82_FR_15306 82 FR 15249 - 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

82 FR 15249 - 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 57 (March 27, 2017)

Page Range15249-15251
FR Document2017-05918

Federal Register, Volume 82 Issue 57 (Monday, March 27, 2017)
[Federal Register Volume 82, Number 57 (Monday, March 27, 2017)]
[Notices]
[Pages 15249-15251]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-05918]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80285; File No. SR- NYSEArca-2017-27]


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

March 21, 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 March 10, 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.
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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''). The Exchange 
proposes to implement the fee changes effective March 10, 2017.\4\ 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.
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    \4\ The Exchange originally filed to amend the Fee Schedule on 
February 28, 2017 (SR-NYSEArca-2017-21) and withdrew such filing on 
March 10, 2017.
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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 March 10, 2017.
Mid-Point Liquidity Order--Securities $1.00 and Greater
    A Mid-Point Liquidity Order is defined in Rule 7.31(d)(3) as a 
Limit Order that is not displayed and does not route, with a working 
price at the midpoint of the Protected Best Bid and Offer 
(``PBBO'').\5\
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    \5\ See Rule 7.31(d)(3).
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    The Exchange currently does not charge a fee for MPL Orders in Tape 
A, Tape B and Tape C securities that remove liquidity from the Exchange 
that are designated as ``Retail Orders.'' \6\ The Exchange proposes to 
charge a fee of $0.0010 per share in each of Tier 1, Tier 2 and Basic 
Rates sections of the Fee Schedule for MPL Orders that remove liquidity 
from the Exchange and that are designated as Retail Orders.
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    \6\ Retail Orders are defined in the Fee Schedule as orders 
designated as retail orders and that meet the requirements of Rule 
7.44(a)(3), but that are not executed in the Retail Liquidity 
Program. The Retail Liquidity Program is a pilot program designed to 
attract additional retail order flow to the Exchange for NYSE Arca-
listed securities and securities traded pursuant to unlisted trading 
privileges while also providing the potential for price improvement 
to such order flow. See Rule 7.44. See also Securities Exchange Act 
Release No. 71176 (December 23, 2013), 78 FR 79524 (December 30, 
2013) (SR-NYSEArca-2013-107).
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Tape B Orders
    The Fee Schedule currently provides that a fee of $0.00285 per 
share is charged for orders that take liquidity from the Book in Tape B 
securities in each of Tier 1, Tier 2, Tier 3, and Cross-Asset Tier 2 
sections of the Fee Schedule, and for Limit Non-Displayed Orders \7\ 
that take liquidity from the Book in Tape B securities in each of Tier 
1, Tier 2 and Tier 3 of the Fee Schedule. The Exchange proposes to 
increase this fee to $0.0029 per share.
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    \7\ A Limit Non-Displayed Order is a Limit Order that is not 
displayed and does not route. See Rule 7.31(d)(2).
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Lead Market Maker (``LMM'') \8\ Transaction Fees
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    \8\ The term ``Lead Market Maker'' is defined in Rule 1.1(ccc) 
to mean a registered Market Maker that is the exclusive Designated 
Market Maker in listings for which the Exchange is the primary 
market.
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    The Exchange currently charges a fee of $0.00285 per share to LMMs 
for orders in primary listed securities that remove liquidity from the 
NYSE Arca Book. The Exchange proposes to increase this fee to $0.0029 
per share.
Tape C Tier 2
    The Exchange proposes a new pricing tier--Tape C Tier 2--for 
securities with a per share price at or above $1.00.
    As proposed, the Tape C Tier 2 would apply 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 0.20% of the US Tape 
C CADV for the billing month over the ETP Holder's or Market Maker's Q4 
2016 Tape C Adding ADV taken as a percentage of Tape C CADV. Such ETP 
Holders and Market Makers would be charged a fee of $0.0029 per share 
for orders that take liquidity from the Book in Tape C Securities. For 
example, if an ETP Holder's Tape C Baseline % CADV during fourth 
quarter 2016 was 0.500%, the ETP Holder would need a Tape C Adding ADV 
of at least 0.700% to meet the requirements for Tape C Tier 2. For all 
other fees and credits, Tiered or Basic Rates apply based on a firm's 
qualifying levels.
    The Exchange recently adopted a Tape C Tier credit of $0.0002 per 
share for orders that provide liquidity to the Book.\9\ That credit is 
applied in addition to the ETP Holder's or Market Maker's Tiered or 
Basic Rate credit(s) except that

