80 FR 39468 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Its Price List To Revise: (i) The Non-Tier Adding Credit; (ii) Certain Fees for Executions at the Close; (iii) Credits Applicable to Designated Market Makers; (iv) Credits Applicable to Supplemental Liquidity Providers; and (v) Pricing Related to the Retail Liquidity Program Under Rule 107C as it Relates to Designated Market Maker Transactions, and To Make Non-Substantive Changes to the Price List
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 131 (July 9, 2015)
Federal Register Volume 80, Issue 131 (July 9, 2015)
| Page Range | 39468-39472 | |
| FR Document | 2015-16726 |
[Federal Register Volume 80, Number 131 (Thursday, July 9, 2015)] [Notices] [Pages 39468-39472] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-16726] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75353; File No. SR-NYSE-2015-30] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Its Price List To Revise: (i) The Non-Tier Adding Credit; (ii) Certain Fees for Executions at the Close; (iii) Credits Applicable to Designated Market Makers; (iv) Credits Applicable to Supplemental Liquidity Providers; and (v) Pricing Related to the Retail Liquidity Program Under Rule 107C as it Relates to Designated Market Maker Transactions, and To Make Non- Substantive Changes to the Price List July 2, 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 June 26, 2015, New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') 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 its price list to revise: (i) The non-tier adding credit; (ii) certain fees for executions at the close; (iii) credits applicable to designated market makers; (iv) credits applicable to supplemental liquidity providers; and (v) pricing related to the retail liquidity program under rule 107c as it relates to designated market maker transactions, and to make non-substantive changes to the price list. 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 its Price List to revise (i) the Non-Tier Adding Credit; (ii) certain fees for executions at the close; (iii) credits applicable to Designated Market Makers (``DMMs''); (iv) credits applicable to Supplemental Liquidity Providers (``SLPs''); and (v) pricing related to the Retail Liquidity Program under Rule 107C as it relates to DMM transactions, and to make non-substantive changes to the Price List. The Exchange proposes to implement the fee change effective July 1, 2015. Member Organization Non-Tier Adding Credit Member organizations are currently eligible for the Non-Tier Adding Credit for all orders in securities priced $1.00 or more, other than Midpoint Passive Liquidity (``MPL'') \4\ and Non-Display Reserve orders, that add liquidity to the NYSE unless a higher credit applies. The applicable rate for the Non-Tier Adding Credit is $0.0015 per share. The Exchange proposes to lower this credit to $0.0014 per share. The credits applicable to MPL orders and Non-Display Reserve orders would be unchanged. --------------------------------------------------------------------------- \4\ An MPL Order is an undisplayed limit order that automatically executes at the mid-point of the best protected bid (``PBB'') or best protected offer (``PBO''), as such terms are defined in Regulation NMS Rule 600(b)(57) (together, ``PBBO''). See Rule 13. See also 17 CFR 242.600(b)(57). --------------------------------------------------------------------------- Executions at the Close The Exchange currently charges member organizations $0.00095 per share for market-at-the-close (``MOC'') and limit-at-the-close (``LOC'') orders, unless a member organization meets specified thresholds set forth in the Price List for MOC and LOC activity. The Exchange proposes to increase this fee by $0.00005 to $0.0010 per share and to identify this pricing tier in the Price List as Non-Tier MOC/ LOC. The Exchange currently charges $0.00065 per share for all MOC and LOC orders from any member organization executing (i) an ADV of MOC and LOC activity on the Exchange in the month of at least 0.375% of consolidated ADV (``CADV'') in NYSE-listed securities during the billing month (``NYSE CADV''); or (ii) an ADV of MOC and LOC activity on the Exchange in that month of at least 0.30% of NYSE CADV plus an ADV of total close activity (i.e., MOC and LOC and other executions at the close) on the Exchange in that month of at least 0.475% of NYSE CADV. The Exchange proposes to increase this fee to $0.00070 per share and to identify this pricing tier in the Price List as MOC/LOC Tier 2. The Exchange does not propose to change the fee of $0.0006 per share applicable to MOC and LOC orders from any member organization executing an ADV of MOC and LOC activity on the NYSE in that month of at least 0.575% of NYSE CADV. The Exchange proposes to identify this tier in the Price List as MOC/LOC Tier 1. [[Page 39469]] DMMs DMMs are currently eligible for a per share credit of $0.0025 when adding liquidity in shares of each More Active Security \5\ if the More Active Security has a stock price of $1.00 or more and the DMM quotes at the National Best Bid or Offer (``NBBO'') in the applicable security at least 10% of the time in the applicable month (``More Active Securities Quoting Requirement''). The Exchange proposes to raise this credit to $0.0027 per share. --------------------------------------------------------------------------- \5\ A ``More Active Security'' is a security with an average daily consolidated volume in the previous month equal to or greater than one million shares. See Price List. --------------------------------------------------------------------------- DMMs are currently eligible for a per share credit when adding liquidity in shares of each More Active Security if (a) the More Active Security has a stock price of $1.00 or more, (b) the DMM meets the More Active Securities Quoting Requirement, (c) the DMM Quoted Size for an applicable month is at least 15% of the NYSE Quoted Size (defined in the Price List as the ``More Active Securities Quoted Size Ratio Requirement''), and (d) the DMM's providing liquidity meets certain thresholds, as follows:$0.0029 per share if the DMM's providing liquidity is 15% or less of the NYSE's total intraday adding liquidity in each such security for that month; \6\ or --------------------------------------------------------------------------- \6\ The NYSE total intraday adding liquidity is totaled monthly and includes all NYSE adding liquidity, excluding NYSE open and NYSE close volume, by all NYSE participants, including SLPs, customers, Floor brokers and DMMs. See Price List. --------------------------------------------------------------------------- $0.0032 per share if the DMM's providing liquidity is more than 15% of the NYSE's total intraday adding liquidity in each such security for that month. The ``NYSE Quoted Size'' is calculated by multiplying the average number of shares quoted on the NYSE at the NBBO by the percentage of time the NYSE had a quote posted at the NBBO. The ``DMM Quoted Size'' is calculated by multiplying the average number of shares of the applicable security quoted at the NBBO by the DMM by the percentage of time during which the DMM quoted at the NBBO. The Exchange proposes to make the following changes to these credits: The Exchange proposes to raise the $0.0029 per share credit to $0.0031 per share when the DMM has a DMM Quoted Size for an applicable month that is at least 10% of the NYSE Quoted Size, reduced from the current requirement of 15% of the NYSE Quoted Size. In addition, the requirement that a DMM provide liquidity of 15% or less of the NYSE's total intraday adding liquidity to receive this credit would no longer apply. The Exchange proposes to raise the $0.0032 per share credit when adding liquidity to $0.0034 per share. The requirements for this credit would remain unchanged, including