83 FR 19376 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Adopt Transaction Fees In Connection with the Exchange's Trading of UTP Securities on Pillar

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 85 (May 2, 2018)

Page Range		19376-19381
FR Document		2018-09258
Federal Register, Volume 83 Issue 85 (Wednesday, May 2, 2018)
[Federal Register Volume 83, Number 85 (Wednesday, May 2, 2018)]
[Notices]
[Pages 19376-19381]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-09258]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83113; File No. SR-NYSE-2018-15]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Adopt Transaction Fees In Connection with the Exchange's Trading of UTP 
Securities on Pillar

April 26, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the

[[Page 19377]]

``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, 
on April 17, 2018, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') 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 adopt transaction fees in connection with 
the Exchange's trading of UTP Securities on Pillar, the Exchange's new 
trading technology platform. The Exchange proposes to implement these 
changes to its Price List effective April 17, 2018.\4\ The proposed 
rule change is available on the Exchange's website 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 Price List on 
April 9, 2018 (SR-NYSE-2018-13) and withdrew such filing on April 
17, 2018.
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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
    On April 9, 2018, the Exchange will introduce trading of UTP 
Securities on the Exchange on the Pillar trading platform.\5\ As 
described in the UTP Trading Rules Filing, with Pillar, the Exchange 
will continue to trade NYSE-listed securities on its current trading 
platform without any changes.\6\
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    \5\ See Securities Exchange Act Release No.82945 (March 26, 
2018), 83 FR 13553 (March 29, 2018) (SR-NYSE-2017-36) (the ``UTP 
Trading Rules Filing''). The term ``UTP Security'' means a security 
that is listed on a national securities exchange other than the 
Exchange and that trades on the Exchange pursuant to unlisted 
trading privileges. See Rule 1.1(ii).
    \6\ See UTP Trading Rules Filing, 83 FR at 13554, n.17.
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    In connection with the offering of trading in UTP Securities, the 
Exchange proposes to amend its Price List to adopt a new pricing for 
trading UTP Securities on the Pillar platform.
    The proposed changes would apply to transactions executed in 
securities priced at or above and below $1.00.
    The Exchange proposes to implement these changes effective April 
17, 2018.
Proposed Rule Change
    The Exchange proposes the following transaction fees for UTP 
trading on its Pillar trading platform.
    The Exchange proposes to add the following heading immediately 
after the crossing session fees and credits in the current fee 
schedule: ``Transaction Fees and Credits For Securities Traded Pursuant 
to Unlisted Trading Privileges (Tapes B and C) on the Pillar Trading 
Platform.'' The Exchange believes that the proposed legend would 
clarify which fees and credits in the current fee schedule would be 
applicable to trading UTP Securities on the Pillar platform, and thus 
add clarity and promote transparency.
    Immediately below this proposed heading, the Exchange proposes a 
second heading titled ``Fees and Credits applicable to Market 
Participants.''
General Information Applicable to the Price List
    The Exchange proposes to summarize general information applicable 
to fees for trading UTP Securities on the Pillar trading platform in 
two bullets under the second heading in the proposed Price List.
    The first bullet would provide that rebates are indicated by 
parentheses.
    The second bullet would provide that, for purposes of determining 
transaction fees and credits based on requirements based on quoting 
levels, average daily volume (``ADV''), and consolidated ADV 
(``CADV''), the Exchange may exclude shares traded any day that (1) the 
Exchange is not open for the entire trading day and/or (2) a disruption 
affects an Exchange system that lasts for more than 60 minutes during 
regular trading hours. The second proposed bullet would reproduce the 
language in footnote 6 of the current Price List.
Transaction Fees
    The Exchange proposes the following fees and credits for all 
transactions in UTP Securities:
Liquidity Adding Non-Displayed Order Fees
    The Exchange does not propose to charge a fee for UTP executions on 
the Exchange of non-displayed orders \7\ that add liquidity to the 
Exchange in securities priced at or above $1.00.
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    \7\ These rates are client rates. The Exchange proposes separate 
provide rates for non-displayed orders by SLPs, discussed below.
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    The Exchange also does not propose to charge a fee for UTP 
executions on the Exchange of non-displayed orders that add liquidity 
to the Exchange in securities priced below $1.00.
Liquidity Adding Displayed Order Credits and Fees
    For securities priced at or above $1.00, the Exchange proposes a 
rebate of $0.0020 per share for UTP executions on the Exchange of 
displayed orders that add liquidity to the Exchange.
    For UTP executions on the Exchange of displayed orders that add 
liquidity to the Exchange by Floor brokers, the Exchange proposes a 
rebate of $0.0026 per share.
    The Exchange does not propose to charge a fee for UTP executions on 
the Exchange of displayed orders that add liquidity to the Exchange in 
securities priced below $1.00.
    For securities priced at or above $1.00, the Exchange proposes a 
credit of $0.0010 per share for UTP executions in each tape for MPL 
orders that add liquidity to the Exchange, unless a specific credit for 
SLP Provide Tiers or Adding Tiers applies.
    For securities priced at or above $1.00, the Exchange proposes a 
rebate of $0.0006 per share for cross trades \8\ in UTP Securities that 
add liquidity to the Exchange.
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    \8\ For purposes of the Price List, cross trades are trades 
where a Floor broker executes customer orders to buy and sell an 
equivalent amount of the same security pursuant to Rule 76.
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Liquidity Removing Order Fees
    For UTP executions on the Exchange that remove liquidity from the 
Exchange, the Exchange proposes to charge $0.0030 per share for 
securities priced at or above $1.00, including MPL Orders, unless the 
Floor broker fee applies, and to charge 0.3% of the total dollar value 
of the transaction for securities priced below $1.00.
    For Floor broker UTP executions that remove liquidity from the 
Exchange, the Exchange proposes a fee $0.0026 per share for securities 
priced at or above $1.00.