[[Page 15250]]

such combined credit cannot exceed $0.0031 per share. For ETP Holders 
and Market Makers that would be subject to the proposed Tape C Tier 2 
fee, the combined credit shall not exceed $0.0033 per share.
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    \9\ See Securities Exchange Act Release No. 80032 (February 13, 
2017), 82 FR 11076 (February 17, 2017) (SR-NYSEArca-2017-10).
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    The Exchange also proposes to rename the current Tape C Tier to 
Tape C Tier 1 to distinguish this pricing tier from the proposed new 
pricing tier, Tape C Tier 2.
Cross Asset Tier 3
    The Exchange proposes a new pricing tier--Cross Asset Tier 3--for 
securities with a per share price at or above $1.00.
    As proposed the Cross Asset Tier 3 would apply to ETP Holders and 
Market Makers that (a) provide liquidity of 0.30% or more of the US 
CADV per month and (b) are affiliated with an OTP Holder or OTP Firm 
that provides an ADV of electronic posted Customer and Professional 
Customer executions in all issues on NYSE Arca Options (excluding mini 
options) of at least 0.80% of total Customer equity and ETF option ADV 
as reported by OCC, of which at least 0.20% of total Customer equity 
and ETF option ADV as reported by OCC is from Customer and Professional 
Customer executions in non-Penny Pilot issues on NYSE Arca Options. 
Such ETP Holders and Market Makers would receive a credit of $0.0030 
per share for orders that provide liquidity to the order book in Tape 
A, Tape B and Tape C Securities. For all other fees and credits, Tiered 
or Basic Rates apply based on a firm's qualifying levels.
    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,\10\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\11\ 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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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
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Mid-Point Liquidity Order
    The Exchange believes that the proposed increase to the fee for 
executions of MPL Orders that remove liquidity and that are designated 
as Retail Orders is reasonable. MPL Orders provide opportunities for 
market participants to interact with orders priced at the midpoint of 
the PBBO, thus providing price improving liquidity to market 
participants and increasing the quality of order execution on the 
Exchange's market, which benefits all market participants.
    Specifically, the Exchange believes that charging a fee for MPL 
Orders that remove liquidity from the Exchange and that are designated 
as Retail Orders is reasonable because the fee is substantially lower 
than the $0.0030 per share (fee) for MPL orders removing liquidity from 
the Book that are not designated as ``Retail Orders.''
Tape B Orders
    The Exchange believes that the proposal to increase the fee charged 
for orders in Tape B Securities in Tier 1, Tier 2, Tier 3 and Cross-
Asset Tier 2 that take liquidity from the Book, and for Limit Non-
Displayed Orders that take liquidity from the Book in Tape B securities 
in each of Tier 1, Tier 2 and Tier 3, is reasonable because the 
proposed rate will continue to be lower than the fee charged by other 
exchanges. For example, Bats EDGX Exchange (``EDGX'') currently charges 
a fee of $0.0030 per share for orders that remove liquidity in Tape B 
securities on that exchange.\12\ The Exchange further believes that the 
proposed fee increase is equitable and not unfairly discriminatory 
because it would apply to all orders in Tape B Securities in Tier 1, 
Tier 2, Tier 3 and Cross-Asset Tier 2 that take liquidity from the 
Book.
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    \12\ See EDGX Fee Schedule at http://www.bats.com/us/equities/membership/fee_schedule/edgx/.
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LMM Transaction Fees
    The Exchange believes that it is reasonable to increase the fee 
charged to LMMs for orders in primary listed securities that remove 
liquidity from the NYSE Arca Book as this fee would be the same as the 
fee increase proposed by the Exchange to Tier 1, Tier 2, Tier 3 and 
Cross-Asset Tier 2 ETP Holders and Market Makers that take liquidity in 
Tape B securities. In addition, the proposed fee change is equitable 
and not unfairly discriminatory because it would apply uniformly to all 
similarly situated LMMs.
Tape C Tier 2
    The Exchange believes that the proposal to adopt a lower fee of 
$0.0029 per share for orders that take liquidity from the Book in Tape 
C Securities for firms that qualify for Tape C Tier 2 is reasonable 
because the proposed rate is lower than fees charged by other exchanges 
for taking liquidity in Tape C Securities, and would create an added 
incentive for ETP Holders and Market Makers to execute additional 
orders on the Exchange. For example, EDGX currently charges a fee of 
$0.0030 per share fee for orders that take liquidity from that exchange 
in Tape C Securities. The Exchange further believes that the proposed 
fee decrease is equitable and not unfairly discriminatory because it 
would apply to all orders in Tape C Securities with a per share price 
of $1.00 and greater that take liquidity from the Book. The Exchange 
believes that the proposal to raise the cap on the combined credit from 
$0.0031 per share to $0.0033 per share for ETP Holders and Market 
Makers that meet the requirement for proposed new Tape C Tier 2 is 
reasonable because it would create an added incentive for ETP Holders 
and Market Makers to add liquidity on the Exchange for the benefit of 
all market participants.
Cross Asset Tier 3
    The Exchange believes the proposed Cross Asset Tier 3 is reasonable 
and equitably allocated because it would apply to ETP Holders and 
Market Makers that provide liquidity 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 Cross Asset Tier 3 is equitable because it 
would be available to all similarly situated ETP Holders and Market 
Makers on an equal basis and would provide credits that are reasonably 
related to the value of an exchange's market quality associated with 
higher volumes. The Exchange further believes that the proposed Cross 
Asset Tier 3 is reasonable, equitable and not unfairly discriminatory 
because the Exchange has previously implemented cross asset tiers, 
including the current Cross Asset Tier 1 and Cross Asset Tier 2.
    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.

