81 FR 54891 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services Related to Tier 1 and Cross Asset Tier 2 Fees and Credits for Orders Executed on the Exchange, and Eliminate the Routable Retail Order Tier

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 159 (August 17, 2016)

Page Range		54891-54893
FR Document		2016-19576
Federal Register, Volume 81 Issue 159 (Wednesday, August 17, 2016)
[Federal Register Volume 81, Number 159 (Wednesday, August 17, 2016)]
[Notices]
[Pages 54891-54893]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-19576]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78545; File No. SR-NYSEArca-2016-111]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Equities Schedule of Fees and Charges for Exchange Services 
Related to Tier 1 and Cross Asset Tier 2 Fees and Credits for Orders 
Executed on the Exchange, and Eliminate the Routable Retail Order Tier

August 11, 2016.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on July 29, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``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 (the ``Fee Schedule'') related 
to Tier 1 and Cross Asset Tier 2 fees and credits for orders executed 
on the Exchange, and eliminate the Routable Retail Order Tier. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule related to Tier 1 
and Cross Asset Tier 2 fees and credits for orders executed on the 
Exchange.\4\ The Exchange also proposes to eliminate the Routable 
Retail Order Tier. The Exchange proposes to implement the fee change 
effective August 1, 2016.
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    \4\ The Tier 2 [sic] fees and credits are available for round 
lots and odd lots with a per share price $1.00 or above.
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Tier 1
    Currently, ETP Holders and Market Makers qualify for Tier 1 fees 
and credits by providing liquidity an average daily share volume per 
month of 0.70% or more of the United States consolidated average daily 
volume (``US CADV'').\5\ In Tape C Securities, ETP Holders and Market 
Makers currently receive a credit of $0.0033 per share for orders that 
provide liquidity to the Book and pay a fee of $0.0029 per share for 
orders that take liquidity from the Book. The Exchange proposes to 
amend the fees and credits applicable to ETP Holders and Market Makers 
for orders executed in Tape C Securities. As proposed, ETP Holders and 
Market Makers would receive a credit of $0.0032 per share for orders 
that provide liquidity to the Book in Tape C Securities and would pay a 
fee of $0.0030 per share for orders that take liquidity from the Book 
in Tape C Securities. The Exchange is not proposing any other pricing 
change in Tier 1.
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    \5\ US CADV would mean the United States Consolidated Average 
Daily Volume for transactions reported to the Consolidated Tape, 
excluding odd lots through January 31, 2014 (except for purposes of 
Lead Market Maker pricing), and excludes volume on days when the 
market closes early and on the date of the annual reconstitution of 
the Russell Investments Indexes. Transactions that are not reported 
to the Consolidated Tape are not included in US CADV. See Fee 
Schedule, footnote 3.
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Cross Asset Tier 2
    Additionally, Cross Asset Tier 2 fees and credits currently apply 
to ETP Holders and Market Makers that either (1) provide liquidity an 
average daily volume share per month of 0.30% or more of the US CADV 
and are affiliated with an OTP Holder or OTP Firm that provides an ADV 
of electronic posted executions for the account of a market maker in 
Penny Pilot issues on NYSE Arca Options (excluding mini options) of at 
least 0.75% of total Customer equity and ETF option ADV as reported by 
The Options Clearing Corporation (``OCC''), or (2) provide liquidity an 
average daily volume share per month of 0.40% or more of the US CADV 
and are affiliated with an OTP Holder or OTP Firm that provides an ADV 
of electronic posted executions for the account of a market maker in 
Penny Pilot issues on NYSE Arca Options (excluding mini options) of at 
least 0.65% of total Customer equity and ETF option ADV as reported by 
OCC. Such ETP Holders and Market Makers receive a credit of $0.0033 per 
share for orders that provide liquidity to the Book in Tape C 
Securities and pay a fee of $0.0029 per share for orders that take 
liquidity from the Book in Tape C Securities. The Exchange proposes to 
amend the fees and credits applicable to ETP Holders and Market Makers 
for orders executed in Tape C Securities. As proposed, ETP Holders and 
Market Makers would receive a credit of $0.0032 per share for orders 
that provide liquidity to the Book in Tape C Securities and pay a fee 
of $0.0030 per share for orders that take liquidity from the Book in 
Tape C Securities.
Elimination of Obsolete Pricing
    The Fee Schedule currently includes a pricing tier, Routable Retail 
Order Tier, that has not encouraged ETP Holders and Market Makers to 
increase their activity to qualify for this pricing tier as 
significantly as the Exchange had anticipated it would. As a result, 
the Exchange proposes to remove this pricing tier from the Fee 
Schedule.
    The proposed changes are not otherwise intended to address any 
other problem, and the Exchange is not aware of any significant problem 
that the affected market participants would have

[[Page 54892]]

in complying with the proposed changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\6\ in general, and furthers the 
objectives of sections 6(b)(4) and 6(b)(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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Tier 1
    The Exchange believes that the proposed change to increase the fee 
from $0.0029 per share to $0.0030 per share and to lower the credit 
from $0.0033 per share to $0.0032 per share for Tier 1 customers in 
Tape C Securities is reasonable as it is comparable to fees charged and 
credits paid by at least one other exchange, specifically, Bats BZX 
Exchange, which charges a fee of $0.0030 per share for orders that 
remove liquidity in Tape C Securities on that market,\8\ and provides a 
credit that ranges between $0.0020 per share and $0.0032 per share, 
depending on the amount of volume transacted.\9\ The Exchange believes 
that the proposed fee change is equitable and not unfairly 
discriminatory because the proposed fees and credits would apply 
uniformly to all similarly situated ETP Holders and Market Makers and 
would apply to all Tier 1 orders that add or take liquidity from the 
Book in Tape C Securities. The Exchange believes that recalibrating the 
fees and credits will continue to attract order flow to the Exchange, 
thereby contributing to price discovery on the Exchange and benefiting 
investors generally.
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    \8\ See Fee Codes and Associated Fees, Bats BZX Exchange Fee 
Schedule, at https://batstrading.com/support/fee_schedule/bzx/.
    \9\ See Add Volume Tiers, Bats BZX Exchange Fee Schedule, at 
https://batstrading.com/support/fee_schedule/bzx/.
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Cross Asset Tier 2
    The Exchange believes that the proposed change to increase the fee 
from $0.0029 per share to $0.0030 per share and to lower the credit 
from $0.0033 per share to $0.0032 per share for Cross Asset Tier 2 
customers in Tape C Securities is reasonable as it is comparable to 
fees charged and credits paid by at least one other exchange, 
specifically, Bats BZX Exchange, which charges a fee of $0.0030 per 
share for orders that remove liquidity from that exchange in Tape C 
Securities,\10\ and provides a lower cross-asset tier rebate of $0.0029 
[sic] per share in Tape C Securities.\11\ The Exchange believes that 
the proposed fee change is equitable and not unfairly discriminatory 
because the proposed fees and credits would apply uniformly to all 
similarly situated ETP Holders and Market Makers and would apply to all 
Cross Asset Tier 2 orders that add or take liquidity from the Book in 
Tape C Securities. The Exchange believes that recalibrating the fees 
and credits will continue to attract order flow to the Exchange, 
thereby contributing to price discovery on the Exchange and benefiting 
investors generally.
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    \10\ See Fee Codes and Associated Fees, Bats BZX Exchange Fee 
Schedule, at https://batstrading.com/support/fee_schedule/bzx/.
    \11\ See Add Volume Tiers, Bats BZX Exchange Fee Schedule, at 
https://batstrading.com/support/fee_schedule/bzx/.
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Elimination of Obsolete Pricing
    The Exchange believes that it is reasonable to eliminate the 
obsolete pricing tier from the Fee Schedule because ETP Holders and 
Market Makers have not increased their activity to qualify for the 
Routable Retail Order Tier as significantly as the Exchange anticipated 
they would. The Exchange believes that it is equitable and not unfairly 
discriminatory to eliminate the Routable Retail Order Tier because, as 
proposed, the pricing tier would be eliminated entirely--ETP Holders 
and Market Makers would no longer be able to qualify for this pricing 
tier. This aspect of the proposed change would therefore result in a 
more streamlined Fee Schedule.
    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,\12\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. The proposal to amend the level of fees and 
credits applicable to Tier 1 customers in Tape C Securities and to 
Cross Asset Tier 2 customers in Tape C Securities would not place a 
burden on competition as the proposed changes are comparable to fees 
and credits for Tape C Securities provided by at least one other 
exchange.\13\ The Exchange believes that the proposed fee changes could 
promote competition between the Exchange and other execution venues, 
including those that currently offer comparable transaction pricing, by 
encouraging additional orders to be sent to the Exchange for execution.
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    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See supra, notes 8-11.
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    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 ETP Holders 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) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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

[[Page 54893]]

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) \16\ of the Act to determine 
whether the proposed rule change should be approved or disapproved.
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    \16\ 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-2016-111 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2016-111. 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 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-NYSEArca-2016-111 and should 
be submitted on or before September 7, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-19576 Filed 8-16-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 159 / Wednesday, August 17, 2016 / Notices 54893

investors, or otherwise in furtherance of available publicly. All submissions Exchange has prepared summaries, set
the purposes of the Act. If the should refer to File Number SR– forth in sections A, B, and C below, of
Commission takes such action, the NYSEArca–2016–111 and should be the most significant aspects of such
Commission shall institute proceedings submitted on or before September 7, statements.
under section 19(b)(2)(B) 16 of the Act to 2016.
determine whether the proposed rule A. Self-Regulatory Organization’s
For the Commission, by the Division of Statement of the Purpose of, and
change should be approved or Trading and Markets, pursuant to delegated
disapproved. Statutory Basis for, the Proposed Rule
authority.17
Change
IV. Solicitation of Comments Robert W. Errett,
Deputy Secretary. 1. Purpose
Interested persons are invited to
[FR Doc. 2016–19576 Filed 8–16–16; 8:45 am]
submit written data, views and The Exchange is proposing to amend
BILLING CODE 8011–01–P
arguments concerning the foregoing, Rule 980NY(d) to provide for the
including whether the proposed rule rejection of certain Electronic Complex
change is consistent with the Act. Orders (‘‘ECOs’’).3 Specifically, the
SECURITIES AND EXCHANGE
Comments may be submitted by any of Exchange proposes to reject certain
COMMISSION
the following methods: ECOs that may undermine the
[Release No. 34–78544; File No. SR– effectiveness of risk limitation
Electronic Comments NYSEMKT–2016–73] mechanisms designed to protect Market
• Use the Commission’s Internet Makers.
comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE
rules/sro.shtml); or MKT LLC; Notice of Filing of Proposed The Exchange requires a Market
• Send an email to rule- Rule Change Amending Rule 980NY(d) Maker to utilize its risk limitation
comments@sec.gov. Please include File To Provide for the Rejection of Certain mechanisms, which automatically
Number SR–NYSEArca–2016–111 on Electronic Complex Orders remove a Market Maker’s quotes in all
the subject line. series of an options class when certain
August 11, 2016. parameter settings are triggered.4 This
Paper Comments Pursuant to section 19(b)(1) of the functionality is designed to mitigate the
• Send paper comments in triplicate Securities Exchange Act of 1934 risk of multiple executions on a Market
to Secretary, Securities and Exchange (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Maker’s quotes occurring
Commission, 100 F Street NE., notice is hereby given that on August 3, simultaneously across multiple series
Washington, DC 20549–1090. 2016, NYSE MKT LLC (the ‘‘Exchange’’ and multiple option classes. Pursuant to
All submissions should refer to File or ‘‘NYSE MKT’’) filed with the Rule 928NY, the Exchange establishes a
Number SR–NYSEArca–2016–111. This Securities and Exchange Commission time period during which the System
file number should be included on the (‘‘SEC’’ or ‘‘Commission’’) the proposed calculates: (1) The number of trades
subject line if email is used. To help the rule change as described in Items I, II, executed by the Market Maker in a
Commission process and review your and III below, which Items have been specified options class; (2) the volume
comments more efficiently, please use prepared by the Exchange. The of contracts traded by the Market Maker
only one method. The Commission will Commission is publishing this notice to in a specified options class; or (3) the
post all comments on the Commission’s solicit comments on the proposed rule percentage of the Market Maker’s quoted
Internet Web site (http://www.sec.gov/ change from interested persons. size in the specified class that has been
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s executed (the ‘‘risk settings’’).5 When a
submission, all subsequent Statement of the Terms of Substance of Market Maker has breached its risk
amendments, all written statements the Proposed Rule Change settings (i.e., has traded more than the
with respect to the proposed rule contract or volume limit or cumulative
The Exchange proposes to amend
change that are filed with the percentage limit of a class during the
Rule 980NY(d) to provide for the
Commission, and all written specified measurement interval), the
rejection of certain Electronic Complex
communications relating to the System will cancel all of the Market
Orders. The proposed rule change is
proposed rule change between the Maker’s quotes in that class until the
available on the Exchange’s Web site at
Commission and any person, other than Market Maker notifies the Exchange it
www.nyse.com, at the principal office of
those that may be withheld from the the Exchange, and at the Commission’s
public in accordance with the Public Reference Room.
3 Rule 900.3NY(e) defines a Complex Order as

provisions of 5 U.S.C. 552, will be any order involving the simultaneous purchase
II. Self-Regulatory Organization’s and/or sale of two or more different option series
available for Web site viewing and in the same underlying security, for the same
printing in the Commission’s Public Statement of the Purpose of, and account, in a ratio that is equal to or greater than
Reference Room, 100 F Street NE., Statutory Basis for, the Proposed Rule one-to-three (.333) and less than or equal to three-
Washington, DC 20549, on official Change to-one (3.00) and for the purpose of executing [sic]
particular investment strategy. Per Rule 980NY, an
business days between the hours of In its filing with the Commission, the ECO is a Complex Order that has been entered into
10:00 a.m. and 3:00 p.m. Copies of the Exchange included statements the NYSE Amex Options System (‘‘System’’) for
filing also will be available for concerning the purpose of, and basis for, execution. See Rule 980NY(preamble).
4 See Rule 928NY(b)(3), (c)(3) and (d)(3). Market
inspection and copying at the principal the proposed rule change and discussed Makers are required to utilize one of the three risk
office of the Exchange. All comments
mstockstill on DSK3G9T082PROD with NOTICES

any comments it received on the settings for their quotes. See Commentary .04 to
received will be posted without change; proposed rule change. The text of these Rule 928NY. Market Makers and ATP Holders may
the Commission does not edit personal statements may be examined at the utilize the risk limitation mechanisms for certain
identifying information from orders, but they are not required to do so. See, e.g.,
places specified in Item IV below. The Rule 928NY(b)(1), (2); (c)(1), (c)(2).
submissions. You should submit only 5 See Rule 928NY(b)(3), (c)(3) and (d)(3). Market
information that you wish to make 17 17 CFR 200.30–3(a)(12). Makers are required to utilize one of the three risk
1 15 U.S.C. 78s(b)(1). settings for its quotes. See Commentary .04 to Rule
16 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4. 928NY.

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Document Created: 2018-02-09 11:35:09
Document Modified: 2018-02-09 11:35:09
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		81 FR 54891