83 FR 23313 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend its Price List
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 97 (May 18, 2018)
Federal Register Volume 83, Issue 97 (May 18, 2018)
| Page Range | 23313-23318 | |
| FR Document | 2018-10606 |
[Federal Register Volume 83, Number 97 (Friday, May 18, 2018)] [Notices] [Pages 23313-23318] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-10606] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83230; File No. SR-NYSE-2018-21] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend its Price List May 14, 2018. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the [[Page 23314]] ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on April 30, 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. --------------------------------------------------------------------------- \1\ 15 U.S.C.78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Price List to (1) amend the cap applicable to certain transactions at the open; (2) offer an optional monthly per security credit to Designated Market Makers (``DMM'') that elect to receive a lower rebate per share credit; (3) amend the NYSE Crossing Session II (``NYSE CSII'') fee cap; (4) offer a rebate for UTP executions in orders designated as ``retail'' that add liquidity to the Exchange; and (5) modify the quoting requirements for the Supplemental Liquidity Provider (``SLP'') tiered rates for displayed and non- displayed orders in UTP securities. 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. 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 its Price List to (1) amend the cap applicable to certain transactions at the open; (2) offer an optional monthly per security credit to DMMs that elect to receive a lower rebate per share credit; (3) amend the NYSE CSII fee cap; (4) offer a rebate for UTP executions in orders designated as ``retail'' that add liquidity to the Exchange; and (5) modify the quoting requirements for the SLP tiered rates for displayed and non-displayed orders in UTP securities. The Exchange proposes to implement these changes to its Price List effective May 1, 2018. Executions at the Open For securities priced $1.00 or more, the Exchange currently charges fees of $0.0010 per share for executions at open, and $0.0003 per share for Floor broker executions at the open, subject to $30,000 cap per month per member organization, provided the member organization executes an ADV that adds liquidity to the Exchange during the billing month (``Adding ADV''),\4\ excluding liquidity added by a DMM, of at least five million shares. The Exchange proposes an alternative, lower $20,000 monthly fee cap for member organizations that execute an ADV that takes liquidity from the NYSE during the billing month (``Taking ADV''), excluding liquidity taken by a DMM, of at least 1.30% of NYSE CADV and an ADV of orders for execution at the open (``Open ADV'') of at least 8 million shares. The $0.0010 per share fee for executions at the open and $0.0003 per share for Floor broker executions at the open would not be changed. DMMs currently are not charged for executions at the opening and would continue to not be charged.\5\ --------------------------------------------------------------------------- \4\ Footnote 2 to the Price List defines ADV as ``average daily volume'' and ``Adding ADV'' as ADV that adds liquidity to the Exchange during the billing month. The Exchange is not proposing to change these definitions. \5\ The existing pricing for executions at the opening in securities priced below $1.00 would also remain unchanged (i.e., 0.3% of the total dollar value of the transaction). --------------------------------------------------------------------------- DMM Optional Monthly Rebate Per Security Credit The Exchange proposes an optional monthly rebate per security (``Rebate Per Security'') to DMMs with 100 or more assigned securities, up to a maximum credit of $100,000 per month across all DMM assigned securities, that elect to receive a lower monthly rebate per share credit (``Optional Credit'') for all assigned securities. DMMs electing the Rebate per Security and corresponding Optional Credit for all assigned securities would be required to notify the Exchange prior to the start of a calendar quarter to be effective for that and subsequent quarters. Similarly, DMMs electing to suspend the Rebate per Security and corresponding Optional Credit for that suspension to be effective for that and subsequent quarters would be required to notify the Exchange prior to the start of that calendar quarter. As proposed, the Rebate Per Security would be available for the following calendar quarter for assigned securities that meet the following quoting requirements: First, in More Active Securities,\6\ if the DMM that elects the Optional Credit meets the More Active Securities Quoting Requirement in an assigned security,\7\ that DMM's assigned security would be eligible for a: --------------------------------------------------------------------------- \6\ ``More Active Securities'' are securities with an average daily consolidated volume (``Security CADV'') in the previous month equal to or greater than 1,000,000 shares per month. \7\ The ``More Active Securities Quoting Requirement'' is met if the More Active Security has a stock price of $1.00 or more and the DMM quotes at the National Best Bid or Offer (``NBBO'') in the applicable security at least 10% of the time in the applicable month. Both ``More Active Securities'' and the ``More Active Securities Quoting Requirement'' are defined in the current Price List. The Exchange is not proposing any changes to these definitions and proposes to relocate them to the new proposed text describing the optional rebate. ---------------------------------------------------------------------------$100.00 Rebate per Security if the DMM quotes at the NBBO in the applicable security 30% of the time or more in the applicable month; $75.00 Rebate Per Security if the DMM quotes at least 20% and up to 30% of the time in the applicable month; and $50.00 if the DMM quotes at least 10% and up to 