82 FR 22687 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Schedule of Fees and Charges for Exchange Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 94 (May 17, 2017)

Page Range		22687-22689
FR Document		2017-09933

Federal Register, Volume 82 Issue 94 (Wednesday, May 17, 2017)

[Federal Register Volume 82, Number 94 (Wednesday, May 17, 2017)]
[Notices]
[Pages 22687-22689]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-09933]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80665; File No. SR-NYSEArca-2017-51]

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

May 11, 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 May 1, 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 the
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'') to adopt a
new pricing tier, Tape C Tier 3. The Exchange proposes to implement the
fee changes effective May 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
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 May 1, 2017.
The Exchange proposes to introduce a new pricing tier level--Tape C
Tier 3--for securities with a per share price of $1.00 or above.
As proposed, a new Tape C Tier 3 credit of $0.0002 per share \4\
for orders that provide liquidity in Tape C Securities would be
applicable to ETP Holders and Market Makers, that, on a daily basis,
measured monthly, (1) directly execute providing volume in Tape C
Securities during the billing month (``Tape C Adding ADV'') that is
equal to at least 0.40% of US Tape C CADV \5\ over the ETP Holder's or
Market Maker's fourth quarter 2016 Tape C Adding ADV taken as a
percentage of Tape C CADV (``Tape C Baseline % CADV''), and (2) execute
providing volume in Tape B Securities during the billing month that is
equal to at least 3.5% of Tape B CADV. For example, if an ETP Holder's
Tape C Baseline % CADV was 0.500%, the ETP Holder would need a Tape C
Adding ADV of at least 0.900% and a Tape B Adding ADV of at least 3.5%
of Tape B CADV in order to qualify for the proposed Tape C Tier 3
credit of $0.0002 per share (i.e., 0.500% Tape C Baseline % CADV plus
0.400% of the US Tape C CADV for the billing month).\6\ The credit
provided under the proposed Tape C Tier 3 would be in addition to the
ETP Holder's Tiered or Basic Rate credit(s).
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\4\ Under the Basic Rate, ETP Holders receive a credit of
$0.0020 per share for Tape C orders that provide liquidity to the
Book.
\5\ The Exchange proposes to use the same definition of US CADV
for purposes of the proposed Tape C Tier 3. Specifically, US 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 US CADV. See Fee Schedule,
Footnote 3.
\6\ 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 0.400% of US Tape C CADV, in addition to the
Tape B Adding ADV of at least 3.5% of Tape B CADV, for the $0.0002
per share credit to apply.
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Under the proposed new Tape C Tier 3, ETP Holders and Market Makers
would also be charged a fee of $0.0029 per share for orders that take
liquidity from the Book in Tape C Securities. For all other fees and
credits, Tiered or Basic Rates apply based on a firm's qualifying
levels.
For ETP Holders that qualify for the proposed new Tape C Tier 3,
Tiered or Basic Rates would apply to all other fees and credits, based
on the 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. The proposed Tape C
Tier 3 provides an incremental credit, similar to current Tape C Tier 1
and Tape C Tier 2 pricing tiers, and therefore, the Exchange proposes
to adopt rule text within each of the Tape C tiers to note that ETP
Holders and Market Makers can only qualify for one of the Tape C
incremental credits. ETP Holders and Market Makers that qualify, for
example, for the proposed Tape C Tier 3 credit cannot also qualify for
either the Tape C Tier 1 incremental credit or the Tape C Tier 2
incremental credit. Using the above example, if an ETP Holder's Tape C
Baseline % CADV was 0.500%, and the ETP Holder had a Tape C Adding ADV
of at least 0.900% and a Tape B Adding ADV of at least 3.5% of Tape B
CADV, the ETP Holder would meet the requirements of Tape C Tier 1, Tape
C Tier 2 and the proposed Tape C Tier 3. As proposed, however, the ETP
Holder would only receive the $0.0002 incremental credit for adding
liquidity and the $0.0029 for taking liquidity associated with the
proposed Tape C Tier 3 pricing tier; the ETP Holder would not be
entitled to the Tape C Tier 1 and Tape C Tier 2 pricing tiers.
Additionally, the Exchange recently adopted a Tape C Tier 2 pricing
tier that references the applicability of a $0.0002 per share credit to
ETP Holders and Market Makers that qualify for that