[[Page 19378]]

Adding and Remove Tiers for Securities at or Above $1.00
    The Exchange proposes tiered adding requirements for displayed 
orders in securities priced at or above $1.00, as follows.
    Under the proposed Tier 1 Adding Credit, the Exchange would offer a 
per tape credit of $0.0026 per share ($0.0025 if an MPL order) on a per 
tape basis for transactions in stocks with a per share price of $1.00 
or more when adding liquidity to the Exchange if the member 
organization has at least 0.05% of Adding CADV in Tape B or C. For 
purposes of qualifying for this tier, the 0.05% of Adding CADV could 
include shares of both an SLP-Prop and an SLMM \9\ of the same or an 
affiliated member organization. The Exchange also proposes to waive the 
Tier 1 add and remove tier requirements until June 1, 2018, which would 
be reflected in footnote *.
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    \9\ Under Rule 107B, a Supplemental Liquidity Provider (``SLP'') 
can be either a proprietary trading unit of a member organization 
(``SLP-Prop'') or a registered market maker at the Exchange 
(``SLMM''). For purposes of the 10% average or more quoting 
requirement in assigned securities pursuant to Rule 107B, quotes of 
an SLP-Prop and an SLMM of the same member organization are not 
aggregated. However, for purposes of adding liquidity for assigned 
SLP securities in the aggregate, shares of both an SLP-Prop and an 
SLMM of the same member organization are included.
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    Under the proposed Tier 2 Adding Credit, the Exchange would offer a 
per tape credit of $0.0023 per share for transactions in stocks with a 
per share price of $1.00 or more when adding liquidity to the Exchange 
if the member organization has at least 0.01% of Adding CADV in Tape B 
or C. For purposes of qualifying for this tier, the 0.01% of Adding 
CADV could include shares of both an SLP-Prop and an SLMM of the same 
or an affiliated member organization.
    Finally, for UTP Securities, the Exchange proposes to charge a per 
tape fee of $0.0028 per share to remove liquidity from the Exchange for 
member organizations with an Adding ADV \10\ of at least 50,000 shares 
for that respective tape.
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    \10\ The phrase ``Adding ADV'' in the proposed tier would have a 
citation to footnote 4 in the current Price List, which provides 
``For purposes of transaction fees and Supplemental Liquidity 
Provider liquidity credits, ADV calculations exclude early closing 
days.'' The text of current footnote 4 would remain unchanged.
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SLP Provide Tiers
    The Exchange proposes tiered and non-tiered rates for displayed and 
non-displayed orders by SLPs that add liquidity to the Exchange in UTP 
Securities priced at or above $1.00, as follows:
Non-Tiered Rates
    For displayed orders in UTP Securities that add liquidity to the 
Exchange, the Exchange proposes a non-tiered credit of $0.0026 per 
share per tape in an assigned UTP Security where the SLP meets the 10% 
average or more quoting requirement in an assigned security pursuant to 
Rule 107B.\11\ For non-displayed orders in UTP Securities that add 
liquidity to the Exchange, the Exchange proposes a non-tiered credit of 
$0.0008 per share per tape in an assigned UTP Security if the SLP meets 
the 10% average or more quoting requirement in an assigned security 
pursuant to Rule 107B.
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    \11\ See note 9, supra.
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Tier 2
    Proposed Tier 2 would provide a $0.0029 per share credit per tape 
in an assigned UTP Security for SLPs adding displayed liquidity to the 
