80 FR 42860 - 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

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 138 (July 20, 2015)

[Federal Register Volume 80, Number 138 (Monday, July 20, 2015)]
[Notices]
[Pages 42860-42862]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17660]



[[Page 42860]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75449; File No. SR-NYSEARCA-2015-55]


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

July 14, 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 24, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Schedule of 
Fees and Charges for Exchange Services (``Fee Schedule'') to (i) raise 
the fee for Market and Auction-Only Orders executed in an Opening, 
Market Order or Trading Halt Auction; (ii) modify the credits the 
Exchange provides for routing certain orders to the New York Stock 
Exchange LLC (``NYSE''); and (iii) revise the Tape B Step Up Tier. The 
Exchange proposes to implement the changes on July 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 (i) raise the 
Tier 1 and Tier 2 fee for Market and Auction-Only Orders executed in an 
Opening, Market Order or Trading Halt Auction and make corresponding 
changes in the Basic Rate pricing; (ii) modify the Tier 1 and Tier 2 
credits the Exchange provides for routing certain orders to the NYSE 
and make corresponding changes in the Basic Rate pricing; and (iii) 
revise the Tape B Step Up Tier. The Exchange proposes to implement the 
fee changes on July 1, 2015.
    For Tier 1 and Tier 2, the Exchange currently charges $0.0010 per 
share for Market and Auction-Only Orders executed in an Opening, Market 
Order or Trading Halt Auction with a cap of $20,000 per month per 
Equity Trading Permit ID. The Exchange proposes to raise this fee from 
$0.0010 to $0.0015 per share. The Exchange is not proposing any change 
to the cap.
    The Exchange proposes to make corresponding changes to the Basic 
Rate pricing section of the Fee Schedule. Specifically, in the Basic 
Rate pricing section, the current fee for Market and Auction-Only 
Orders executed in an Opening, Market Order or Trading Halt Auction is 
$0.0010 per share, with a cap of $20,000 per month per Equity Trading 
Permit ID. The Exchange proposes to raise this fee to $0.0015 per 
share. The Exchange is not proposing any change to the cap.
    In a recent rule filing, the NYSE has proposed to modify its fee 
structure for equities transaction, including changes to the rates for 
providing liquidity, to become effective July 1, 2015.\4\ The 
Exchange's current credits for routing orders to NYSE are closely 
related to the NYSE's rates, including credits for providing liquidity, 
and the Exchange is proposing an adjustment to its routing credits to 
maintain the existing relationship to the rates proposed by the NYSE. 
Specifically, for Tier 1 and Tier 2 PO+ orders,\5\ the current Exchange 
credit for orders that are routed to the NYSE that provide liquidity to 
the NYSE is $0.0015 per share, which is equal to the current NYSE 
rebate for execution of customer orders that add liquidity to the NYSE. 
The Exchange is proposing to lower the credits for routing Tier 1 and 
Tier 2 PO+ Orders to the NYSE by the same amount ($0.0001) as the 
decrease in the corresponding NYSE credit. The proposed new credit for 
such orders routed to the NYSE that provide liquidity to the NYSE would 
be $0.0014 per share. This proposed fee change would maintain the 
current relationship with NYSE rates.
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    \4\ See SR-NYSE-2015-30.
    \5\ A PO+ Order is a Primary Only Order (i.e., a market or limit 
order that is to be routed to the primary market) that is entered 
for participation in the primary market, other than for 
participation in the primary market opening or primary market re-
opening. See NYSE Arca Equities Rule 7.31(f)(1)(C).
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    The Exchange proposes to make corresponding changes to the Basic 
Rate pricing section of the Fee Schedule. Currently, the credit for PO+ 
Orders that provide liquidity to the NYSE is set at $0.0015 per share. 
The Exchange proposes to lower this credit to $0.0014 per share. Again, 
this proposed fee change would maintain the current relationship with 
NYSE rates.
    Finally, the Exchange proposes to revise the Tape B Step Up Tier. 
Currently, ETP Holders and Market Makers, that, on a daily basis, 
measured monthly, directly execute providing volume in Tape B 
Securities during a billing month (``Tape B Adding ADV'') that is equal 
to at least 0.275% of the U.S. Tape B Consolidated Average Daily Volume 
(``Tape B CADV'') for the billing month over the ETP Holder's or Market 
Maker's May 2013 Tape B Adding ADV taken as a percentage of Tape B CADV 
(``Tape B Baseline % CADV'') receive a credit of $0.0004 per share for 
orders that provide liquidity to the Exchange in Tape B Securities, 
which is in addition to the ETP Holder's Tiered or Basic Rate 
credit(s). The Exchange proposes to specify in the Fee Schedule that 
ETP Holders that qualify for the Cross-Asset Tier would not be eligible 
to qualify for the Tape B Step Up Tier. The Exchange believes that the 
credit of $0.0030 per share is sufficient that an ETP Holder that 
qualifies for the Cross-Asset Tier should not also receive the 
increased credits applicable to the Tape B Step Up Tier. Similar to 
Retail Order Tier ETP Holders and Market Makers, who are currently 
ineligible to qualify for the Tape B Step Up Tier, the Exchange 
proposes to exclude Cross-Asset Tier ETP Holders from also qualifying 
for the Tape B Step Up Tier.
    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