the requirement to provide liquidity of more than 15% of the NYSE's total intraday adding liquidity in each such security for that month. The Exchange proposes to delete the defined term, ``More Active Securities Quoted Size Ratio Requirement,'' as currently set forth in the Price List, as part of the changes to these credits. In any month in which a DMM quotes at the NBBO at least 20% of the time in a security with a Security CADV \7\ of less than 1,000,000 shares per month (``Less Active Securities''), such DMM receives all of the market data quote revenue (the ``Quoting Share'') received by the Exchange from the Consolidated Tape Association under the Revenue Allocation Formula of Regulation NMS (regardless of whether the stock price exceeds $1.00). If the DMM quotes at the NBBO in a Less Active Security \8\ at least 15% of the time, but quotes less than 20% of the time in an applicable month, the DMM receives 50% of the Quoting Share. --------------------------------------------------------------------------- \7\ ``Security CADV'' is defined in the Price List as the average daily consolidated volume of a security. \8\ ``Less Active Securities'' are defined in the Price List as securities that have a Security CADV of less than 1,000,000 shares per month in the previous month. --------------------------------------------------------------------------- The Exchange proposes to raise the threshold for the Security CADV of securities with respect to which DMMs would receive the Quoting Share from less than 1,000,000 shares to less than 1,500,000 shares in the previous month. A DMM would receive 50% of the Quoting Share if it quotes at the NBBO in a security that has a Security CADV of less than 1,500,000 shares in the previous month at least 15% of the time, but less than 20% of the time in an applicable month. SLPs SLPs are eligible for certain credits when adding liquidity to the Exchange. The amount of the credit is currently determined by the ``tier'' for which the SLP qualifies, which is based on the SLP's level of quoting and the ADV of liquidity added by the SLP in assigned securities. Currently, SLP Tier 3 provides that when adding liquidity to the NYSE in securities with a share price of $1.00 or more, an SLP is eligible for a credit of $0.0023 per share traded if the SLP (1) meets the 10% average or more quoting requirement in assigned securities pursuant to Rule 107B and (2) adds liquidity for assigned SLP securities in the aggregate \9\ of an ADV \10\ of more than 0.20% of NYSE CADV,\11\ or with respect to an SLP that is also a DMM and subject to Rule 107B(i)(2)(a),\12\ more than 0.15% of NYSE CADV. The SLP Tier 3 credit in the case of Non-Displayed Reserve Orders is $0.0008. For less active SLP securities (i.e., securities with an ADV in the previous month of 500,000 share or less per month (``Less Active SLP Securities'')), under SLP Tier 3, the SLP is eligible for a per share credit of $0.0028; $0.0013 if a Non-Displayed Reserve Order. --------------------------------------------------------------------------- \9\ Under Rule 107B, an SLP can be either a proprietary trading unit of a member organization (``SLP-Prop'') or a registered market maker at the Exchange (``SLMM''). For purposes of the 10% average or more quoting requirement in assigned securities pursuant to Rule 107B, quotes of an SLP-Prop and an SLMM of the same member organization are not aggregated. However, for purposes of adding liquidity for assigned SLP securities in the aggregate, shares of both an SLP-Prop and an SLMM of the same member organization are included. \10\ The defined term, ``ADV,'' used here as defined in footnote 2 to the Price List. \11\ NYSE CADV is defined in the Price List as the consolidated average daily volume of NYSE-listed securities. \12\ Rule 107B(i)(2)(A) prohibits a DMM from acting as a SLP in the same securities in which it is a DMM. --------------------------------------------------------------------------- Similarly, SLP Tier 2 provides that an SLP adding liquidity in securities with a per share price of $1.00 or more is eligible for a per share credit of $0.0026 if the SLP: (1) Meets the 10% average or more quoting requirement in an assigned security pursuant to Rule 107B; and (2) adds liquidity for all assigned SLP securities in the aggregate of an ADV of more than 0.45% of NYSE CADV, or with respect to an SLP that is also a DMM and subject to Rule 107B(i)(2)(a), more than 0.40% of NYSE CADV.\13\ The SLP Tier 2 credit in the case of Non-Displayed Reserve Orders is $0.0011. For Less Active SLP Securities, under SLP Tier 2, the SLP is eligible for a per share credit of $0.0031; [$]0.0016 if a Non-Displayed Reserve Order. --------------------------------------------------------------------------- \13\ In determining whether an SLP meets the requirement to add liquidity in the aggregate of an ADV of more than 0.35% or 0.30% depending on whether the SLP is also a DMM, the SLP may include shares of both an SLP-Prop and an SLMM of the same member organization. --------------------------------------------------------------------------- SLP Tier 1 provides that an SLP adding liquidity in securities with a per share price of $1.00 or more is eligible for a per share credit of $0.0029 if the SLP: (1) Meets the 10% average or more quoting requirement in an assigned security pursuant to Rule 107B; and (2) adds liquidity for all for assigned SLP securities in the aggregate of an ADV of more than 0.90% of NYSE CADV, or with respect to an SLP that is also a [[Page 39470]] DMM and subject to Rule 107B(i)(2)(a), more than 0.85% of NYSE CADV. The SLP Tier 1 credit in the case of Non-Displayed Reserve Orders is $0.0014. For Less Active SLP Securities, the SLP is eligible for a per share credit of $0.0034; $0.0019 if a Non-Displayed Reserve Order. Finally, the SLP Non-Tier provides that an SLP adding liquidity in securities with a per share price of $1.00 or more that does not qualify for the credits described above is eligible for the applicable rate for the base SLP tier, which would be the rate that applies to the non-SLP activity of the member organization, i.e., the non-Tier Adding Credit, Tier 3 Adding Credit, Tier 2 Adding Credit or Tier 1 Adding Credit (``SLP Non-Tier''). In the case of Non-Displayed Reserve Orders, there is no credit under the SLP Non-Tier. For SLP Tier 3, SLP Tier 2, and SLP Tier 1, the Exchange proposes to eliminate the higher credits that currently apply to Less Active Securities. Accordingly, regardless of the ADV of a security, SLPs would receive a per share credit of $0.0023, $0.0026, and $0.0029 for SLP Tier 3, SLP Tier 2, and SLP Tier 1, respectively and $.0008, $0.0011, and $0.0014 for Non-Displayed Reserve Orders for SLP Tier 3, SLP Tier 2, and SLP Tier 1, respectively. In addition, for SLP Tier 1 and SLP Tier 2, the Exchange proposes to lower the ADV percentage requirement for credits for SLPs that are also DMMs and subject to Rule 107B(i)(2)(A). The ADV percentage requirement for SLPs that are also DMMs and subject to Rule 107B(i)(2)(A) for SLP Tier 1 and SLP Tier 2 would decrease from 0.85% to 0.65% and 0.40% to [0.30%], respectively. The Exchange does not propose to change the ADV percentage requirement for SLP Tier 3, nor does the Exchange propose any changes to the SLP Non-Tier. Finally, the Exchange proposes to raise the per share credits for Non-Displayed Reserve Orders for SLP Tier 3, from $0.0008 to $0.0009, for SLP Tier 2, from $0.0011 to $0.0012, and for SLP Tier 1, from $0.0014 to $0.0015. Retail Liquidity Program The Retail Liquidity Program is a pilot program that is designed to attract additional retail order flow to the Exchange for NYSE-listed securities while also providing the potential for price improvement to such order flow.