Exchange if the SLP (1) adds liquidity for all assigned UTP Securities 
in the aggregate of an CADV of at least 0.01% per tape, and meets the 
10% average or more quoting requirement in 250 or more assigned UTP 
Securities in Tapes B and C combined pursuant to Rule 107B, and (2) 
meets the 10% average or more quoting requirement in an assigned UTP 
Security pursuant to Rule 107B.
    Proposed Tier 2 would provide a $0.0011 per share credit per tape 
in an assigned UTP Security for SLPs adding non-displayed liquidity to 
the Exchange if the SLP meets the 10% average or more quoting 
requirement in an assigned UTP Security pursuant to Rule 107B.
Tier 1
    Proposed Tier 1 would provide a $0.0032 per share credit per tape 
in an assigned UTP Security for SLPs adding displayed liquidity to the 
Exchange if the SLP (1) adds liquidity for all assigned UTP Securities 
in the aggregate of an CADV of at least 0.05% per tape, and (2) meets 
the 10% average or more quoting requirement in 500 or more assigned UTP 
Securities in Tapes B and C combined pursuant to Rule 107B, and (2) 
meets the 10% average or more quoting requirement in an assigned UTP 
Security pursuant to Rule 107B.
    Proposed Tier 1 would provide a $0.0014 per share credit per tape 
for SLPs adding non-displayed liquidity to the Exchange, and a $0.0025 
per share credit for MPL Orders adding liquidity, in an assigned UTP 
Security if the SLP meets the 10% average or more quoting requirement 
in an assigned UTP Security pursuant to Rule 107B.
Tape A Tier
    The proposed Tape A Tier would provide a $0.00005 per share in an 
assigned UTP Security in addition to the Tape A SLP credit in Tape A 
assigned securities for SLPs adding displayed liquidity to the Exchange 
if the SLP (1) qualifies for the SLP Tier 1 provide rate in both Tape B 
and C or quotes in excess of the 10% average quoting requirement in 300 
or more assigned securities separately in Tapes B and Tape C pursuant 
to Rule 107B, and (2) where the SLP meets the 10% average quoting 
requirement pursuant to Rule 107B.
    Finally, the Exchange proposes to waive the provide volume 
component of the SLP Tier requirements until June 1, 2018, which would 
be reflected in footnote **.
Routing Fees
    Under a new heading titled ``Routing Fees,'' the Exchange proposes 
the following fees for routing, which would be applicable to all orders 
in UTP Securities that are routed.
    For executions in securities with a price at or above $1.00 that 
route to and execute in an auction on the Exchange's affiliate NYSE 
American, the Exchange proposes to charge a fee of $0.0005 per share. 
For executions in securities with a price at or above $1.00 that route 
to and execute in an auction on an Away Market \12\ other than NYSE 
American, the Exchange proposes to charge a fee of $0.0010 per share, 
and a fee of $0.0030 per share for all other executions.
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    \12\ The term ``Away Market'' is defined in Rule 1.1(ff) to mean 
any exchange, alternative trading system (``ATS'') or other broker-
dealer (1) with which the Exchange maintains an electronic linkage, 
and (2) that provides instantaneous responses to orders routed from 
the Exchange.
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    For securities priced below $1.00 that route to and execute on an 
Away Market, the Exchange proposes to charge a fee of 0.30% of the 
total dollar value of the transaction for executions in an Away Market 
auction as well as all other executions.
* * * * *
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems that member 
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\13\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\14\ in 
particular, because it provides for the

[[Page 19379]]

