82 FR 11076 - 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
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 32 (February 17, 2017)
Federal Register Volume 82, Issue 32 (February 17, 2017)
| Page Range | 11076-11079 | |
| FR Document | 2017-03183 |
[Federal Register Volume 82, Number 32 (Friday, February 17, 2017)] [Notices] [Pages 11076-11079] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-03183] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80032; File No. SR-NYSEARCA-2017-10] 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 February 13, 2017. 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 January 30, 2017, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services. The Exchange proposes to implement the fee changes effective February 1, 2017. 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, as described below, and implement the fee changes on February 1, 2017. Tape B Tiers Currently, a Tape B Tier 1 credit of $0.0030 per share \4\ applies to ETP Holders and Market Makers, that, on a daily basis, measured monthly, directly execute providing volume in Tape B Securities during the billing month (``Tape B Adding ADV'') that is equal to at least 0.40% of US Tape B CADV over the ETP Holder's second quarter 2015 Tape B Adding ADV taken as a percentage of Tape B CADV (``Tape B Baseline % CADV''). --------------------------------------------------------------------------- \4\ Under the Basic Rate, ETP Holders receive a credit of $0.0020 per share for Tape B orders that provide liquidity to the Book. --------------------------------------------------------------------------- The Exchange proposes to revise the threshold such that, to qualify for the Tape B Tier 1 credit, providing volume executed by ETP Holders and Market Makers would no longer be measured against the ETP Holder's Tape B baseline % CADV and would instead be based on such ETP holder directly executing providing volume in Tape B Securities that is equal to at least 1.50% of US Tape B CADV for the billing month. The Exchange is not proposing any change to the level of Tape B Tier 1 credits. Secondly, the Exchange proposes to introduce an alternative method of qualifying for Tape B Tier 2 credits. Currently, a Tape B Tier 2 credit of $0.0028 per share \5\ applies to ETP Holders and Market Makers, that, on a daily basis, measured monthly, directly execute Tape B Adding ADV that is equal to at least 0.20% of the US Tape B CADV over the ETP Holder's or Market Maker's Tape B Baseline % CADV. As proposed, ETP Holders and Market Makers could alternatively qualify for the Tape B Tier 2 credit by directly executing Tape B Adding ADV that is equal to at least 1.0% of the US Tape B CADV. The Exchange believes that, by providing for an additional method of qualifying for Tape B Tier 2, this proposed change will provide a greater incentive to attract additional liquidity in Tape B Securities so as to qualify for the Tape B Tier 2 credit. --------------------------------------------------------------------------- \5\ Under the Basic Rate, ETP Holders receive a credit of $0.0020 per share for Tape B orders that provide liquidity to the Book. --------------------------------------------------------------------------- The Exchange is not proposing any change to the level of Tape B Tier 2 credits. Tape C Tier The Exchange proposes to introduce a new pricing tier level--Tape C Tier--for securities with a per share price above $1.00. As proposed, a new Tape C Tier credit of $0.0002 per share \6\ would be applicable to ETP Holders and Market Makers, that, on a daily basis, measured monthly, directly execute providing volume in Tape C Securities during the billing month (``Tape C Adding ADV'') that is equal to at least 0.10% of US Tape C CADV over the ETP Holder's or Market Maker's fourth quarter 2016 Tape C Adding ADV taken as a percentage of Tape C CADV.\7\ For example, if an ETP Holder's Tape C Baseline % CADV during fourth quarter 2016 was 0.500%, the ETP Holder [[Page 11077]] would need a Tape C Adding ADV of at least 0.600% in order to qualify for the proposed Tape C Tier credit of $0.0002 per share (i.e., 0.500% Tape C Baseline % CADV plus 0.100% of the US Tape C CADV for the billing month).