSE National real-
time proprietary market data products will be required to execute the
appropriate subscriber agreement, which includes, among other things,
provisions against the redistribution of data.
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    \15\ FAR is the principal set of rules governing the process by
which the U.S. federal government purchases goods and services.
    \16\ See 48 CFR 2.101. FAR defines ``Federal agency'' as ``any
executive agency or any independent establishment in the legislative
or judicial branch of the Government (except the Senate, the House
of Representatives, the Architect of the Capitol, and any activities
under the Architect's direction).'' ``Executive agency'' is defined
as ``an executive department, a military department, or any
independent establishment within the meaning of 5 U.S.C. 101, 102,
and 104(1), respectively, and any wholly owned Government
corporation within the meaning of 31 U.S.C. 9101.''
    \17\ Currently, pursuant to this proposed rule change, the NYSE
National Integrated Feed is the only product to which fees would
apply.
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    8. One-Month Free Trial. Finally, the Exchange proposes a one-month
free trial for any firm that subscribes to a particular NYSE National
market data product for the first time. As proposed, a first-time
subscriber would be any firm that has not previously subscribed to a
particular NYSE National market data product listed on the Fee
Schedule. As proposed, a first-time subscriber of a particular NYSE
National market data product would not be charged the Access Fee, Non-
Display Fee, any applicable Professional and Non-Professional User Fee,
and Redistribution Fee for that product for one calendar month. For
example, a firm that currently subscribes to NYSE National BBO for free
would be eligible to receive a free one-month trial of the NYSE
National Integrated Feed, whether in a display-only format or for non-
display use. On the other hand, if a firm pays an Access Fee and
receives the NYSE National Integrated Feed for non-display use, it
would not be eligible to receive a free one-month trial of the NYSE
National Integrated Feed in a display-only format (or vice-versa). The
proposed free trial would be for the first full calendar month
following the date a subscriber is approved to receive trial access to
the particular NYSE National market data product. The Exchange would
provide the one-month free trial for each particular product to each
subscriber once.
    The Exchange believes that providing a one-month free trial to NYSE
National market data products listed on the Fee Schedule would enable
potential subscribers to determine whether a particular NYSE National
market data product provides value to their business models before
fully committing to expend development and implementation costs related
to the receipt of that product, and is intended to encourage increased
use of the Exchange's market data products by defraying some of the
development and implementation costs subscribers would ordinarily have
to expend before using a product.
Application of Proposed Fees
    The Exchange is not required to make the NYSE National Integrated
Feed available or to offer any specific pricing alternatives to any
customers, nor is any firm required to purchase the NYSE National
Integrated Feed. Firms that choose to purchase the NYSE National
Integrated Feed do so for the primary goals of using it to increase
their revenues, reduce their expenses, and in some instances to compete
directly with the Exchange (including for order flow). Those firms are
able to determine for themselves whether or not the NYSE National
Integrated Feed or any other similar products are attractively priced.
    The Exchange produces and disseminates the NYSE National Integrated
Feed as part of its market data offerings to support its transaction
execution services. Since May 2018, when NYSE National relaunched
trading, the Exchange has observed a direct correlation between the
steady increase of subscribers to the NYSE National Integrated Feed and
the increase in the Exchange's transaction market share volume over the
same period.
    Based on the reported usage of the NYSE National Integrated Feed,
the Exchange believes that its data subscribers use the order-by-order
detail information available in this market data product to make
trading decisions that directly benefit the transaction services that
the Exchange offers. Specifically, subscribers of the NYSE National
Integrated Feed represent firms that provide over 99% of the Exchange's
executed transaction volume. More than half of the feed's subscribers
overall (i.e., 33 of 56) report ``Category 1'' non-display use of the
NYSE National Integrated Feed, which means that they use the data for
trading on their own behalf. This figure confirms that a substantial
portion of the NYSE National Integrated Feed's subscribers have
analyzed whether it is in their business interest to use the feed for
their own trading, and have concluded that it is.
    The 56 current subscribers to the NYSE National Integrated Feed
would be impacted by this proposed rule change. The scope of the fee
impact for each data recipient would depend on that data recipient's
use of the data. Based on current usage, at least 33 firms would be
subject to Category 1 Non-Display Use fees, at least 14 firms would be
subject to Category 2 Non-Display Use fees, and at least 10 firms would
be subject to Category 3 Non-Display Use fees. Because the product has
not been previously been subject to fees, the Exchange does not know
the full impact of the proposed fees on current data recipients because
subscribers may choose to reduce or eliminate their use of data.
    The Exchange determined the level of the fees to charge for the
NYSE National Integrated Feed based on the value of the Exchange's
transaction services. As noted above, over an 18-month period, NYSE
National has grown from 0% to nearly 2% market share of consolidated
trading volume. During that same period, the Exchange has had a steady
increase in the number of subscribers to the NYSE National Integrated
feed.
    The proposed fee structure is not novel as it is based on the fee
structure currently in place for the NYSE American Integrated Feed.\18\
Both NYSE American and NYSE National trade all NMS Stocks. As noted
above, in October 2019, NYSE National had 1.9% market share; for that
same month, NYSE American had 0.29% market share.\19\ Even though NYSE
National's market share is several times higher than NYSE American's,
the Exchange is proposing fees for the NYSE National Integrated Feed
that are based on the existing fee structure and rates that data
recipients already pay for the NYSE American Integrated Feed.
Specifically, the fees for the NYSE American Integrated Feed--which
like the NYSE National Integrated Feed, includes top of book, depth of
book, trades, and security status messages--consist of an Access Fee of
$2,500 per month, a Professional User Fee (Per User) of $10 per month,
a Non-Professional User Fee (Per User) of $2 per month, Non-Display
Fees of $5,000 per month for each of Categories 1, 2 and 3, and a
Redistribution Fee of $1,500 per month. NYSE American also charges a
Non-Display Use Declaration Late Fee of $1,000 per month and a

Multiple Data Feed Fee of $200 per month.\20\
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    \18\ See Securities Exchange Act Release Nos. 76525 (November
25, 2015), 80 FR 75148 (December 1, 2015) (SR-NYSEMKT-2015-95)
(Notice of filing and immediate effectiveness of proposed rule
change to establish fees for NYSE MKT Integrated Feed), and 76975
(January 26, 2016), 81 FR 5139 (February 1, 2016) (SR-NYSEMKT-2016-
11) (Notice of filing and immediate effectiveness of proposed rule
change amending the fees for NYSE MKT Integrated Feed to add a
Multiple Data Feed Fee).
    \19\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at http://markets.cboe.com/us/equities/market_share/.
    \20\ See NYSE American LLC Equities Proprietary Market Data Fees
at https://www.nyse.com/publicdocs/nyse/data/NYSE_American_Equities_Market_Data_Fee_Schedule.pdf.
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    The Exchange anticipates that there may be current data recipients
of the NYSE National Integrated Feed that have subscribed only because
it is free and may choose to discontinue using the product once the
fees are implemented. A data recipient that chooses to discontinue the
NYSE National Integrated Feed may also choose to shift order flow away
from the Exchange. In today's competitive environment, if data
recipients were to both discontinue the product and shift order flow
away from the Exchange, the Exchange would reevaluate the fees and
potentially file a separate proposed rule change to amend its fees.
However, in advance of implementing the proposed fees, the Exchange
cannot estimate with precision the impact of the proposed fees on the
Exchange's transaction services business or the number of NYSE National
Integrated Feed subscribers.
    Although the Exchange is proposing to make this proposed rule
change operative on February 3, 2020, it is making this filing now
because the Exchange believes it is appropriate to provide market
participants with early notice of these proposed changes, so that they
can begin determining whether the value of the NYSE National Integrated
Feed to their businesses is such that they will choose to continue
using the product once it is no longer provided for free. The Exchange
believes that market participants should be able to begin such
determinations before the Exchange begins charging fees (which is also
consistent with the free trial period proposed in this filing).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\21\ in general, and
Sections 6(b)(4) and 6(b)(5) of the Act,\22\ in particular, in that it
provides an equitable allocation of reasonable fees among users and
recipients of the data and is not designed to permit unfair
discrimination among customers, issuers, and brokers.
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    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(4), (5).
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The Proposed Rule Change Is Reasonable
    In adopting Regulation NMS, the Commission granted SROs and broker-
dealers increased authority and flexibility to offer new and unique
market data to the public. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues, and also recognized that
current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \23\
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    \23\ See Regulation NMS Adopting Release, 70 FR 37495, at 37499.
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    With respect to market data, the decision of the United States
Court of Appeals for the District of Columbia Circuit in NetCoalition
v. SEC upheld the Commission's reliance on the existence of competitive
market mechanisms to evaluate the reasonableness and fairness of fees
for proprietary market data:

    In fact, the legislative history indicates that the Congress
intended that the market system ``evolve through the interplay of
competitive forces as unnecessary regulatory restrictions are
removed'' and that the SEC wield its regulatory power ``in those
situations where competition may not be sufficient,'' such as in the
creation of a ``consolidated transactional reporting system.'' \24\
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    \24\ NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010)
(``NetCoalition I'') (quoting H.R. Rep. No. 94-229 at 92 (1975), as
reprinted in 1975 U.S.C.C.A.N. 323).

    The court agreed with the Commission's conclusion that ``Congress
intended that `competitive forces should dictate the services and
practices that constitute the U.S. national market system for trading
equity securities.' '' \25\
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    \25\ Id. at 535.
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    In this competitive marketplace, the Exchange's executed trading
volume has grown from 0% market share to nearly 2% market share in less
than two years and the Exchange believes that it is reasonable to begin
charging fees for the NYSE National Integrated Feed.
1. The Proposed Fees Are Constrained by Significant Competitive Forces
a. Exchange Market Data Is Sold in a Competitive Market
    In 2018, Charles M. Jones, the Robert W. Lear Professor of Finance
and Economics of the Columbia University School of Business, conducted
an analysis of the market for equity market data in the United States.
He canvassed the demand for both consolidated and exchange proprietary
market data products and the uses to which those products were put by
market participants, and reported his conclusions in a paper annexed
hereto.\26\ Among other things, Professor Jones concluded that:
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    \26\ See Exhibit 3A, Charles M. Jones, Understanding the Market
for U.S. Equity Market Data, August 31, 2018 (hereinafter ``Jones
Paper'').
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     ``The market [for exchange market data] is characterized
by robust competition: exchanges compete with each other in selling
proprietary market data products. They also compete with consolidated
data feeds and with data provided by alternative trading systems
(`ATSs'). Barriers to entry are very low, so existing exchanges must
also take into account competition from new entrants, who generally try
to build market share [as NYSE National has done with its Integrated
Feed] by offering their proprietary market data products for free for
some period of time.'' \27\
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    \27\ Id. at 2.
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     ``Although there are regulatory requirements for some
market participants to use consolidated data products, there is no
requirement for market participants to purchase any proprietary market
data product for regulatory purposes.'' \28\
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    \28\ Id.
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     ``There are a variety of data products, and consumers of
equity market data choose among them based on their needs. Like most
producers, exchanges offer a variety of market data products at
different price levels. Advanced proprietary market data products
provide greater value to those who subscribe. As in any other market,
each potential subscriber takes the features and prices of available
products into account in choosing what market data products to buy
based on its business model.'' \29\
---------------------------------------------------------------------------

    \29\ Id.
---------------------------------------------------------------------------

     ``Exchange equity market data fees are a small cost for
the industry overall: the data demonstrates that total exchange market
data revenues are orders of magnitude smaller than (i) broker-dealer
commissions, (ii) investment bank earnings from equity trading, and
(iii) revenues earned by third-party vendors.'' \30\
---------------------------------------------------------------------------

    \30\ Id.
---------------------------------------------------------------------------

     ``For proprietary exchange data feeds, the main question
is whether there is a competitive market for proprietary market data.
More than 40 active exchanges and alternative trading systems compete
vigorously in both the market for order flow and in the market for
market data. The two are closely linked: an exchange needs to consider
the negative impact on its order flow if it raises the price of its
market data.

Furthermore, new entrants have been frequent over the past 10 years or
so, and these venues often give market data away for free, [again, as
NYSE National has done with its Integrated Feed] serving as a check on
pricing by more established exchanges. These are all the standard
hallmarks of a competitive market.'' \31\
---------------------------------------------------------------------------

    \31\ Id. at 39-40.
---------------------------------------------------------------------------

    Professor Jones' conclusions are consistent with the demonstration
of the competitive constraints on the pricing of market data
demonstrated by analysis of exchanges as platforms for market data and
trading services, as shown below.
b. Exchanges That Offer Market Data and Trading Services Function as
Two-Sided Platforms
    An exchange may demonstrate that its fees are constrained by
competitive forces by showing that the platform theory of competition
applies.
    As the United States Supreme Court recognized in Ohio v. American
Express, platforms are firms that act as intermediaries between two or
more sets of agents, and typically the choices made on one side of the
platform affect the results on the other side of the platform via
externalities, or ``indirect network effects.'' \32\ Externalities are
linkages between the different sides of a platform such that one cannot
understand pricing and competition for goods or services on one side of
the platform in isolation; one must also account for the influence of
the other sides. As the Supreme Court explained:
---------------------------------------------------------------------------

    \32\ Ohio v. American Express, 138 S. Ct. 2274, 2280-81 (2018).

    To ensure sufficient participation, two-sided platforms must be
sensitive to the prices that they charge each side. . . . Raising
the price on side A risks losing participation on that side, which
decreases the value of the platform to side B. If the participants
on side B leave due to this loss in value, then the platform has
even less value to side A--risking a feedback loop of declining
demand. . . . Two-sided platforms therefore must take these indirect
network effects into account before making a change in price on
either side.\33\
---------------------------------------------------------------------------

    \33\ Id. at 2281.