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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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4) & (5).
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Adding Liquidity Credits and Fees
Liquidity Adding Non-Displayed Order Fees
    The Exchange believes that not charging a fee for liquidity adding 
non-displayed orders in UTP Securities is reasonable, equitable and not 
unfairly discriminatory because it is designed to facilitate execution 
of, and enhance trading opportunities for, non-displayable orders, 
thereby further incentivizing entry of non-displayed orders on the 
Exchange. The Exchange notes that other markets charge fees for non-
displayed orders.\15\
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    \15\ IEX, for instance, charges a fee of $0.0009 per share for 
providing non-displayed liquidity for securities priced at or above 
$1.00 and 0.30% of TDVT (i.e., the total dollar value of the 
transaction calculated as the execution price) for securities below 
$1.00. See Investors Exchange Fee Schedule 2017, available at 
https://www.iextrading.com/trading/fees/.
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Liquidity Adding Displayed Order Credits and Fees
    The Exchange believes that rebates of $0.0020 per share for UTP 
executions on the Exchange of displayed orders that add liquidity to 
the Exchange (unless another credit applies) and $0.0026 per share for 
UTP executions on the Exchange of displayed orders that add liquidity 
to the Exchange by Floor brokers are reasonable, equitable and not 
unfairly discriminatory because it will encourage submission of 
additional displayed liquidity to a public exchange, thereby promoting 
price discovery and transparency.
    The Exchange further believes the proposed rebate for Floor brokers 
is equitable and not unfairly discriminatory because it would continue 
to encourage member organizations to send orders to the trading Floor 
for execution, thereby contributing to robust levels of liquidity on 
the trading Floor, which benefits all market participants. Further, the 
proposed Floor broker credit is also equitable and not unfairly 
discriminatory because those member organizations that make significant 
contributions to market quality and that contribute to price discovery 
by providing higher volumes of liquidity would be allocated a higher 
credit. The Exchange believes that any member organizations that would 
qualify for the proposed $0.0020 per share for UTP executions that add 
liquidity could qualify for the higher rate based on the levels of 
activity sent to Floor brokers. For the same reasons, the Exchange 
believes the proposed credits for MPL orders and cross trades in UTP 
Securities that add liquidity to the Exchange are reasonable and not 
unfairly discriminatory.
    The Exchange believes that not charging UTP executions on the 
Exchange of displayed orders that add liquidity to the Exchange in 
securities priced below $1.00 would encourage price discovery and 
enhance market quality by encouraging more competitive pricing of 
displayed orders in low-priced UTP Securities. The Exchange believes 
that not charging a fee for liquidity adding displayed orders is 
equitable and not unfairly discriminatory because it is designed to 
facilitate execution of, and enhance trading opportunities for, 
displayable orders, thereby further incentivizing entry of displayed 
orders on the Exchange.
Liquidity Removing Fees
    The Exchange believes that charging $0.0030 per share for 
securities priced at or above $1.00, including MPL Orders unless the 
Floor broker fee applies, and 0.3% of the total dollar value of the 
transaction for securities priced below $1.00 for executions on the 
Exchange in UTP Securities that remove liquidity is reasonable and 
consistent with the Act. The Exchange notes that the proposed fees are 
in line with the fees the Exchange currently charges for removing 
liquidity from the Exchange in Tape A securities.\16\
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    \16\ See page 5 of the current NYSE Price List, available at 
https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
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Adding Tier Credits and Remove Tier Fees
    The Exchange believes that that the proposed tiered adding 
requirements for displayed orders in securities priced at or above 
$1.00 are reasonable, equitable and not unfairly discriminatory, as 
follows.
    The proposed Tier 1 ($0.0026 per share, $0.0025 if an MPL order) 
and Tier 2 ($0.0023 per share) Adding Credits per share for 
transactions in UTP Securities with a per share stock price of $1.00 or 
more when adding liquidity are reasonable because it would further 
contribute to incenting member organizations to provide additional 
amounts of liquidity on the Exchange. The Exchange believes that the 
proposed Tier 1 and Tier 2 Adding Credits are reasonable, equitable and 
not unfairly discriminatory because all member organizations would 
benefit from such increased levels of liquidity. In addition, the Tier 
1 and Tier 2 Adding Credits would provide a higher credit to member 
organizations that is reasonably related to the value to the Exchange's 
market quality associated with higher volumes of liquidity. In 
addition, the Exchange believes that the proposed Tier 1 and Tier 2 
Adding Credits are equitable and not unfairly discriminatory as all 
similarly situated market participants will be subject to the same 
credits on an equal and non-discriminatory basis.
    Further, the Exchange believes that proposed Tier 1 charge of 
$0.0028 per share in UTP Securities for member organizations with an 
Adding ADV of at least 50,000 shares that removes liquidity from the 
Exchange is reasonable, equitable and not unfairly discriminatory 
because the proposed fees are in line with the fees the Exchange 
currently charges for removing liquidity from the Exchange in Tape A 
securities.\17\
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    \17\ See id.
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    Finally, the Exchange believes it is reasonable and not unfairly 
discriminatory to waive the Tier 1 requirements until June 1, 2018, 
because the proposed credits and fees will apply to all similarly 
situated member organizations.
SLP Provide Tiers
    The Exchange believes that higher rebates for SLPs discussed below 
are reasonable, equitable and not unfairly discriminatory because SLPs 
have monthly quoting requirements that non-SLP market participants do 
not have. As discussed below, the Exchange believes that the proposed 
rebates for SLPs are commensurate with the SLP's quoting requirement, 
are consistent with rebates charged on other markets, and will 
encourage the SLPs to add liquidity to the market in UTP Securities, 
thereby providing customers with a higher quality venue for price 
discovery, liquidity, competitive quotes and price improvement.
Non-Tiered Credits
    The Exchange believes that the proposed non-tiered credit of 
$0.0026 per share for displayed orders, and the proposed non-tiered 
credit of $0.0008 per share for non-displayed orders, for SLPs that add 
liquidity to the Exchange are reasonable, equitable and not unfairly 
discriminatory because, although slightly higher than the non-tiered 
SLP rates applicable to Tape A securities, would encourage submission 
of additional liquidity to a public