\8\ The credit provided under the proposed Tape C Tier would be in addition to the ETP Holder's Tiered or Basic Rate credit(s); provided, however, that such combined credit would not be permitted to exceed $0.0031 per share. --------------------------------------------------------------------------- \6\ Under the Basic Rate, ETP Holders receive a credit of $0.0020 per share for Tape C orders that provide liquidity to the Book. \7\ The Exchange proposes to use the same definition of US CADV for purposes of the proposed Tape C Tier. Specifically, U.S. CADV means 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 U.S. CADV. See Fee Schedule, Footnote 3. \8\ The Exchange recognizes that a firm that becomes an ETP Holder or Market Maker after the Baseline Month would have a Tape C Baseline ADV of zero. In this regard, a new ETP Holder or Market Maker would need to have a Tape C Adding ADV during the billing month of no less than 0.100% of US Tape C CADV for the $0.0002 per share credit to apply. --------------------------------------------------------------------------- Finally, for ETP Holders that qualify for the proposed new Tape C Tier, Tiered or Basic Rates would apply to all other fees and credits, based on a firm's qualifying levels, and if an ETP Holder qualifies for more than one tier in the Fee Schedule, the Exchange would apply the most favorable rate available under such tiers. Deletion of the ``P'' Modifier On April 30, 2015, the Exchange filed the first of a number of proposed rule changes (the ``first Pillar filing'') to adopt new equity trading rules to reflect the implementation of Pillar, the Exchange's new integrated trading technology platform designed to use a single specification for connecting to the equities and options markets operated by NYSE Arca and its affiliates, New York Stock Exchange LLC and NYSE MKT LLC.\9\ The Commission approved the first Pillar filing, including the interim use of the ``P'' modifier.\10\ The Exchange also previously filed a proposed rule change to amend its Fee Schedule to adopt references that would be applicable during the migration to Pillar,\11\ including the adoption of the ``P'' modifier, where applicable, to the Fee Schedule.\12\ --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 74951 (May 13, 2015), 80 FR 28721 (May 19, 2015) (SR-NYSEArca-2015-38) (notice of filing of proposed rule change adopting new equity trading rules relating to trading sessions, order ranking and display, and order execution, and the use of the ``P'' modifier). \10\ See Securities Exchange Act Release No. 75494 (July 20, 2015), 80 FR 44170 (July 24, 2015) (SR-NYSEArca-2015-38) (approval of proposed rule change adopting new equity trading rules relating to trading sessions, order ranking and display, and order execution, and the use of ``P'' modifier). \11\ See Securities Exchange Act Release Nos. 77124 (February 12, 2016), 81 FR 8548 (February 19, 2016) (SR-NYSEArca-2016-18); and 77588 (April 12, 2016), 81 FR 22676 (April 18, 2016) (SR-NYSEArca- 2016-54) (``Pillar Fee Filings''). \12\ Id. --------------------------------------------------------------------------- Once the migration of securities to Pillar was completed, the Exchange filed a proposed rule change to amend the Fee Schedule to remove references adopted in the Pillar Fee Filings,\13\ with exception to references to the ``P'' modifier as the ``P'' modified rules remained in effect at that time. The Exchange has since amended its rules to, among other things, delete the ``P'' modifier,\14\ and now proposes to delete references to the ``P'' modifier from the Fee Schedule. --------------------------------------------------------------------------- \13\ See Securities Exchange Act Release No. 77925 (May 26, 2016), 81 FR 35412 (June 2, 2016) (SR-NYSEArca-2016-78). \14\ See Securities Exchange Act Release No. 79078 (October 11, 2016), 81 FR 71559 (October 17, 2016) (SR-NYSEArca-2016-135). --------------------------------------------------------------------------- Deletion of Obsolete Fee Language In September 2016, the Exchange filed a proposed rule change to adopt a new Step Up pricing tier.\15\ The Step Up Tier Filing adopted lower requirements for ETP Holders and Market Makers to qualify for the Step Up Tier credits for the months of September 2016 and October 2016. The Exchange previously filed a proposed rule change to delete from the Fee Schedule reference to the Step Up Tier credits applicable to ETP Holders and Market Makers for the month of September 2016,\16\ and now proposes to delete from the Fee Schedule reference to the Step Up Tier credits applicable to ETP Holders and Market Makers for the month of October 2016 as that language is now obsolete. --------------------------------------------------------------------------- \15\ See Securities Exchange Act Release No. 78892 (September 21, 2016), 81 FR 66315 (September 27, 2016) (SR-NYSEArca-2016-128) (the ``Step Up Tier Filing''). \16\ See Securities Exchange Act Release No. 79054 (October 5, 2016), 81 FR 70473 (October 12, 2016) (SR-NYSEArca-2016-137). --------------------------------------------------------------------------- The proposed changes are not otherwise intended to address any other issues, and the Exchange is not aware of any significant problems that market participants would have in complying with the proposed changes. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\17\ in general, and furthers the objectives of Sections 6(b)(4) and (5) of the Act,\18\ 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. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b). \18\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Tape B Tiers The Exchange believes the proposed changes to the Tape B Tiers are reasonable and equitably allocated because they would apply to ETP Holders and Market Makers that provide liquidity to the Exchange and are designed to incentivize these market participants to increase the orders sent directly to the Exchange and therefore provide liquidity that supports the quality of price discovery and promotes market transparency. The Exchange believes the Tape B Tiers are equitable because they are open to all similarly situated ETP Holders and Market Makers on an equal basis and provide credits that are reasonably related to the value of an exchange's market quality associated with higher volumes. The Exchange believes that the proposed thresholds for qualifying for Tape B Tiers are reasonable because they are designed to encourage increased trading activity on the NYSE Arca equity market. The Exchange believes it is reasonable, equitable and not unfairly discriminatory to require ETP Holders and Market Makers to meet the higher threshold to qualify for the Tape B Tier 1 credit because doing so would result in a higher credit paid to such participants. Further, ETP Holders and Market Makers that do not meet the proposed threshold for the Tape B Tier 1 can also avail themselves to the Tape B Tier 2 credit, which while providing for a lower credit, also has lower requirements to qualify for such credit. Further, pursuant to this proposed rule change, ETP Holders and Market Makers will now be able to alternatively qualify for the Tape B Tier 2 credit. The proposed new method of qualifying for the Tape B Tier 2 credit is also equitable and not unfairly discriminatory because it would be available to all ETP Holders and Market Makers on an equal and non- discriminatory basis. In this regard, the Exchange notes that ETP Holders and Market Makers that do not meet the proposed alternative method would continue to have the opportunity to qualify for the Tape B Tier 2 credit by satisfying the existing requirement, which would not change as a result of this proposal. Tape C Tier The Exchange believes the proposed Tape C Tier is reasonable and equitably allocated because it would apply to ETP Holders and Market Makers that provide liquidity in Tape C Securities to the Exchange and is designed to incentivize these market participants to increase the orders sent directly to the Exchange and therefore provide liquidity that supports the quality of price discovery and promotes market transparency. The Exchange believes the new Tape C Tier [[Page 11078]] is equitable because it would be available to all similarly situated ETP Holders and Market Makers on an equal basis and provides a credit that is reasonably related to the value of an exchange's market quality associated with higher volumes. The Exchange further believes that the proposed Tape C Tier is reasonable, equitable and not unfairly discriminatory because the Exchange has previously implemented pricing tiers that target a particular segment of securities, such as Tape A and Tape B Securities. The Exchange further believes that it is equitable and not unfairly discriminatory that the proposed $0.0002 credit under the Tape C Tier would not be permitted to exceed $0.0031 per share when combined with other credits available to ETP Holders under other tiers specified in the Fee Schedule because the ETP Holders that qualify for these specified tiers would already receive a higher credit for such executions. The Exchange believes that the proposed rule change regarding Tape B and Tape C credits would create an added incentive for ETP Holders and Market Makers to execute additional orders on the Exchange. The Exchange believes that the proposed change is equitable and not unfairly discriminatory because providing incentives for orders in exchange-listed securities that are executed on a registered national securities exchange (rather than relying on certain available off- exchange execution methods) would contribute to investors' confidence in the fairness of their transactions and would benefit all investors by deepening the Exchange's liquidity pool, supporting the quality of price discovery, promoting market transparency and improving investor protection. Volume-based rebates and fees such as the ones currently in place on the Exchange, and as proposed herein, have been widely adopted in the cash equities markets and are equitable because they are open to all ETP Holders and Market Makers on an equal basis and provide additional benefits or