80 FR 28735 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Reduce Fees for Routing Certain Retail Orders to Away Market Centers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 96 (May 19, 2015)
Federal Register Volume 80, Issue 96 (May 19, 2015)
| Page Range | 28735-28737 | |
| FR Document | 2015-12062 |
[Federal Register Volume 80, Number 96 (Tuesday, May 19, 2015)] [Notices] [Pages 28735-28737] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-12062] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74947; File No. SR-NYSEArca-2015-39] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Reduce Fees for Routing Certain Retail Orders to Away Market Centers May 13, 2015. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on April 30, 2015, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services (``Fee Schedule'') to reduce fees for routing certain retail orders to away market centers. The Exchange proposes to implement the changes on May 1, 2015. The text of the proposed rule change is available on the Exchange's Web site 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule to reduce fees for routing certain retail orders to away market centers. The Exchange proposes to implement the changes on May 1, 2015. The Exchange currently charges $0.0029 per share for all orders in Tape A Securities that are routed outside the Book to the NYSE; and $0.0035 per share for all orders in Tape B Securities and Tape C Securities that are routed outside the Book to any away market center. The Exchange proposes to reduce the fees for certain orders, i.e., for Primary Until 9:45 Orders \4\ and Primary After [[Page 28736]] 3:55 Orders \5\ that are designated as retail orders and meet the requirements of Rule 7.44(a)(3), but which are not executed in the Retail Liquidity Program \6\ (``Retail Orders''). Under Rule 7.44(a)(3), a Retail Order is an agency order or a riskless principal order that meets the criteria of Financial Industry Regulatory Authority, Inc. Rule 5320.03 that originates from a natural person and is submitted to the Exchange by a Retail Member Organization (``RMO''),\7\ provided that no change is made to the terms of the order with respect to price or side of market and the order does not originate from a trading algorithm or any other computerized methodology. An ETP Holder may designate an order a Retail Order either (1) by designating certain order entry ports at the Exchange as ``Retail Order Ports'' and attesting, in a form and/or manner prescribed by the Exchange, that all orders submitted to the Exchange via such Retail Order Ports are Retail Orders; or (2) by means of a specific tag in the order entry message.\8\ --------------------------------------------------------------------------- \4\ A Primary Until 9:45 Order is an Order entered for participation on the primary market until 9:45 a.m. Eastern Time (6:45 a.m. Pacific Time) after which time the order is cancelled on the primary market and entered on the NYSE Arca Book. The Primary Until 9:45 Order may be Day only and may not be designated as GTC or GTD. Orders that return to the NYSE Arca Book after routing to the primary market retain their original order attributes. See NYSE Arca Equities Rule 7.31(f)(2). \5\ A Primary After 3:55 Order is an Order entered for participation on the Exchange until 3:55 p.m. Eastern Time (12:55 p.m. Pacific Time) after which time the order is cancelled on the Exchange and an order is entered for participation on the primary market. The Primary After 3:55 Order may be Day only and may not be designated as GTC or GTD. Orders that route to the primary market at 3:55 p.m. Eastern Time retain their original order attributes. See NYSE Arca Equities Rule 7.31(f)(2) [sic]. \6\ The Retail Liquidity Program is a pilot program designed to attract additional retail order flow to the Exchange for NYSE Arca- listed securities and securities traded pursuant to unlisted trading privileges (``UTP Securities'') while also providing the potential for price improvement to such order flow. See Rule 7.44. See Securities Exchange Act Release No. 71176 (December 23, 2013), 78 FR 79524 (December 30, 2013) (SR-NYSEArca-2013-107). \7\ ``RMO'' is defined in Rule 7.44(a)(2) as an ETP Holder that is approved by the Exchange to submit Retail Orders. However, an order designated as a Retail Order of an RMO for purposes of the Retail Liquidity Program is separate from the designation of an order as a Retail Order for purposes of existing pricing tiers in the Fee Schedule. See Securities Exchange Act Release No. 71722 (March 13, 2014), 78 [sic] FR 15376 (March 19, 2014) (SR-NYSEArca- 2014-22) (``Arca Retail Approval Order'' [sic]). The proposed rule change solely concerns Retail Orders outside the Retail Liquidity Program that are currently defined in the Fee Schedule as ``Retail Orders''. \8\ See, e.g., Securities Exchange Act Release No. 68322 (November 29, 2012), 77 FR 72425 (December 5, 2012) (SR-NYSEArca- 2012-129). ETP Holders designating orders as Retail Orders by using a tag in the order entry message are required to have written policies and procedures reasonably designed to assure that it only designates orders as Retail Orders if all requirements of a Retail Order are met. The written policies and procedures require the ETP Holder to (i) exercise due diligence before entering a Retail Order to assure that entry as a Retail Order is in compliance with the requirements specified by the