[[Page 42861]]

Section 6(b) of the Act,\6\ in general, and furthers the objectives of 
Sections 6(b)(4) and (5) of the Act,\7\ 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed fee increase for Market and 
Auction-Only Orders executed in an Opening, Market Order or Trading 
Halt Auction are reasonable because they are the same as the fees 
imposed by at least one other exchange.\8\ In addition, the proposed 
fee changes are equitable and not unfairly discriminatory because they 
apply uniformly to all similarly situated ETP Holders.
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    \8\ See NASDAQ Crossing Network Fees at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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    The Exchange believes that the proposed changes to routing credits 
for PO+ Orders that provide liquidity to the NYSE are reasonable 
because the Exchange's credits for routing such orders are closely 
related to the NYSE's rebates for its members for providing liquidity, 
and the proposed change is consistent with the change proposed by the 
NYSE to lower its rebate for providing liquidity. The proposed change 
would result in maintaining the existing relationship between the two 
sets of fees. In addition, the Exchange believes that the proposed rule 
change, which would result in a decrease in the per share credit for 
PO+ Orders routed to the NYSE that provide liquidity to the NYSE, would 
thereby align the rate that the Exchange provides to ETP Holders with 
the rate that NYSE provides to its members for providing liquidity. 
Further, the proposed change is equitable and not unfairly 
discriminatory because the rebate reduction would apply uniformly 
across pricing tiers and all similarly situated ETP Holders would be 
subject to the same credit.
    The Exchange believes that prohibiting Cross-Asset Tier ETP Holders 
from qualifying for the Tape B Step Up Tier is reasonable, equitable 
and not unfairly discriminatory because ETP Holders that qualify for 
the Cross-Asset Tier would already receive a higher credit of $0.0030 
before the Tape B Step Up Credit, which is higher than other tiers with 
the Tape B Step Up credit. For example, Tier 1 ETP Holders that qualify 
for Tape B Step Up Tier would receive a Tier 1 credit of $0.0023 plus a 
Tape B Step Up credit of $0.0004 for a total credit of $0.0027, 
compared with the standalone Cross-Asset credit of $0.0030. The 
Exchange notes that Cross-Asset Tier ETP Holders and Market Makers 
currently do not qualify for Tape C Step Up Tier 2 credit.
    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.

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

    In accordance with Section 6(b)(8) of the Act,\9\ 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. In particular, the proposed routing credit changes 
would not place a burden on competition because the Exchange is seeking 
to align its credits with the credits provided by the NYSE.\10\ In 
addition, the proposed change to the Exchange's fee for Market and 
Auction-Only Orders executed in an Opening, Market Order or Trading 
Halt Auction is consistent with the fee charged by at least one other 
exchange.\11\
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    \9\ 15 U.S.C. 78f(b)(8).
    \10\ See supra note 4.
    \11\ See supra note 8.
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    The Exchange does not believe prohibiting Cross-Asset Tier ETP 
Holders from qualifying for increased credit(s) will impair ETP 
Holders' ability to compete. The Exchange already provides a credit for 
Cross-Asset Tier ETP Holders and ETP Holders impacted by the proposed 
change may readily adjust their trading behavior to maintain or 
increase their credits or decrease their fees in a favorable manner.
    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) \12\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(2).
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    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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEARCA-2015-55 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-NYSEARCA-2015-55. 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

[[Page 42862]]

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 Section, 100 F Street NE., Washington, DC 
20549-1090. 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-
NYSEARCA-2015-55 and should be submitted on or before August 7, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-17660 Filed 7-17-15; 8:45 am]
 BILLING CODE 8011-01-P