\14\ Retail order flow is submitted through the Retail Liquidity Program as a distinct order type called a ``Retail Order,'' which is defined in Rule 107C(a)(3) as 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''), 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.\15\ In addition to RMOs, Retail Liquidity Providers (``RLPs'') were created as an additional class of market participant under the Retail Liquidity Program. RLPs are required to provide potential price improvement for Retail Orders in the form of ``RPIs,'' which are non-displayed interest that is better than the PBBO.\16\ Member organizations other than RLPs are also permitted, but not required, to submit RPIs. --------------------------------------------------------------------------- \14\ See Rule 107C. See also Securities Exchange Act Release Nos. 67347 (July 3, 2012), 77 FR 40673 (July 10, 2012) (SR-NYSE- 2011-55) (establishing the Retail Liquidity Program pilot) and 74454 (March 6, 2015), 80 FR 13054 (March 12, 2015) (SR-NYSE-2015-10) (extending the pilot period to September 30, 2015). \15\ RMO is defined in Rule 107C(a)(2) as a member organization (or a division thereof) that has been approved by the Exchange under Rule 107C to submit Retail Orders. \16\ RLP is defined in Rule 107C(a)(1) as a member organization that is approved by the Exchange to act as such and that is required to submit RPIs in accordance with Rule 107C. RPI is defined in Rule 107C(a)(4) and consists of non-displayed interest in NYSE-listed securities that is priced better than the PBBO by at least $0.001 and that is identified as such. --------------------------------------------------------------------------- RLP executions of RPIs against Retail Orders are currently provided with a credit of $0.0003 per share if the RLP satisfies the applicable percentage requirement of Rule 107C. RPIs of an RLP that does not satisfy the applicable percentage requirement of Rule 107C are subject to a fee of $0.0003 per share. A fee of $0.0003 per share also currently applies to non-RLP member organization executions of RPIs against Retail Orders, unless the non- RLP member organization executes an ADV during the month of at least 500,000 shares of RPIs, in which case a credit of $0.0003 per share applies. For executions of Retail Orders if executed against RPIs or MPL Orders, RMOs are not currently charged or provided with a credit (i.e., they are free).\17\ --------------------------------------------------------------------------- \17\ Retail Orders are otherwise charged according to standard fees applicable to non-Retail Orders if executed against the Book. --------------------------------------------------------------------------- The Exchange proposes a credit of $0.0020 per share for executions of an RPI by a DMM that is not an RLP against a Retail Order. The Exchange also proposes to exclude DMMs from the other rates applicable to non-RLP Member organizations in connection with the executions of RPIs against Retail Orders. Finally, the Exchange proposes to make non-substantive changes to the Price List. Effective June 1, 2015, the Exchange eliminated the credit of $0.0010 per share for executions of Non-Displayed Reserve Orders for market participants, other than SLPs, that provide liquidity.\18\ The Exchange proposes to add a line item to the Price List for Non-Displayed Reserve Orders, and to add a comma to the description of the Non-Tier Adding Credit, to make it clear in the Price List that there is no charge with respect to executions of Non- Displayed Reserve Orders for market participants, other than SLPs, that provide liquidity. --------------------------------------------------------------------------- \18\ See Securities Exchange Act Release No. 75139 (June 10, 2015), 80 FR 34475 (June 16, 2015) (SR-NYSE-2015-28). --------------------------------------------------------------------------- The above proposed changes are not otherwise intended to address any other issues, and the Exchange is not aware of any problems that members and member organizations would have in complying with the proposed change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\19\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\20\ 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. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78f(b). \20\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Member Organization Non-Tier Adding Credit The Exchange believes that the change to the Member Organization Non-Tier Adding Credit for executions of orders in securities with a per share price of $1.00 or more is reasonable, equitable and not unfairly discriminatory because it is intended to incentivize member organizations to submit additional amounts of liquidity to the Exchange to be eligible to receive the higher credits available from the Tier 1 Adding Credit, the Tier 2 Adding Credit and the Tier 3 Adding Credit. The Exchange believes that the proposed lower credit for the Member Organization Non-Tier Adding Credit is equitable and not unfairly discriminatory because it would apply equally to all member organizations. [[Page 39471]] Executions at the Close The Exchange believes that increasing the MOC/LOC Non-Tier fee to $0.0010 is reasonable because this rate would be lower than the non- tier rate, Tier F, for market-on-close and limit-on-close orders on the NASDAQ Stock Market (``NASDAQ''), of $0.0015 per executed share.\21\ Similarly, the Exchange believes that increasing the MOC/LOC Tier 2 fee to $0.0007 per share is reasonable because it would be lower than the lowest fee for market-on-close and limit-on-close orders on NASDAQ, of $0.0008 per executed share. The Exchange notes that it is not changing the fee of $0.0006 for MOC/LOC Tier 1. The Exchange believes that maintaining the lowest fee for the highest liquidity requirements would incentivize member organizations to send in more closing auction volume to the primary market, thereby deepening the Exchange's liquidity pool and supporting the quality of price discovery. The Exchange believes that it is equitable and not unfairly discriminatory to charge lower fees to member organizations that make significant contributions to market quality by providing higher volumes of liquidity, which benefits all market participants. The Exchange believes the proposed fees are equitable and not unfairly discriminatory because all similarly situated member organizations would be subject to the same fee structure. --------------------------------------------------------------------------- \21\ See NASDAQ Rule 7018(d). --------------------------------------------------------------------------- The Exchange believes that the proposal to add defined terms to the Price List for the MOC/LOC fee tiers is reasonable because the change would make the Price List clearer and easier to understand. DMMs The Exchange believes that the proposed higher credits would increase the incentive to DMMs to provide additional liquidity on the Exchange to meet the quoting and quoted size requirements for the higher credits. Moreover, the requirement is equitable and not unfairly discriminatory because it would apply equally to all DMM firms. The Exchange believes that the $0.0031 rebate for DMMs when adding liquidity with orders, other than MPL orders, in a More Active Security if the More Active Security has a stock price of $1.00 or more and the DMM meets the More Active Securities Quoting Requirement and has a DMM Quoted Size for an applicable month that is at least 10% of the NYSE Quoted Size is reasonable because the requirement for DMM Quoted Size would be reduced from 15% to 10% of the NYSE Quote Size, the DMM would still need to meet the More Active Securities Quoting Requirement of 10%, and the requirement for providing liquidity of 15% or less of the NYSE's total intraday adding in liquidity in each such security would no longer apply. The Exchange believes that maintaining the requirement for DMM Quoted