[[Page 19380]]

exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for member organizations.
Tiers 1 and 2
    The Exchange believes the proposed credits for SLPs adding 
displayed liquidity to the Exchange (proposed Tier 2 credit of $0.0029 
per share and Tier 1 credit of $0.0032 per share) and non-displayed 
liquidity to the Exchange (proposed Tier 2 credit of $0.0011 per share, 
Tier 1 credit of $0.0014 per share credit, and $0.0025 per share credit 
for MPL Orders), are reasonable, equitable and not unfairly 
discriminatory because the proposed credits are in line with the fees 
the Exchange currently charges SLPs for adding displayed and non-
displayed liquidity in Tape A securities.\18\
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    \18\ See page 5 of the current NYSE Price List, available at 
https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
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Tape A Tier
    The Exchange believes that proposed SLP Tier A Tier is reasonable 
because it would provide SLPs with an additional way to qualify for a 
rebate, thereby providing SLPs with greater flexibility and creating an 
added incentive for SLPs to bring additional order flow to a public 
market in UTP Securities.
    Finally, the Exchange believes it is reasonable and not unfairly 
discriminatory to waive the provide volume component of the SLP Tier 
requirements until June 1, 2018, because the proposed credits and fees 
will apply to all similarly situated SLPs.
Routing Fees
    The Exchange believes that its proposed routing fees are a 
reasonable, equitable and not an unfairly discriminatory allocation of 
fees because the fee would be applicable to all member organizations in 
an equivalent manner. Moreover, the proposed fees for routing shares 
are also reasonable, equitable and not unfairly discriminatory because 
they are consistent with fees charged on other exchanges. In 
particular, the Exchange's proposal to charge a fee of $0.0005 per 
share for executions that route to and execute on an NYSE American 
auction in securities priced at or above $1.00 is the same as the fee 
charged by the Exchange's affiliate NYSE Arca, Inc. (``NYSE Arca''), to 
route orders to NYSE American auctions.\19\ Moreover, the Exchange 
believes that the proposed $0.0005 per share routing fee is reasonable 
and not unfairly discriminatory because it is the same as NYSE 
American's fee for executions in the opening and closing auctions.\20\ 
The Exchange notes that the proposed $0.0005 routing fee is at least 
half the base rate charged for auction orders on most other markets, 
including the NYSE.\21\
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    \19\ See page 4 of the NYSE Arca, Inc., Schedule of Fees and 
Charges, available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf.
    \20\ See page 1 of NYSE American's Price List, available at 
https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf.
    \21\ The NYSE's base rate is $0.0010. See note 18, supra. The 
NASDAQ Stock Market's (``NASDAQ'') base rate, in contrast, is 
$0.0016. See note 22, infra.
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    The proposal to charge $0.0010 per share for executions that route 
to and execute on Away Market auctions other than NYSE American in 
securities priced at or above $1.00 is reasonable and not unfairly 
discriminatory because it is consistent with fees charged on other 
exchanges. The Exchange notes that the proposed fee is the same, and in 
some cases lower than, the fees charged on other exchanges.\22\
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    \22\ For example, NASDAQ charges a rate of $0.0016 per executed 
share for Tier F. See NASDAQ Fee Schedule at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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    The proposal to charge $0.0030 for all other executions in 
securities priced at or above $1.00 that route to and execute on Away 
Market auctions is reasonable, equitable and not unfairly 
discriminatory because it is consistent with fees charged on other 
exchanges.\23\
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    \23\ For example, NASDAQ charges a rate of $0.0030 to remove 
liquidity for shares executed at or above $1.00. See NASDAQ Fee 
Schedule at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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    Further, the proposal to charge a fee of 0.30% of total dollar 
value for transactions in securities with a price under $1.00 are 
reasonable, equitable and not unfairly discriminatory because it is 
consistent with fees charged on other exchanges.\24\
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    \24\ NASDAQ, for example, charges a fee of 0.30% (i.e. 30 basis 
points) of total dollar volume to remove liquidity for shares 
executed below $1.00. See NASDAQ Fee Schedule at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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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 member organizations or competing order execution venues to 
maintain their competitive standing in the financial markets.

