82 FR 39469 - 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 To Modify the Fees and Credits for Routing Certain Orders to NYSE American LLC

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 159 (August 18, 2017)

[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Notices]
[Pages 39469-39471]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17434]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81392; File No. SR-NYSEARCA-2017-89]


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 To 
Modify the Fees and Credits for Routing Certain Orders to NYSE American 
LLC

August 14, 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 August 4, 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'') to modify the 
fees and credits for routing certain orders to NYSE American LLC 
(``NYSE American'').\4\ The Exchange also proposes to make non-
substantive changes to the Fee Schedule in connection with the name 
change of its affiliate NYSE MKT LLC to NYSE American LLC. The Exchange 
proposes to implement the changes effective August 4, 2017.\5\ 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\ On July 24, 2017, the Exchange's affiliate, NYSE MKT LLC, 
transitioned to the Pillar trading platform and has been renamed 
NYSE American LLC. See Securities Exchange Act Release Nos. 79242 
(November 4, 2016), 81 FR 79081 (November 10, 2016) (SR-NYSEMKT-
2016-97); 79400 (November 25, 2016), 81 FR 86750 (December 1, 2016) 
(SR-NYSEMKT-2016-103); 80283 (March 21, 2017), 82 FR 15244 (March 
27, 2017) (SR-NYSEMKT-2017-14); and 80748 (May 23, 2017), 82 FR 
24764 (May 30, 2017) (SR-NYSEMKT-2017-20).
    \5\ The Exchange originally filed to amend the Fee Schedule on 
July 24, 2017 (SR-NYSEArca-2017-81) and withdrew such filing on 
August 4, 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 to modify the fees 
and credits for routing certain orders to the NYSE American. The 
Exchange also proposes to make non-substantive changes to the Fee 
Schedule in connection with the name change of its affiliate NYSE MKT 
LLC to NYSE American LLC.
    In a recent rule filing, NYSE American proposed to modify its fee 
schedule for equities transactions, including changes to the rates for 
providing liquidity and for executions that occur in the opening and 
closing auction.\6\ The Exchange's current credits for routing orders 
to NYSE American are closely related to the NYSE American's rates, 
including the rates for providing liquidity, and the Exchange is 
proposing an adjustment to its rates to remain competitive with the 
rates of NYSE American. Specifically, for Tier 1 and Tier 2 PO \7\ and 
PO+ \8\ Orders, the Exchange currently provides a credit of $0.0016 per 
share for orders that are routed to NYSE American that provide 
liquidity to the NYSE American order book, which is equal to the NYSE 
American rebate for execution of customer orders that add liquidity to 
NYSE American.
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    \6\ See Securities Exchange Act Release No. 81228 (July 27, 
2017), 82 FR 36012 (August 2, 2017) (SR-NYSEMKT-2017-43) (the ``NYSE 
American Fee Filing'').
    \7\ A PO order is a Market or Limit Order that on arrival is 
routed directly to the primary listing market without being assigned 
a working time or interacting with interest on the NYSE Arca Book. 
See Rule 7.31(f)(1).
    \8\ The Exchange transitioned to the Pillar trading platform in 
2016 and on Pillar, the PO+ modifier in the Exchange's rules was 
replaced with the Primary Only Day/IOC Order, which is a Primary 
Only Order designated Day or IOC, as provided in current Rule 
7.31(f)(1(B). See Securities Exchange Act Release No. 76267 (October 
26, 2015), 80 FR 66951 (October 30, 2015) (SR-NYSEArca-2015-56). A 
Primary Only Order designated Day functions similar to what was a 
PO+ Order. Therefore, to promote clarity to the Fee Schedule and 
avoid any confusion, the Exchange proposes to remove reference to 
PO+ Orders from the Fee Schedule.
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    A PO Order is designed to route to the primary listing market of 
the security underlying the order (i.e., NYSE, NASDAQ, etc.) 
immediately upon arrival and the order therefore does not rest on the 
Exchange's order book. Because such orders do not rest on the 
Exchange's book, the Exchange charges fees or provides credits for 
those orders based on the fees or credits of the destination primary 
listing market, which are the fees and credits that the Exchange is 
charged by the primary listing market that receives the order. In the 
NYSE American Fee Filing, NYSE American proposed to not charge a fee or 
provide a credit for executions of displayed orders that provide 
liquidity on that exchange.\9\ Accordingly, the Exchange is proposing 
to amend the rates for routing Tier 1 and Tier 2 PO Orders to NYSE 
American to reflect the rates proposed by NYSE American. As proposed, 
there will be no credit for such orders routed to NYSE American that 
provide liquidity to the NYSE American book.
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    \9\ The Exchange notes that orders that are routed to NYSE 
American will be displayed on that exchange. PO Orders do not 
provide ETP Holders the ability to add non-displayed liquidity to 
away markets.
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    The Exchange proposes to make corresponding changes to the Basic 
Rate pricing section of the Fee Schedule.
    Additionally, in the NYSE American Fee Filing, NYSE American 
proposed to charge a fee of $0.0005 per share for executions at the 
open or close.

[[Page 39470]]

Accordingly, the Exchange proposes to amend the Fee Schedule to lower 
the Tier 1, Tier 2 and Basic Rate fee for PO Orders in Tape B 
securities that are routed to NYSE American that execute in the opening 
or closing auction, from $0.00085 per share to $0.0005 per share.
    As noted above, the Exchange's affiliate, NYSE MKT LLC, has been 
renamed NYSE American LLC. Accordingly, in the Fee Schedule, under 
``NYSE Arca Marketplace: Trade Related Fees and Credits,'' under 
``Round Lots and Odd Lots (Per Share Price $1.00 or Above), and ``Co-
location Fees,'' in General Notes 1 and 4, the Exchange proposes to 
change references to ``NYSE MKT Book'' to ``NYSE American Book''; 
``NYSE MKT'' to ``NYSE American''; ``NYSE MKT LLC'' to ``NYSE American 
LLC''; and ``NYSE Amex Options'' to ``NYSE American Options.'' None of 
the foregoing changes are substantive.
    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,\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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    The Exchange believes that the proposed changes to routing credits 
for PO Orders that provide liquidity to NYSE American and routing fees 
for such orders that execute in the opening or closing auction on NYSE 
American are reasonable because the Exchange's rates for routing such 
orders are closely related to NYSE American's rates for its members, 
and the proposed change is consistent with the change proposed by NYSE 
American to not provide a rebate for providing liquidity and to charge 
a lower fee for executions in the opening or closing auction. While the 
proposed rule change would result in a decrease in the per share credit 
for PO Orders routed to NYSE American that provide liquidity to NYSE 
American, and a decrease in the per share fee for such routed orders 
that execute in the opening or closing auction, the Exchange would 
remain competitive with NYSE American as that exchange also no longer 
provides a credit to its members for providing liquidity and charges a 
lower fee for executions in the opening or closing auction. Further, 
the proposed change is equitable and not unfairly discriminatory 
because the proposed elimination of routing credits for PO Orders that 
provide liquidity to NYSE American and the proposed decrease of routing 
fees for such orders that execute in the opening or closing auction on 
NYSE American would apply uniformly across pricing tiers and all 
similarly situated ETP Holders.
    The Exchange believes that the proposed rule change regarding the 
name change from NYSE MKT LLC to NYSE American LLC is consistent with 
Section 6(b) of the Act,\12\ in general, and with Section 6(b)(1) \13\ 
in particular, in that it enables the Exchange to be so organized as to 
have the capacity to be able to carry out the purposes of the Act and 
to comply, and to enforce compliance by its exchange members and 
persons associated with its exchange members, with the provisions of 
the Act, the rules and regulations thereunder, and the rules of the 
Exchange. The proposed rule change would ensure that the Fee Schedule 
accurately reflects the name change of the Exchange's affiliate from 
NYSE MKT to NYSE American and the rebranding of NYSE Amex Options to 
NYSE American Options and would contribute to the orderly operation of 
the Exchange by adding clarity and transparency to the Fee Schedule.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(1).
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    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.

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

    In accordance with Section 6(b)(8) of the Act,\14\ 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. In particular, the proposed routing credit and fee 
changes would not place a burden on competition because the Exchange is 
lowering the credit it provides and fees it charges to ETP Holders to 
match the credits and fees provided by NYSE American.\15\
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    \14\ 15 U.S.C. 78f(b)(8).
    \15\ See supra note 6.
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues. In 
such an environment, the Exchange must continually review, and consider 
adjusting, its fees and credits to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed rule change promotes a competitive environment.

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) \16\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \17\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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) \18\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \18\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEARCA-2017-89 on the subject line.

[[Page 39471]]

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-2017-89. 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-2017-89 and should 
be submitted on or before September 8, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17434 Filed 8-17-17; 8:45 am]
BILLING CODE 8011-01-P