FR 2024-30924

Summary of the Document

The Securities and Exchange Commission has released a notice relating to the proposed rule change by the New York Stock Exchange (NYSE). Effective February 3, 2025, NYSE intends to raise certain fees for its Integrated Data Feed by up to 12.31%. This proposal marks the first fee increase since 2016 and is designed to account for inflation within the data processing sector. The increased fees aim to reflect NYSE's substantial technological investments to manage a growing volume of message traffic. The public is invited to comment on this proposal by January 21, 2025.

Significant Issues and Concerns

Several significant concerns arise from the document. Firstly, while the fee increase is intended to align with specific inflation metrics in the data processing industry, the document lacks detailed information on how these additional funds will directly benefit subscribers or enhance service quality. This lack of specificity might leave stakeholders questioning the tangible advantages of the increased fees.

Moreover, the exclusion of certain fees, like the Non-Professional User Fee and others from the increase, is not sufficiently explained. This could create ambiguity and lead to questions of consistency and fairness in how the fees are adjusted.

Additionally, the document leans heavily on technical terms such as the Producer Price Index (PPI) and Consumer Price Index (CPI). This use of specialized language might pose a challenge for a general audience, reducing the accessibility and transparency of critical information.

There is also a possible oversight concerning the broader economic factors that might influence cost and pricing structures beyond the niche data processing sector. The lack of discussion about broader economic impacts could lead to incomplete justification for the proposed fee increase.

Impact on the Public and Stakeholders

Broadly, this fee adjustment could result in higher operational costs for companies and individuals who rely on the NYSE Integrated Data Feed. Such costs might be transferred to end consumers, potentially affecting a wider audience indirectly.

For specific stakeholders, larger financial institutions may absorb these costs more readily due to economies of scale, potentially widening the gap between small and large market participants. The absence of discussion on the differential impacts on various sizes of market participants might raise concerns about competitive fairness and the equitable distribution of costs.

Positively, the investment by NYSE in technological enhancements promises improved data services. However, for the benefits to be fully realized, clear communication about service improvements accompanying fee increases would be helpful.

Conclusion

While the document primarily addresses fee increases to keep pace with specific cost indices, it raises numerous questions about transparency, fairness, and the equitable impact across different stakeholders. Attention to how these fee hikes will tackle broader operational improvements and consideration for smaller market entities could enhance the perceived fairness and understanding of these changes. Overall, while reflecting necessary financial adjustments, the proposal's implications should be more comprehensively detailed to ensure clarity and equity for all affected parties.

In reviewing the Federal Register document, the financial aspects of the proposed changes by the New York Stock Exchange (NYSE) are central to understanding the overall impact on stakeholders. The document outlines adjustments to several specific fees associated with its NYSE Integrated data feed.

The NYSE currently charges various fees on a monthly basis for accessing and using its integrated data services. These include an Access Fee of $7,500, a Redistribution Fee of $4,000, and fees for both Professional and Non-Professional Users, set at $70 and $16 per user, respectively. Additionally, there are Non-Display Fees of $20,000 applicable to several categories, a Non-Display Declaration Late Fee of $1,000, and a Multiple Data Feed Fee of $200.

The proposed changes indicate a one-time increase in most of these fees, with the Access Fee rising to $8,400, the Redistribution Fee to $4,400, the Professional User Fee to $78, and the Non-Display Fee to $22,400. The cap for category 3 under the Non-Display Fees will rise to $67,200 per month. These adjustments exclude the Non-Professional User Fee, the Non-Display Declaration Late Fee, and the Multiple Data Feed Fee, which remain unchanged.

Relation to Identified Issues

These proposed fee increases, pegged at a percentage increase matching the Data Processing and Related Services Producer Price Index (Data PPI), raise several concerns. One issue is the clarity on how the additional revenue will directly enhance services or benefit the subscribers. While it is stated that there has been significant investment to improve technology due to rising message traffic, specifics linking the fee increase to tangible improvements for subscribers are not provided.

Moreover, the justification for exempting certain fees, such as the Non-Professional User Fee, from these increases is not elaborated upon in detail. This may raise questions regarding consistency in the application of fee adjustments, potentially leading to perceptions of unfairness or imbalance.

The use of the Data PPI as the basis for the increments is explained, but the lack of a detailed financial analysis beyond this inflationary measure might leave stakeholders questioning whether this is the most appropriate or comprehensive benchmark for setting these increases.

Accessibility and Comprehension

The document also presents these financial changes using technical language and an industrial metric for inflation, which may be challenging for a general audience to fully understand. This complex presentation of financial reasoning could benefit from simpler explanations or examples that link the reasoning directly to broader economic factors and their impacts, potentially offering a more transparent view to all stakeholders, including smaller market participants who may be disproportionately affected by these changes.

Overall, while the financial references in the document provide a detailed account of the intended adjustments, greater clarity and linkage to subscriber benefits would enhance understanding and acceptance among the broader audience.