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

    In accordance with Section 6(b)(8) of the Act,\25\ 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 member organizations. 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. 
The Exchange believes that providing higher rebates and credits to SLPs 
and Floor brokers could similarly promote competition because the 
higher rates would encourage submission of additional liquidity by 
member organizations with enhanced quoting obligations (SLPs) and those 
that make significant contributions to market quality and contribute to 
price discovery by providing higher volumes of liquidity (Floor 
brokers).
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    \25\ 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

[[Page 19381]]

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 member organizations 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) \26\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \27\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 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) \28\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \28\ 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-NYSE-2018-15 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-NYSE-2018-15. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2018-15 and should be submitted on 
or before May 23, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-09258 Filed 5-1-18; 8:45 am]
 BILLING CODE 8011-01-P
19376 Federal Register / Vol. 83, No. 85 / Wednesday, May 2, 2018 / Notices

III. Proceedings To Determine Whether opportunity to make an oral file number should be included on the
To Approve or Disapprove SR– presentation.41 subject line if email is used. To help the
NYSEArca–2018–04 and Grounds for Interested persons are invited to Commission process and review your
Disapproval Under Consideration submit written data, views, and comments more efficiently, please use
arguments regarding whether the only one method. The Commission will
The Commission is instituting proposal should be approved or post all comments on the Commission’s
proceedings pursuant to Section disapproved by May 23, 2018. Any internet website (http://www.sec.gov/
19(b)(2)(B) of the Exchange Act 38 to person who wishes to file a rebuttal to rules/sro.shtml). Copies of the
determine whether the proposed rule any other person’s submission must file submission, all subsequent
change should be approved or that rebuttal by June 6, 2018. amendments, all written statements
disapproved. Institution of such The Commission asks that with respect to the proposed rule
proceedings is appropriate at this time commenters address the sufficiency of change that are filed with the
in view of the legal and policy issues the Exchange’s statements in support of Commission, and all written
raised by the proposed rule change. the proposal, which are set forth in the communications relating to the
Institution of proceedings does not Notice,42 the issues raised by the proposed rule change between the
indicate that the Commission has commenters, and any other issues raised Commission and any person, other than
reached any conclusions with respect to by the proposed rule change under the those that may be withheld from the
any of the issues involved. Rather, as Exchange Act. In particular, the public in accordance with the
described below, the Commission seeks Commission seeks commenters’ views provisions of 5 U.S.C. 552, will be
and encourages interested persons to regarding the concerns raised with available for website viewing and
provide comments on the proposed rule respect to selective disclosure of printing in the Commission’s Public
change. confidential portfolio information, Reference Room, 100 F Street NE,
namely, whether such disclosure is Washington, DC 20549, on official
Pursuant to Section 19(b)(2)(B) of the consistent with the requirement of
Exchange Act,39 the Commission is business days between the hours of
Section 6(b)(5) that the rules of the 10:00 a.m. and 3:00 p.m. Copies of these
providing notice of the grounds for exchange be designed to prevent filings also will be available for
disapproval under consideration. The fraudulent and manipulative acts and inspection and copying at the principal
Commission is instituting proceedings practices. The Commission also seeks office of the Exchange. All comments
to allow for additional analysis of the commenters’ views regarding the received will be posted without change.
proposed rule change’s consistency with various concerns raised about how the Persons submitting comments are
Section 6(b)(5) of the Exchange Act, Shares may trade in the secondary cautioned that we do not redact or edit
which requires, among other things, that market, including the potential for personal identifying information from
the rules of a national securities frequent trading halts and poor trading comment submissions. You should
exchange be ‘‘designed to prevent performance during times of market submit only information that you wish
fraudulent and manipulative acts and volatility and stress. In this regard, the to make available publicly. All
practices, to promote just and equitable Commission specifically seeks submissions should refer to File
principles of trade, . . . to remove commenters’ views on whether the Number SR–NYSEArca–2018–04 and
impediments to and perfect the proposal is consistent with the should be submitted on or before May
mechanism of a free and open market maintenance of a fair and orderly 23, 2018. Rebuttal comments should be
and a national market system, and, in market. submitted by June 6, 2018.
general, to protect investors and the Comments may be submitted by any
For the Commission, by the Division of
public interest.’’ 40 of the following methods:
Trading and Markets, pursuant to delegated
IV. Procedure: Request for Written Electronic Comments authority.43
Comments • Use the Commission’s internet Eduardo A. Aleman,
comment form (http://www.sec.gov/ Assistant Secretary.
The Commission requests that rules/sro.shtml); or [FR Doc. 2018–09265 Filed 5–1–18; 8:45 am]
interested persons provide written • Send an email to rule-comments@ BILLING CODE 8011–01–P
submissions of their views, data, and sec.gov. Please include File Number SR–
arguments with respect to the issues NYSEArca–2018–04 on the subject line.
identified above, as well as any other SECURITIES AND EXCHANGE
concerns they may have with the Paper Comments COMMISSION
proposal. In particular, the Commission • Send paper comments in triplicate
invites the written views of interested to Secretary, Securities and Exchange [Release No. 34–83113; File No. SR–NYSE–
persons concerning whether the Commission, 100 F Street NE, 2018–15]
proposal is consistent with Section Washington, DC 20549–1090. Self-Regulatory Organizations; New
6(b)(5) or any other provision of the All submissions should refer to File York Stock Exchange LLC; Notice of
Exchange Act, or the rules and Numbers SR–NYSEArca-2018–04. This Filing and Immediate Effectiveness of
regulations thereunder. Although there Proposed Rule Change to Adopt
do not appear to be any issues relevant 41 Section 19(b)(2) of the Exchange Act, as
Transaction Fees In Connection with
to approval or disapproval that would amended by the Securities Act Amendments of
1975, Public Law 94–29 (June 4, 1975), grants the the Exchange’s Trading of UTP
be facilitated by an oral presentation of Securities on Pillar
daltland on DSKBBV9HB2PROD with NOTICES

Commission flexibility to determine what type of
views, data, and arguments, the proceeding—either oral or notice and opportunity
Commission will consider, pursuant to for written comments—is appropriate for April 26, 2018.
Rule 19b–4, any request for an consideration of a particular proposal by a self- Pursuant to Section 19(b)(1) 1 of the
regulatory organization. See Securities Act
Amendments of 1975, Senate Comm. on Banking,
Securities Exchange Act of 1934 (the
38 15 U.S.C. 78s(b)(2)(B). Housing & Urban Affairs, S. Rep. No. 75, 94th
39 Id. Cong., 1st Sess. 30 (1975). 43 17 CFR 200.30–3(a)(57).
40 15 U.S.C. 78f(b)(5). 42 See supra note 3. 1 15 U.S.C.78s(b)(1).

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Federal Register / Vol. 83, No. 85 / Wednesday, May 2, 2018 / Notices 19381

response, and because market Paper Comments Rule 17a–5(c), SEC File No. 270–199, OMB
participants may readily adjust their Control No. 3235–0199
• Send paper comments in triplicate
order routing practices, the Exchange to Brent J. Fields, Secretary, Securities Notice is hereby given that pursuant
believes that the degree to which fee and Exchange Commission, 100 F Street to the Paperwork Reduction Act of 1995
changes in this market may impose any NE, Washington, DC 20549–1090. (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
burden on competition is extremely All submissions should refer to File Securities and Exchange Commission
limited. As a result of all of these Number SR–NYSE–2018–15. This file (‘‘Commission’’) is soliciting comments
considerations, the Exchange does not number should be included on the on the existing collection of information
believe that the proposed changes will subject line if email is used. To help the provided for in Rule 17a–5(c) (17 CFR
impair the ability of member Commission process and review your 240.17a–5(c)), under the Securities
organizations or competing order comments more efficiently, please use Exchange Act of 1934 (15 U.S.C. 78a et
execution venues to maintain their only one method. The Commission will seq.). The Commission plans to submit
competitive standing in the financial post all comments on the Commission’s this existing collection of information to
markets. internet website (http://www.sec.gov/ the Office of Management and Budget
C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the (‘‘OMB’’) for extension and approval.
Statement on Comments on the submission, all subsequent Rule 17a–5(c) generally requires
Proposed Rule Change Received From amendments, all written statements broker-dealers who carry customer
Members, Participants, or Others with respect to the proposed rule accounts to provide statements of the
change that are filed with the broker-dealer’s financial condition to
No written comments were solicited their customers. Paragraph (c)(5) of Rule
or received with respect to the proposed Commission, and all written
communications relating to the 17a–5 provides a conditional exemption
rule change. from this requirement. A broker-dealer
proposed rule change between the
III. Date of Effectiveness of the Commission and any person, other than that elects to take advantage of the
Proposed Rule Change and Timing for those that may be withheld from the exemption must publish its statements
Commission Action public in accordance with the on its website in a prescribed manner,
provisions of 5 U.S.C. 552, will be and must maintain a toll-free number
The foregoing rule change is effective
available for website viewing and that customers can call to request a copy
upon filing pursuant to Section
printing in the Commission’s Public of the statements.
19(b)(3)(A) 26 of the Act and
Reference Room, 100 F Street NE, The purpose of the Rule is to ensure
subparagraph (f)(2) of Rule 19b–4 27
Washington, DC 20549 on official that customers of broker-dealers are