Exchange, and (ii) monitor whether orders entered as Retail Orders meet the applicable requirements. If the ETP Holder represents Retail Orders from another broker-dealer customer, the ETP Holder's supervisory procedures must be reasonably designed to assure that the orders it receives from such broker- dealer customer that it designates as Retail Orders meets the definition of a Retail Order. --------------------------------------------------------------------------- Specifically, the Exchange proposes to charge a fee of $0.0010 per share for all Primary Until 9:45 Orders and Primary After 3:55 Orders that are designated as Retail Orders and that are routed to the primary listing market. The Exchange proposes to include this fee in three places in the Basic Rates section of the Fee Schedule for each of Tape A, Tape B, and Tape C securities by adding text following the existing rate for routing orders that provides ``except that Primary Until 9:45 Orders and Primary After 3:55 Orders that are designated as Retail Orders and routed to the primary listing market will be charged $0.0010 per share (fee).'' The proposed changes are not otherwise intended to address any other issues, and the Exchange is not aware of any problems that ETP Holders would have in complying with the proposed changes. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\9\ in general, and furthers the objectives of Sections 6(b)(4) and (5) of the Act,\10\ in particular, because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that the proposed fee changes are reasonable as they are designed to attract additional retail order flow to the Exchange that include an instruction to route to the primary listing market at designated times. In addition, the proposed fees are equitable and not unfairly discriminatory because they will apply uniformly to all similarly situated ETP Holders. The Exchange notes that a significant percentage of the orders of individual investors are executed over-the-counter.\11\ While the Exchange believes that markets and price discovery optimally function through the interactions of diverse flow types, it also believes that growth in internalization has required differentiation of retail order flow from other order flow types. The proposed new fee is set at a level to incentivize ETP Holders to continue to direct a subset of Retail Orders to the Exchange, rather than to an over-the-counter market. The Exchange believes that, because Retail Orders are likely to reflect long-term investment intentions, they promote price discovery and dampen volatility. Accordingly, the presence of Retail Orders on the Exchange, or if routed, on the primary listing market for those securities, has the potential to benefit all market participants. For this reason, the Exchange believes that the proposed pricing is equitable and not unfairly discriminatory and would continue to encourage greater retail participation on the Exchange and other registered exchanges. --------------------------------------------------------------------------- \11\See Concept Release on Equity Market Structure, Securities Exchange Act Release No. 61358 (January 14, 2010), 75 FR 3594 (January 21, 2010) (``Concept Release'') (noting that dark pools and internalizing broker-dealers executed approximately 25.4% of share volume in September 2009). See also Mary Jo White, Focusing on Fundamentals: The Path to Address Equity Market Structure (Speech at the Security Traders Association 80th Annual Market Structure Conference, Oct. 2, 2013) (available on the Commission's Web site) (``White Speech''); Mary L. Schapiro, Strengthening Our Equity Market Structure (Speech at the Economic Club of New York, Sept. 7, 2010) (available on the Commission's Web site) (``Schapiro Speech''). In her speech, Chair White noted a steadily increasing percentage of trading that occurs in ``dark'' venues, which appear to execute more than half of the orders of long-term investors. Similarly, in her speech, only three years earlier, Chair Schapiro noted that nearly 30 percent of volume in U.S.-listed equities was executed in venues that do not display their liquidity or make it generally available to the public and the percentage was increasing nearly every month. --------------------------------------------------------------------------- The pricing proposed herein is not designed to permit unfair discrimination, but instead to promote a competitive process around retail executions such that retail investors would receive better prices. The proposed change is also equitable and not unfairly discriminatory because it would contribute to investors' confidence in the fairness of their transactions and because it would benefit all investors by deepening the Exchange's liquidity pool, supporting the quality of price discovery, promoting market transparency and improving investor protection. Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition. For these reasons, the Exchange believes that the proposal is consistent with the Act. [[Page 28737]] B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\12\ the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, the Exchange believes that the proposed fees would increase competition for retail order flow among execution venues and encourage additional execution opportunities on the Exchange and other registered exchanges. The Exchange believes the proposed fee change also would not impose any burden on competition among market participants. To the contrary, because Primary Until 9:45 Orders and Primary After 3:55 Orders are designed to route to the primary listing market during designated times, the Exchange believes that the proposed fee would promote inter-exchange competition by proving an incentive for ETP Holders to route such orders to the Exchange, which would also benefit the primary listing markets that would receive the orders when routed. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change promotes a competitive environment. 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) \13\ of the Act and subparagraph (f)(2) of Rule 19b-4 \14\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 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) \15\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \15\ 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEArca-2015-39 on the subject line. Paper Comments Send paper comments in triplicate to Robert W. Errett, Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2015-39. 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 Web site (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 Web site 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 will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2015-39 and should be submitted on or before June 9, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-12062 Filed 5-18-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 96 / Tuesday, May 19, 2015 / Notices 28735
also will be independently reviewed forms of accepted Permitted Cover to (the ‘‘Commission’’) the proposed rule
annually under the Clearing House’s satisfy its payment obligations in the change as described in Items I, II, and
model governance framework. event of a Clearing Member default. The III below, which Items have been
Commission therefore finds that the prepared by the self-regulatory
III. Discussion and Commission
proposed rule change is designed to organization. The Commission is
Findings
promote the prompt and accurate publishing this notice to solicit
Section 19(b)(2)(C) of the Act 6 directs clearance and settlement of securities comments on the proposed rule change
the Commission to approve a proposed transactions and, to the extent from interested persons.
rule change of a self-regulatory applicable, derivative agreements,
organization if the Commission finds contracts, and transactions and, in I. Self-Regulatory Organization’s
that such proposed rule change is general, to protect investors and the Statement of the Terms of Substance of
consistent with the requirements of the public interest in accordance with the Proposed Rule Change
Act and the rules and regulations Section 17A(b)(3)(F) of the Act.9 The Exchange proposes to amend the
thereunder applicable to such self- NYSE Arca Equities Schedule of Fees
regulatory organization. Section IV. Conclusion and Charges for Exchange Services
17A(b)(3)(F) of the Act 7 requires, among On the basis of the foregoing, the (‘‘Fee Schedule’’) to reduce fees for
other things, that the rules of a clearing Commission finds that the proposal is routing certain retail orders to away
agency are designed to promote the consistent with the requirements of the market centers. The Exchange proposes
prompt and accurate clearance and Act and in particular with the to implement the changes on May 1,
settlement of securities transactions requirements of Section 17A of the 2015. The text of the proposed rule
and, to the extent applicable, derivative Act 10 and the rules and regulations change is available on the Exchange’s
agreements, contracts, and transactions thereunder. Web site at www.nyse.com, at the
and, in general, to protect investors and It is therefore ordered, pursuant to principal office of the Exchange, and at
the public interest. Section 19(b)(2) of the Act,11 that the the Commission’s Public Reference
The Commission finds that the proposed rule change (File No. SR– Room.
proposed rule change is consistent with ICEEU–2015–007) be, and hereby is,
Section 17A of the Act 8 and the rules approved.12 II. Self-Regulatory Organization’s
thereunder applicable to ICE Clear Statement of the Purpose of, and
For the Commission, by the Division of Statutory Basis for, the Proposed Rule
Europe. The proposed Haircut Policy Trading and Markets, pursuant to delegated
will codify the general principles and authority.13 Change
limitations for assets accepted by ICE Robert W. Errett, In its filing with the Commission, the
Clear Europe as Permitted Cover. The Deputy Secretary. self-regulatory organization included
proposed policy also provides a statements concerning the purpose of,
[FR Doc. 2015–12032 Filed 5–18–15; 8:45 am]
framework for ensuring that appropriate and basis for, the proposed rule change
BILLING CODE 8011–01–P
prices are used to value Permitted Cover and discussed any comments it received
and establishes a VaR-based on the proposed rule change. The text
methodology, utilizing six different SECURITIES AND EXCHANGE of those statements may be examined at
estimations for each applicable risk COMMISSION the places specified in Item IV below.
factor and calculating each estimation The Exchange has prepared summaries,
using a 99.9% confidence interval, for [Release No. 34–74947; File No. SR– set forth in sections A, B, and C below,
determining haircuts to ensure that the NYSEArca–2015–39]
of the most significant parts of such
value of Permitted Cover held by ICE statements.