[[Page 15251]]

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

    In accordance with Section 6(b)(8) of the Act,\13\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, the Exchange believes that the proposed 
changes 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. 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.
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    \13\ 15 U.S.C. 78f(b)(8).
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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. Finally, the 
Exchange believes the proposed fee changes do not impose any burden on 
competition as the fee changes are consistent with the fees charged by 
other exchanges.\14\
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    \14\ See supra, note 12.
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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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \15\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \16\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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) \17\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \17\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2017-27 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-2017-27. 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-2017-27 and should 
be submitted on or before April 17, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
Eduardo A. Aleman,
Assistant Secretary.
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    \18\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-05918 Filed 3-24-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                                                   Federal Register / Vol. 82, No. 57 / Monday, March 27, 2017 / Notices                                                      15249

                                                    Reference Room, 100 F Street NE.,                       effective March 10, 2017.4 The proposed                 liquidity from the Exchange and that are
                                                    Washington, DC 20549, on official                       rule change is available on the                         designated as Retail Orders.
                                                    business days between the hours of                      Exchange’s Web site at www.nyse.com,
                                                                                                                                                                    Tape B Orders
                                                    10:00 a.m. and 3:00 p.m. Copies of the                  at the principal office of the Exchange,
                                                    filing also will be available for                       and at the Commission’s Public                             The Fee Schedule currently provides
                                                    inspection and copying at the principal                 Reference Room.                                         that a fee of $0.00285 per share is
                                                    office of the Exchange. All comments                                                                            charged for orders that take liquidity
                                                                                                            II. Self-Regulatory Organization’s                      from the Book in Tape B securities in
                                                    received will be posted without change;
                                                                                                            Statement of the Purpose of, and                        each of Tier 1, Tier 2, Tier 3, and Cross-
                                                    the Commission does not edit personal
                                                                                                            Statutory Basis for, the Proposed Rule                  Asset Tier 2 sections of the Fee
                                                    identifying information from
                                                                                                            Change                                                  Schedule, and for Limit Non-Displayed
                                                    submissions. You should submit only
                                                    information that you wish to make                                                                               Orders 7 that take liquidity from the
                                                                                                              In its filing with the Commission, the
                                                    available publicly. All submissions                                                                             Book in Tape B securities in each of Tier
                                                                                                            self-regulatory organization included
                                                    should refer to File No. SR–CBOE–                                                                               1, Tier 2 and Tier 3 of the Fee Schedule.
                                                                                                            statements concerning the purpose of,
                                                    2017–022, and should be submitted on                                                                            The Exchange proposes to increase this
                                                                                                            and basis for, the proposed rule change
                                                    or before April 17, 2017.                                                                                       fee to $0.0029 per share.
                                                                                                            and discussed any comments it received
                                                      For the Commission, by the Division of                on the proposed rule change. The text                   Lead Market Maker (‘‘LMM’’) 8
                                                    Trading and Markets, pursuant to delegated              of those statements may be examined at                  Transaction Fees
                                                    authority.11                                            the places specified in Item IV below.                    The Exchange currently charges a fee
                                                    Eduardo A. Aleman,                                      The Exchange has prepared summaries,                    of $0.00285 per share to LMMs for
                                                    Assistant Secretary.                                    set forth in sections A, B, and C below,                orders in primary listed securities that
                                                    [FR Doc. 2017–05922 Filed 3–24–17; 8:45 am]             of the most significant parts of such                   remove liquidity from the NYSE Arca
                                                    BILLING CODE 8011–01–P