discounts that are reasonably related to the value to an exchange's market quality associated with higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns, and introduction of higher volumes of orders into the price and volume discovery processes. The Exchange believes that the proposed amendment to Tape B Tiers and the introduction of Tape C Tier will provide such enhancements in market quality on the Exchange's equity market by incentivizing increased participation. Deletion of the ``P'' Modifier The Exchange believes that the proposed changes to the Fee Schedule to delete the ``P'' modifier from rules referenced in the Fee Schedule is reasonable, equitable and not unfairly discriminatory because the changes are intended to add clarity to the Fee Schedule and avoid investor confusion, which is in the public interest. The ``P'' modifier, which is no longer necessary, was intended to distinguish the Pillar trading rules from the now obsolete rules during the transitional period to a single trading platform and a single set of rules governing trading, would remove impediments to and perfect the mechanism of a national market system because these proposed changes would add greater clarity to the Exchange's rules and promote market transparency and efficiency. Deletion of Obsolete Fee Language The Exchange believes that it is reasonable, equitable and not unfairly discriminatory to delete reference to obsolete fees from the Fee Schedule. The Step Up Tier Filing adopted lower requirements for ETP Holders and Market Makers to qualify for the Step Up Tier credits for the month of October 2016. Given that October 2016 has now passed, the Exchange believes deletion of the outdated language will bring clarity to the Fee Schedule. 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,\19\ 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 proposal to revise the threshold to qualify for Tape B credits and the addition of a new Tape C credit would encourage the submission of additional liquidity to a public exchange, thereby promoting price discovery and transparency and enhancing order execution opportunities for ETP Holders and Market Makers. The Exchange believes that this could promote competition between the Exchange and other execution venues, including those that currently offer similar order types and comparable transaction pricing, by encouraging additional orders to be sent to the Exchange for execution. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- With respect to the changes related to the renaming of order types [sic] on Pillar, the proposed changes are not designed to address any competitive issue but rather provide the public and investors with a Fee Schedule that is transparent. 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) \20\ of the Act and subparagraph (f)(2) of Rule 19b-4 \21\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(3)(A). \21\ 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 [[Page 11079]] Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) \22\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEARCA-2017-10 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-2017-10. 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-2017-10 and should be submitted on or before March 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-03183 Filed 2-16-17; 8:45 am] BILLING CODE 8011-01-P
![11076 Federal Register / Vol. 82, No. 32 / Friday, February 17, 2017 / Notices
request(s) that the Postal Service states I. Self-Regulatory Organization’s of US Tape B CADV for the billing
concern market dominant product(s), Statement of the Terms of Substance of month.
applicable statutory and regulatory the Proposed Rule Change The Exchange is not proposing any
requirements include 39 U.S.C. 3622, 39 change to the level of Tape B Tier 1
The Exchange proposes to amend the
U.S.C. 3642, 39 CFR part 3010, and 39 credits.
NYSE Arca Equities Schedule of Fees
CFR part 3020, subpart B. For request(s) Secondly, the Exchange proposes to
and Charges for Exchange Services. The
that the Postal Service states concern introduce an alternative method of
Exchange proposes to implement the fee
competitive product(s), applicable qualifying for Tape B Tier 2 credits.
changes effective February 1, 2017. The
statutory and regulatory requirements Currently, a Tape B Tier 2 credit of
proposed rule change is available on the
include 39 U.S.C. 3632, 39 U.S.C. 3633, $0.0028 per share 5 applies to ETP
Exchange’s Web site at www.nyse.com,
39 U.S.C. 3642, 39 CFR part 3015, and Holders and Market Makers, that, on a
at the principal office of the Exchange,
39 CFR part 3020, subpart B. Comment daily basis, measured monthly, directly
and at the Commission’s Public
deadline(s) for each request appear in execute Tape B Adding ADV that is
Reference Room.
section II. equal to at least 0.20% of the US Tape
II. Self-Regulatory Organization’s B CADV over the ETP Holder’s or
II. Docketed Proceeding(s) Statement of the Purpose of, and Market Maker’s Tape B Baseline %
1. Docket No(s).: R2017–5; Filing Statutory Basis for, the Proposed Rule CADV. As proposed, ETP Holders and
Title: Notice of United States Postal Change Market Makers could alternatively
Service of Type 2 Rate Adjustment, In its filing with the Commission, the qualify for the Tape B Tier 2 credit by
Notice of Filing Functionally Equivalent self-regulatory organization included directly executing Tape B Adding ADV
Agreement, and Notice of Application statements concerning the purpose of, that is equal to at least 1.0% of the US
for Non-Public Treatment; Filing and basis for, the proposed rule change Tape B CADV. The Exchange believes
Acceptance Date: February 10, 2017; and discussed any comments it received that, by providing for an additional
Filing Authority: 39 CFR 3010.40 et seq.; on the proposed rule change. The text method of qualifying for Tape B Tier 2,
Public Representative: Natalie R. Ward; of those statements may be examined at this proposed change will provide a
Comments Due: February 24, 2017. the places specified in Item IV below. greater incentive to attract additional
This notice will be published in the The Exchange has prepared summaries, liquidity in Tape B Securities so as to
Federal Register. set forth in sections A, B, and C below, qualify for the Tape B Tier 2 credit.
of the most significant parts of such The Exchange is not proposing any
Stacy L. Ruble, change to the level of Tape B Tier 2
Secretary. statements.
credits.
[FR Doc. 2017–03151 Filed 2–16–17; 8:45 am] A. Self-Regulatory Organization’s
BILLING CODE 7710–FW–P Statement of the Purpose of, and the Tape C Tier
Statutory Basis for, the Proposed Rule The Exchange proposes to introduce a
Change new pricing tier level—Tape C Tier—for
securities with a per share price above
SECURITIES AND EXCHANGE 1. Purpose $1.00.
COMMISSION The Exchange proposes to amend the As proposed, a new Tape C Tier credit
Fee Schedule, as described below, and of $0.0002 per share 6 would be
[Release No. 34–80032; File No. SR– implement the fee changes on February applicable to ETP Holders and Market
NYSEARCA–2017–10] 1, 2017. Makers, that, on a daily basis, measured
monthly, directly execute providing
Self-Regulatory Organizations; NYSE Tape B Tiers
volume in Tape C Securities during the
Arca, Inc.; Notice of Filing and Currently, a Tape B Tier 1 credit of billing month (‘‘Tape C Adding ADV’’)
Immediate Effectiveness of Proposed $0.0030 per share 4 applies to ETP that is equal to at least 0.10% of US
Rule Change To Amend the NYSE Arca Holders and Market Makers, that, on a Tape C CADV over the ETP Holder’s or
Equities Schedule of Fees and daily basis, measured monthly, directly Market Maker’s fourth quarter 2016
Charges for Exchange Services execute providing volume in Tape B Tape C Adding ADV taken as a
Securities during the billing month percentage of Tape C CADV.7 For
February 13, 2017.
(‘‘Tape B Adding ADV’’) that is equal to example, if an ETP Holder’s Tape C
Pursuant to Section 19(b)(1) 1 of the at least 0.40% of US Tape B CADV over Baseline % CADV during fourth quarter
Securities Exchange Act of 1934 (the the ETP Holder’s second quarter 2015 2016 was 0.500%, the ETP Holder
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Tape B Adding ADV taken as a
notice is hereby given that, on January percentage of Tape B CADV (‘‘Tape B 5 Under the Basic Rate, ETP Holders receive a
30, 2017, NYSE Arca, Inc. (the Baseline % CADV’’). credit of $0.0020 per share for Tape B orders that
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with The Exchange proposes to revise the provide liquidity to the Book.
6 Under the Basic Rate, ETP Holders receive a
the Securities and Exchange threshold such that, to qualify for the credit of $0.0020 per share for Tape C orders that
Commission (the ‘‘Commission’’) the Tape B Tier 1 credit, providing volume provide liquidity to the Book.
proposed rule change as described in executed by ETP Holders and Market 7 The Exchange proposes to use the same
Items I, II, and III below, which Items Makers would no longer be measured definition of US CADV for purposes of the proposed
have been prepared by the self- against the ETP Holder’s Tape B Tape C Tier. Specifically, U.S. CADV means United
States Consolidated Average Daily Volume for
mstockstill on DSK3G9T082PROD with NOTICES
regulatory organization. The baseline % CADV and would instead be transactions reported to the Consolidated Tape,
Commission is publishing this notice to based on such ETP holder directly excluding odd lots through January 31, 2014 (except
solicit comments on the proposed rule executing providing volume in Tape B for purposes of Lead Market Maker pricing), and
change from interested persons. Securities that is equal to at least 1.50% excludes volume on days when the market closes
early and on the date of the annual reconstitution
of the Russell Investments Indexes. Transactions
1 15 U.S.C. 78s(b)(1). 4 Under the Basic Rate, ETP Holders receive a that are not reported to the Consolidated Tape are
2 15 U.S.C. 78a. credit of $0.0020 per share for Tape B orders that not included in U.S. CADV. See Fee Schedule,
3 17 CFR 240.19b–4. provide liquidity to the Book. Footnote 3.
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is equitable because it would be the Exchange’s equity market by encouraging additional orders to be sent
available to all similarly situated ETP incentivizing increased participation. to the Exchange for execution.
Holders and Market Makers on an equal With respect to the changes related to
Deletion of the ‘‘P’’ Modifier the renaming of order types [sic] on
basis and provides a credit that is
reasonably related to the value of an The Exchange believes that the Pillar, the proposed changes are not
exchange’s market quality associated proposed changes to the Fee Schedule designed to address any competitive
with higher volumes. The Exchange to delete the ‘‘P’’ modifier from rules issue but rather provide the public and
further believes that the proposed Tape referenced in the Fee Schedule is investors with a Fee Schedule that is
C Tier is reasonable, equitable and not reasonable, equitable and not unfairly transparent.
unfairly discriminatory because the discriminatory because the changes are Finally, the Exchange notes that it
Exchange has previously implemented intended to add clarity to the Fee operates in a highly competitive market
pricing tiers that target a particular Schedule and avoid investor confusion, in which market participants can
segment of securities, such as Tape A which is in the public interest. The ‘‘P’’ readily favor competing venues if they
and Tape B Securities. modifier, which is no longer necessary, deem fee levels at a particular venue to
The Exchange further believes that it was intended to distinguish the Pillar be excessive or rebate opportunities
is equitable and not unfairly trading rules from the now obsolete available at other venues to be more
discriminatory that the proposed rules during the transitional period to a favorable. In such an environment, the
$0.0002 credit under the Tape C Tier single trading platform and a single set Exchange must continually adjust its
would not be permitted to exceed of rules governing trading, would fees and rebates to remain competitive
$0.0031 per share when combined with remove impediments to and perfect the with other exchanges and with
other credits available to ETP Holders mechanism of a national market system alternative trading systems that have
under other tiers specified in the Fee because these proposed changes would been exempted from compliance with
Schedule because the ETP Holders that add greater clarity to the Exchange’s the statutory standards applicable to
qualify for these specified tiers would rules and promote market transparency exchanges. Because competitors are free
already receive a higher credit for such and efficiency. to modify their own fees and credits in
executions. response, and because market
Deletion of Obsolete Fee Language participants may readily adjust their
The Exchange believes that the
proposed rule change regarding Tape B The Exchange believes that it is order routing practices, the Exchange
and Tape C credits would create an reasonable, equitable and not unfairly believes that the degree to which fee
added incentive for ETP Holders and discriminatory to delete reference to changes in this market may impose any
Market Makers to execute additional obsolete fees from the Fee Schedule. burden on competition is extremely
orders on the Exchange. The Exchange The Step Up Tier Filing adopted lower limited. As a result of all of these
believes that the proposed change is requirements for ETP Holders and considerations, the Exchange does not
equitable and not unfairly Market Makers to qualify for the Step believe that the proposed changes will
discriminatory because providing Up Tier credits for the month of October impair the ability of ETP Holders or
incentives for orders in exchange-listed 2016. Given that October 2016 has now competing order execution venues to
securities that are executed on a passed, the Exchange believes deletion maintain their competitive standing in
registered national securities exchange of the outdated language will bring the financial markets.
(rather than relying on certain available clarity to the Fee Schedule. C. Self-Regulatory Organization’s
off-exchange execution methods) would For the foregoing reasons, the Statement on Comments on the
contribute to investors’ confidence in Exchange believes that the proposal is Proposed Rule Change Received From
the fairness of their transactions and consistent with the Act. Members, Participants, or Others
would benefit all investors by
B. Self-Regulatory Organization’s No written comments were solicited
deepening the Exchange’s liquidity
Statement on Burden on Competition or received with respect to the proposed
pool, supporting the quality of price
rule change.
discovery, promoting market In accordance with Section 6(b)(8) of
transparency and improving investor the Act,19 the Exchange believes that the III. Date of Effectiveness of the
protection. proposed rule change would not impose Proposed Rule Change and Timing for
Volume-based rebates and fees such any burden on competition that is not Commission Action
as the ones currently in place on the necessary or appropriate in furtherance The foregoing rule change is effective
Exchange, and as proposed herein, have of the purposes of the Act. Instead, the upon filing pursuant to Section
been widely adopted in the cash Exchange believes that the proposal to 19(b)(3)(A) 20 of the Act and
equities markets and are equitable revise the threshold to qualify for Tape subparagraph (f)(2) of Rule 19b–4 21
because they are open to all ETP B credits and the addition of a new Tape thereunder, because it establishes a due,
Holders and Market Makers on an equal C credit would encourage the fee, or other charge imposed by the
basis and provide additional benefits or submission of additional liquidity to a Exchange.
discounts that are reasonably related to public exchange, thereby promoting At any time within 60 days of the
the value to an exchange’s market price discovery and transparency and filing of such proposed rule change, the
quality associated with higher levels of enhancing order execution Commission summarily may
market activity, such as higher levels of opportunities for ETP Holders and temporarily suspend such rule change if
liquidity provision and/or growth Market Makers. The Exchange believes
mstockstill on DSK3G9T082PROD with NOTICES
it appears to the Commission that such
patterns, and introduction of higher that this could promote competition action is necessary or appropriate in the
volumes of orders into the price and between the Exchange and other public interest, for the protection of
volume discovery processes. The execution venues, including those that investors, or otherwise in furtherance of
Exchange believes that the proposed currently offer similar order types and the purposes of the Act. If the
amendment to Tape B Tiers and the comparable transaction pricing, by
introduction of Tape C Tier will provide 20 15 U.S.C. 78s(b)(3)(A).
such enhancements in market quality on 19 15 U.S.C. 78f(b)(8). 21 17 CFR 240.19b–4(f)(2).
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![Federal Register / Vol. 82, No. 32 / Friday, February 17, 2017 / Notices 11079
Commission takes such action, the NYSEARCA–2017–10 and should be Applicants: 299 Park Avenue, New
Commission shall institute proceedings submitted on or before March 10, 2017. York, NY 10171.
under Section 19(b)(2)(B) 22 of the Act to For the Commission, by the Division of FOR FURTHER INFORMATION CONTACT:
determine whether the proposed rule Trading and Markets, pursuant to delegated Steven I. Amchan, Senior Counsel, at
change should be approved or authority.23 (202) 551–6826, or Daniele Marchesani,
disapproved. Eduardo A. Aleman, Assistant Chief Counsel, at (202) 551–
IV. Solicitation of Comments Assistant Secretary. 6821 (Division of Investment
Interested persons are invited to [FR Doc. 2017–03183 Filed 2–16–17; 8:45 am] Management, Chief Counsel’s Office).
submit written data, views, and BILLING CODE 8011–01–P SUPPLEMENTARY INFORMATION: The
arguments concerning the foregoing, following is a summary of the
including whether the proposed rule application. The complete application
change is consistent with the Act. SECURITIES AND EXCHANGE may be obtained via the Commission’s
Comments may be submitted by any of COMMISSION Web site by searching for the file
the following methods: [Investment Company Act Release No. number, or the applicant using the
32477; 812–14743] Company name box, at http://
Electronic Comments
www.sec.gov/search/search.htm or by
• Use the Commission’s Internet General Electric Company and GE calling (202) 551–8090.
comment form (http://www.sec.gov/ Capital International Holdings Limited;
rules/sro.shtml); or Applicants’ Representations
Notice of Application
• Send an email to rule-comments@ 1. GE, a New York corporation, is one
sec.gov. Please include File Number SR– February 13, 2017.