    The Exchange and its affiliated exchanges have long maintained that
they function as platforms between consumers of market data and
consumers of trading services. Proving the existence of linkages
between the two sides of this platform requires an in-depth economic
analysis of both public data and confidential exchange data about
particular customers' trading activities and market data purchases.
Exchanges, however, are prohibited from publicly sharing details about
these specific customer activities and purchases. For example, pursuant
to Exchange Rule 7.41, transactions executed on the Exchange are
processed anonymously.
    The Exchange and its affiliated exchanges have retained a third-
party expert, Marc Rysman, Professor of Economics at Boston University,
to analyze how platform economics applies to stock exchanges' sale of
market data products and trading services, and to explain how this
affects the assessment of competitive forces affecting the exchanges'
data fees.\34\ Professor Rysman was able to analyze exchange data that
is not otherwise publicly available in a manner that is consistent with
the exchanges' confidentiality obligations to its customers. As shown
in his paper, Professor Rysman surveyed the existing economic
literature analyzing stock exchanges as platforms between market data
and trading activities, and explained the types of linkages between
market data access and trading activities that must be present for an
exchange to function as a platform. In addition, Professor Rysman
undertook an empirical analysis of customers' trading activities within
the NYSE group of exchanges in reaction to NYSE's introduction in 2015
of the NYSE Integrated Feed, a full order-by-order depth of book data
product similar to the NYSE National Integrated Feed that is the
subject of this fee filing.\35\
---------------------------------------------------------------------------

    \34\ See Exhibit 3B, Marc Rysman, Stock Exchanges as Platforms
for Data and Trading, December 2, 2019 (hereinafter ``Rysman
Paper''), ] 6.
    \35\ See Securities Exchange Act Release Nos. 74128 (January 23,
2015), 80 FR 4951 (January 29, 2015) (SR-NYSE-2015-03) (Notice of
filing and immediate effectiveness of proposed rule change to
establish NYSE Integrated Feed) and 76485 (November 20, 2015), 80 FR
74158 (November 27, 2015) (SR-NYSE-2015-57) (Notice of filing and
immediate effectiveness of proposed rule change to establish fees
for the NYSE Integrated Feed).
---------------------------------------------------------------------------

    Professor Rysman's analysis of this confidential firm-level data
shows that firms that purchased the NYSE Integrated Feed market data
product after its introduction were more likely to route orders to NYSE
as opposed to one of the other NYSE-affiliated exchanges, such as NYSE
Arca or NYSE American.\36\ Moreover, Professor Rysman shows that the
same is true for firms that did not subscribe to the NYSE Integrated
Feed: The introduction of the NYSE Integrated Feed led to more trading
on NYSE (as opposed to other NYSE-affiliated exchanges) by firms that
did not subscribe to the NYSE Integrated Feed.\37\ This is the sort of
externality that is a key characteristic of a platform market.\38\
---------------------------------------------------------------------------

    \36\ Rysman Paper ]] 80-90.
    \37\ Id. ]] 91-93.
    \38\ Id. ] 91.
---------------------------------------------------------------------------

    From this empirical evidence, Professor Rysman concludes:
     ``[D]ata is more valuable when it reflects more trading
activity and more liquidity-providing orders. These linkages alone are
enough to make platform economics necessary for understanding the
pricing of market data.'' \39\
---------------------------------------------------------------------------

    \39\ Id. ] 95.
---------------------------------------------------------------------------

     ``[L]inkages running in the opposite direction, from data
to trading, are also very likely to exist. This is because market data
from an exchange reduces uncertainty about the likelihood, price, or
timing of execution for an order on that exchange. This reduction in
uncertainty makes trading on that exchange more attractive for traders
that subscribe to that exchange's market data. Increased trading by
data subscribers, in turn, makes trading on the exchange in question
more attractive for traders that do not subscribe to the exchange's
market data.'' \40\
---------------------------------------------------------------------------

    \40\ Id. ] 96.
---------------------------------------------------------------------------

     The ``mechanisms by which market data makes trading on an
exchange more attractive for subscribers to market data . . . apply to
a wide assortment of market data products, including BBO, order book,
and full order-by-order depth of book data products at all exchanges.''
\41\
---------------------------------------------------------------------------

    \41\ Id.
---------------------------------------------------------------------------

     ``[E]mpirical evidence confirms that stock exchanges are
platforms for data and trading.'' \42\
---------------------------------------------------------------------------

    \42\ Id. ] 97.
---------------------------------------------------------------------------

     ``The platform nature of stock exchanges means that data
fees cannot be analyzed in isolation, without accounting for the
competitive dynamics in trading services.'' \43\
---------------------------------------------------------------------------

    \43\ Id. ] 98.
---------------------------------------------------------------------------

     ``Competition is properly understood as being between
platforms (i.e., stock exchanges) that balance the needs of consumers
of data and traders.'' \44\
---------------------------------------------------------------------------

    \44\ Id.
---------------------------------------------------------------------------

     ``Data fees, data use, trading fees, and order flow are
all interrelated.'' \45\
---------------------------------------------------------------------------

    \45\ Id.
---------------------------------------------------------------------------

     ``Competition for order flow can discipline the pricing of
market data, and vice-versa.'' \46\
---------------------------------------------------------------------------

    \46\ Id.
---------------------------------------------------------------------------

     ``As with platforms generally, overall competition between
exchanges will limit their overall profitability, not margins on any
particular side of the platform.'' \47\
---------------------------------------------------------------------------

    \47\ Id. ] 100.
---------------------------------------------------------------------------

    The Exchange has observed a similar correlation in connection with
its

offering of the NYSE National Integrated Feed. Since May 2018, when the
Exchange re-launched trading, the number of subscribers of the NYSE
National Integrated Feed has grown from 12 to 56. Over this same
period, the Exchange has increased market share from 0% to nearly 2%.
The Exchange therefore believes that its proposed fees for the NYSE
National Integrated Feed are subject to platform-based competitive
constraints on pricing.
c. Exchange Market Data Fees Are Constrained by the Availability of
Substitute Platforms
    Professor Rysman's conclusions that exchanges function as platforms
for market data and transaction services mean that exchanges do not set
fees for market data products without considering, and being
constrained by, the effect the fees will have on the order-flow side of
the platform. As the D.C. Circuit recognized in NetCoalition I, ``[n]o
one disputes that competition for order flow is fierce.'' \48\ The
court further noted that ``no exchange possesses a monopoly, regulatory
or otherwise, in the execution of order flow from broker dealers,'' and
that an exchange ``must compete vigorously for order flow to maintain
its share of trading volume.'' \49\
---------------------------------------------------------------------------

    \48\ NetCoalition I, 615 F.3d at 544 (internal quotation
omitted).
    \49\ Id.
---------------------------------------------------------------------------

    Similarly, the Commission itself has recognized that the market for
trading services in NMS stocks has become ``more fragmented and
competitive.'' \50\ The Commission's Division of Trading and Markets
has also recognized that with so many ``operating equities exchanges
and dozens of ATSs, there is vigorous price competition among the U.S.
equity markets and, as a result, [transaction] fees are tailored and
frequently modified to attract particular types of order flow, some of
which is highly fluid and price sensitive.'' \51\ Indeed, today, equity
trading is currently dispersed across 13 exchanges,\52\ 31 alternative
trading systems,\53\ and numerous broker-dealer internalizers and
wholesalers, all competing for order flow. Based on publicly-available
information, no single exchange has more than 18% market share.\54\
---------------------------------------------------------------------------

    \50\ See Securities Exchange Act Release No. 51808, 84 FR 5202,
5253 (February 20, 2019) (File No. S7-05-18).
    \51\ Commission Division of Trading and Markets, Memorandum to
EMSAC, dated October 20, 2015, available here: https://www.sec.gov/spotlight/emsac/memo-maker-taker-fees-on-equities-exchanges.pdf.
    \52\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at http://markets.cboe.com/us/equities/market_share/. See generally https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
    \53\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of
alternative trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/atslist.htm.
    \54\ See Cboe Global Markets U.S. Equities Market Volume
Summary, available at http://markets.cboe.com/us/equities/market_share/.
---------------------------------------------------------------------------