[[Page 22688]]

pricing tier.\7\ The $0.0002 per share incremental credit is in
addition to a [sic] ETP Holder's or Market Maker's Tiered or Basic Rate
credit(s) except that the combined credit is not to exceed $0.0033 per
share. The reference to the $0.0033 per share cap is currently found in
the Tape C Tier 1 pricing tier. The Exchange proposes to relocate the
cap language from the Tape C Tier 1 pricing tier to the Tape C Tier 2
pricing tier which the Exchange believes is a more appropriate place
for it on the Fee Schedule. The proposed relocation of the rule text
will not result in any change to the manner in which the credit is
applied.
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\7\ See Securities Exchange Act Release No. 80285 (March 21,
2017), 82 FR 15249 (March 27, 2017) (SR-NYSEArca-2017-27).
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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,\8\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\9\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes the proposed Tape C Tier 3 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 3 is equitable
because the proposed new tier would be available to all similarly
situated ETP Holders and Market Makers on an equal basis and the
proposed new tier 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 3 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 also believes that the requirement to execute providing
volume in Tape B Securities during the billing month that is equal to
at least 3.5% of Tape B CADV for the proposed Tape C Tier 3 is
reasonable as it would provide incentives for adding liquidity in Tape
B Securities and strengthen market quality in Tape B Securities. The
Exchange further believes that the requirement to execute providing
volume in Tape B Securities for the proposed Tape C Tier 3 is equitable
and not unfairly discriminatory because it would apply uniformly to all
similarly situated ETP Holders and Market Makers.
The Exchange believes that it is reasonable, equitable and not
unfairly discriminatory to permit ETP Holders and Market Makers to
qualify for just one Tape C pricing tiers [sic]. As noted above, 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. This method of billing is reasonable because it results in the
application of the most beneficial fees and credits for which an ETP
[sic] qualifies when an ETP Holder qualifies for more than one pricing
tier.
The Exchange believes that the proposed rule change regarding 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.
The Exchange believes that relocating rule text related to the
$0.0033 per share cap from the Tape C Tier 1 pricing tier to the Tape C
Tier 2 pricing tier removes impediments to and perfects the mechanism
of a free and open market by providing clarity and adding transparency
to the Exchange's rules. The Exchange also believes that relocating the
rule text would not be inconsistent with the public interest and the
protection of investors because investors will not be harmed and in
fact would benefit from increased transparency. The Exchange believes
the proposed amendment to the Fee Schedule is both reasonable and
equitable because ETP Holders and Market Makers would benefit from
clear guidance in the rule text describing the manner in which the
Exchange's fees and credits would be assessed.
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 introduction of Tape C Tier 3 will provide such enhancements
in market quality on the Exchange's equity market by incentivizing
increased participation.
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,\10\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, the Exchange believes that the addition
of new Tape C credits 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.
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\10\ 15 U.S.C. 78f(b)(8).
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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

[[Page 22689]]

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) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 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) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2017-51 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-2017-51. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2017-51, and should
be submitted on or before June 7, 2017.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09933 Filed 5-16-17; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 94 / Wednesday, May 17, 2017 / Notices 22689