Size at 15% of the NYSE Quote Size for the $0.0034 credit is reasonable as the credit for meeting that requirement would be higher than the $0.0031 credit for meeting the lower requirement of at least 10% of NYSE Quoted Size. Moreover, the requirements are equitable and not unfairly discriminatory because they would apply equally to all DMMs. The Exchange believes that expanding the number of securities that can make a DMM eligible to receive the market data quote revenue is reasonable as it would encourage greater quoting in an expanded universe of less actives securities where there may be fewer liquidity providers. Moreover, the requirement is equitable and not unfairly discriminatory because it would apply equally to all DMMs. SLPs The Exchange believes that removing the higher credits for SLPs that apply to providing liquidity in Less Active Securities is reasonable and would not impose a burden on competition because the credits would be removed in their entirety and generally have not encouraged liquidity on the Exchange, as intended. The Exchange believes that lowering the ADV percentage requirements for the SLP Tier 1 and SLP Tier 2 credits for SLPs that are also DMMs and subject to Rule 107B(i)(2)(A) is reasonable because lowering the requirements would increase the incentives to add liquidity and more closely compares to the requirements for SLP Tier 3. Moreover, the requirement is equitable and not unfairly discriminatory because it would apply equally to all SLPs. The Exchange believes that increasing the credits for SLPs for Non- Displayed Reserve Orders for SLP Tier 3, SLP Tier 2 and SLP Tier 1 is reasonable because the added incentive created by the availability of the higher credit is reasonably related to an SLP's liquidity obligations on the Exchange and the value to the Exchange's market quality associated with higher volumes. The proposed changes also are equitable and not unfairly discriminatory because all similarly situated SLPs would be eligible to qualify for the rates by satisfying the related thresholds, where applicable. Retail Liquidity Program The Exchange believes that the proposed change to the rates under the Retail Liquidity Program is reasonable. The Exchange originally introduced the existing rates approximately three years ago.\22\ At that time, the Exchange stated that, because the Retail Liquidity Program was a pilot program, the Exchange anticipated that it would periodically review applicable pricing to seek to ensure that it contributes to the goal of the Retail Liquidity Program, which is designed to attract additional retail order flow to the Exchange for NYSE-listed securities while also providing the potential for price improvement to such order flow. The proposed new rate is a result of this review. --------------------------------------------------------------------------- \22\ See Securities Exchange Act Release No. 67529 (July 27, 2012), 77 FR 46137 (August 2, 2012) (SR-NYSE-2012-30). --------------------------------------------------------------------------- The proposed new rate would be set at a level that would reasonably incentivize DMMs to contribute to RPI liquidity being available for interaction with Retail Orders which would encourage more Retail Orders being submitted to the Exchange. Together, this would increase the pool of robust liquidity available on the Exchange, thereby contributing to the quality of the Exchange's market and to the Exchange's status as a premier destination for liquidity and order execution. 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 has the potential to benefit all market participants. In addition, the Exchange believes that it is equitable and not unfairly discriminatory to allocate higher or additional credits to DMMs compared to other market participants because the higher credit is reasonably related to a DMM's affirmative obligations on the Exchange.\23\ The Exchange also believes the proposed credit is equitable and not unfairly discriminatory because it will apply equally to all DMMs. --------------------------------------------------------------------------- \23\ Under Rule 104(a), DMMs registered in one or more securities traded on the Exchange have obligations with respect to the quality of the markets in securities to which they are assigned, such as engaging in a course of dealings for their own account to provide a continuous two-sided quote with reasonable size, maintaining fair and orderly markets and facilitating openings, reopenings, and the close of trading in assigned securities. --------------------------------------------------------------------------- The Exchange believes that the non-substantive clarifying changes to the [[Page 39472]] Price List are reasonable because they are designed to provide greater transparency with regard to how the Exchange assesses fees and provides rebates. The Exchange notes that the proposed non-substantive clarifying changes are not designed to amend any fee or rebate, nor to change how the Exchange assesses fees or calculates credits. In particular, the proposed changes are reasonable and equitable because they do not modify the fees or credits applicable to Non-Displayed Reserve Orders for market participants, other than SLPs, that provide liquidity. 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 the foregoing reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\24\ 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 change would contribute to the Exchange's market quality by promoting price discovery and ultimately increased competition. For the same reasons, the proposed change also would not impose any burden on competition among market participants. Pricing for executions at the opening would remain at the same relatively low levels and would continue to reflect the benefit that market participants receive through the ability to have their orders interact with other liquidity at the opening. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees and credits in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. As a result of all of these considerations, the Exchange does not believe that the proposed changes will impair the ability of member organizations or competing order execution venues to maintain their competitive standing in the financial markets. 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) \25\ of the Act and subparagraph (f)(2) of Rule 19b-4 \26\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78s(b)(3)(A). \26\ 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) \27\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \27\ 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 protected]. Please include File Number SR-NYSE-2015-30 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2015-30. 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 NYSE's principal office and on its Internet Web site at www.nyse.com. 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-NYSE-2015-30 and should be submitted on or before July 30, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\28\ --------------------------------------------------------------------------- \28\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-16726 Filed 7-8-15; 8:45 am] BILLING CODE 8011-01-P
![39468 Federal Register / Vol. 80, No. 131 / Thursday, July 9, 2015 / Notices
post all comments on the Commission’s ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 107C as it relates to DMM transactions,
Internet Web site (http://www.sec.gov/ notice is hereby given that, on June 26, and to make non-substantive changes to
rules/sro.shtml). Copies of the 2015, New York Stock Exchange LLC the Price List. The Exchange proposes to
submission, all subsequent (‘‘NYSE’’ or the ‘‘Exchange’’) filed with implement the fee change effective July
amendments, all written statements the Securities and Exchange 1, 2015.