    Further, low barriers to entry mean that new exchanges may rapidly
and inexpensively enter the market and offer additional substitute
platforms to compete with the Exchange.\55\ In addition to the 13
presently-existing exchanges, three new ones are expected to enter the
market in 2020: Long Term Stock Exchange (LTSE), which has been
approved as an equities exchange but is not yet operational; \56\
Members Exchange (MEMX), which has recently filed its application to be
approved as a registered equities exchange; \57\ and Miami
International Holdings (MIAX), which has announced its plan to
introduce equities trading on an existing registered options
exchange.\58\
---------------------------------------------------------------------------

    \55\ See Jones Paper at 10-11.
    \56\ See Securities Exchange Act Release No. 85828 (May 10,
2019) (File No. 10-234) (Findings, Opinion, and Order of the
Commission in the Matter of the Application of Long Term Stock
Exchange, Inc. for Registration as a National Securities Exchange).
    \57\ See Securities Exchange Act Release No. 87436 (October 31,
2019) (File No. 10-237) (Notice of filing of application of MEMX LLC
for registration as a national securities exchange under Section 6
of the Act).
    \58\ See Press Release of Miami International Holdings Inc.,
dated May 17, 2019, available here: https://www.miaxoptions.com/sites/default/files/press_release-files/MIAX_Press_Release_05172019.pdf.
---------------------------------------------------------------------------

    Given Professor Rysman's conclusion that exchanges are platforms
for market data and trading, this fierce competition for order flow on
the trading side of the platform acts to constrain, or ``discipline,''
the pricing of market data on the other side of the platform.\59\ And
due to the ready availability of substitutes and the low cost to move
order flow to those substitute trading venues, an exchange setting
market data fees that are not at competitive levels would expect to
quickly lose business to alternative platforms with more attractive
pricing.\60\ Although the various exchanges may differ in their
strategies for pricing their market data products and their transaction
fees for trades--with some offering market data for free along with
higher trading costs, and others charging more for market data and
comparatively less for trading--the fact that exchanges are platforms
ensures that no exchange makes pricing decisions for one side of its
platform without considering, and being constrained by, the effects
that price will have on the other side of the platform.
---------------------------------------------------------------------------

    \59\ Rysman Paper ] 98.
    \60\ See Jones Paper at 11.
---------------------------------------------------------------------------

    In sum, the fierce competition for order flow thus constrains any
exchange from pricing its market data at a supracompetitive price, and
constrains the Exchange here in setting its fees for the NYSE National
Integrated Feed.
    The proposed fees are therefore reasonable because in setting them,
the Exchange is constrained by the availability of numerous substitute
platforms offering market data products and trading. Such substitutes
need not be identical, but only substantially similar to the product at
hand.
    More specifically, in setting fees for the NYSE National Integrated
Feed, the Exchange is constrained by the fact that, if its pricing
across the platform is unattractive to customers, customers have their
pick of an increasing number of alternative platforms to use instead of
the Exchange. The Exchange believes that it has considered all relevant
factors and has not considered irrelevant factors in order to establish
reasonable fees. The existence of numerous alternative platforms to the
Exchange's platform ensures that the Exchange cannot set unreasonable
market data fees without suffering the negative effects of that
decision in the fiercely competitive market in which it operates as a
platform.
d. NYSE National Integrated Feed Is an Optional Market Data Product
    Subscribing to the NYSE National Integrated Feed is entirely
optional. The Exchange is not required to make the NYSE National
Integrated Feed available to any customers, nor is any customer
required to purchase the NYSE National Integrated Feed. Unlike some
other data products (e.g., the consolidated quotation and last-sale
information feeds) that firms are required to purchase in order to
fulfil regulatory obligations,\61\ a customer's decision whether to
purchase the NYSE National Integrated Feed is entirely discretionary.
Most firms that choose to subscribe to the NYSE National

Integrated Feed do so for the primary goals of using it to increase
their revenues, reduce their expenses, and in some instances to compete
directly with the Exchange for order flow. Such firms are able to
determine for themselves whether the NYSE National Integrated Feed is
necessary for their business needs, and if so, whether or not it is
attractively priced. If the NYSE National Integrated Feed does not
provide sufficient value to firms based on the uses those firms may
have for it, such firms may simply choose to conduct their business
operations in ways that do not use the NYSE National Integrated
Feed.\62\ If they do not choose to use the NYSE National Integrated
Feed, they could also choose not to direct order flow to the Exchange.
---------------------------------------------------------------------------

    \61\ The Exchange notes that broker-dealers are not required to
purchase proprietary market data to comply with their best execution
obligations. See In the Matter of the Application of Securities
Industry and Financial Markets Association for Review of Actions
Taken by Self-Regulatory Organizations, Release Nos. 34-72182; AP-3-
15350; AP-3-15351 (May 16, 2014). Similarly, there is no requirement
in Regulation NMS or any other rule that proprietary data be
utilized for order routing decisions, and some broker-dealers and
ATSs have chosen not to do so.
    \62\ See generally Jones Paper at 8, 10-11.
---------------------------------------------------------------------------

    But even if such firms determine that the fees for NYSE National
Integrated Feed are too high, customers can access much of the same
data on the NYSE National Integrated Feed for free by subscribing to
the NYSE National BBO feed (which includes best-bid-and-offer
information for NYSE National on a real-time basis) and NYSE National
Trades (which includes last-sale information on a real-time basis),
both of which are offered at no cost. NYSE National top-of-book
quotation information and last-sale information is also available on
the consolidated SIP feeds. In this way, the NYSE National BBO, NYSE
National Trades, and SIP data products are all substitutes for a
significant portion of the data available on the NYSE National
Integrated Feed. The availability of these substitute products
constrains the Exchange's ability to charge supracompetitive prices for
the NYSE National Integrated Feed.
    The only content available on NYSE National Integrated Feed that is
not available on these other products is the order-by-order look at the
NYSE National book, which provides information about depth of book on
the Exchange. The Exchange has been a vocal advocate for the creation
of a ``SIP Premium'' product that would include depth-of-book
information on the consolidated market data feeds.\63\ Future products
such as SIP Premium would include not only integrated depth-of-book
information from NYSE National, but all other exchanges as well, and
would further constrain the Exchange's ability to price NYSE National
Integrated Feed at a supracompetitive price.
---------------------------------------------------------------------------

    \63\ See NYSE, ``Stock Quotes and Trade Data: One Size Doesn't
Fit All'' (August 22, 2019), posted at https://www.nyse.com/equities-insights#20190822.
---------------------------------------------------------------------------