alternative trading systems that have Electronic Comments SECURITIES AND EXCHANGE
been exempted from compliance with COMMISSION
the statutory standards applicable to • Use the Commission’s Internet
comment form (http://www.sec.gov/ [Investment Company Act Release No.
exchanges. Because competitors are free 32634; File No. 812–14467]
to modify their own fees and credits in rules/sro.shtml); or
response, and because market • Send an email to rule-comments@ Aspiriant Trust, et al.
participants may readily adjust their sec.gov. Please include File Number SR–
May 11, 2017.
order routing practices, the Exchange NYSEArca–2017–51 on the subject line.
AGENCY: Securities and Exchange
believes that the degree to which fee
Paper Comments Commission (‘‘Commission’’).
changes in this market may impose any
ACTION: Notice.
burden on competition is extremely • Send paper comments in triplicate
limited. As a result of all of these to Brent J. Fields, Secretary, Securities Notice of an application for an order
considerations, the Exchange does not and Exchange Commission, 100 F Street under section 12(d)(1)(J) of the
believe that the proposed changes will NE., Washington, DC 20549–1090. Investment Company Act of 1940 (the
impair the ability of ETP Holders or ‘‘Act’’) for an exemption from sections
All submissions should refer to File 12(d)(1)(A), (B), and (C) of the Act;
competing order execution venues to
Number SR–NYSEArca–2017–51. This under sections 6(c) and 17(b) of the Act
maintain their competitive standing in
file number should be included on the for an exemption from sections 17(a)(1)
the financial markets.
subject line if email is used. To help the and (2) of the Act; and under section
C. Self-Regulatory Organization’s Commission process and review your 6(c) of the Act for an exemption from
Statement on Comments on the comments more efficiently, please use rule 12d1–2(a) under the Act. The
Proposed Rule Change Received From only one method. The Commission will requested order would: (a) Permit
Members, Participants, or Others post all comments on the Commission’s certain registered open-end investment
Internet Web site (http://www.sec.gov/ companies to acquire shares of certain
No written comments were solicited rules/sro.shtml). Copies of the registered open-end investment
or received with respect to the proposed submission, all subsequent companies, registered closed-end
rule change. amendments, all written statements investment companies, business
III. Date of Effectiveness of the with respect to the proposed rule development companies, as defined in
Proposed Rule Change and Timing for change that are filed with the section 2(a)(48) of the Act, and unit
Commission Action Commission, and all written investment trusts (collectively,
communications relating to the ‘‘Underlying Funds’’) that are within
The foregoing rule change is effective proposed rule change between the and outside the same group of
upon filing pursuant to Section Commission and any person, other than investment companies as the acquiring
19(b)(3)(A) 11 of the Act and those that may be withheld from the investment companies, in excess of the
subparagraph (f)(2) of Rule 19b–4 12 limits in section 12(d)(1) of the Act; and
public in accordance with the
thereunder, because it establishes a due, (b) permit certain registered open-end
provisions of 5 U.S.C. 552, will be
fee, or other charge imposed by the management investment companies
available for Web site viewing and relying on rule 12d1–2 under the Act to
Exchange. printing in the Commission’s Public invest in certain financial instruments.
At any time within 60 days of the Reference Room, 100 F Street NE., Applicants: Aspiriant Trust, a
filing of such proposed rule change, the Washington, DC 20549 on official Delaware statutory trust that is
Commission summarily may business days between the hours of registered under the Act as an open-end
temporarily suspend such rule change if 10:00 a.m. and 3:00 p.m. Copies of such management investment company with
it appears to the Commission that such filing also will be available for multiple series; Aspiriant, LLC, a
action is necessary or appropriate in the inspection and copying at the principal Delaware limited liability company that
public interest, for the protection of office of the Exchange. All comments is registered as an investment adviser
investors, or otherwise in furtherance of received will be posted without change; under the Investment Advisers Act of
the purposes of the Act. If the the Commission does not edit personal 1940; and UMB Distribution Services,
Commission takes such action, the identifying information from LLC, a Wisconsin limited liability
Commission shall institute proceedings submissions. You should submit only company that is registered as a broker-
under Section 19(b)(2)(B) 13 of the Act to information that you wish to make dealer under the Securities Exchange
determine whether the proposed rule available publicly. All submissions Act of 1934 and is a member of the
change should be approved or should refer to File Number SR– Financial Industry Regulatory
disapproved. NYSEArca–2017–51, and should be Authority.
submitted on or before June 7, 2017. Filing Dates: The application was
IV. Solicitation of Comments filed on May 20, 2015, and amended on
For the Commission, by the Division of September 3, 2015, March 16, 2016,
Interested persons are invited to Trading and Markets, pursuant to delegated September 26, 2016, September 27,
submit written data, views, and authority.14 2016, and March 13, 2017.
arguments concerning the foregoing, Eduardo A. Aleman, Hearing or Notification of Hearing: An
including whether the proposed rule Assistant Secretary. order granting the requested relief will
nlaroche on DSK30NT082PROD with NOTICES

change is consistent with the Act. [FR Doc. 2017–09933 Filed 5–16–17; 8:45 am] be issued unless the Commission orders
Comments may be submitted by any of a hearing. Interested persons may
BILLING CODE 8011–01–P
the following methods: request a hearing by writing to the
Commission’s Secretary and serving
11 15 U.S.C. 78s(b)(3)(A). applicants with a copy of the request,
12 17 CFR 240.19b–4(f)(2). personally or by mail. Hearing requests
13 15 U.S.C. 78s(b)(2)(B). 14 17 CFR 200.30–3(a)(12). should be received by the Commission

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Document Created: 2017-05-17 01:42:22
Document Modified: 2017-05-17 01:42:22

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 22687