20% of the time in the applicable month. Second, in Less Active Securities,\8\ if the DMM that elects the Optional Credit meets the Less Active Securities Quoting Requirement in an assigned security,\9\ that DMM's assigned security would be eligible for a --------------------------------------------------------------------------- \8\ ``Less Active Securities'' are securities with Security CADV of less than 1,000,000 shares per month in the previous month. \9\ The ``Less Active Securities Quoting Requirement'' is met if the Less Active Security has a stock price of $1.00 or more and the DMM quotes at the NBBO in the applicable security at least 15% of the time in the applicable month. Both ``Less Active Securities'' and the ``Less Active Securities Quoting Requirement'' are defined in the current Price List. As with the definitions of More Active Securities and the More Active Securities Quoting Requirement, the Exchange is not proposing any changes to these definitions and proposes to relocate them to the new proposed text describing the optional rebate. --------------------------------------------------------------------------- $200.00 Rebate per Security if the DMM quotes at the NBBO in the applicable security 60% of the time or more in the applicable month; $125.00 if the DMM quotes at least 40% and up to 60% of the time in the applicable month; and [[Page 23315]] $100.00 if the DMM quotes at least 15% and up to 40% of the time in the applicable month. The Exchange proposes to amend the current DMM rebates to reflect the proposed corresponding lower Optional Credits for DMMs that elect for the Rebate per Security, as follows. More Active Securities Currently, DMMs earn a rebate of $0.0027 per share when adding liquidity with orders, other than Mid-Point Liquidity Orders (``MPL Order''), in More Active Securities if the More Active Security has a stock price of $1.00 or more and the DMM meets the More Active Securities Quoting Requirement and has a DMM Quoted Size for an applicable month that is at least 5% of the NYSE Quoted Size,\10\ unless the more favorable rates set forth below in the Price List apply. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0026 per share if the quoting requirements are met. --------------------------------------------------------------------------- \10\ The ``NYSE Quoted Size'' is calculated by multiplying the average number of shares quoted on the NYSE at the NBBO by the percentage of time the NYSE had a quote posted at the NBBO. The ``DMM Quoted Size'' is calculated by multiplying the average number of shares of the applicable security quoted at the NBBO by the DMM by the percentage of time during which the DMM quoted at the NBBO. See Price List, n. 7. --------------------------------------------------------------------------- Currently, DMMs earn a rebate of $0.0031 per share when adding liquidity with orders, other than MPL Orders, in More Active Securities if the More Active Security has a stock price of $1.00 or more and the DMM meets (1) the More Active Securities Quoting Requirement, (2) has a DMM Quoted Size for an applicable month that is at least 10% of the NYSE Quoted Size, and (3) the DMM quotes at the NBBO in the applicable security at least 20% of the time in the applicable month and for providing liquidity that is more than 5% of the NYSE's total intraday adding liquidity in each such security for that month. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0030 per share if the quoting and providing requirements are met. Similarly, DMMs currently earn a rebate of $0.0034 per share when adding liquidity with orders, other than MPL Orders, in More Active Securities if the More Active Security has a stock price of $1.00 or more and the DMM meets (1) the More Active Securities Quoting Requirement, (2) has a DMM Quoted Size for an applicable month that is at least 15% of the NYSE Quoted Size, for providing liquidity that is more than 15% of the NYSE's total intraday adding liquidity in each such security for that month, and (3) the DMMs quotes at the NBBO in the applicable security at least 30% of the time in the applicable month. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0033 per share if the quoting and providing requirements are met. DMMs currently earn a $0.0035 per share when adding liquidity with orders, other than MPL Orders, in More Active Securities if the More Active Security has a stock price of $1.00 or more and the DMM meets (1) the More Active Securities Quoting Requirement, (2) has a DMM Quoted Size for an applicable month that is at least 25% of the NYSE Quoted Size, for providing liquidity that is more than 15% of the NYSE's total intraday adding liquidity in each such security for that month, and (3) the DMMs quotes at the NBBO in the applicable security at least 50% of the time in the applicable month. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0034 per share if the quoting and providing requirements are met. DMMs currently earn a rebate of $0.0015 per share when adding liquidity with orders, other than MPL orders, in More Active Securities if the More Active Security has a stock price of $1.00 or more and the DMM does not meet the More Active Securities Quoting in the applicable month. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0014 per share if the quoting requirements are met. DMMs are currently eligible for a rebate of $0.0035 per share when adding liquidity with orders, other than MPL orders, in Less Active Securities if the Less Active Security has a stock price of $1.00 or more and the DMM meets the Less Active Securities Quoting in the applicable month. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0031 per share if the quoting requirements are met. DMMs are currently eligible for a rebate of $0.0045 per share when adding liquidity with orders, other than MPL orders, in Less Active Securities if the Less Active Security has a stock price of $1.00 or more and the DMM quotes at the NBBO in the applicable security at least 30% of the time in the applicable month. The Exchange proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0041 per share if the quoting requirements are met. Finally, DMMs are currently eligible for a rebate of $0.0015 per share when adding liquidity in shares of Less Active Securities if the Less Active Security has a stock price of $1.00 or more and the DMM does not meet the Less Active Securities Quoting Requirement in the applicable security in the applicable month. The Exchange proposes to move this rate from its current position in the Price List to directly following the rebate described in the previous paragraph and proposes that DMMs electing the optional Rebate per Security would instead receive an Optional Credit of $0.0011 per share if the quoting requirements are met. NYSE CSII Fee Cap Currently, the Exchange charges a fee of $0.0004 per share (both sides) for executions in NYSE CSII.\11\ Fees for executions in CSII are capped at $100,000 [sic] per month per member organization. The Exchange proposes an alternative, lower cap of $25,000 per month per member organization for member organizations that execute a Taking ADV, excluding liquidity taken by a DMM, of at least 1.30% of NYSE CADV and Open ADV of at least 8 million shares. The $0.0004 per share fee for executions in NYSE CSII would remain unchanged. --------------------------------------------------------------------------- \11\ CSII runs on the Exchange from 4:00 p.m. to 6:30 p.m. Eastern Time and handles member organization crosses of baskets of securities of aggregate-priced buy and sell orders. See NYSE Rules 900-907. --------------------------------------------------------------------------- Proposed Changes to Fees and Credits for UTP Securities On April 9, 2018, the Exchange began trading UTP Securities on the Exchange on the Pillar trading platform.\12\ The Exchange proposes the following changes to the fees and credits for UTP Securities. --------------------------------------------------------------------------- \12\ 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). --------------------------------------------------------------------------- Retail Credit For securities priced at or above $1.00, the Exchange proposes a rebate of $0.0030 per share for UTP executions in orders designated as ``retail'' \13\ that add liquidity to the Exchange. --------------------------------------------------------------------------- \13\ Orders designated as ``retail'' are orders that satisfy the Retail Modifier requirements of Rule 13. --------------------------------------------------------------------------- [[Page 23316]] Quoting Requirements for SLP Tiered Credits Currently, the Exchange offers tiered rates for displayed and nondisplayed orders by SLPs that add liquidity to the Exchange in UTP Securities priced at or above $1.00. Specifically, Tier 2 provides 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 (2) 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 (3) meets the 10% average or more quoting requirement in an assigned UTP Security pursuant to Rule 107B. Similarly, Tier 1 provides 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 (3) meets the 10% average or more quoting requirement in an assigned UTP Security pursuant to Rule 107B. Finally, the Tape A Tier provides 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 (2) 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 (3) where the SLP meets the 10% average quoting requirement pursuant to Rule 107B. The provide volume component of the above SLP Tier requirements are waived until June 1, 2018. In each case, the Exchange proposes to clarify that the quoting requirement (item (2) in the above description of the tier requirements) means quoting on an average daily basis, calculated monthly. To effectuate this change, the Exchange proposes to add the phrase ``, on an average daily basis, calculated monthly,'' after ``quotes'' in Tier 2, Tier 1 and the Tape A Tier. * * * * * 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,\14\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\15\ 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. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78f(b). \15\ 15 U.S.C. 78f(b)(4) & (5). --------------------------------------------------------------------------- Executions at the Open The Exchange believes that the proposed additional $20,000 cap for executions at the open for member organizations executing a Taking ADV, excluding liquidity taken by a DMM, of at least 1.30% of NYSE CADV and Open ADV of at least 8 million shares is reasonable, equitable and not unfairly discriminatory because it would encourage additional liquidity on the Exchange's opening auction and because members and member organizations benefit from the substantial amounts of liquidity that are present on the Exchange during such time. The Exchange believes the proposed change is equitable and not unfairly discriminatory because it would continue to encourage member organizations to send orders to the open, thereby contributing to robust levels of liquidity in the open, which benefits all market participants. The proposed fee will encourage the submission of additional liquidity to a national securities exchange, thereby promoting price discovery and transparency and enhancing order execution opportunities for member organizations from the substantial amounts of liquidity that are present on the Exchange during the opening. Moreover, the requirement is equitable and not unfairly discriminatory because it would apply equally to all similarly situated member organizations. Finally, the Exchange notes that the current fee and current and proposed caps together are comparable to those for executions at the opening on other markets.