    Further, in the case of products that are also redistributed
through market data vendors such as Bloomberg and Refinitiv, the
vendors themselves provide additional price discipline for proprietary
data products because they control the primary means of access to
certain end users. These vendors impose price discipline based upon
their business models. For example, vendors that assess a surcharge on
data they sell are able to refuse to offer proprietary products that
their end users do not or will not purchase in sufficient numbers.
Currently, only one vendor redistributes the NYSE National Integrated
Feed. Even in the absence of fees for the NYSE National Integrated
Feed, vendors have not elected to make available the NYSE National
Integrated Feed and likely will not unless their customers request it,
and customers will not elect to pay the proposed fees unless the NYSE
National Integrated Feed can provide value by sufficiently increasing
revenues or reducing costs in the customer's business in a manner that
will offset the fees. All of these factors operate as constraints on
pricing proprietary data products.
    In setting the proposed fees for the NYSE National Integrated Feed,
the Exchange considered the competitiveness of the market for
proprietary data and all of the implications of that competition. The
Exchange believes that it has considered all relevant factors and has
not considered irrelevant factors in order to establish reasonable
fees. The existence of alternatives to the Exchange's platform and the
continued availability of the Exchange's separate data feeds for free
ensure that the Exchange cannot set unreasonable fees when vendors and
subscribers can elect these alternatives or choose not to purchase a
specific proprietary data product if the attendant fees are not
justified by the returns that any particular vendor or data recipient
would achieve through the purchase.
2. The Proposed Fees Are Reasonable
    The specific fees that the Exchange proposes for the NYSE National
Integrated Feed are reasonable for the following additional reasons.
    Overall. The Exchange believes that the proposed fees for the NYSE
National Integrated Feed are reasonable because they represent not only
the value of the data available from the NYSE National BBO and NYSE
National Trades data feeds but also the value of receiving the data on
an integrated basis. Receiving the data on an integrated basis provides
greater efficiencies and reduced errors for vendors and subscribers
that currently choose to integrate the data themselves after receiving
it from the Exchange. Some vendors and subscribers may not have the
technology or resources to integrate separate data feeds in a timely
and/or efficient manner, and thus the integration feature of the
product may be valuable to them.
    The Exchange believes the proposed fees for the NYSE National
Integrated Feed are also reasonable when compared to fees for
comparable products, such as the NYSE American Integrated Feed.\64\
Even though NYSE National's market share is several times higher than
NYSE American's, the Exchange is proposing fees for the NYSE National
Integrated Feed that are based on the existing fee structure and rates
that data recipients already pay for the NYSE American Integrated Feed.
The Exchange believes that adopting the same fee structure as its
affiliated exchanges would reduce administrative burdens on NYSE
National data subscribers that also currently subscribe to market data
feeds from NYSE, NYSE Arca, or NYSE American.
---------------------------------------------------------------------------

    \64\ See NYSE American Integrated Feed, https://www.nyse.com/market-data/real-time/integrated-feed.
---------------------------------------------------------------------------

    Access Fee. The Exchange believes that is reasonable to charge
access fees because of the value of the data to data recipients in
their profit-generating activities. The Exchange believes that the
proposed monthly Access Fee of $2,500 for the NYSE National Integrated
Feed is reasonable because it is comparable to the monthly access fee
for the NYSE American Integrated Feed, which is also $2,500.\65\
---------------------------------------------------------------------------

    \65\ See NYSE American LLC Equities Proprietary Market Data Fees
at https://www.nyse.com/publicdocs/nyse/data/NYSE_American_Equities_Market_Data_Fee_Schedule.pdf.
---------------------------------------------------------------------------

    Redistribution Fees. The Exchange believes that it is reasonable to
charge redistribution fees because vendors receive value from
redistributing the data in their business products for their customers.
The Exchange believes that charging a Redistribution Fee is reasonable
because the vendors that would be charged such a fee profit by re-
transmitting the Exchange's market data to their customers. This fee
would be charged only once per month to each vendor account that
redistributes the NYSE National Integrated Feed, regardless of the
number of customers to which that vendor redistributes the data.
Currently, there is only one vendor that redistributes the NYSE
National Integrated Feed. Accordingly, this proposed fee would have
limited impact. The Exchange believes the proposed monthly
Redistribution Fee of

$1,500 for the NYSE National Integrated Feed is reasonable because it
is comparable to the monthly Redistribution Fee for NYSE American
Integrated Feed, which is also $1,500, and the monthly External
Distributor Fee for Nasdaq BX, Inc.'s (``Nasdaq BX'') BX TotalView
Product, which is also $1,500.\66\
---------------------------------------------------------------------------

    \66\ See Section 119(a) of Nasdaq BX Equity 7 Pricing Schedule.
---------------------------------------------------------------------------

    User Fees. The Exchange believes that having separate Professional
and Non-Professional User fees for the NYSE National Integrated Feed is
reasonable because it will make the product more affordable and result
in greater availability to Professional and Non-Professional Users.
Setting a modest Non-Professional User fee is reasonable because it
provides an additional method for Non-Professional Users to access the
NYSE National Integrated Feed by providing the same data that is
available to Professional Users. The proposed monthly Professional User
Fee (Per User) of $10 and monthly Non-Professional User Fee (Per User)
of $1 are reasonable because they are comparable to per user fees for
the NYSE American Integrated Feed. The monthly Professional User Fee
(Per User) for the NYSE American Integrated Feed is $10, and the
monthly Non-Professional User Fee (Per User) for the NYSE American
Integrated Feed is $2.\67\
---------------------------------------------------------------------------

    \67\ See NYSE American LLC Equities Proprietary Market Data Fees
at https://www.nyse.com/publicdocs/nyse/data/NYSE_American_Equities_Market_Data_Fee_Schedule.pdf.
---------------------------------------------------------------------------

    Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are reasonable, because they reflect the value of the
data to the data recipients in their profit-generating activities and
do not impose the burden of counting non-display devices.
    The Exchange believes that the proposed Non-Display Use fees
reflect the significant value of the non-display data use to data
recipients, which purchase such data on an entirely voluntary basis.
Non-display data can be used by data recipients for a wide variety of
profit-generating purposes, including proprietary and agency trading
and smart order routing, as well as by data recipients that operate
order matching and execution platforms that compete directly with the
Exchange for order flow. The data also can be used for a variety of
non-trading purposes that indirectly support trading, such as risk
management and compliance. Although some of these non-trading uses do
not directly generate revenues, they can nonetheless substantially
reduce a recipient's costs by automating such functions so that they
can be carried out in a more efficient and accurate manner and reduce
errors and labor costs, thereby benefiting recipients. The Exchange
believes that charging for non-trading uses is reasonable because data
recipients can derive substantial value from such uses, for example, by
automating tasks so that can be performed more quickly and accurately
and less expensively than if they were performed manually.
    Previously, the non-display use data pricing policies of many
exchanges required customers to count, and the exchanges to audit the
count of, the number of non-display devices used by a customer. As non-
display use grew more prevalent and varied, however, exchanges received
an increasing number of complaints about the impracticality and
administrative burden associated with that approach. In response, the
Exchange and its affiliated exchanges developed a non-display use
pricing structure that does not require non-display devices to be
counted or those counts to be audited, and instead looks merely at the
three following categories of potential use of non-display data: Use of
the data on the customer's own behalf (Category 1), use on behalf of
clients (Category 2), and use to internally match buy and sell orders
within an organization (Category 3).
    The Exchange believes that it is reasonable to segment the fee for
non-display use into these three categories. As noted above, the uses
to which customers can put the NYSE National Integrated Feed are
numerous and varied, and the Exchange believes that charging separate
fees for these separate categories of use is reasonable because it
reflects the actual value the customer derives from the data, based
upon how many categories of use the customer makes of the data.
Segmenting the fees for non-display data in this way avoids the
unreasonable result of customers that make only limited non-display use
of the data paying the same fees as customers that use the data for
numerous different revenue-generating and cost-saving purposes.
    The Exchange believes that the proposed fees of $5,000 per month
for each of Categories 1, 2, and 3 is reasonable. These fees are
comparable to the NYSE American Integrated Feed fees for non-display
use for the different categories of use, which is also $5,000 per
category.\68\ The Exchange believes that the proposed fees directly and
appropriately reflect the significant value of using non-display data
in a wide range of computer-automated functions relating to both
trading and non-trading activities and that the number and range of
these functions continue to grow through innovation and technology
developments.
---------------------------------------------------------------------------