with respect to the proposed rule Commission (the ‘‘Commission’’) the
Member Organization Non-Tier Adding
change that are filed with the proposed rule change as described in
Credit
Commission, and all written Items I, II, and III below, which Items
communications relating to the have been prepared by the self- Member organizations are currently
proposed rule change between the regulatory organization. The eligible for the Non-Tier Adding Credit
Commission and any person, other than Commission is publishing this notice to for all orders in securities priced $1.00
those that may be withheld from the solicit comments on the proposed rule or more, other than Midpoint Passive
public in accordance with the change from interested persons. Liquidity (‘‘MPL’’) 4 and Non-Display
provisions of 5 U.S.C. 552, will be Reserve orders, that add liquidity to the
I. Self-Regulatory Organization’s NYSE unless a higher credit applies.
available for Web site viewing and Statement of the Terms of Substance of
printing in the Commission’s Public The applicable rate for the Non-Tier
the Proposed Rule Change Adding Credit is $0.0015 per share. The
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official The Exchange proposes to amend its Exchange proposes to lower this credit
business days between the hours of price list to revise: (i) The non-tier to $0.0014 per share. The credits
10:00 a.m. and 3:00 p.m. Copies of such adding credit; (ii) certain fees for applicable to MPL orders and Non-
filing also will be available for executions at the close; (iii) credits Display Reserve orders would be
inspection and copying at the principal applicable to designated market makers; unchanged.
office of FINRA. All comments received (iv) credits applicable to supplemental
Executions at the Close
will be posted without change; the liquidity providers; and (v) pricing
related to the retail liquidity program The Exchange currently charges
Commission does not edit personal member organizations $0.00095 per
identifying information from under rule 107c as it relates to
designated market maker transactions, share for market-at-the-close (‘‘MOC’’)
submissions. You should submit only and limit-at-the-close (‘‘LOC’’) orders,
information that you wish to make and to make non-substantive changes to
the price list. The text of the proposed unless a member organization meets
available publicly. All submissions specified thresholds set forth in the
rule change is available on the
should refer to File Number SR–FINRA– Price List for MOC and LOC activity.
Exchange’s Web site at www.nyse.com,
2015–020 and should be submitted on The Exchange proposes to increase this
at the principal office of the Exchange,
or before July 30, 2015. fee by $0.00005 to $0.0010 per share
and at the Commission’s Public
For the Commission, by the Division of Reference Room. and to identify this pricing tier in the
Trading and Markets, pursuant to delegated Price List as Non-Tier MOC/LOC.
authority.31 II. Self-Regulatory Organization’s The Exchange currently charges
Robert W. Errett, Statement of the Purpose of, and $0.00065 per share for all MOC and LOC
Deputy Secretary. Statutory Basis for, the Proposed Rule orders from any member organization
Change executing (i) an ADV of MOC and LOC
[FR Doc. 2015–16729 Filed 7–8–15; 8:45 am]
BILLING CODE 8011–01–P In its filing with the Commission, the activity on the Exchange in the month
self-regulatory organization included of at least 0.375% of consolidated ADV
statements concerning the purpose of, (‘‘CADV’’) in NYSE-listed securities
SECURITIES AND EXCHANGE and basis for, the proposed rule change during the billing month (‘‘NYSE
COMMISSION and discussed any comments it received CADV’’); or (ii) an ADV of MOC and
on the proposed rule change. The text LOC activity on the Exchange in that
[Release No. 34–75353; File No. SR–NYSE– of those statements may be examined at month of at least 0.30% of NYSE CADV
2015–30] the places specified in Item IV below. plus an ADV of total close activity (i.e.,
The Exchange has prepared summaries, MOC and LOC and other executions at
Self-Regulatory Organizations; New set forth in sections A, B, and C below, the close) on the Exchange in that
York Stock Exchange LLC; Notice of of the most significant parts of such month of at least 0.475% of NYSE
Filing of Proposed Rule Change To statements. CADV. The Exchange proposes to
Amend Its Price List To Revise: (i) The A. Self-Regulatory Organization’s increase this fee to $0.00070 per share
Non-Tier Adding Credit; (ii) Certain Statement of the Purpose of, and the and to identify this pricing tier in the
Fees for Executions at the Close; (iii) Statutory Basis for, the Proposed Rule Price List as MOC/LOC Tier 2.
Credits Applicable to Designated Change The Exchange does not propose to
Market Makers; (iv) Credits Applicable change the fee of $0.0006 per share
to Supplemental Liquidity Providers; 1. Purpose applicable to MOC and LOC orders from
and (v) Pricing Related to the Retail The Exchange proposes to amend its any member organization executing an
Liquidity Program Under Rule 107C as Price List to revise (i) the Non-Tier ADV of MOC and LOC activity on the
it Relates to Designated Market Maker Adding Credit; (ii) certain fees for NYSE in that month of at least 0.575%
Transactions, and To Make Non- executions at the close; (iii) credits of NYSE CADV. The Exchange proposes
to identify this tier in the Price List as
srobinson on DSK5SPTVN1PROD with NOTICES
Substantive Changes to the Price List applicable to Designated Market Makers
(‘‘DMMs’’); (iv) credits applicable to MOC/LOC Tier 1.
July 2, 2015.
Supplemental Liquidity Providers
Pursuant to Section 19(b)(1) 1 of the (‘‘SLPs’’); and (v) pricing related to the 4 An MPL Order is an undisplayed limit order
Securities Exchange Act of 1934 (the that automatically executes at the mid-point of the
Retail Liquidity Program under Rule best protected bid (‘‘PBB’’) or best protected offer
(‘‘PBO’’), as such terms are defined in Regulation
31 17 CFR 200.30–3(a)(12). 2 15 U.S.C. 78a. NMS Rule 600(b)(57) (together, ‘‘PBBO’’). See Rule
1 15 U.S.C. 78s(b)(1). 3 17 CFR 240.19b–4. 13. See also 17 CFR 242.600(b)(57).
VerDate Sep<11>2014 17:10 Jul 08, 2015 Jkt 235001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 E:\FR\FM\09JYN1.SGM 09JYN1](https://thefederalregister.org/doc/80_FR_39599/page/1.svg)
![Federal Register / Vol. 80, No. 131 / Thursday, July 9, 2015 / Notices 39469
DMMs total intraday adding liquidity to receive pursuant to Rule 107B and (2) adds
DMMs are currently eligible for a per this credit would no longer apply. liquidity for assigned SLP securities in
share credit of $0.0025 when adding The Exchange proposes to raise the the aggregate 9 of an ADV 10 of more
liquidity in shares of each More Active $0.0032 per share credit when adding than 0.20% of NYSE CADV,11 or with
Security 5 if the More Active Security liquidity to $0.0034 per share. The respect to an SLP that is also a DMM
has a stock price of $1.00 or more and requirements for this credit would and subject to Rule 107B(i)(2)(a),12 more
the DMM quotes at the National Best remain unchanged, including the than 0.15% of NYSE CADV. The SLP
Bid or Offer (‘‘NBBO’’) in the applicable requirement to provide liquidity of more Tier 3 credit in the case of Non-
security at least 10% of the time in the than 15% of the NYSE’s total intraday Displayed Reserve Orders is $0.0008.
applicable month (‘‘More Active adding liquidity in each such security For less active SLP securities (i.e.,
Securities Quoting Requirement’’). The for that month. securities with an ADV in the previous
The Exchange proposes to delete the month of 500,000 share or less per
Exchange proposes to raise this credit to
defined term, ‘‘More Active Securities month (‘‘Less Active SLP Securities’’)),
$0.0027 per share.