\16\ --------------------------------------------------------------------------- \16\ For example, NASDAQ charges $0.0015 per share for certain orders executed in the NASDAQ Opening Cross and applies at $35,000 fee cap per month per firm for such executions. See Nasdaq Rule 7018(e). --------------------------------------------------------------------------- DMM Optional Monthly Rebate Per Security Credit The Exchange believes that providing Exchange DMMs with the option to receive lower per share transaction credits in exchange for monthly rebates per assigned security, up to a maximum credit of $100,000 per month across all DMM assigned securities, is reasonable, equitable and not unfairly discriminatory because it would foster liquidity provision and stability in the marketplace and lessen DMM reliance on transaction fees, to the benefit of the marketplace and all market participants. Moreover, the proposal is reasonable, equitable and not unfairly discriminatory because it would balance the increased risks and heightened quoting and other obligations that DMMs on the Exchange have and that other market participants do not have. As such, it is equitable and not unfairly discriminatory to offer DMMs the option to receive a flat per security credit coupled with lower transaction fees that are in line with the best credit for other member organizations that do not have the same quoting and trading obligations as DMMs.\17\ The requirement is also equitable and not unfairly discriminatory because it would apply equally to all DMM firms, who would have the option to elect (or not elect) to participate on a quarterly basis. --------------------------------------------------------------------------- \17\ The proposed lower transaction fees are in line with the best credit for member organizations of $0.0022 when the member organization has ``Adding ADV'' (i.e., when a member organization has ADV that adds liquidity to the Exchange during the billing month, excluding any liquidity added by a DMM) of at least 1.10% of NYSE CADV (defined in the Price List as the consolidated average daily volume of NYSE-listed securities), and executes MOC and LOC orders of at least 0.12% of NYSE CADV. --------------------------------------------------------------------------- The Exchange also believes that assigning a maximum credit of $100,000 per month for the Rebate Per Security is reasonable, equitable and not unfairly discriminatory. Further, the Exchange believes offering this credit to DMMs with 100 or more assigned securities will provide a further incentive for DMMs to quote and trade a greater number of securities on the Exchange and will generally allow the Exchange and DMMs to better compete for order flow, and thus enhance competition. The Exchange also believes that requirement of 100 or more assigned securities to qualify for the credit is equitable and not unfairly discriminatory because it would apply equally to all DMM firms. NYSE CSII Fee Cap The Exchange believes that the proposed additional, lower monthly fee [[Page 23317]] cap for CSII transactions is reasonable and an equitable allocation of fees because it would encourage the execution of additional liquidity on a public exchange, thereby promoting price discovery and transparency. The proposed change 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 executing higher volumes would receive a lower fee. Further, the Exchange believes that the proposed cap is reasonable, equitable and not unfairly discriminatory because all similarly situated member organizations will be subject to the same fee structure and access to the Exchange's market would continue to be offered on fair and non- discriminatory terms. Retail Credit The Exchange believes that the proposed credit of $0.0030 per share for UTP executions in orders designated as ``retail'' that add liquidity to the Exchange is reasonable, equitable and not unfairly discriminatory because it will encourage member organizations to provide additional retail order flow to a public market, to the benefit of the marketplace and all market participants. The proposed credit is also equitable and not unfairly discriminatory because it would apply equally to all member organizations with retail order flow. Member organizations not wishing to be eligible for the proposed pricing would be free to not designate orders in UTP Securities as ``retail.'' SLP Quoting Requirements The believes that specifying that the quoting requirement for SLP tiered credits (Tier 2, Tier 1 and Tap A Tier) are on an average daily basis calculated monthly provides greater specificity and clarity to the Price List, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market system, and, in general, protecting investors and the public interest. 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 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,\18\ 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 foster liquidity provision and stability in the marketplace, thereby promoting price discovery and transparency and enhancing order execution opportunities for member organizations. In this regard, the Exchange believes that the transparency and competitiveness of attracting additional executions on an exchange market would encourage competition. The Exchange also believes that the proposed rule change is designed to provide the public and investors with a Price List that is clear and transparent. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- 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. 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) \19\ of the Act and subparagraph (f)(2) of Rule 19b-4 \20\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b)(3)(A). \20\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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) \21\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \21\ 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-2018-21 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2018-21. 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 [[Page 23318]] 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-2018-21 and should be submitted on or before June 8, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-10606 Filed 5-17-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 97 / Friday, May 18, 2018 / Notices 23313
the execution of order flow from broker from other exchanges and from off- Commission, 100 F Street NE,
dealers’. . . .’’ 10 Although the court exchange venues. The proposed fee will Washington, DC 20549–1090.