    \68\ See id.
---------------------------------------------------------------------------

    The Exchange also believes that, regarding Category 3 fees, it is
reasonable to charge $5,000 per month for each trading platform on
which the data recipient uses the Non-Display data, because such use of
the data is directly in competition with the Exchange and the Exchange
should be permitted to recoup some of its lost trading revenue by
charging for the data that makes such competition possible. The
Exchange believes that it is reasonable to cap such fees for Category 3
use at $15,000 per month per data recipient, because a higher monthly
fee may potentially dissuade competitors from buying the NYSE National
Integrated Feed for use by their trading platforms.
    The proposed Non-Display Use fees for the NYSE National Integrated
Feed are also reasonable because they take into account the extra value
of receiving the data for Non-Display Use on an integrated basis. The
Exchange believes that the proposed fees directly and appropriately
reflect the significant value of using the NYSE National Integrated
Feed on a non-display basis in a wide range of computer-automated
functions relating to both trading and non-trading activities and that
the number and range of these functions continue to grow through
innovation and technology developments.\69\
---------------------------------------------------------------------------

    \69\ See also Exchange Act Release No. 69157, March 18, 2013, 78
FR 17946, 17949 (March 25, 2013) (SR-CTA/CQ-2013-01) (``[D]ata feeds
have become more valuable, as recipients now use them to perform a
far larger array of non-display functions. Some firms even base
their business models on the incorporation of data feeds into black
boxes and application programming interfaces that apply trading
algorithms to the data, but that do not require widespread data
access by the firm's employees. As a result, these firms pay little
for data usage beyond access fees, yet their data access and usage
is critical to their businesses.'').
---------------------------------------------------------------------------

    Non-Display Use Declaration Late Fee. The Exchange believes that it
is reasonable to require annual submissions of the Non-Display Use
Declaration so that the Exchange will have current and accurate
information about the use of the NYSE National Integrated Feed and can
correctly assess fees for the uses of the NYSE National Integrated
Feed. Requiring annual submissions of such declarations is reasonable
because it also allows users to re-assess their own usage each year.
    The Exchange believes that it is reasonable to impose a late fee in
connection with the submission of the Non-Display Use Declaration. In
order to correctly assess fees for the non-

display use of the NYSE National Integrated Feed, the Exchange needs to
have current and accurate information about the use of the NYSE
National Integrated Feed. The failure of data recipients to submit the
Non-Display Use Declaration on time leads to potentially incorrect
billing and administrative burdens, including tracking and obtaining
late Non-Display Use Declarations and correcting and following up on
payments owed in connection with late Non-Display Use Declarations. The
purpose of the late fee is to incent data recipients to submit the Non-
Display Use Declaration promptly to avoid the administrative burdens
associated with the late submission of Non-Display Use Declarations.
    Multiple Data Feed Fee. The Exchange believes that it is reasonable
to require data recipients to pay a modest additional fee for taking a
data feed for a market data product in more than two locations, because
such data recipients can derive substantial value from being able to
consume the product in as many locations as they want. In addition,
there are administrative burdens associated with tracking each location
at which a data recipient receives the product. The Multiple Data Feed
Fee is designed to encourage data recipients to better manage their
requests for additional data feeds and to monitor their usage of data
feeds. The proposed fee is designed to apply to data feeds received in
more than two locations so that each data recipient can have one
primary and one backup data location before having to pay a multiple
data feed fee.
    Fee Waiver for Federal Agencies. The Exchange believes the proposal
to not charge the access fees, display fees for professional users, and
non-display fees associated with its proprietary market data products
to customers that are Federal agencies is reasonable because it is
designed to facilitate federal government regulation without giving an
undue advantage to one set of commercial users over another. The
Exchange believes that it is reasonable to assess no fees to Federal
agencies that subscribe to the Exchange's proprietary market data
products because Federal agencies do not use the Exchange's proprietary
market data for commercial gain, but only for regulatory purposes.
    One-Month Free Trial. The Exchange believes the proposal to provide
the NYSE National Integrated Free to new customers free-of-charge for
their first subscription month is reasonable because it would allow
vendors and subscribers to become familiar with the feed and determine
whether it suits their needs without incurring fees. Making a new
market data product available for free for a trial period is consistent
with offerings of other exchanges. For example, Nasdaq BX offers new
subscribers of BX TotalView a 30-day waiver of user fees.\70\
---------------------------------------------------------------------------

    \70\ See Section 123(a)(4) of Nasdaq BX's Equity 7 Pricing
Schedule.
---------------------------------------------------------------------------

    No Charge Until February 3, 2020. The Exchange believes it is
reasonable to continue to make the NYSE National Integrated Feed
available free of charge through February 3, 2020 because providing it
at no charge would continue to provide an opportunity for vendors and
subscribers to determine whether the NYSE National Integrated Feed
suits their needs without incurring fees. As noted above, other
exchanges provide or have provided market data products free for a
certain period of time.
    For all of the foregoing reasons, the Exchange believes that the
proposed fees for the NYSE National Integrated Fee are reasonable.
The Proposed Fees Are Equitably Allocated
    The Exchange believes the proposed fees for the NYSE National
Integrated Feed are allocated fairly and equitable among the various
categories of users of the feed, and any differences among categories
of users are justified.
    Overall. The Exchange believes that the proposed fees are equitably
allocated because they will apply to all data recipients that choose to
subscribe to the NYSE National Integrated Feed. Any subscriber or
vendor that chooses to subscribe to the NYSE National Integrated Feed
is subject to the same Fee Schedule, regardless of what type of
business they operate or the use they plan to make of the data feed.
Subscribers and vendors may choose to continue to receive some or all
of the data on the NYSE National Integrated Feed through the existing
separate feeds for free, or they can choose to pay for the NYSE
National Integrated Feed in order to receive integrated data, or they
or they can choose a combination of the two approaches, thereby
allowing each vendor or subscriber to choose the best business solution
for itself.
    Access Fee. The Exchange believes the proposed monthly Access Fee
of $2,500 for the NYSE National Integrated Feed is equitably allocated
because it would be charged on an equal basis to all data recipients
that receive a data feed of the NYSE National Integrated Feed,
regardless of what type of business they operate or the use they plan
to make of the data feed.
    Redistribution Fees. The Exchange believes the proposed monthly fee
of $1,500 for redistributing the NYSE National Integrated Feed is
equitably allocated because it would be charged on an equal basis to
those vendors that choose to redistribute the feed.
    User Fees. The Exchange believes that the fee structure
differentiating Professional User fees ($10 per month per user) from
Non-Professional User fees ($1 per month per user) for display device
access to the NYSE National Integrated Feed is equitable. This
structure has long been used by the Exchange to reduce the price of
data to Non-Professional Users and make it more broadly available.\71\
Offering the NYSE National Integrated Feed to Non-Professional Users
with the same data as is available to Professional Users results in
greater equity among data recipients. These user fees would be charged
uniformly to all display devices that have access to the NYSE National
Integrated Feed.
---------------------------------------------------------------------------

