81 FR 30594 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List To Make a Clarifying Change Regarding the Rebate Program Recently Implemented by the Exchange for the NYSE Bonds System

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 95 (May 17, 2016)

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30594-30595]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11542]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77812; File No. SR-NYSE-2016-34]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Its Price List To Make a Clarifying Change Regarding the 
Rebate Program Recently Implemented by the Exchange for the NYSE Bonds 
System

May 11, 2016.
    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 May 3, 2016, 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 
and II 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 its Price List to make a clarifying 
change regarding the rebate program recently implemented by the 
Exchange for the NYSE Bonds\SM\ system. 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 make a clarifying 
change regarding the rebate program recently implemented by the 
Exchange for the NYSE Bonds system.\4\ The purpose of this proposed 
rule change is to clarify the application of the rebate program only. 
The Exchange is not proposing to change in any way the manner in which 
the rebate program operates.
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    \4\ See Securities Exchange Act Release No. 77591 (April 12, 
2016), 81 FR 22656 (April 18, 2016) (SR-NYSE-2016-26).
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    Pursuant to the Liquidity Provider Incentive Program, a voluntary 
rebate program, the Exchange pays Users \5\ of NYSE Bonds a monthly 
rebate provided Users who opt into the rebate program meet specified 
quoting requirements. Under the program, the rebate payable is based on 
the number of CUSIPs \6\ a User quotes.
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    \5\ Rule 86(b)(2)(M) defines a User as any Member or Member 
Organization, Sponsored Participant, or Authorized Trader that is 
authorized to access NYSE Bonds.
    \6\ CUSIP stands for Committee on Uniform Securities 
Identification Procedures. A CUSIP number identifies most financial 
instruments, including: stocks of all registered U.S. and Canadian 
companies, commercial paper, and U.S. government and municipal 
bonds. The CUSIP system--owned by the American Bankers Association 
and managed by Standard & Poor's--facilitates the clearance and 
settlement process of securities. See http://www.sec.gov/answers/cusip.htm.
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    The rebate amount is tiered based on the number of CUSIPs quoted by 
a User, as follows:

                  Liquidity Provider Incentive Program
------------------------------------------------------------------------
                                                               Monthly
                      Number of CUSIPs                          rebate
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400-599....................................................      $10,000
600-799....................................................       20,000
800 or more................................................       30,000
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    To qualify for a rebate, a User is required to provide continuous 
two-sided quotes for at least eighty percent (80%) of the time during 
the Core Bond Trading Session for an entire calendar month.\7\ The 
Exchange calculates each participating User's quoting performance 
beginning each month on a daily basis, up to and including the last 
trading day of a calendar month, to determine at the end of each month 
each User's monthly average. Under the program, Users must provide a 
two-sided quote for a minimum of hundred (100) bonds per side of the 
market with an average spread of half-point ($0.50) or less in CUSIPs 
whose average maturity is at least five (5) years as of the date the 
User provides a quote. The Exchange proposes to make a clarifying 
change to the rule text to note that in order for a CUSIP to qualify 
for inclusion in the rebate calculation, a User must provide continuous 
two-sided quotes in a CUSIP, whether it's for eighty percent (80%) or 
fifty percent (50%) of the time, as applicable, for a minimum of 
hundred (100) bonds per side of the market that has an average spread 
of half-point ($0.50) or less and whose average maturity is at least 
five (5) years as of the date the User provides the quote.
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    \7\ For the first calendar month after a User opts in, the User 
is required to provide continuous two-sided quotes for fifty percent 
(50%) of the time during the Core Bond Trading Session.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\9\ 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. The Exchange believes 
that the clarifying change to the current rule text is reasonable as it 
will clarify the application of the rebate program and will help to 
avoid confusion for Users that opt into the rebate program. The 
Exchange notes that the proposed change is not designed to amend any 
rebate, nor alter the manner in which it calculates rebates under the 
program. The Exchange believes the proposed amendment is intended to 
make the Price List clearer and less confusing for investors and 
eliminate potential investor confusion, thereby removing impediments to 
and perfecting the mechanism of a free and open market and a national 
market system, and, in general, protecting investors and the public 
interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4), (5).

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[[Page 30595]]

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

    In accordance with Section 6(b)(8) of the Act,\10\ 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. The Exchange is proposing to make a clarifying 
change to the Price List that would not have any impact on competition.
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    \10\ 15 U.S.C. 78f(b)(8).
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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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) normally 
does not become operative for 30 days after the date of its filing. 
However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest as it will allow the 
Exchange to clarify the application of its rebate program and therefore 
reduce confusion in the application of the Exchange's Price List. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\13\
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    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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 to 
determine whether the proposed rule should be approved or disapproved.

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-2016-34 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-2016-34. 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 such filing also will 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-NYSE-2016-34, and should be 
submitted on or before June 7, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11542 Filed 5-16-16; 8:45 am]
 BILLING CODE 8011-01-P