and the SEC were discussing the cash apply to all similarly situated members. All submissions should refer to File
equities markets, the Exchange believes Moreover, the proposal promotes Number SR–BX–2018–018. This file
that these views apply with equal force competition because the Exchange number should be included on the
to the options markets. intends for it to incentivize members to subject line if email is used. To help the
The Exchange believes that its add liquidity to the Exchange, Commission process and review your
proposed fee is reasonable because it potentially attracting additional comments more efficiently, please use
benefits participants by providing a new participants to the Exchange. only one method. The Commission will
way in which members may qualify for In sum, if the change proposed herein post all comments on the Commission’s
a reduced transaction fee, while also is unattractive to market participants, it internet website (http://www.sec.gov/
incentivizing members to add liquidity is likely that the Exchange will lose rules/sro.shtml). Copies of the
to the Exchange. It is also reasonable for market share as a result. Accordingly, submission, all subsequent
the Exchange to charge a higher fee for the Exchange does not believe that the amendments, all written statements
a Midpoint pegging order that receives proposed change will impair the ability with respect to the proposed rule
price improvement relative to the of members or competing order change that are filed with the
midpoint of the NBBO than it does for execution venues to maintain their Commission, and all written
a Midpoint pegging order that executes competitive standing in the financial communications relating to the
at the Midpoint because the former markets. proposed rule change between the
order receives a better price than the C. Self-Regulatory Organization’s Commission and any person, other than
latter one relative to the midpoint of the Statement on Comments on the those that may be withheld from the
NBBO. Proposed Rule Change Received From public in accordance with the
The Exchange believes that the Members, Participants, or Others provisions of 5 U.S.C. 552, will be
proposed fee is an equitable allocation available for website viewing and
and is not unfairly discriminatory No written comments were either printing in the Commission’s Public
because the Exchange will apply the solicited or received. Reference Room, 100 F Street NE,
same fee to all similarly situated III. Date of Effectiveness of the Washington, DC 20549, on official
members. Proposed Rule Change and Timing for business days between the hours of
B. Self-Regulatory Organization’s Commission Action 10:00 a.m. and 3:00 p.m. Copies of the
Statement on Burden on Competition filing also will be available for
The foregoing rule change has become
inspection and copying at the principal
The Exchange does not believe that effective pursuant to Section
office of the Exchange. All comments
the proposed rule change will impose 19(b)(3)(A)(ii) of the Act.11
received will be posted without change.
any burden on competition not At any time within 60 days of the
Persons submitting comments are
necessary or appropriate in furtherance filing of the proposed rule change, the
cautioned that we do not redact or edit
of the purposes of the Act. In terms of Commission summarily may
personal identifying information from
inter-market competition, the Exchange temporarily suspend such rule change if
comment submissions. You should
notes that it operates in a highly it appears to the Commission that such
submit only information that you wish
competitive market in which market action is: (i) Necessary or appropriate in
to make available publicly. All
participants can readily favor competing the public interest; (ii) for the protection
submissions should refer to File
venues if they deem fee levels at a of investors; or (iii) otherwise in
Number SR–BX–2018–018 and should
particular venue to be excessive, or furtherance of the purposes of the Act.
be submitted on or before June 8, 2018.
rebate opportunities available at other If the Commission takes such action, the
Commission shall institute proceedings For the Commission, by the Division of
venues to be more favorable. In such an
to determine whether the proposed rule Trading and Markets, pursuant to delegated
environment, the Exchange must authority.12
continually adjust its fees to remain should be approved or disapproved.
Eduardo A. Aleman,
competitive with other exchanges and IV. Solicitation of Comments Assistant Secretary.
with alternative trading systems that
have been exempted from compliance Interested persons are invited to [FR Doc. 2018–10600 Filed 5–17–18; 8:45 am]
with the statutory standards applicable submit written data, views, and BILLING CODE 8011–01–P
to exchanges. Because competitors are arguments concerning the foregoing,
free to modify their own fees in including whether the proposed rule
response, and because market change is consistent with the Act. SECURITIES AND EXCHANGE
participants may readily adjust their Comments may be submitted by any of COMMISSION
order routing practices, the Exchange the following methods: [Release No. 34–83230; File No. SR–NYSE–
believes that the degree to which fee Electronic Comments 2018–21]
changes in this market may impose any
• Use the Commission’s internet Self-Regulatory Organizations; New
burden on competition is extremely
comment form (http://www.sec.gov/ York Stock Exchange LLC; Notice of
limited.
rules/sro.shtml); or Filing and Immediate Effectiveness of
In this instance, the proposed fee does
• Send an email to rule-comments@ Proposed Rule Change To Amend its
not impose a burden on competition
sec.gov. Please include File Number SR–
daltland on DSKBBV9HB2PROD with NOTICES
because the Exchange’s execution Price List
BX–2018–018 on the subject line.
services are completely voluntary and May 14, 2018.
subject to extensive competition both Paper Comments
Pursuant to Section 19(b)(1) 1 of the
10 Id. at 539 (quoting Securities Exchange Act
• Send paper comments in triplicate Securities Exchange Act of 1934 (the
Release No. 59039 (December 2, 2008), 73 FR to Secretary, Securities and Exchange
12 17 CFR 200.30–3(a)(12).
74770, 74782–83 (December 9, 2008) (SR–
NYSEArca–2006–21)). 11 15 U.S.C. 78s(b)(3)(A)(ii). 1 15 U.S.C.78s(b)(1).
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![Federal Register / Vol. 83, No. 97 / Friday, May 18, 2018 / Notices 23315
• $100.00 if the DMM quotes at least providing liquidity that is more than Security would instead receive an
15% and up to 40% of the time in the 15% of the NYSE’s total intraday adding Optional Credit of $0.0041 per share if
applicable month. liquidity in each such security for that the quoting requirements are met.
The Exchange proposes to amend the month, and (3) the DMMs quotes at the Finally, DMMs are currently eligible
current DMM rebates to reflect the NBBO in the applicable security at least for a rebate of $0.0015 per share when
proposed corresponding lower Optional 30% of the time in the applicable adding liquidity in shares of Less Active
Credits for DMMs that elect for the month. The Exchange proposes that
Securities if the Less Active Security
Rebate per Security, as follows. DMMs electing the optional Rebate per
has a stock price of $1.00 or more and
Security would instead receive an
More Active Securities the DMM does not meet the Less Active
Optional Credit of $0.0033 per share if
Currently, DMMs earn a rebate of the quoting and providing requirements Securities Quoting Requirement in the
$0.0027 per share when adding liquidity are met. applicable security in the applicable
with orders, other than Mid-Point DMMs currently earn a $0.0035 per month. The Exchange proposes to move
Liquidity Orders (‘‘MPL Order’’), in share when adding liquidity with this rate from its current position in the
More Active Securities if the More orders, other than MPL Orders, in More Price List to directly following the
Active Security has a stock price of Active Securities if the More Active rebate described in the previous
$1.00 or more and the DMM meets the Security has a stock price of $1.00 or paragraph and proposes that DMMs
More Active Securities Quoting more and the DMM meets (1) the More electing the optional Rebate per Security
Requirement and has a DMM Quoted Active Securities Quoting Requirement, would instead receive an Optional
Size for an applicable month that is at (2) has a DMM Quoted Size for an Credit of $0.0011 per share if the
least 5% of the NYSE Quoted Size,10 applicable month that is at least 25% of quoting requirements are met.
unless the more favorable rates set forth the NYSE Quoted Size, for providing NYSE CSII Fee Cap
below in the Price List apply. The liquidity that is more than 15% of the
Exchange proposes that DMMs electing NYSE’s total intraday adding liquidity Currently, the Exchange charges a fee
the optional Rebate per Security would in each such security for that month, of $0.0004 per share (both sides) for
instead receive an Optional Credit of and (3) the DMMs quotes at the NBBO executions in NYSE CSII.11 Fees for
$0.0026 per share if the quoting in the applicable security at least 50% executions in CSII are capped at
requirements are met. of the time in the applicable month. The $100,000 [sic] per month per member
Currently, DMMs earn a rebate of Exchange proposes that DMMs electing organization. The Exchange proposes an
$0.0031 per share when adding liquidity the optional Rebate per Security would alternative, lower cap of $25,000 per
with orders, other than MPL Orders, in instead receive an Optional Credit of month per member organization for
More Active Securities if the More $0.0034 per share if the quoting and member organizations that execute a
Active Security has a stock price of providing requirements are met. Taking ADV, excluding liquidity taken
$1.00 or more and the DMM meets (1) DMMs currently earn a rebate of by a DMM, of at least 1.30% of NYSE
the More Active Securities Quoting $0.0015 per share when adding liquidity
CADV and Open ADV of at least 8
Requirement, (2) has a DMM Quoted with orders, other than MPL orders, in
million shares. The $0.0004 per share
Size for an applicable month that is at More Active Securities if the More
fee for executions in NYSE CSII would
least 10% of the NYSE Quoted Size, and Active Security has a stock price of
remain unchanged.
(3) the DMM quotes at the NBBO in the $1.00 or more and the DMM does not
applicable security at least 20% of the meet the More Active Securities Proposed Changes to Fees and Credits
time in the applicable month and for Quoting in the applicable month. The for UTP Securities
Exchange proposes that DMMs electing
providing liquidity that is more than 5% On April 9, 2018, the Exchange began
the optional Rebate per Security would
of the NYSE’s total intraday adding trading UTP Securities on the Exchange
instead receive an Optional Credit of
liquidity in each such security for that on the Pillar trading platform.12 The
$0.0014 per share if the quoting
month. The Exchange proposes that Exchange proposes the following
requirements are met.
DMMs electing the optional Rebate per DMMs are currently eligible for a changes to the fees and credits for UTP
Security would instead receive an rebate of $0.0035 per share when adding Securities.
Optional Credit of $0.0030 per share if liquidity with orders, other than MPL
the quoting and providing requirements orders, in Less Active Securities if the Retail Credit
are met. Less Active Security has a stock price of
Similarly, DMMs currently earn a For securities priced at or above
$1.00 or more and the DMM meets the $1.00, the Exchange proposes a rebate of
rebate of $0.0034 per share when adding Less Active Securities Quoting in the
liquidity with orders, other than MPL $0.0030 per share for UTP executions in
applicable month. The Exchange orders designated as ‘‘retail’’ 13 that add
Orders, in More Active Securities if the proposes that DMMs electing the
More Active Security has a stock price liquidity to the Exchange.
optional Rebate per Security would
of $1.00 or more and the DMM meets (1) instead receive an Optional Credit of
the More Active Securities Quoting $0.0031 per share if the quoting
11 CSII runs on the Exchange from 4:00 p.m. to
Requirement, (2) has a DMM Quoted 6:30 p.m. Eastern Time and handles member
requirements are met. organization crosses of baskets of securities of
Size for an applicable month that is at DMMs are currently eligible for a aggregate-priced buy and sell orders. See NYSE
least 15% of the NYSE Quoted Size, for rebate of $0.0045 per share when adding Rules 900–907.
12 See Securities Exchange Act Release No.82945
liquidity with orders, other than MPL
daltland on DSKBBV9HB2PROD with NOTICES
10 The ‘‘NYSE Quoted Size’’ is calculated by (March 26, 2018), 83 FR 13553 (March 29, 2018)
multiplying the average number of shares quoted on
orders, in Less Active Securities if the (SR–NYSE–2017–36) (the ‘‘UTP Trading Rules
the NYSE at the NBBO by the percentage of time Less Active Security has a stock price of Filing’’). The term ‘‘UTP Security’’ means a security
the NYSE had a quote posted at the NBBO. The $1.00 or more and the DMM quotes at that is listed on a national securities exchange other
‘‘DMM Quoted Size’’ is calculated by multiplying the NBBO in the applicable security at than the Exchange and that trades on the Exchange
the average number of shares of the applicable pursuant to unlisted trading privileges. See Rule
security quoted at the NBBO by the DMM by the
least 30% of the time in the applicable 1.1(ii).
percentage of time during which the DMM quoted month. The Exchange proposes that 13 Orders designated as ‘‘retail’’ are orders that
at the NBBO. See Price List, n. 7. DMMs electing the optional Rebate per satisfy the Retail Modifier requirements of Rule 13.
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![23318 Federal Register / Vol. 83, No. 97 / Friday, May 18, 2018 / Notices
filing also will be available for II. Self-Regulatory Organization’s Chapter VI, Section 18(a)(2) by adding
inspection and copying at the principal Statement of the Purpose of, and an additional sentence stating, ‘‘Market
office of the Exchange. All comments Statutory Basis for, the Proposed Rule Order Spread Protection shall not apply
received will be posted without change. Change to the Opening Process and during a
Persons submitting comments are In its filing with the Commission, the halt.’’ Today, the Market Order Spread
cautioned that we do not redact or edit Exchange included statements Protection does not apply during the
personal identifying information from concerning the purpose of and basis for Opening Process and during a trading
comment submissions. You should the proposed rule change and discussed halt. The Exchange is adding this
submit only information that you wish any comments it received on the additional specificity to the rule to make
to make available publicly. All proposed rule change. The text of these clear when the protection is operative.
submissions should refer to File statements may be examined at the Both the Opening Process and trading
Number SR–NYSE–2018–21 and should places specified in Item IV below. The halts have the same or more restrictive
be submitted on or before June 8, 2018. Exchange has prepared summaries, set boundaries as those proposed for the
For the Commission, by the Division of forth in sections A, B, and C below, of Market Order Spread Protection. With
Trading and Markets, pursuant to delegated the most significant aspects of such respect to the Opening Process, a Valid
authority.22 statements. Width National Best Bid or Offer is
Eduardo A. Aleman, required. A Valid Width National Best
A. Self-Regulatory Organization’s Bid or Offer’’ or ‘‘Valid Width NBBO’’
Assistant Secretary.
Statement of the Purpose of, and shall mean the combination of all away
[FR Doc. 2018–10606 Filed 5–17–18; 8:45 am]
Statutory Basis for, the Proposed Rule market quotes and any combination of
BILLING CODE 8011–01–P
Change NOM-registered Market Maker orders
1. Purpose and quotes received over the OTTO or
SECURITIES AND EXCHANGE SQF Protocols within a specified bid/
The purpose of the proposed rule ask differential as established and
COMMISSION change is to amend Chapter VI, Section published by the Exchange.3 The Valid
18, entitled, ‘‘Order Price Protection’’ to Width NBBO is configurable by
[Release No. 34–83228; File No. SR– ‘‘Risk Protections’’ and relocate all the underlying, and tables with valid width
NASDAQ–2018–037] order protections into a single rule and differentials are posted by Nasdaq on its
categorize them as either order website.4 The Exchange’s threshold for
Self-Regulatory Organizations; The protections, order and quote protections
Nasdaq Stock Market LLC; Notice of the Market Order Spread Protection is
or market maker protections. The currently set at $5.5 Today, the
Filing and Immediate Effectiveness of Exchange believes that placing all the
Proposed Rule Change To Amend the maximum bid/ask differentials are more
order protections into a single rule will restrictive for both Penny and Non-
Market Order Spread Protection provide market participants with Penny issues that are not LEAPS 6 (up to
May 14, 2018. information as to the availability of $2.00 and $2.25, respectively, for the
Pursuant to Section 19(b)(1) of the these protections, which are all bid/ask differentials). The maximum
Securities Exchange Act of 1934 mandatory. The Exchange also proposes bid/ask differentials are equal to or more
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 to amend the Market Order Spread restrictive for both Penny and Non-
notice is hereby given that on April 30, Protection and Acceptable Trade Range Penny issues that are LEAPS (up to a
2018, The Nasdaq Stock Market LLC Rules to add more specificity. $5.00 bid/ask differential.) The
(‘‘Nasdaq’’ or the ‘‘Exchange’’) filed with Universal Amendments Exchange believes that the Market Order
the Securities and Exchange Spread Protection is unnecessary during
The Exchange proposes to restructure
Commission (‘‘Commission’’) the the Opening Process because other
Chapter VI, Section 18 into three parts:
proposed rule change as described in protections are in place to ensure that
(1) Order protections; (2) order and
Items I and II below, which Items have the best bid and offer displayed on the
quote protections; and (3) market maker
been prepared by the Exchange. The Exchange are within a reasonable range.
protections. The Exchange proposes to
Commission is publishing this notice to As provided in Chapter V, Section 4
reletter and renumber the rule as well to
solicit comments on the proposed rule trading halts are subject to the
provide a more organized structure. The
change from interested persons. reopening process as provided for in
Exchange believes that categorizing the
Chapter VI, Section 8. The same
I. Self-Regulatory Organization’s various protections provides more
protections noted for the Opening
Statement of the Terms of Substance of information to market participants as to
Process above will apply for trading
the Proposed Rule Change each of the risk protections.
halts. The Exchange believes that the
The Exchange proposes a proposal to Order Price Protection Market Order Spread Protection is
amend the Market Order Spread The Exchange proposes only to 3 Away markets that are crossed will void all
Protection and reorganize Rule Chapter reorganize the rule by adding new Valid Width NBBO calculations. If any Market
VI, Section 18 entitled, ‘‘Order Price lettering and numbering to conform to Maker orders or quotes on NOM are crossed
Protections.’’ the remainder of the proposed rule, no internally, then all such orders and quotes will be
The text of the proposed rule change other amendments are being made to excluded from the Valid Width NBBO calculation.
See NOM Chapter VI, Section 8(a)(6).
is available on the Exchange’s website at Order Price Protection. 4 The table with the differentials is published on
http://nasdaq.cchwallstreet.com, at the
daltland on DSKBBV9HB2PROD with NOTICES
Market Order Spread Protection the Exchange’s website at: http://
principal office of the Exchange, and at www.nasdaqtrader.com/content/technicalsupport/
the Commission’s Public Reference The Exchange proposes to relocate the NOM_SystemSettings.pdf.
Room. Market Order Spread Protection rule 5 The current Market Order Spread Differential is
from Chapter VI, Section 6(c) into set at $5. The table in note 4 above notes the current
setting.
22 17 CFR 200.30–3(a)(12). Chapter VI, Section 18. The Exchange 6 LEAPS are option series with a time to
1 15 U.S.C. 78s(b)(1). also proposes to amend the Market expiration greater than nine (9) months. See
2 17 CFR 240.19b–4. Order Spread Protection at proposed Chapter VI, Section 8.
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Document Created: 2018-05-18 02:15:53
Document Modified: 2018-05-18 02:15:53
| 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 23313 |
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