    \71\ See, e.g., Securities Exchange Act Release No. 59544 (March
9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131)
(establishing the $15 Non-Professional User Fee (Per User) for NYSE
OpenBook); Securities Exchange Act Release No. 20002, File No. S7-
433 (July 22, 1983), 48 FR 34552 (July 29, 1983) (establishing Non-
Professional fees for CTA data); NASDAQ BX Equity 7 Pricing
Schedule, Section 123.
---------------------------------------------------------------------------

    Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are equitably allocated because they would require
subscribers to pay fees only for the uses they actually make of the
data. As noted above, non-display data can be used by data recipients
for a wide variety of profit-generating purposes (including trading,
risk management, and compliance) as well as purposes that do not
directly generate revenues but nonetheless substantially reduce the
recipient's costs by automating certain functions. The Exchange
believes that it is equitable to charge non-display data subscribers a
$5,000 fee for each category of use they make of such data--namely,
using the data on their own behalf (Category 1), on behalf of their
clients (Category 2), and to internally match buy and sell orders
within an organization (Category 3)--because this fee structure results
in subscribers with greater uses of the data paying higher fees, and
subscribers with fewer uses of the data paying lower fees. This
segmented fee structure is also equitable because no subscriber of non-
display data would be charged a fee for a category of use in which it
did not actually engage.
    The Exchange also believes that, regarding Category 3 fees, it is
equitable to charge $5,000 per month for each

trading platform on which the data recipient uses the Non-Display data,
because such use of the data is directly in competition with the
Exchange and the Exchange should be permitted to recoup some of its
lost trading revenue by charging for the data that makes such
competition possible. The Exchange believes that it is equitable to cap
such fees for Category 3 use at $15,000 per month per data recipient,
because a higher monthly fee may potentially dissuade competitors from
buying the NYSE National Integrated Feed for use by their trading
platforms.
    Non-Display Use Declaration Late Fee. The Exchange believes that
the proposed fee of $1,000 per month for a late Non-Display Use
Declaration is equitably allocated because it applies to any data
recipient that pays an Access Fee for the NYSE National Integrated Feed
but has failed to complete and submit a Non-Display Use Declaration. In
addition, the Exchange believes that it is equitable to charge a late
fee to subscribers who fail to timely submit their Non-Display Use
Declarations because their failure to do so leads to potentially
incorrect billing and administrative burdens on the part of the
Exchange. The Exchange believes it is equitable to defray these
administrative costs by imposing a late fee only on subscribers' whose
declarations were late, as opposed to all subscribers.
    Multiple Data Feed Fee. The Exchange believes that the $200 per
month per location fee to data recipients taking the NYSE National
Integrated Feed in more than two locations is equitable because it
would apply to all such customers, regardless of what type of business
they operate or the use they make of the data feed. In addition, the
Exchange believes that it is equitable to charge a fee to subscribers
for taking a data feed in more than two locations because there are
administrative burdens on the part of the Exchange associated with
tracking each location at which a data recipient receives the product.
The Exchange believes that it is equitable for it to defray these
administrative costs by imposing a modest fee only on subscribers who
seek to take the feed in more than two locations, as opposed to all
subscribers.
    Fee Waiver for Federal Agencies. The Exchange believes that the
proposal to not charge the access fees, display fees for professional
users, and non-display fees associated with its proprietary market data
products to customers that are Federal agencies is equitable because it
is designed to facilitate federal government regulation without giving
an undue advantage to one set of commercial users over another. The
Exchange believes that it is equitable to waive fees for Federal
agencies that subscribe to the Exchange's proprietary market data
products because Federal agencies do not use the Exchange's proprietary
market data for commercial gain, but only for regulatory purposes.
    One-Month Free Trial. The Exchange believes the proposal to provide
the NYSE National Integrated Feed to new customers free-of-charge for
their first subscription month is equitable because it applies to any
first-time subscriber, regardless of the use they plan to make of the
feed. As proposed, any first-time subscriber of the NYSE National
Integrated Feed would not be charged the Access Fee, Non-Display Fee,
any applicable Professional and Non-Professional User Fee, and
Redistribution Fee for one calendar month. The Exchange believes it is
equitable to restrict the availability of this one-month free trial to
customers that have not previously subscribed to the NYSE National
Integrated Feed, since customers who are current or previous
subscribers of the feed are already familiar with it and whether it
suits their needs.
    No Charge Until February 3, 2020. The Exchange believes that the
proposal to continue to make the NYSE National Integrated Feed
available free of charge through February 3, 2020 is equitable because
it applies equally to all customers.
    For all of the foregoing reasons, the Exchange believes that the
proposed fees for the NYSE National Integrated Fee are equitably
allocated.
The Proposed Fees Are Not Unfairly Discriminatory
    The Exchange believes the proposed fees for the NYSE National
Integrated Feed are not unfairly discriminatory because any differences
in the application of the fees are based on meaningful distinctions
between customers, and those meaningful distinctions are not unfairly
discriminatory between customers.
    Overall. The Exchange believes that the proposed fees are not
unfairly discriminatory because they would apply to all data recipients
that choose to subscribe to the NYSE National Integrated Feed. Any
vendor or subscriber that chooses to subscribe to the NYSE National
Integrated Feed is subject to the same Fee Schedule, regardless of what
type of business they operate or the use they plan to make of the data
feed. Vendors and subscribers may choose to continue to receive some or
all of the data on the NYSE National Integrated Feed through the
existing separate feeds for free, or they can choose to pay for the
NYSE National Integrated Feed in order to receive integrated data, or
they or they can choose a combination of the two approaches, thereby
allowing each vendor or subscriber to choose the best business solution
for itself.
    Access Fee. The Exchange believes the proposed monthly Access Fee
of $2,500 for the NYSE National Integrated Feed is not unfairly
discriminatory because it would be charged on an equal basis to all
data recipients that receive a data feed of the NYSE National
Integrated Feed, regardless of what type of business they operate or
the use they plan to make of the data feed.
    Redistribution Fees. The Exchange believes the proposed monthly fee
of $1,500 for redistributing the NYSE National Integrated Feed is not
unfairly discriminatory because it would be charged on an equal basis
to those vendors that choose to redistribute the feed.
    User Fees. The Exchange believes that the fee structure
differentiating Professional User fees ($10 per month per user) from
Non-Professional User fees ($1 per month per user) for display device
access to the NYSE National Integrated Feed is not unfairly
discriminatory. This structure has long been used by the Exchange to
reduce the price of data to Non-Professional Users and make it more
broadly available.\72\ Offering the NYSE National Integrated Feed to
Non-Professional Users with the same data as is available to
Professional Users results in greater equity among data recipients.
These user fees would be charged uniformly to all display devices that
have access to the NYSE National Integrated Feed.
---------------------------------------------------------------------------

    \72\ See e.g., Securities Exchange Act Release No. 59544 (March
9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131)
(establishing the $15 Non-Professional User Fee (Per User) for NYSE
OpenBook). See e.g., Securities Exchange Act Release No. 20002, File
No. S7-433 (July 22, 1983), 48 FR 34552 (July 29, 1983)
(establishing nonprofessional fees for CTA data); NASDAQ BX Equity 7
Pricing Schedule, Section 123.
---------------------------------------------------------------------------

    Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are not unfairly discriminatory because they would
require subscribers for non-display use to pay fees only for the
categories of use they actually make of the data. As noted above, non-
display data can be used by data recipients for a wide variety of
profit-generating purposes (including trading, risk management, and
compliance) as well as purposes that do not directly generate revenues
but nonetheless substantially reduce the recipient's costs by
automating certain functions. The