Self-Regulatory Organizations; NYSE
Clear Europe is sufficient to cover the
Arca, Inc.; Notice of Filing and A. Self-Regulatory Organization’s
Clearing House’s Margin and Guaranty
Immediate Effectiveness of Proposed Statement of the Purpose of, and the
Fund requirements. The policy also
Rule Change Amending the NYSE Arca Statutory Basis for, the Proposed Rule
provides a methodology for setting
Equities Schedule of Fees and Change
absolute and relative concentration
Charges for Exchange Services To
limits on particular bonds a Clearing 1. Purpose
Reduce Fees for Routing Certain Retail
Member may provide as Permitted
Orders to Away Market Centers The Exchange proposes to amend the
Cover to guard against liquidity and
concentration risks and establishes Fee Schedule to reduce fees for routing
May 13, 2015.
several measures designed to mitigate certain retail orders to away market
Pursuant to Section 19(b)(1) 1 of the
wrong-way-risk. In addition, the centers. The Exchange proposes to
Securities Exchange Act of 1934 (the
proposed policy provides procedures for implement the changes on May 1, 2015.
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 The Exchange currently charges
the regular review and monitoring of notice is hereby given that, on April 30, $0.0029 per share for all orders in Tape
Permitted Cover and associated haircuts 2015, NYSE Arca, Inc. (the ‘‘Exchange’’ A Securities that are routed outside the
and permits the Clearing House to or ‘‘NYSE Arca’’) filed with the Book to the NYSE; and $0.0035 per
respond promptly to changes in market Securities and Exchange Commission share for all orders in Tape B Securities
conditions by modifying haircuts or
and Tape C Securities that are routed
other limits on Permitted Cover. 9 15 U.S.C. 78q–1(b)(3)(F).
outside the Book to any away market
Accordingly, the Commission believes 10 15 U.S.C. 78q–1.
11 15 U.S.C. 78s(b)(2). center.
that the Haircut Policy is designed to The Exchange proposes to reduce the
tkelley on DSK3SPTVN1PROD with NOTICES
12 In approving the proposed rule change, the
appropriately value Permitted Cover fees for certain orders, i.e., for Primary
Commission considered the proposal’s impact on
and enable ICE Clear Europe to efficiency, competition and capital formation. 15 Until 9:45 Orders 4 and Primary After
efficiently and effectively liquidate all U.S.C. 78c(f).
13 17 CFR 200.30–3(a)(12).
4 A Primary Until 9:45 Order is an Order entered
6 15 U.S.C. 78s(b)(2)(C). 1 15 U.S.C. 78s(b)(1).
for participation on the primary market until 9:45
7 15 U.S.C. 78q–1(b)(3)(F). 2 15 U.S.C. 78a.
a.m. Eastern Time (6:45 a.m. Pacific Time) after
8 15 U.S.C. 78q–1. 3 17 CFR 240.19b–4. Continued
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3:55 Orders 5 that are designated as Specifically, the Exchange proposes to that markets and price discovery
retail orders and meet the requirements charge a fee of $0.0010 per share for all optimally function through the
of Rule 7.44(a)(3), but which are not Primary Until 9:45 Orders and Primary interactions of diverse flow types, it also
executed in the Retail Liquidity After 3:55 Orders that are designated as believes that growth in internalization
Program 6 (‘‘Retail Orders’’). Under Rule Retail Orders and that are routed to the has required differentiation of retail
7.44(a)(3), a Retail Order is an agency primary listing market. The Exchange order flow from other order flow types.