                                                                                                            statements.                                             Book. The Exchange proposes to
                                                                                                            A. Self-Regulatory Organization’s                       increase this fee to $0.0029 per share.
                                                                                                            Statement of the Purpose of, and the                    Tape C Tier 2
                                                    SECURITIES AND EXCHANGE                                 Statutory Basis for, the Proposed Rule
                                                    COMMISSION                                                                                                         The Exchange proposes a new pricing
                                                                                                            Change
                                                                                                                                                                    tier—Tape C Tier 2—for securities with
                                                    [Release No. 34–80285; File No. SR–                     1. Purpose                                              a per share price at or above $1.00.
                                                    NYSEArca–2017–27]                                                                                                  As proposed, the Tape C Tier 2 would
                                                                                                              The Exchange proposes to amend the                    apply to ETP Holders and Market
                                                    Self-Regulatory Organizations; NYSE                     Fee Schedule, as described below, and                   Makers that, on a daily basis, measured
                                                    Arca, Inc.; Notice of Filing and                        implement the fee changes on March 10,                  monthly, directly execute providing
                                                    Immediate Effectiveness of Proposed                     2017.                                                   volume in Tape C Securities during the
                                                    Rule Change To Amend the NYSE Arca                      Mid-Point Liquidity Order—Securities                    billing month (‘‘Tape C Adding ADV’’)
                                                    Equities Schedule of Fees and                           $1.00 and Greater                                       that is equal to at least 0.20% of the US
                                                    Charges for Exchange Services                                                                                   Tape C CADV for the billing month over
                                                                                                              A Mid-Point Liquidity Order is                        the ETP Holder’s or Market Maker’s Q4
                                                    March 21, 2017.                                         defined in Rule 7.31(d)(3) as a Limit                   2016 Tape C Adding ADV taken as a
                                                       Pursuant to Section 19(b)(1) 1 of the                Order that is not displayed and does not                percentage of Tape C CADV. Such ETP
                                                    Securities Exchange Act of 1934 (the                    route, with a working price at the                      Holders and Market Makers would be
                                                    ‘‘Act’’) 2 and Rule 19b–4 thereunder,3                  midpoint of the Protected Best Bid and                  charged a fee of $0.0029 per share for
                                                    notice is hereby given that, on March                   Offer (‘‘PBBO’’).5                                      orders that take liquidity from the Book
                                                    10, 2017, NYSE Arca, Inc. (the                            The Exchange currently does not                       in Tape C Securities. For example, if an
                                                    ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with               charge a fee for MPL Orders in Tape A,                  ETP Holder’s Tape C Baseline % CADV
                                                    the Securities and Exchange                             Tape B and Tape C securities that                       during fourth quarter 2016 was 0.500%,
                                                    Commission (the ‘‘Commission’’) the                     remove liquidity from the Exchange that                 the ETP Holder would need a Tape C
                                                    proposed rule change as described in                    are designated as ‘‘Retail Orders.’’ 6 The              Adding ADV of at least 0.700% to meet
                                                    Items I, II, and III below, which Items                 Exchange proposes to charge a fee of                    the requirements for Tape C Tier 2. For
                                                    have been prepared by the self-                         $0.0010 per share in each of Tier 1, Tier               all other fees and credits, Tiered or
                                                    regulatory organization. The                            2 and Basic Rates sections of the Fee                   Basic Rates apply based on a firm’s
                                                    Commission is publishing this notice to                 Schedule for MPL Orders that remove                     qualifying levels.
                                                    solicit comments on the proposed rule                                                                              The Exchange recently adopted a
                                                    change from interested persons.                            4 The Exchange originally filed to amend the Fee     Tape C Tier credit of $0.0002 per share
                                                                                                            Schedule on February 28, 2017 (SR–NYSEArca–             for orders that provide liquidity to the
                                                    I. Self-Regulatory Organization’s                       2017–21) and withdrew such filing on March 10,          Book.9 That credit is applied in addition
                                                    Statement of the Terms of Substance of                  2017.                                                   to the ETP Holder’s or Market Maker’s
                                                    the Proposed Rule Change                                   5 See Rule 7.31(d)(3).
                                                                                                                                                                    Tiered or Basic Rate credit(s) except that
                                                                                                               6 Retail Orders are defined in the Fee Schedule as

