82 FR 22360 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 92 (May 15, 2017)

[Federal Register Volume 82, Number 92 (Monday, May 15, 2017)]
[Notices]
[Pages 22360-22362]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-09715]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80632; File No. SR-NYSEArca-2017-50]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Equities Schedule of Fees and Charges for Exchange Services

May 9, 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 April 28, 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 and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Schedule of 
Fees and Charges for Exchange Services (``Fee Schedule''). 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.

[[Page 22361]]

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 purpose of this filing is to amend the Quoting and Depth 
Standard under the recently adopted Exchange Traded Fund Liquidity 
Provider Program (``ELP Program'').\4\ The Exchange proposes to 
implement the proposed fee change effective May 1, 2017.
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    \4\ See Securities Exchange Act Release No. 80258 (March 16, 
2017), 82 FR 14775 (March 22, 2017) (SR-NYSEArca-2017-28) (``ELP 
Program Filing'').
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    Pursuant to the ELP Program Filing, the Exchange currently provides 
an incremental credit of $0.0001 per share to ETP Holders and Market 
Makers (collectively, ``ELPs'') for providing displayed liquidity that 
result in an execution to ELPs that meet prescribed quoting standards 
in NYSE-Arca listed Tape B securities that have a consolidated average 
daily volume (``CADV'') in the previous month of less than 250,000 
shares (``ELP Securities''). Pursuant to the ELP Program Filing, 
beginning March 2017 and through April 2017, an ELP that quotes at the 
National Best Bid or Offer (``NBBO'') for at least an average of 15% of 
the time for the billing month in at least 50 ELP Securities for each 
billing month (``Quoting Standard'') \5\ is paid the stated incremental 
credit in their Tape B executions that add liquidity.
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    \5\ An ELP would meet the Quoting Standard if the average of the 
percentage of time during regular trading hours during which the ELP 
maintains a quote at each of the NBB and NBO equals at least 15%. As 
an example, where the ELP maintains a quote for any number of shares 
at the NBB for 20% of the time during regular trading hours in at 
least 50 ELP Securities and maintains a quote for any number of 
shares at the NBO for 10% of the time during regular trading hours 
in the same ELP Securities, the ELP would be deemed to be at the 
NBBO for the required time period of 15% ((20% + 10%)/2).
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    In the ELP Program Filing, the Exchange proposed that beginning May 
1, 2017, in order for an ELP to qualify for the incremental credit, the 
ELP must, in at least 50 ELP Securities:
     Quote at the NBBO for at least an average of 15% of the 
time for the billing month, and,
     Display at least 2,500 shares that are priced no more than 
2% away from the NBBO at least 90% of the time for the billing month 
(``Quoting and Depth Standard'').
    The Exchange proposes to require the Quoting and Depth Standard to 
begin June 1, 2017 instead of on May 1, 2017. As a result, the Quoting 
Standard that was implemented for March 2017 and April 2017 will be 
extended through May 2017. Thus, until June 1, 2017, ELPs will continue 
to qualify for the incremental credit by meeting just the Quoting 
Standard. Beginning June 1, 2017, as noted above, ELPs will be required 
to meet the Quoting and Depth Standard to qualify for the incremental 
credit. The Exchange is not proposing any other change to the ELP 
Program.
    The ELP Program is intended to provide incentives for increased 
trading in ELP Securities for market participants. The Exchange 
believes the proposed rule change will strengthen market quality in ELP 
Securities. The ELP Program is also intended to reward liquidity 
providers who improve displayed liquidity and the size of such 
liquidity in the market. The Exchange believes that the ELP Program 
will encourage the additional utilization of, and interaction with, the 
Exchange and provide customers with the premier venue for price 
discovery, liquidity, competitive quotes and price improvement.
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems that ETP 
Holders would have in complying with the proposed changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\7\ in particular, 
because it provides for the equitable allocation of reasonable dues, 
fees, and other charges among its members, issuers and other persons 
using its facilities and does not unfairly discriminate between 
customers, issuers, brokers or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed rule change would continue 
to encourage increased participation by ELPs in the trading of ETP 
Securities. In particular, the Exchange believes that extending the 
implementation date for the Quoting and Depth Standard from May 1, 2017 
to June 1, 2017 would provide ELPs with additional time to implement 
the requirements associated with the ELP credit while encouraging ELPs 
to participate in the ELP Program. The Exchange also believes that 
extending the Quoting Standard through May 2017 would continue to 
encourage the submission of additional liquidity by ETP Holders to a 
public exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for all market participants on 
the Exchange.
    The Exchange believes the ELP Program will continue to provide an 
incentive for ELPs to quote and trade a greater number of securities on 
the Exchange and will generally allow the Exchange and ELPs to better 
compete for order flow and thus enhance competition. Further, the ELP 
program is intended to provide ELPs with an incentive to increase 
displayed quoting on NYSE Arca and thereby provide liquidity and better 
quoting that supports the quality of price discovery and promotes 
market transparency. The Exchange also believes that the proposed 
incremental credit for ELPs that meet the requirements of the ELP 
Program is equitable and not unfairly discriminatory because it would 
apply uniformly to all ELPs.
    As proposed, the ELP Program is designed to enhance the Exchange's 
competitiveness as a listing venue and to strengthen its market quality 
for NYSE Arca-listed securities.
    The Exchange believes that adopting the Quoting and Depth Standard 
beginning June 2017 instead of May 2017 is reasonable because the 
additional requirement has not yet been implemented by the Exchange so 
no ETP Holder is or would be adversely impacted. The Quoting and Depth 
Standard would ensure that liquidity displayed on the Exchange by ELPs 
is available for a greater period of time during the trading day to 
provide market participants an adequate opportunity to transact against 
such liquidity. The Exchange also believes that extending the Quoting 
Standard through May 2017 is reasonable in order for the Exchange to 
continue providing ELPs with the incremental credit associated with the 
ELP Program. The Exchange believes that adopting the Quoting and Depth 
Standard beginning June 2017 and extending the Quoting Standard through 
May 2017 is equitable and not unfairly discriminatory because the 
proposed changes would apply uniformly to all ELPs.

[[Page 22362]]

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

    In accordance with Section 6(b)(8) of the Act,\8\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. The proposed rule change is intended to adopt the 
Quoting and Depth Standard in June 2017 rather than in May 2017, as was 
originally proposed in the ELP Program Filing, while extending the 
current Quoting Standard through May 2017.
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    \8\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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.

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-2017-50 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-2017-50. 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-2017-50 and should 
be submitted on or before June 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09715 Filed 5-12-17; 8:45 am]
BILLING CODE 8011-01-P