order or a riskless principal order that proposes to include this fee in three The proposed new fee is set at a level
meets the criteria of Financial Industry places in the Basic Rates section of the to incentivize ETP Holders to continue
Regulatory Authority, Inc. Rule 5320.03 Fee Schedule for each of Tape A, Tape to direct a subset of Retail Orders to the
that originates from a natural person B, and Tape C securities by adding text Exchange, rather than to an over-the-
and is submitted to the Exchange by a following the existing rate for routing counter market. The Exchange believes
Retail Member Organization (‘‘RMO’’),7 orders that provides ‘‘except that that, because Retail Orders are likely to
provided that no change is made to the Primary Until 9:45 Orders and Primary reflect long-term investment intentions,
terms of the order with respect to price After 3:55 Orders that are designated as they promote price discovery and
or side of market and the order does not Retail Orders and routed to the primary
originate from a trading algorithm or dampen volatility. Accordingly, the
listing market will be charged $0.0010 presence of Retail Orders on the
any other computerized methodology. per share (fee).’’
An ETP Holder may designate an order The proposed changes are not Exchange, or if routed, on the primary
a Retail Order either (1) by designating otherwise intended to address any other listing market for those securities, has
certain order entry ports at the Exchange issues, and the Exchange is not aware of the potential to benefit all market
as ‘‘Retail Order Ports’’ and attesting, in any problems that ETP Holders would participants. For this reason, the
a form and/or manner prescribed by the have in complying with the proposed Exchange believes that the proposed
Exchange, that all orders submitted to changes. pricing is equitable and not unfairly
the Exchange via such Retail Order discriminatory and would continue to
Ports are Retail Orders; or (2) by means 2. Statutory Basis encourage greater retail participation on
of a specific tag in the order entry The Exchange believes that the the Exchange and other registered
message.8 proposed rule change is consistent with exchanges.
Section 6(b) of the Act,9 in general, and The pricing proposed herein is not
which time the order is cancelled on the primary furthers the objectives of Sections designed to permit unfair
market and entered on the NYSE Arca Book. The 6(b)(4) and (5) of the Act,10 in particular, discrimination, but instead to promote a
Primary Until 9:45 Order may be Day only and may
not be designated as GTC or GTD. Orders that because it provides for the equitable competitive process around retail
return to the NYSE Arca Book after routing to the allocation of reasonable dues, fees, and executions such that retail investors
primary market retain their original order attributes. other charges among its members,
See NYSE Arca Equities Rule 7.31(f)(2). would receive better prices. The
issuers and other persons using its
5 A Primary After 3:55 Order is an Order entered proposed change is also equitable and
for participation on the Exchange until 3:55 p.m.
facilities and does not unfairly
not unfairly discriminatory because it
Eastern Time (12:55 p.m. Pacific Time) after which discriminate between customers,
time the order is cancelled on the Exchange and an issuers, brokers or dealers. would contribute to investors’
order is entered for participation on the primary The Exchange believes that the confidence in the fairness of their
market. The Primary After 3:55 Order may be Day
proposed fee changes are reasonable as transactions and because it would
only and may not be designated as GTC or GTD. benefit all investors by deepening the
Orders that route to the primary market at 3:55 p.m. they are designed to attract additional
Eastern Time retain their original order attributes. retail order flow to the Exchange that Exchange’s liquidity pool, supporting
See NYSE Arca Equities Rule 7.31(f)(2) [sic]. include an instruction to route to the the quality of price discovery,
6 The Retail Liquidity Program is a pilot program
primary listing market at designated promoting market transparency and
designed to attract additional retail order flow to
the Exchange for NYSE Arca-listed securities and times. In addition, the proposed fees are improving investor protection.
securities traded pursuant to unlisted trading equitable and not unfairly Finally, the Exchange believes that it
privileges (‘‘UTP Securities’’) while also providing discriminatory because they will apply is subject to significant competitive
the potential for price improvement to such order uniformly to all similarly situated ETP
flow. See Rule 7.44. See Securities Exchange Act
forces, as described below in the
Release No. 71176 (December 23, 2013), 78 FR Holders. Exchange’s statement regarding the
79524 (December 30, 2013) (SR–NYSEArca–2013– The Exchange notes that a significant burden on competition. For these
107). percentage of the orders of individual reasons, the Exchange believes that the
7 ‘‘RMO’’ is defined in Rule 7.44(a)(2) as an ETP
investors are executed over-the- proposal is consistent with the Act.
Holder that is approved by the Exchange to submit counter.11 While the Exchange believes
Retail Orders. However, an order designated as a
Retail Order of an RMO for purposes of the Retail approximately 25.4% of share volume in September
Liquidity Program is separate from the designation require the ETP Holder to (i) exercise due diligence 2009). See also Mary Jo White, Focusing on
of an order as a Retail Order for purposes of existing before entering a Retail Order to assure that entry Fundamentals: The Path to Address Equity Market
pricing tiers in the Fee Schedule. See Securities as a Retail Order is in compliance with the Structure (Speech at the Security Traders
Exchange Act Release No. 71722 (March 13, 2014), requirements specified by the Exchange, and (ii) Association 80th Annual Market Structure
78 [sic] FR 15376 (March 19, 2014) (SR–NYSEArca– monitor whether orders entered as Retail Orders Conference, Oct. 2, 2013) (available on the
2014–22) (‘‘Arca Retail Approval Order’’ [sic]). The meet the applicable requirements. If the ETP Holder Commission’s Web site) (‘‘White Speech’’); Mary L.
proposed rule change solely concerns Retail Orders represents Retail Orders from another broker-dealer Schapiro, Strengthening Our Equity Market
outside the Retail Liquidity Program that are customer, the ETP Holder’s supervisory procedures Structure (Speech at the Economic Club of New
currently defined in the Fee Schedule as ‘‘Retail must be reasonably designed to assure that the York, Sept. 7, 2010) (available on the Commission’s
Orders’’. orders it receives from such broker-dealer customer Web site) (‘‘Schapiro Speech’’). In her speech, Chair
8 See, e.g., Securities Exchange Act Release No. that it designates as Retail Orders meets the White noted a steadily increasing percentage of
tkelley on DSK3SPTVN1PROD with NOTICES
68322 (November 29, 2012), 77 FR 72425 definition of a Retail Order. trading that occurs in ‘‘dark’’ venues, which appear
9 15 U.S.C. 78f(b).
(December 5, 2012) (SR–NYSEArca–2012–129). ETP to execute more than half of the orders of long-term
10 15 U.S.C. 78f(b)(4) and (5).
Holders designating orders as Retail Orders by investors. Similarly, in her speech, only three years
using a tag in the order entry message are required 11See Concept Release on Equity Market earlier, Chair Schapiro noted that nearly 30 percent
to have written policies and procedures reasonably Structure, Securities Exchange Act Release No. of volume in U.S.-listed equities was executed in
designed to assure that it only designates orders as 61358 (January 14, 2010), 75 FR 3594 (January 21, venues that do not display their liquidity or make
Retail Orders if all requirements of a Retail Order 2010) (‘‘Concept Release’’) (noting that dark pools it generally available to the public and the
are met. The written policies and procedures and internalizing broker-dealers executed percentage was increasing nearly every month.
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B. Self-Regulatory Organization’s action is necessary or appropriate in the submissions. You should submit only
Statement on Burden on Competition public interest, for the protection of information that you wish to make
In accordance with Section 6(b)(8) of investors, or otherwise in furtherance of available publicly. All submissions
the Act,12 the Exchange believes that the the purposes of the Act. If the should refer to File Number SR–
proposed rule change would not impose Commission takes such action, the NYSEArca–2015–39 and should be
any burden on competition that is not Commission shall institute proceedings submitted on or before June 9, 2015.
necessary or appropriate in furtherance under Section 19(b)(2)(B) 15 of the Act to For the Commission, by the Division of
of the purposes of the Act. Instead, the determine whether the proposed rule Trading and Markets, pursuant to delegated
Exchange believes that the proposed change should be approved or authority.16
fees would increase competition for disapproved. Robert W. Errett,
retail order flow among execution IV. Solicitation of Comments Deputy Secretary.
venues and encourage additional
Interested persons are invited to [FR Doc. 2015–12062 Filed 5–18–15; 8:45 am]
execution opportunities on the
submit written data, views, and BILLING CODE 8011–01–P
Exchange and other registered
arguments concerning the foregoing,
exchanges. The Exchange believes the
including whether the proposed rule
proposed fee change also would not SECURITIES AND EXCHANGE
change is consistent with the Act.
impose any burden on competition COMMISSION
Comments may be submitted by any of
among market participants. To the
the following methods:
contrary, because Primary Until 9:45 Sunshine Act Meeting
Orders and Primary After 3:55 Orders Electronic Comments
are designed to route to the primary • Use the Commission’s Internet Notice is hereby given, pursuant to
listing market during designated times, comment form (http://www.sec.gov/ the provisions of the Government in the
the Exchange believes that the proposed rules/sro.shtml); or Sunshine Act, Public Law 94–409, that
fee would promote inter-exchange • Send an email to rule-comments@ the Securities and Exchange
competition by proving an incentive for sec.gov. Please include File Number SR– Commission will hold a Closed Meeting
ETP Holders to route such orders to the NYSEArca–2015–39 on the subject line. on Thursday, May 21, 2015 at 2:00 p.m.
Exchange, which would also benefit the
primary listing markets that would Paper Comments Commissioners, Counsel to the
Commissioners, the Secretary to the
receive the orders when routed. • Send paper comments in triplicate
The Exchange notes that it operates in Commission, and recording secretaries
to Robert W. Errett, Deputy Secretary,
a highly competitive market in which will attend the Closed Meeting. Certain
Securities and Exchange Commission,
market participants can readily favor staff members who have an interest in
100 F Street NE., Washington, DC
competing venues. In such an the matters also may be present.
20549–1090.
environment, the Exchange must All submissions should refer to File The General Counsel of the
continually review, and consider Number SR–NYSEArca–2015–39. This Commission, or her designee, has
adjusting, its fees and credits to remain file number should be included on the certified that, in her opinion, one or
competitive with other exchanges. For subject line if email is used. To help the more of the exemptions set forth in 5
the reasons described above, the Commission process and review your U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
Exchange believes that the proposed comments more efficiently, please use and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
rule change promotes a competitive only one method. The Commission will and (10), permit consideration of the
environment. post all comments on the Commission’s scheduled matter at the Closed Meeting.
C. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/ Commissioner Stein, as duty officer,
Statement on Comments on the rules/sro.shtml). Copies of the voted to consider the items listed for the
Proposed Rule Change Received From submission, all subsequent Closed Meeting in closed session.
Members, Participants, or Others amendments, all written statements The subject matter of the Closed
with respect to the proposed rule Meeting will be: Institution and
No written comments were solicited
change that are filed with the settlement of injunctive actions;
or received with respect to the proposed
Commission, and all written Institution and settlement of
rule change.
communications relating to the administrative proceedings;
III. Date of Effectiveness of the proposed rule change between the Adjudicatory matter; and Other matters
Proposed Rule Change and Timing for Commission and any person, other than relating to enforcement proceedings.
Commission Action those that may be withheld from the
public in accordance with the At times, changes in Commission
The foregoing rule change is effective priorities require alterations in the
upon filing pursuant to Section provisions of 5 U.S.C. 552, will be
available for Web site viewing and scheduling of meeting items.
19(b)(3)(A) 13 of the Act and
subparagraph (f)(2) of Rule 19b–4 14 printing in the Commission’s Public For further information and to
thereunder, because it establishes a due, Reference Room, 100 F Street NE., ascertain what, if any, matters have been
fee, or other charge imposed by the Washington, DC 20549, on official added, deleted or postponed, please
Exchange. business days between the hours of contact the Office of the Secretary at
At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of the (202) 551–5400.
filing of such proposed rule change, the filing will also be available for Dated: May 14, 2015.
tkelley on DSK3SPTVN1PROD with NOTICES
Commission summarily may inspection and copying at the principal
Brent J. Fields,
temporarily suspend such rule change if office of the Exchange. All comments
received will be posted without change; Secretary.
it appears to the Commission that such
the Commission does not edit personal [FR Doc. 2015–12183 Filed 5–15–15; 11:15 am]
12 15 U.S.C. 78f(b)(8). identifying information from BILLING CODE 8011–01–P
13 15 U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(2). 15 15 U.S.C. 78s(b)(2)(B). 16 17 CFR 200.30–3(a)(12).
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Document Created: 2015-12-15 15:29:35
Document Modified: 2015-12-15 15:29:35
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 28735 |
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