Friday, October 24, 2014

UTP Vendor Alert #2014 - 5
UTP Level 1 Fee Change Announcement for January 1, 2015

Markets Impacted:

  • UTP/SIP

Products Impacted:

  • UTP Quotation Data Feed (UQDF)
  • UTP Trade Data Feed (UTDF)
  • OTC Montage Data Feed (OMDF)
  • Bulletin Board Dissemination Service (BBDS)
  • Trade Data Dissemination Service (TDDS)

Contact Information:

What you need to know:

As of January 1, 2015, the UTP Committee will move forward with the following fee changes:

  • Introduction of new Non-Display Use fees
  • Reduction of the UTP Level 1 Professional Subscriber fee to $22 per month
  • Increase of the UTP Level 1 Per Query fee to $0.0075 per quote

The fees have been filed with the SEC and a published version is available here.

 

What is changing?

As of January 1, 2015, the following fee changes will take effect:

  • Introduction of a new Non-Display Use fee schedule
  • Reduction of the UTP Level 1 Professional Subscriber fee to $22 per month
  • Increase of the UTP Level 1 Per Query fee to $0.0075 per quote

The fee changes have been filed with the SEC and a published version is available here.

Subscriber and Per Quote Fees

These fees apply to a Subscriber’s receipt of data by means of a display controlled by the Vendor. The fee changes are as follows:

TIMING

ENTITLEMENT NAME

FEE

Real-Time Professional Subscriber $22 per Subscriber per month
Real-Time Per Query

$0.0075 per Query

Non-Display Use Fees

These fees apply to the use of data in a manner that does not involve the display of the data. Examples are cited below. The fees are as follows:

TIMING

ENTITLEMENT NAME

FEE

Real-Time Non-Display Trading Platform $3,500 per Trading Platform per month
Real-Time Non-Display Internal Use (Internal Enterprise License) $3,500 per firm per month
Real-Time Non-Display Use on behalf of Customers (External Enterprise License) $3,500 per firm per month

What is the UTP Level 1 Non-Display Use?

For purposes of the proposed Non-Display Use fees, Non-Display Use refers to accessing, processing or consuming data, whether received by means of direct or indirect access to data feeds, for a purpose other than the display or redistribution of the data.

The non-display fees do not apply to a data feed recipient's use of data to create derived data solely for purposes of display. However, the creation and use of derived data may be subject to other fees.

If a data feed recipient has any questions about whether Non-Display Use fees apply, please contact UTP Administration.

How is the Non-Display Use Fee charged?

The newly introduced monthly charges for Non-Display Use apply only to Vendors that receive a data feed containing real-time UTP Level 1 Information. The Non-Display fee is $3,500 for each of three types of Non-Display Use: Electronic trading system use; internal use and use on behalf of customers. The fee for use in an electronic trading system applies separately for each electronic trading platform that the Vendor operates. As a result, a single Vendor may be liable for non-display fees both for internal use and for use on behalf of customers, as well as for each of its electronic trading platforms. The three types of Non-Display Use are further described as follows:

Non-Display Use fee for electronic trading systems:

1. The Non-Display Use fee for electronic trading systems applies when a data feed recipient uses data in an electronic trading system, whether the system trades on the data feed recipient's own behalf or on behalf of its customers. As examples, this fee applies to the use of data in such trading platforms as exchanges, alternative trading systems (“ATS's”), broker crossing networks, broker crossing systems not filed as ATS’s, dark pools, multilateral trading facilities, and systematic internalization systems.

An organization that uses data in more than one electronic trading system must count each such trading platform. For example, an organization that uses quotation information for the purposes of operating an ATS and also for operating a broker crossing system not registered as an ATS would be required to pay two electronic trading system fees.

Non-Display Enterprise Licenses:

There are two types of Non-Display Enterprise Licenses that include, but are not limited to, use of data for automated order or quote generation and/or order pegging, price referencing for algorithmic trading, price referencing for smart order routing, operations control programs, investment analysis, order verification, surveillance programs, risk management, compliance or portfolio valuation.

2. The Non-Display fee for Internal Use applies when a data feed recipient uses data for Non-Display purposes on its own behalf (other than for purposes of an electronic trading system).

3. The Non-Display fee for External Use on behalf of customers applies when a data feed recipient uses data for Non-Display purposes on behalf of its customers (other than for purposes of an electronic trading system).

Examples of internal Non-Display Uses and External Non-Display Uses (on behalf of customers) include, but are not limited to, use of data for automated order or quote generation or for order pegging, price referencing for algorithmic trading or smart order routing, and use of data for operations control programs, investment analysis, order verification, surveillance programs, risk management, compliance or portfolio valuation. The Internal Non-Display License includes all internal Non-Display Uses. Similarly, the External Non-Display Enterprise License permits all external non-display uses on behalf of customers.

How will the new fees be administered?

A Vendor's Non-Display Uses of data may subject the Vendor to the Non-Display Use fee for each of the three categories. For example, if a broker-dealer operates an ATS, the Non-Display Use fee for electronic trading systems would apply; if it operates a trading desk to trade with its own capital, the non-Display fee for internal use would also apply; and, if it also operates a separate trading desk to trade on behalf of its clients, the non-display fee for use on behalf of customers would also apply. If, in addition to the ATS, the Vendor also operates a broker crossing system not registered as an ATS, then two non-display fees for electronic trading systems would apply.

A Vendor must count each electronic trading system that uses data for payment of the Non-Display fee for electronic trading systems. Vendors that operate Electronic Trading Platforms are required to report the total number each month.

When will the new fees be implemented?

The fees are expected to go into effect as of January 1, 2015. Invoices for the January 2015 period will be sent on or about February 7, 2015. Thereafter, invoices will be billed monthly. Firms are expected to update their Trading Platform use as it fluctuates.

If your firm is assessed a Non-Display Use fee and does not use the data for non-display purposes, please contact UTP Administration for a review for a credit.

Who should I contact for additional information?

Please contact UTP Administration at +1 301 978 8080.

UTP Plan:

The fees are imposed under the UTP Plan. The UTP Plan governs the collection, processing and distribution of all data related to Nasdaq-listed securities. It is the single source of consolidated data for those securities. The UTP Plan is administered by the securities exchanges listed at www.utpplan.com and FINRA. They determine policy matters and oversee system operations. The SEC has approved the UTP Plan. Amendments to the plan are filed with the Commission in accordance with Section 11A of the Securities Exchange Act of 1934.

The markets make data feeds available under the UTP Plan. The UTP Quote Data Feed (UQDF) provides continuous quotations from all market centers trading Nasdaq-listed securities. The UTP Trade Data Feed (UTDF) provides continuous last sale information from all market centers trading Nasdaq-listed securities. If you have any questions regarding the UTP SIP Plan or the fee changes, please send an email to UTP Administration.



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