thereunder, because it establishes a due,
business days between the hours of provided with information concerning
fee, or other charge imposed by the
10:00 a.m. and 3:00 p.m. Copies of the the financial condition of the firm that
Exchange.
filing also will be available for may be holding the customers’ cash and
At any time within 60 days of the
inspection and copying at the principal securities. The Commission, when
filing of such proposed rule change, the
office of the Exchange. All comments adopting the Rule in 1972, stated that
Commission summarily may
received will be posted without change. the goal was to ‘‘directly’’ send a
temporarily suspend such rule change if
Persons submitting comments are customer essential information so that
it appears to the Commission that such
cautioned that we do not redact or edit the customer could ‘‘judge whether his
action is necessary or appropriate in the
personal identifying information from broker or dealer is financially sound.’’
public interest, for the protection of
comment submissions. You should The Commission adopted the Rule in
investors, or otherwise in furtherance of
submit only information that you wish response to the failure of several broker-
the purposes of the Act. If the
to make available publicly. All dealers holding customer funds and
Commission takes such action, the
submissions should refer to File securities in the period between 1968
Commission shall institute proceedings
Number SR–NYSE–2018–15 and should and 1971.
under Section 19(b)(2)(B) 28 of the Act to
be submitted on or before May 23, 2018. The Commission estimates that
determine whether the proposed rule
approximately 162 broker-dealer
change should be approved or For the Commission, by the Division of
Trading and Markets, pursuant to delegated
respondents carrying approximately 132
disapproved.
authority.29 million public customer accounts incur
IV. Solicitation of Comments Eduardo A. Aleman, a burden of approximately 161,037
Interested persons are invited to Assistant Secretary.
hours per year to comply with the Rule.
submit written data, views, and Written comments are invited on: (a)
[FR Doc. 2018–09258 Filed 5–1–18; 8:45 am]
arguments concerning the foregoing, Whether the proposed collection of
BILLING CODE 8011–01–P
including whether the proposed rule information is necessary for the proper
change is consistent with the Act. performance of the functions of the
Comments may be submitted by any of Commission, including whether the
SECURITIES AND EXCHANGE
the following methods: information shall have practical utility;
COMMISSION
(b) the accuracy of the Commission’s
Electronic Comments Proposed Collection; Comment estimates of the burden of the proposed
• Use the Commission’s internet Request collection of information; (c) ways to
comment form (http://www.sec.gov/ enhance the quality, utility, and clarity
Upon Written Request, Copies Available of the information collected; and (d)
rules/sro.shtml); or
daltland on DSKBBV9HB2PROD with NOTICES

From: Securities and Exchange ways to minimize the burden of the
• Send an email to rule-comments@
Commission, Office of FOIA Services, collection of information on
sec.gov. Please include File Number SR–
100 F Street NE, Washington, DC respondents, including through the use
NYSE–2018–15 on the subject line.
20549–2736 of automated collection techniques or
26 15 U.S.C. 78s(b)(3)(A). Extension: other forms of information technology.
27 17 CFR 240.19b–4(f)(2). Consideration will be given to
28 15 U.S.C. 78s(b)(2)(B). 29 17 CFR 200.30–3(a)(12). comments and suggestions submitted in

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Document Created: 2018-05-02 00:49:43
Document Modified: 2018-05-02 00:49:43
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		83 FR 19376