                                                       The Exchange proposes to amend the                   orders designated as retail orders and that meet the
                                                                                                                                                                       7 A Limit Non-Displayed Order is a Limit Order
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    NYSE Arca Equities Schedule of Fees                     requirements of Rule 7.44(a)(3), but that are not
                                                                                                            executed in the Retail Liquidity Program. The Retail    that is not displayed and does not route. See Rule
                                                    and Charges for Exchange Services                       Liquidity Program is a pilot program designed to        7.31(d)(2).
                                                    (‘‘Fee Schedule’’). The Exchange                        attract additional retail order flow to the Exchange       8 The term ‘‘Lead Market Maker’’ is defined in

                                                    proposes to implement the fee changes                   for NYSE Arca-listed securities and securities          Rule 1.1(ccc) to mean a registered Market Maker
                                                                                                            traded pursuant to unlisted trading privileges while    that is the exclusive Designated Market Maker in
                                                                                                            also providing the potential for price improvement      listings for which the Exchange is the primary
                                                      11 17 CFR 200.30–3(a)(12).                            to such order flow. See Rule 7.44. See also             market.
                                                      1 15 U.S.C. 78s(b)(1).                                Securities Exchange Act Release No. 71176                  9 See Securities Exchange Act Release No. 80032
                                                      2 15 U.S.C. 78a.
                                                                                                            (December 23, 2013), 78 FR 79524 (December 30,          (February 13, 2017), 82 FR 11076 (February 17,
                                                      3 17 CFR 240.19b–4.                                   2013) (SR–NYSEArca–2013–107).                           2017) (SR–NYSEArca–2017–10).



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                                                    15250                           Federal Register / Vol. 82, No. 57 / Monday, March 27, 2017 / Notices