Exchange believes that it is not unfairly discriminatory to charge non-
display data subscribers a $5,000 fee for each category of use they
make of such data--namely, using the data on their own behalf (Category
1), on behalf of their clients (Category 2), and to internally match
buy and sell orders within an organization (Category 3)--because this
fee structure results in subscribers with greater uses for the data
paying higher fees, while subscribers with fewer uses of the data pay
lower fees. This segmented fee structure is not unfairly discriminatory
because no subscriber of non-display data would be charged a fee for a
category of use in which it did not actually engage.
    The Exchange also believes that, regarding Category 3 fees, it is
not unreasonably discriminatory to charge $5,000 per month for each
trading platform on which the data recipient uses the Non-Display data,
because such use of the data is directly in competition with the
Exchange and the Exchange should be permitted to recoup some of its
lost trading revenue by charging for the data that makes such
competition possible. The Exchange believes that it is not unreasonably
discriminatory to cap such fees for Category 3 use at $15,000 per month
per data recipient, because a higher monthly fee may potentially
dissuade competitors from buying the NYSE National Integrated Feed for
use by their trading platforms.
    Non-Display Use Declaration Late Fee. The Exchange believes that
the proposed fee of $1,000 per month for a late Non-Display Use
Declaration is not unfairly discriminatory because it applies to any
data recipient that pays an Access Fee for the NYSE National Integrated
Feed but has failed to complete and submit a Non-Display Use
Declaration. In addition, the Exchange believes that it is not unfairly
discriminatory to charge a late fee to subscribers who fail to timely
submit their Non-Display Use Declarations because their failure to do
so leads to potentially incorrect billing and administrative burdens on
the part of the Exchange. Nor is it unfairly discriminatory for the
Exchange to defray these administrative costs by imposing a late fee
only on subscribers' whose declarations were late, as opposed to all
subscribers.
    Multiple Data Feed Fee. The Exchange believes that the $200 per
month per location fee to data recipients taking the NYSE National
Integrated Feed in more than two locations is not unfairly
discriminatory because it would apply to all such customers, regardless
of what type of business they operate or the use they make of the data
feed. In addition, the Exchange believes that it is not unfairly
discriminatory to charge a fee to subscribers for taking a data feed in
more than two locations because there are administrative burdens on the
part of the Exchange associated with tracking each location at which a
data recipient receives the product. The Exchange believes that it is
not unfairly discriminatory for it to defray these administrative costs
by imposing a modest fee only on subscribers who seek to take the feed
in more than two locations, as opposed to all subscribers.
    Fee Waiver for Federal Agencies. The Exchange believes that the
proposal to not charge the access fees, display fees for professional
users, and non-display fees associated with its proprietary market data
products to customers that are Federal agencies is not unreasonably
discriminatory because it is designed to facilitate federal government
regulation without giving an undue advantage to one set of commercial
users over another. The Exchange believes that it is not unfairly
discriminatory to waive fees for Federal agencies that subscribe to the
Exchange's proprietary market data products because Federal agencies do
not use the Exchange's proprietary market data for commercial gain, but
only for regulatory purposes.
    One-Month Free Trial. The Exchange believes the proposal to provide
the NYSE National Integrated Feed to new customers free-of-charge for
their first subscription month is not unfairly discriminatory because
it applies to any first-time subscriber, regardless of the use they
plan to make of the feed. As proposed, any first-time subscriber of the
NYSE National Integrated Feed would not be charged the Access Fee, Non-
Display Fee, any applicable Professional and Non-Professional User Fee,
and Redistribution Fee for one calendar month. The Exchange believes it
is not unfairly discriminatory to restrict the availability of this
one-month free trial to customers that have not previously subscribed
to the NYSE National Integrated Feed, since customers who are current
or previous subscribers of the feed are already familiar with it and
whether it suits their needs.
    No Charge Until February 3, 2020. The Exchange believes that the
proposal to continue to make the NYSE National Integrated Feed
available free of charge through February 3, 2020 is not unfairly
discriminatory because it applies equally to all customers.
    For all of the foregoing reasons, the Exchange believes that the
proposed fees for the NYSE National Integrated Fee are not unfairly
discriminatory.

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

    The Exchange does not believe that the proposed fees will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
    Intramarket Competition. The Exchange believes that the proposed
fees do not put any market participants at a relative disadvantage
compared to other market participants. As noted above, the proposed fee
schedule would apply to all subscribers of the NYSE National Integrated
Feed, and customers may not only choose whether to subscribe to the
feed at all, but may tailor their subscriptions by choosing particular
uses of the feed but not others (e.g., Category 1 only versus all three
categories; display device access only versus non-display use).
    The Exchange also believes that the proposed fees neither favor nor
penalize one or more categories of market participants in a manner that
would impose an undue market on competition. As shown above, to the
extent that particular proposed fees apply to only a subset of
subscribers (e.g., Category 2 fees apply only to those making non-
display use on behalf of clients; late fees apply only to customers who
fail to timely submit their declarations), those distinctions are not
unfairly discriminatory and do unfairly burden one set of customers
over another. To the contrary, by tailoring the proposed fees in this
manner, the Exchange believes that it has eliminated the potential
burden on competition that might result from unfairly asking
subscribers to pay fees for services they did not use, or late fees
they did not actually incur.
    Intermarket Competition. The Exchange believes that the proposed
fees do not impose a burden on competition or on other SROs that is not
necessary or appropriate. As demonstrated above and in Professor
Rysman's attached [sic] paper, exchanges are platforms for market data
and trading. In setting the proposed fees, the Exchange was constrained
by the availability of numerous substitute platforms also offering
market data products and trading, and low barriers to entry mean new
exchange platforms are frequently introduced. The fact that exchanges
are platforms ensures that no exchange can make pricing decisions for
one side of its platform without considering, and being constrained by,
the effects that price will have on the other side of the platform. In
setting fees for the NYSE National Integrated Feed, the Exchange is
constrained by the fact

that, if its pricing across the platform is unattractive to customers,
customers will have its pick of an increasing number of alternative
platforms to use instead of the Exchange. Given this intense
competition between platforms, no one exchange's market data fees can
impose an unnecessary burden on competition, and the Exchange's
proposed fees do not do so here.
    In addition, the Exchange believes that the proposed fees do not
impose a burden on competition or on other exchanges that is not
necessary or appropriate because of the availability of numerous
substitute market data products. Many other exchanges offer proprietary
data feeds like the NYSE National Integrated Feed, supplying depth of
book order data, last sale data, security status updates, stock summary
messages, and the exchange's best bid and offer at any given time, on a
real-time basis. Because market data users can find suitable substitute
feeds, an exchange that overprices its market data products stands a
high risk that users may substitute another platform, in which case the
platform would stand to lose both market data and trading fees. These
competitive pressures ensure that no one exchange's market data fees
can impose an unnecessary burden on competition, and the Exchange's
proposed fees do not do so here.

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

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

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \73\ of the Act and subparagraph (f)(2) of Rule
19b-4 \74\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \73\ 15 U.S.C. 78s(b)(3)(A).
    \74\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \75\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \75\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSENAT-2019-31 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSENAT-2019-31. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSENAT-2019-31, and should be submitted
on or before January 16, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\76\
---------------------------------------------------------------------------

    \76\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-27730 Filed 12-23-19; 8:45 am]
 BILLING CODE 8011-01-P