DMMs are currently eligible for a per Quoted Size Ratio Requirement,’’ as under SLP Tier 3, the SLP is eligible for
share credit when adding liquidity in currently set forth in the Price List, as a per share credit of $0.0028; $0.0013 if
shares of each More Active Security if part of the changes to these credits. a Non-Displayed Reserve Order.
In any month in which a DMM quotes Similarly, SLP Tier 2 provides that an
(a) the More Active Security has a stock
at the NBBO at least 20% of the time in SLP adding liquidity in securities with
price of $1.00 or more, (b) the DMM
a security with a Security CADV 7 of less a per share price of $1.00 or more is
meets the More Active Securities
than 1,000,000 shares per month (‘‘Less eligible for a per share credit of $0.0026
Quoting Requirement, (c) the DMM Active Securities’’), such DMM receives
Quoted Size for an applicable month is if the SLP: (1) Meets the 10% average or
all of the market data quote revenue (the more quoting requirement in an
at least 15% of the NYSE Quoted Size ‘‘Quoting Share’’) received by the
(defined in the Price List as the ‘‘More assigned security pursuant to Rule
Exchange from the Consolidated Tape 107B; and (2) adds liquidity for all
Active Securities Quoted Size Ratio Association under the Revenue
Requirement’’), and (d) the DMM’s assigned SLP securities in the aggregate
Allocation Formula of Regulation NMS of an ADV of more than 0.45% of NYSE
providing liquidity meets certain (regardless of whether the stock price
thresholds, as follows: CADV, or with respect to an SLP that is
exceeds $1.00). If the DMM quotes at the
• $0.0029 per share if the DMM’s NBBO in a Less Active Security 8 at least
also a DMM and subject to Rule
providing liquidity is 15% or less of the 107B(i)(2)(a), more than 0.40% of NYSE
15% of the time, but quotes less than CADV.13 The SLP Tier 2 credit in the
NYSE’s total intraday adding liquidity 20% of the time in an applicable month,
in each such security for that month; 6 case of Non-Displayed Reserve Orders is
the DMM receives 50% of the Quoting $0.0011. For Less Active SLP Securities,
or Share.
• $0.0032 per share if the DMM’s The Exchange proposes to raise the
under SLP Tier 2, the SLP is eligible for
providing liquidity is more than 15% of a per share credit of $0.0031; [$]0.0016
threshold for the Security CADV of
the NYSE’s total intraday adding if a Non-Displayed Reserve Order.
securities with respect to which DMMs SLP Tier 1 provides that an SLP
liquidity in each such security for that would receive the Quoting Share from
month. adding liquidity in securities with a per
less than 1,000,000 shares to less than share price of $1.00 or more is eligible
The ‘‘NYSE Quoted Size’’ is
1,500,000 shares in the previous month. for a per share credit of $0.0029 if the
calculated by multiplying the average
A DMM would receive 50% of the SLP: (1) Meets the 10% average or more
number of shares quoted on the NYSE
Quoting Share if it quotes at the NBBO quoting requirement in an assigned
at the NBBO by the percentage of time
in a security that has a Security CADV security pursuant to Rule 107B; and (2)
the NYSE had a quote posted at the
of less than 1,500,000 shares in the adds liquidity for all for assigned SLP
NBBO. The ‘‘DMM Quoted Size’’ is
previous month at least 15% of the time, securities in the aggregate of an ADV of
calculated by multiplying the average
but less than 20% of the time in an more than 0.90% of NYSE CADV, or
number of shares of the applicable
applicable month. with respect to an SLP that is also a
security quoted at the NBBO by the
DMM by the percentage of time during SLPs
which the DMM quoted at the NBBO. SLPs are eligible for certain credits
9 Under Rule 107B, an SLP can be either a
The Exchange proposes to make the proprietary trading unit of a member organization
when adding liquidity to the Exchange. (‘‘SLP-Prop’’) or a registered market maker at the
following changes to these credits: The amount of the credit is currently Exchange (‘‘SLMM’’). For purposes of the 10%
The Exchange proposes to raise the average or more quoting requirement in assigned
determined by the ‘‘tier’’ for which the
$0.0029 per share credit to $0.0031 per securities pursuant to Rule 107B, quotes of an SLP-
SLP qualifies, which is based on the Prop and an SLMM of the same member
share when the DMM has a DMM
SLP’s level of quoting and the ADV of organization are not aggregated. However, for
Quoted Size for an applicable month
liquidity added by the SLP in assigned purposes of adding liquidity for assigned SLP
that is at least 10% of the NYSE Quoted securities in the aggregate, shares of both an SLP-
securities.
Size, reduced from the current Currently, SLP Tier 3 provides that Prop and an SLMM of the same member
requirement of 15% of the NYSE organization are included.
when adding liquidity to the NYSE in 10 The defined term, ‘‘ADV,’’ used here as defined
Quoted Size. In addition, the securities with a share price of $1.00 or in footnote 2 to the Price List.
requirement that a DMM provide more, an SLP is eligible for a credit of 11 NYSE CADV is defined in the Price List as the
liquidity of 15% or less of the NYSE’s $0.0023 per share traded if the SLP (1) consolidated average daily volume of NYSE-listed
securities.
meets the 10% average or more quoting
srobinson on DSK5SPTVN1PROD with NOTICES
5 A ‘‘More Active Security’’ is a security with an 12 Rule 107B(i)(2)(A) prohibits a DMM from
average daily consolidated volume in the previous requirement in assigned securities acting as a SLP in the same securities in which it
month equal to or greater than one million shares. is a DMM.
See Price List. 7 ‘‘Security CADV’’ is defined in the Price List as 13 In determining whether an SLP meets the
6 The NYSE total intraday adding liquidity is the average daily consolidated volume of a security. requirement to add liquidity in the aggregate of an
totaled monthly and includes all NYSE adding 8 ‘‘Less Active Securities’’ are defined in the Price ADV of more than 0.35% or 0.30% depending on
liquidity, excluding NYSE open and NYSE close List as securities that have a Security CADV of less whether the SLP is also a DMM, the SLP may
volume, by all NYSE participants, including SLPs, than 1,000,000 shares per month in the previous include shares of both an SLP-Prop and an SLMM
customers, Floor brokers and DMMs. See Price List. month. of the same member organization.