                                                    such combined credit cannot exceed                       executions of MPL Orders that remove                  from the Book in Tape C Securities for
                                                    $0.0031 per share. For ETP Holders and                   liquidity and that are designated as                  firms that qualify for Tape C Tier 2 is
                                                    Market Makers that would be subject to                   Retail Orders is reasonable. MPL Orders               reasonable because the proposed rate is
                                                    the proposed Tape C Tier 2 fee, the                      provide opportunities for market                      lower than fees charged by other
                                                    combined credit shall not exceed                         participants to interact with orders                  exchanges for taking liquidity in Tape C
                                                    $0.0033 per share.                                       priced at the midpoint of the PBBO,                   Securities, and would create an added
                                                       The Exchange also proposes to                         thus providing price improving                        incentive for ETP Holders and Market
                                                    rename the current Tape C Tier to Tape                   liquidity to market participants and                  Makers to execute additional orders on
                                                    C Tier 1 to distinguish this pricing tier                increasing the quality of order execution             the Exchange. For example, EDGX
                                                    from the proposed new pricing tier,                      on the Exchange’s market, which
                                                                                                                                                                   currently charges a fee of $0.0030 per
                                                    Tape C Tier 2.                                           benefits all market participants.
                                                                                                                                                                   share fee for orders that take liquidity
                                                                                                                Specifically, the Exchange believes
                                                    Cross Asset Tier 3                                       that charging a fee for MPL Orders that               from that exchange in Tape C Securities.
                                                       The Exchange proposes a new pricing                   remove liquidity from the Exchange and                The Exchange further believes that the
                                                    tier—Cross Asset Tier 3—for securities                   that are designated as Retail Orders is               proposed fee decrease is equitable and
                                                    with a per share price at or above $1.00.                reasonable because the fee is                         not unfairly discriminatory because it
                                                       As proposed the Cross Asset Tier 3                    substantially lower than the $0.0030 per              would apply to all orders in Tape C
                                                    would apply to ETP Holders and Market                    share (fee) for MPL orders removing                   Securities with a per share price of
                                                    Makers that (a) provide liquidity of                     liquidity from the Book that are not                  $1.00 and greater that take liquidity
                                                    0.30% or more of the US CADV per                         designated as ‘‘Retail Orders.’’                      from the Book. The Exchange believes
                                                    month and (b) are affiliated with an OTP                                                                       that the proposal to raise the cap on the
                                                                                                             Tape B Orders
                                                    Holder or OTP Firm that provides an                                                                            combined credit from $0.0031 per share
                                                    ADV of electronic posted Customer and                       The Exchange believes that the                     to $0.0033 per share for ETP Holders
                                                    Professional Customer executions in all                  proposal to increase the fee charged for              and Market Makers that meet the
                                                    issues on NYSE Arca Options                              orders in Tape B Securities in Tier 1,                requirement for proposed new Tape C
                                                    (excluding mini options) of at least                     Tier 2, Tier 3 and Cross-Asset Tier 2 that            Tier 2 is reasonable because it would
                                                    0.80% of total Customer equity and ETF                   take liquidity from the Book, and for                 create an added incentive for ETP
                                                    option ADV as reported by OCC, of                        Limit Non-Displayed Orders that take                  Holders and Market Makers to add
                                                    which at least 0.20% of total Customer                   liquidity from the Book in Tape B
                                                                                                                                                                   liquidity on the Exchange for the benefit
                                                    equity and ETF option ADV as reported                    securities in each of Tier 1, Tier 2 and
                                                                                                                                                                   of all market participants.
                                                    by OCC is from Customer and                              Tier 3, is reasonable because the
                                                    Professional Customer executions in                      proposed rate will continue to be lower               Cross Asset Tier 3
                                                    non-Penny Pilot issues on NYSE Arca                      than the fee charged by other exchanges.
                                                    Options. Such ETP Holders and Market                     For example, Bats EDGX Exchange                          The Exchange believes the proposed
                                                    Makers would receive a credit of                         (‘‘EDGX’’) currently charges a fee of                 Cross Asset Tier 3 is reasonable and
                                                    $0.0030 per share for orders that                        $0.0030 per share for orders that remove              equitably allocated because it would