of the largest and most diversified
NYSEARCA–2017–10 on the subject AGENCY: Securities and Exchange infrastructure and financial services
line. Commission (‘‘Commission’’). corporations in the world. Its products
Paper Comments ACTION: Notice of an application under and services range from aircraft engines,
section 6(c) of the Investment Company power generation, oil and gas
• Send paper comments in triplicate Act of 1940 (‘‘Act’’). production equipment and household
to Brent J. Fields, Secretary, Securities
appliances to medical imaging, business
and Exchange Commission, 100 F Street SUMMARY OF APPLICATION: General and consumer financing, and industrial
NE., Washington, DC 20549–1090. Electric Company (‘‘GE’’) and GE products. Applicants state that GE is not
All submissions should refer to File Capital International Holdings Limited an investment company as defined in
Number SR–NYSEARCA–2017–10. This (‘‘European Holdco’’) request an order section 3(a) of the Act.
file number should be included on the under section 6(c) of the Act exempting 2. European Holdco, a UK limited
subject line if email is used. To help the European Holdco from all provisions of company and a wholly-owned
Commission process and review your the Act during the period from the date subsidiary of GE, is the successor to the
comments more efficiently, please use of the requested order to the earlier of former General Electric Capital
only one method. The Commission will (a) three years from such date and (b) Corporation (‘‘Old GE Capital’’) with
post all comments on the Commission’s the completion of the sales process respect to various foreign businesses
Internet Web site (http://www.sec.gov/ described in the application formerly held by Old GE Capital.
rules/sro.shtml). Copies of the (‘‘Exemption Period’’). European Holdco, directly or through its
submission, all subsequent APPLICANTS: GE and European Holdco. majority-owned subsidiaries, engages in
amendments, all written statements
FILING DATES: The application was filed financing activities primarily for mid-
with respect to the proposed rule
on February 10, 2017. sized companies within the industries
change that are filed with the
HEARING OR NOTIFICATION OF HEARING: in which GE provides its services.
Commission, and all written
communications relating to the An order granting the application will 3. On April 10, 2015, GE announced
proposed rule change between the be issued unless the Commission orders a plan to reduce the size of its financial
Commission and any person, other than a hearing. Interested persons may services businesses through the sale of
those that may be withheld from the request a hearing by writing to the most of the assets of Old GE Capital over
public in accordance with the Commission’s Secretary and serving the next 24 months and to focus on the
provisions of 5 U.S.C. 552, will be applicant with a copy of the request, continued investment and growth of
available for Web site viewing and personally or by mail. Hearing requests GE’s industrial businesses. As part of
printing in the Commission’s Public should be received by the Commission this plan, Old GE Capital’s businesses
Reference Room, 100 F Street NE., by 5:30 p.m. on March 10, 2017, and were reorganized principally into
Washington, DC 20549 on official should be accompanied by proof of European Holdco and a separate U.S.
business days between the hours of service on applicant, in the form of an holding company (the
10:00 a.m. and 3:00 p.m. Copies of the affidavit or, for lawyers, a certificate of ‘‘Reorganization’’), with the non-U.S.
filing also will be available for service. Hearing requests should state businesses being contributed to
inspection and copying at the principal the nature of the writer’s interest, the European Holdco.1 The non-U.S.
office of the Exchange. All comments reason for the request, and the issues businesses transferred from Old GE
received will be posted without change; contested. Persons who wish to be Capital to European Holdco include,
the Commission does not edit personal notified of a hearing may request among others, (i) banking, (ii)
mstockstill on DSK3G9T082PROD with NOTICES
identifying information from notification by writing to the equipment financing, (iii) inventory
submissions. You should submit only Commission’s Secretary. financing, (iv) factoring, (v) automobile
information that you wish to make ADDRESSES: Secretary, U.S. Securities
1 As part of the plan to restructure and reduce the
available publicly. All submissions and Exchange Commission, 100 F Street
Old GE Capital business, Old GE Capital formed a
should refer to File Number SR– NE., Washington, DC 20549–1090; finance subsidiary (‘‘FinCo’’), whose primary
purpose is to finance the operations of GE’s foreign
22 15 U.S.C. 78s(b)(2)(B). 23 17 CFR 200.30–3(a)(12). subsidiaries.
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Document Created: 2017-02-17 00:28:38
Document Modified: 2017-02-17 00:28:38
| 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 | 82 FR 11076 |
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