VerDate Sep<11>2014 17:10 Jul 08, 2015 Jkt 235001 PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 E:\FR\FM\09JYN1.SGM 09JYN1](https://thefederalregister.org/doc/80_FR_39599/page/2.svg)
![39470 Federal Register / Vol. 80, No. 131 / Thursday, July 9, 2015 / Notices
DMM and subject to Rule 107B(i)(2)(a), Retail order flow is submitted through other rates applicable to non-RLP
more than 0.85% of NYSE CADV. The the Retail Liquidity Program as a Member organizations in connection
SLP Tier 1 credit in the case of Non- distinct order type called a ‘‘Retail with the executions of RPIs against
Displayed Reserve Orders is $0.0014. Order,’’ which is defined in Rule Retail Orders.
For Less Active SLP Securities, the SLP 107C(a)(3) as an agency order or a Finally, the Exchange proposes to
is eligible for a per share credit of riskless principal order that meets the make non-substantive changes to the
$0.0034; $0.0019 if a Non-Displayed criteria of Financial Industry Regulatory Price List. Effective June 1, 2015, the
Reserve Order. Authority, Inc. Rule 5320.03 that Exchange eliminated the credit of
Finally, the SLP Non-Tier provides originates from a natural person and is $0.0010 per share for executions of Non-
that an SLP adding liquidity in submitted to the Exchange by a Retail Displayed Reserve Orders for market
securities with a per share price of $1.00 Member Organization (‘‘RMO’’), participants, other than SLPs, that
or more that does not qualify for the provided that no change is made to the provide liquidity.18 The Exchange
credits described above is eligible for terms of the order with respect to price proposes to add a line item to the Price
the applicable rate for the base SLP tier, or side of market and the order does not List for Non-Displayed Reserve Orders,
which would be the rate that applies to originate from a trading algorithm or and to add a comma to the description
the non-SLP activity of the member any other computerized methodology.15 of the Non-Tier Adding Credit, to make
organization, i.e., the non-Tier Adding In addition to RMOs, Retail Liquidity it clear in the Price List that there is no
Credit, Tier 3 Adding Credit, Tier 2 Providers (‘‘RLPs’’) were created as an charge with respect to executions of
Adding Credit or Tier 1 Adding Credit additional class of market participant Non-Displayed Reserve Orders for
(‘‘SLP Non-Tier’’). In the case of Non- under the Retail Liquidity Program. market participants, other than SLPs,
Displayed Reserve Orders, there is no RLPs are required to provide potential that provide liquidity.
credit under the SLP Non-Tier. price improvement for Retail Orders in The above proposed changes are not
For SLP Tier 3, SLP Tier 2, and SLP the form of ‘‘RPIs,’’ which are non- otherwise intended to address any other
Tier 1, the Exchange proposes to displayed interest that is better than the issues, and the Exchange is not aware of
eliminate the higher credits that PBBO.16 Member organizations other any problems that members and
currently apply to Less Active than RLPs are also permitted, but not member organizations would have in
Securities. Accordingly, regardless of required, to submit RPIs. complying with the proposed change.
the ADV of a security, SLPs would RLP executions of RPIs against Retail
Orders are currently provided with a 2. Statutory Basis
receive a per share credit of $0.0023,
$0.0026, and $0.0029 for SLP Tier 3, credit of $0.0003 per share if the RLP The Exchange believes that the
SLP Tier 2, and SLP Tier 1, respectively satisfies the applicable percentage proposed rule change is consistent with
and $.0008, $0.0011, and $0.0014 for requirement of Rule 107C. RPIs of an Section 6(b) of the Act,19 in general, and
Non-Displayed Reserve Orders for SLP RLP that does not satisfy the applicable furthers the objectives of Sections
Tier 3, SLP Tier 2, and SLP Tier 1, percentage requirement of Rule 107C are 6(b)(4) and 6(b)(5) of the Act,20 in
respectively. subject to a fee of $0.0003 per share. particular, because it provides for the
A fee of $0.0003 per share also equitable allocation of reasonable dues,
In addition, for SLP Tier 1 and SLP
currently applies to non-RLP member fees, and other charges among its
Tier 2, the Exchange proposes to lower
organization executions of RPIs against members, issuers and other persons
the ADV percentage requirement for
Retail Orders, unless the non-RLP using its facilities and does not unfairly
credits for SLPs that are also DMMs and
member organization executes an ADV discriminate between customers,
subject to Rule 107B(i)(2)(A). The ADV
during the month of at least 500,000 issuers, brokers or dealers.
percentage requirement for SLPs that are
shares of RPIs, in which case a credit of
also DMMs and subject to Rule Member Organization Non-Tier Adding
$0.0003 per share applies.
107B(i)(2)(A) for SLP Tier 1 and SLP For executions of Retail Orders if Credit
Tier 2 would decrease from 0.85% to executed against RPIs or MPL Orders,
0.65% and 0.40% to [0.30%], The Exchange believes that the
RMOs are not currently charged or change to the Member Organization
respectively. The Exchange does not provided with a credit (i.e., they are
propose to change the ADV percentage Non-Tier Adding Credit for executions
free).17 of orders in securities with a per share
requirement for SLP Tier 3, nor does the The Exchange proposes a credit of
Exchange propose any changes to the price of $1.00 or more is reasonable,
$0.0020 per share for executions of an equitable and not unfairly
SLP Non-Tier. RPI by a DMM that is not an RLP against
Finally, the Exchange proposes to discriminatory because it is intended to
a Retail Order. The Exchange also incentivize member organizations to
raise the per share credits for Non- proposes to exclude DMMs from the
Displayed Reserve Orders for SLP Tier submit additional amounts of liquidity
3, from $0.0008 to $0.0009, for SLP Tier to the Exchange to be eligible to receive
(March 6, 2015), 80 FR 13054 (March 12, 2015) (SR–
2, from $0.0011 to $0.0012, and for SLP NYSE–2015–10) (extending the pilot period to the higher credits available from the
Tier 1, from $0.0014 to $0.0015. September 30, 2015). Tier 1 Adding Credit, the Tier 2 Adding
15 RMO is defined in Rule 107C(a)(2) as a member Credit and the Tier 3 Adding Credit.
Retail Liquidity Program organization (or a division thereof) that has been The Exchange believes that the
approved by the Exchange under Rule 107C to
The Retail Liquidity Program is a pilot submit Retail Orders.
proposed lower credit for the Member
program that is designed to attract 16 RLP is defined in Rule 107C(a)(1) as a member Organization Non-Tier Adding Credit is
additional retail order flow to the organization that is approved by the Exchange to act equitable and not unfairly
srobinson on DSK5SPTVN1PROD with NOTICES
Exchange for NYSE-listed securities as such and that is required to submit RPIs in discriminatory because it would apply
accordance with Rule 107C. RPI is defined in Rule equally to all member organizations.
while also providing the potential for 107C(a)(4) and consists of non-displayed interest in
price improvement to such order flow.14 NYSE-listed securities that is priced better than the
18 See Securities Exchange Act Release No. 75139
PBBO by at least $0.001 and that is identified as
14 See Rule 107C. See also Securities Exchange such. (June 10, 2015), 80 FR 34475 (June 16, 2015) (SR–
Act Release Nos. 67347 (July 3, 2012), 77 FR 40673 17 Retail Orders are otherwise charged according NYSE–2015–28).