                                                    provide liquidity to the order book in                   liquidity in Tape B securities on that                apply to ETP Holders and Market
                                                    Tape A, Tape B and Tape C Securities.                    exchange.12 The Exchange further                      Makers that provide liquidity to the
                                                    For all other fees and credits, Tiered or                believes that the proposed fee increase               Exchange and is designed to incentivize
                                                    Basic Rates apply based on a firm’s                      is equitable and not unfairly                         these market participants to increase the
                                                    qualifying levels.                                       discriminatory because it would apply                 orders sent directly to the Exchange and
                                                       The proposed changes are not                          to all orders in Tape B Securities in Tier            therefore provide liquidity that supports
                                                    otherwise intended to address any other                  1, Tier 2, Tier 3 and Cross-Asset Tier 2              the quality of price discovery and
                                                    issues, and the Exchange is not aware of                 that take liquidity from the Book.                    promotes market transparency. The
                                                    any significant problems that market                     LMM Transaction Fees                                  Exchange believes the new Cross Asset
                                                    participants would have in complying                                                                           Tier 3 is equitable because it would be
                                                                                                                The Exchange believes that it is
                                                    with the proposed changes.                                                                                     available to all similarly situated ETP
                                                                                                             reasonable to increase the fee charged to
                                                    2. Statutory Basis                                       LMMs for orders in primary listed                     Holders and Market Makers on an equal
                                                                                                             securities that remove liquidity from the             basis and would provide credits that are
                                                       The Exchange believes that the                                                                              reasonably related to the value of an
                                                                                                             NYSE Arca Book as this fee would be
                                                    proposed rule change is consistent with                                                                        exchange’s market quality associated
                                                                                                             the same as the fee increase proposed by
                                                    Section 6(b) of the Act,10 in general, and                                                                     with higher volumes. The Exchange
                                                                                                             the Exchange to Tier 1, Tier 2, Tier 3
                                                    furthers the objectives of Sections
                                                                                                             and Cross-Asset Tier 2 ETP Holders and                further believes that the proposed Cross
                                                    6(b)(4) and (5) of the Act,11 in particular,
                                                                                                             Market Makers that take liquidity in                  Asset Tier 3 is reasonable, equitable and
                                                    because it provides for the equitable
                                                                                                             Tape B securities. In addition, the                   not unfairly discriminatory because the
                                                    allocation of reasonable dues, fees, and
                                                                                                             proposed fee change is equitable and                  Exchange has previously implemented
                                                    other charges among its members,                         not unfairly discriminatory because it
                                                    issuers and other persons using its                                                                            cross asset tiers, including the current
                                                                                                             would apply uniformly to all similarly                Cross Asset Tier 1 and Cross Asset Tier
                                                    facilities and does not unfairly                         situated LMMs.                                        2.
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                                                    discriminate between customers,
                                                    issuers, brokers or dealers.                             Tape C Tier 2                                            Finally, the Exchange believes that it
                                                    Mid-Point Liquidity Order                                  The Exchange believes that the                      is subject to significant competitive
                                                                                                             proposal to adopt a lower fee of $0.0029              forces, as described below in the
                                                      The Exchange believes that the                         per share for orders that take liquidity              Exchange’s statement regarding the
                                                    proposed increase to the fee for                                                                               burden on competition. For these
                                                      10 15
                                                                                                               12 See EDGX Fee Schedule at http://
                                                                                                                                                                   reasons, the Exchange believes that the
                                                            U.S.C. 78f(b).                                   www.bats.com/us/equities/membership/fee_
                                                      11 15 U.S.C. 78f(b)(4) and (5).                        schedule/edgx/.
                                                                                                                                                                   proposal is consistent with the Act.



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                                                                                   Federal Register / Vol. 82, No. 57 / Monday, March 27, 2017 / Notices                                                   15251

                                                    B. Self-Regulatory Organization’s                        III. Date of Effectiveness of the                     Commission and any person, other than
                                                    Statement on Burden on Competition                       Proposed Rule Change and Timing for                   those that may be withheld from the
                                                       In accordance with Section 6(b)(8) of                 Commission Action                                     public in accordance with the
                                                    the Act,13 the Exchange believes that the                   The foregoing rule change is effective             provisions of 5 U.S.C. 552, will be
                                                    proposed rule change would not impose                    upon filing pursuant to Section                       available for Web site viewing and
                                                    any burden on competition that is not                    19(b)(3)(A) 15 of the Act and                         printing in the Commission’s Public
                                                    necessary or appropriate in furtherance                  subparagraph (f)(2) of Rule 19b–4 16                  Reference Room, 100 F Street NE.,
                                                    of the purposes of the Act. Instead, the                 thereunder, because it establishes a due,             Washington, DC 20549, on official
                                                    Exchange believes that the proposed                      fee, or other charge imposed by the                   business days between the hours of
                                                    changes would encourage the                              Exchange.                                             10:00 a.m. and 3:00 p.m. Copies of the
                                                    submission of additional liquidity to a                     At any time within 60 days of the                  filing also will be available for
                                                    public exchange, thereby promoting                       filing of such proposed rule change, the              inspection and copying at the principal
                                                    price discovery and transparency and                     Commission summarily may                              office of the Exchange. All comments
                                                    enhancing order execution                                temporarily suspend such rule change if               received will be posted without change;
                                                    opportunities for ETP Holders. The                       it appears to the Commission that such                the Commission does not edit personal
                                                    Exchange believes that this could                        action is necessary or appropriate in the             identifying information from
                                                    promote competition between the                          public interest, for the protection of                submissions. You should submit only
                                                    Exchange and other execution venues,                     investors, or otherwise in furtherance of             information that you wish to make
                                                    including those that currently offer                     the purposes of the Act. If the                       available publicly. All submissions
                                                    similar order types and comparable                       Commission takes such action, the
                                                                                                                                                                   should refer to File Number SR–
                                                    transaction pricing, by encouraging                      Commission shall institute proceedings
                                                                                                                                                                   NYSEArca–2017–27 and should be
                                                    additional orders to be sent to the                      under Section 19(b)(2)(B) 17 of the Act to
                                                                                                             determine whether the proposed rule                   submitted on or before April 17, 2017.
                                                    Exchange for execution.
                                                       Finally, the Exchange notes that it                   change should be approved or                            For the Commission, by the Division of
                                                    operates in a highly competitive market                  disapproved.                                          Trading and Markets, pursuant to delegated
                                                                                                                                                                   authority.18
                                                    in which market participants can                         IV. Solicitation of Comments
                                                    readily favor competing venues if they                                                                         Eduardo A. Aleman,
                                                                                                               Interested persons are invited to
                                                    deem fee levels at a particular venue to                 submit written data, views, and
                                                                                                                                                                   Assistant Secretary.
                                                    be excessive or rebate opportunities                     arguments concerning the foregoing,                   [FR Doc. 2017–05918 Filed 3–24–17; 8:45 am]
                                                    available at other venues to be more                     including whether the proposed rule                   BILLING CODE 8011–01–P
                                                    favorable. In such an environment, the                   change is consistent with the Act.
                                                    Exchange must continually adjust its                     Comments may be submitted by any of
                                                    fees and rebates to remain competitive                   the following methods:                                SECURITIES AND EXCHANGE
                                                    with other exchanges and with                                                                                  COMMISSION
                                                    alternative trading systems that have                    Electronic Comments
                                                    been exempted from compliance with                         • Use the Commission’s Internet                     [Release No. 34–80284; File No. SR–MIAX–
                                                    the statutory standards applicable to                    comment form (http://www.sec.gov/                     2017–13]
                                                    exchanges. Because competitors are free                  rules/sro.shtml); or
                                                    to modify their own fees and credits in                    • Send an email to rule-comments@                   Self-Regulatory Organizations; Miami
                                                    response, and because market                             sec.gov. Please include File Number SR–               International Securities Exchange,
                                                    participants may readily adjust their                    NYSEArca–2017–27 on the subject line.                 LLC; Notice of Filing and Immediate
                                                    order routing practices, the Exchange                                                                          Effectiveness of a Proposed Rule
                                                    believes that the degree to which fee                    Paper Comments
                                                                                                                                                                   Change To Amend Rule 521,
                                                    changes in this market may impose any                       • Send paper comments in triplicate
                                                                                                                                                                   Nullification and Adjustment of
                                                    burden on competition is extremely                       to Secretary, Securities and Exchange
                                                                                                                                                                   Options Transactions Including
                                                    limited. As a result of all of these                     Commission, 100 F Street NE.,
                                                                                                                                                                   Obvious Errors
                                                    considerations, the Exchange does not                    Washington, DC 20549–1090.
                                                    believe that the proposed changes will                   All submissions should refer to File                  March 21, 2017.
                                                    impair the ability of ETP Holders or                     Number SR–NYSEArca–2017–27. This
                                                    competing order execution venues to                                                                               Pursuant to the provisions of Section
                                                                                                             file number should be included on the
                                                    maintain their competitive standing in                                                                         19(b)(1) of the Securities Exchange Act
                                                                                                             subject line if email is used. To help the
                                                    the financial markets. Finally, the                      Commission process and review your                    of 1934 (‘‘Act’’) 1 and Rule 19b–4
                                                    Exchange believes the proposed fee                       comments more efficiently, please use                 thereunder,2 notice is hereby given that
                                                    changes do not impose any burden on                      only one method. The Commission will                  on March 17, 2017, Miami International
                                                    competition as the fee changes are                       post all comments on the Commission’s                 Securities Exchange, LLC (‘‘MIAX’’ or
                                                    consistent with the fees charged by                      Internet Web site (http://www.sec.gov/                ‘‘Exchange’’) filed with the Securities
                                                    other exchanges.14                                       rules/sro.shtml). Copies of the                       and Exchange Commission
                                                                                                             submission, all subsequent                            (‘‘Commission’’) a proposed rule change
                                                    C. Self-Regulatory Organization’s                                                                              as described in Items I and II below,
                                                                                                             amendments, all written statements
                                                    Statement on Comments on the                                                                                   which Items have been prepared by the
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                             with respect to the proposed rule
                                                    Proposed Rule Change Received From                                                                             Exchange. The Commission is
                                                                                                             change that are filed with the
                                                    Members, Participants, or Others                                                                               publishing this notice to solicit
                                                                                                             Commission, and all written
                                                      No written comments were solicited                     communications relating to the                        comments on the proposed rule change
                                                    or received with respect to the proposed                 proposed rule change between the                      from interested persons.
                                                    rule change.
                                                                                                               15 15 U.S.C. 78s(b)(3)(A).                            18 17 CFR 200.30–3(a)(12).
                                                      13 15 U.S.C. 78f(b)(8).                                  16 17 CFR 240.19b–4(f)(2).                            1 15 U.S.C. 78s(b)(1).
                                                      14 See supra, note 12.                                   17 15 U.S.C. 78s(b)(2)(B).                            2 17 CFR 240.19b–4.




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Document Created: 2017-03-25 00:21:00
Document Modified: 2017-03-25 00:21:00
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 15249 

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