19 15 U.S.C. 78f(b).
(July 10, 2012) (SR–NYSE–2011–55) (establishing to standard fees applicable to non-Retail Orders if
the Retail Liquidity Program pilot) and 74454 executed against the Book. 20 15 U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014 17:10 Jul 08, 2015 Jkt 235001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\09JYN1.SGM 09JYN1](https://thefederalregister.org/doc/80_FR_39599/page/3.svg)
![39472 Federal Register / Vol. 80, No. 131 / Thursday, July 9, 2015 / Notices
Price List are reasonable because they changes in this market may impose any and Exchange Commission, 100 F Street
are designed to provide greater burden on competition is extremely NE., Washington, DC 20549–1090.
transparency with regard to how the limited. As a result of all of these
Exchange assesses fees and provides considerations, the Exchange does not All submissions should refer to File
rebates. The Exchange notes that the believe that the proposed changes will Number SR–NYSE–2015–30. This file
proposed non-substantive clarifying impair the ability of member number should be included on the
changes are not designed to amend any organizations or competing order subject line if email is used. To help the
fee or rebate, nor to change how the execution venues to maintain their Commission process and review your
Exchange assesses fees or calculates competitive standing in the financial comments more efficiently, please use
credits. In particular, the proposed markets. only one method. The Commission will
changes are reasonable and equitable post all comments on the Commission’s
because they do not modify the fees or C. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/
credits applicable to Non-Displayed Statement on Comments on the rules/sro.shtml). Copies of the
Reserve Orders for market participants, Proposed Rule Change Received From
submission, all subsequent
other than SLPs, that provide liquidity. Members, Participants, or Others
amendments, all written statements
The Exchange believes that it is No written comments were solicited with respect to the proposed rule
subject to significant competitive forces, or received with respect to the proposed change that are filed with the
as described below in the Exchange’s rule change. Commission, and all written
statement regarding the burden on communications relating to the
competition. III. Date of Effectiveness of the
Proposed Rule Change and Timing for proposed rule change between the
For the foregoing reasons, the
Exchange believes that the proposal is Commission Action Commission and any person, other than
consistent with the Act. those that may be withheld from the
The foregoing rule change is effective
public in accordance with the
B. Self-Regulatory Organization’s upon filing pursuant to Section
19(b)(3)(A) 25 of the Act and provisions of 5 U.S.C. 552, will be
Statement on Burden on Competition available for Web site viewing and
subparagraph (f)(2) of Rule 19b–4 26
In accordance with Section 6(b)(8) of thereunder, because it establishes a due, printing in the Commission’s Public
the Act,24 the Exchange believes that the fee, or other charge imposed by the Reference Room, 100 F Street NE.,
proposed rule change would not impose Exchange. Washington, DC 20549 on official
any burden on competition that is not At any time within 60 days of the business days between the hours of
necessary or appropriate in furtherance filing of such proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the
of the purposes of the Act. Instead, the Commission summarily may filing will also be available for
Exchange believes that the proposed temporarily suspend such rule change if inspection and copying at the NYSE’s
change would contribute to the it appears to the Commission that such principal office and on its Internet Web
Exchange’s market quality by promoting action is necessary or appropriate in the site at www.nyse.com. All comments
price discovery and ultimately
public interest, for the protection of received will be posted without change;
increased competition. For the same
investors, or otherwise in furtherance of the Commission does not edit personal
reasons, the proposed change also
the purposes of the Act. If the identifying information from
would not impose any burden on
Commission takes such action, the submissions. You should submit only
competition among market participants.
Commission shall institute proceedings information that you wish to make
Pricing for executions at the opening
under Section 19(b)(2)(B) 27 of the Act to available publicly. All submissions
would remain at the same relatively low
determine whether the proposed rule should refer to File Number SR–NYSE–
levels and would continue to reflect the
change should be approved or 2015–30 and should be submitted on or
benefit that market participants receive
disapproved. before July 30, 2015.
through the ability to have their orders
interact with other liquidity at the IV. Solicitation of Comments For the Commission, by the Division of
opening. Interested persons are invited to Trading and Markets, pursuant to delegated
Finally, the Exchange notes that it authority.28
submit written data, views, and
operates in a highly competitive market
arguments concerning the foregoing, Robert W. Errett,
in which market participants can
including whether the proposed rule Deputy Secretary.
readily favor competing venues if they
change is consistent with the Act. [FR Doc. 2015–16726 Filed 7–8–15; 8:45 am]
deem fee levels at a particular venue to
Comments may be submitted by any of
be excessive or rebate opportunities BILLING CODE 8011–01–P
the following methods:
available at other venues to be more
favorable. In such an environment, the Electronic Comments
Exchange must continually adjust its • Use the Commission’s Internet
fees and rebates to remain competitive comment form (http://www.sec.gov/
with other exchanges and with rules/sro.shtml); or
alternative trading systems that have • Send an email to rule-comments@
been exempted from compliance with sec.gov. Please include File Number SR–
the statutory standards applicable to NYSE–2015–30 on the subject line.
exchanges. Because competitors are free
srobinson on DSK5SPTVN1PROD with NOTICES
to modify their own fees and credits in Paper Comments
response, and because market • Send paper comments in triplicate
participants may readily adjust their to Brent J. Fields, Secretary, Securities
order routing practices, the Exchange
believes that the degree to which fee 25 15 U.S.C. 78s(b)(3)(A).
26 17 CFR 240.19b–4(f)(2).
24 15 U.S.C. 78f(b)(8). 27 15 U.S.C. 78s(b)(2)(B). 28 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 17:10 Jul 08, 2015 Jkt 235001 PO 00000 Frm 00066 Fmt 4703 Sfmt 9990 E:\FR\FM\09JYN1.SGM 09JYN1](https://thefederalregister.org/doc/80_FR_39599/page/5.svg)
Document Created: 2018-02-23 09:14:13
Document Modified: 2018-02-23 09:14:13
| 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 39468 |
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR