83_FR_47411 83 FR 47230 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Price List To Amend the Threshold Levels and Rebate Amounts Payable Under the Liquidity Provider Incentive Program, and To Amend the Rebate Amount Payable Under the Agency Order Incentive Program

83 FR 47230 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Price List To Amend the Threshold Levels and Rebate Amounts Payable Under the Liquidity Provider Incentive Program, and To Amend the Rebate Amount Payable Under the Agency Order Incentive Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 181 (September 18, 2018)

Page Range47230-47232
FR Document2018-20195

Federal Register, Volume 83 Issue 181 (Tuesday, September 18, 2018)
[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Notices]
[Pages 47230-47232]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20195]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84100; File No. SR-NYSE-2018-39]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend Its Price List To Amend the Threshold Levels and Rebate 
Amounts Payable Under the Liquidity Provider Incentive Program, and To 
Amend the Rebate Amount Payable Under the Agency Order Incentive 
Program

September 12, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on August 31, 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 amend its Price List to amend the 
threshold levels and rebate amounts payable under the Liquidity 
Provider Incentive Program, and amend the rebate amount payable under 
the Agency Order Incentive Program. The Exchange proposes to implement 
the fee changes effective September 1, 2018. 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 amend the 
threshold levels and rebate amounts payable under the Liquidity 
Provider Incentive Program, and amend the rebate amount payable under 
the Agency Order Incentive Program. The Exchange proposes to implement 
the fee changes effective September 1, 2018.

Liquidity Provider Incentive Program

    Pursuant to the Liquidity Provider Incentive Program,\4\ a User \5\ 
can qualify for a daily rebate based on the number of qualifying CUSIPs 
\6\ on the NYSE Bonds Book for which a Unique User \7\ meets prescribed 
quoting requirements. The Exchange proposes to amend the threshold 
levels and rebate amounts payable under the Liquidity Provider 
Incentive Program to encourage participants to meet the quoting 
requirements in a greater number of CUSIPs.
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    \4\ See Securities Exchange Act Release Nos. 77591 (April 12, 
2016), 81 FR 22656(April 18, 2016) (SR-NYSE-2016-26); 77812 (May 11, 
2016), 81 FR 30594 (May 17, 2016) (SR-NYSE-2016-34); 79210 (November 
1, 2016), 81 FR 78213 (November 7, 2016) (SR-NYSE-2016-68); and 
80934 (June 15, 2017), 82 FR 28173 (June 20, 2017) (SR-NYSE-2017-
27).
    \5\ A User is any Member or Member Organization, Sponsored 
Participant, or Authorized Trader that is authorized to access NYSE 
Bonds. See Rule 86(b)(2)(M). For purposes of the Liquidity Provider 
Incentive Program, a User is a Member or Member Organization that is 
authorized to access NYSE Bonds.
    \6\ CUSIP stands for Committee on Uniform Securities 
Identification Procedures. A CUSIP number identifies most financial 
instruments, including: stocks of all registered U.S. and Canadian 
companies, commercial paper, and U.S. government and municipal 
bonds. The CUSIP system--owned by the American Bankers Association 
and managed by Standard & Poor's--facilitates the clearance and 
settlement process of securities. See http://www.sec.gov/answers/cusip.htm.
    \7\ For purposes of the Liquidity Provider Incentive Program, 
the term `Unique User' means a User, a trading desk of a User, or a 
customer of a User, on whose behalf a Member or Member Organization 
enters quotes or orders under a Unique User ID that such User 
requests from and is provided by the Exchange. See Securities 
Exchange Act Release No. 80934 (June 15, 2017), 82 FR 28173 (June 
20, 2017) (SR-NYSE-2017-27).
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    Currently, the daily rebate amount is tiered based on the number of 
qualifying CUSIPs that meet quoting requirements, as follows:

------------------------------------------------------------------------
               Number of qualifying CUSIPs                 Daily rebate
------------------------------------------------------------------------
400-599.................................................            $500

[[Page 47231]]

 
600-799.................................................           1,000
800 or more.............................................           1,500
------------------------------------------------------------------------

    The Exchange now proposes to amend the current tiers by: (1) 
Adjusting the third tier (800 or more CUSIPs) so that it becomes 800-
999 CUSIPs; and (2) adopting a new tier for 1000 or more CUSIPs with a 
corresponding daily rebate of $2,000. With the proposed changes to the 
tiers, the Exchange is attempting to strike the right balance between 
the number of qualifying CUSIPs and its corresponding rebate to ensure 
that the incentive program achieves its intended purpose of attracting 
liquidity in a greater number of CUSIPs to NYSE Bonds.
    With the proposed amended tiers, the CUSIP threshold and 
corresponding rebate would be as follows:

------------------------------------------------------------------------
               Number of qualifying CUSIPs                 Daily rebate
------------------------------------------------------------------------
400-599.................................................            $500
600-799.................................................           1,000
800-999.................................................           1,500
1,000 or more...........................................           2,000
------------------------------------------------------------------------

    The Exchange is not proposing any change to the Liquidity Provider 
Incentive Program other than to add an additional tier and a 
corresponding rebate for the new tier.

Agency Order Incentive Program

    Pursuant to the Agency Order Incentive Program,\8\ the Exchange 
currently provides a monthly rebate of $4,000 to a User that submits an 
average of 400 resting limit orders of any size per trading day during 
the month and that are submitted as Agency Orders \9\ by the User. In 
order to further incentivize Users to provide displayed liquidity on 
NYSE Bonds, the Exchange proposes to provide an increased monthly 
rebate of $10,000 to Users that meet the requirements of the incentive 
program. The proposed increased rebate would be applicable for a 
limited period of time, from September 2018 to December 2018. In the 
absence of a proposed rule change filed by the Exchange, the monthly 
rebate payable under the Agency Order Incentive Program would revert 
back to $4,000 per month beginning January 2019.
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    \8\ See Securities Exchange Act Release No. 82343 (December 18, 
2017), 82 FR 60782 (December 22, 2017) (SR-NYSE-2017-68).
    \9\ For purposes of the Agency Order Incentive Program, an 
Agency Order is any order submitted by a User that it represents as 
agent on NYSE Bonds. See Securities Exchange Act Release No. 82343 
(December 18, 2017), 82 FR 60782 (December 22, 2017).
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    The Exchange is not proposing any change to the Agency Order 
Incentive Program other than to change the amount of the rebate for a 
period of four months, from September 2018 to December 2018.
    The proposed rule change is intended to provide Users with a 
greater incentive to transact on NYSE Bonds.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in 
particular, because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities and does not unfairly discriminate 
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------

    The Exchange believes its proposed rebates pursuant to a tiered 
pricing structure is reasonable, equitable and non-discriminatory. The 
Exchange's proposal to add a new tier is reasonable as it is designed 
to encourage participants to provide liquidity in a greater number of 
CUSIPs on NYSE Bonds in order to benefit by receiving a larger daily 
rebate that was previously not available. The Exchange believes that 
with the proposed amended tiers, which provides for additional volume 
thresholds, Users that meet prescribed quoting requirements in a 
varying number of CUSIPs would qualify for rebates. The purpose of the 
Liquidity Provider Incentive Program is to incentivize Users to provide 
liquidity to the Exchange. In order to achieve that objective, the 
Exchange believes it is reasonable to amend the tiers and rebates 
payable under each tier to allow Users of varying levels of 
participation to qualify for the rebates payable under the incentive 
program. Volume-based rebates such as those maintained by the Exchange 
for NYSE Bonds are equitable because they are open to all Users on an 
equal basis and provide additional benefits that are reasonably related 
to the value of an exchange's market quality. The proposed modification 
to the tiers and the proposed addition of a new tier is each intended 
to incentivize Users to provide liquidity in a greater number of CUSIPs 
on NYSE Bonds in an effort to qualify for the enhanced rebate made 
available by the tiers.
    The Exchange believes that by providing Users with the ability to 
earn increased rebates, the Exchange is rewarding aggressive liquidity 
providers in the market, and by doing so, the Exchange will encourage 
the additional utilization of, and interaction with, the NYSE Bonds 
platform and provide customers with the premier venue for price 
discovery, liquidity, and competitive quotes.
    The Exchange further believes that the rebate currently in place is 
reasonable because it is designed to give Users who meet quoting 
requirements in a minimum of 400 CUSIPs a benefit by way of a daily 
rebate. The Exchange also believes that the Liquidity Provider 
Incentive Program is equitable and not unfairly discriminatory because 
it would uniformly apply to all Users that trade bonds on NYSE Bonds.
    The Exchange believes it is reasonable and equitable to adopt an 
increased rebate payable to Users under the Agency Order Incentive 
Program in order to incentivize Users to submit Agency Orders to the 
Exchange. This in turn would provide NYSE Bonds with potential new 
order flow and liquidity providers as it continues to grow its 
marketplace. The Exchange believes it is reasonable and equitable to 
adopt an increased rebate for a limited period of time as an incentive 
for Users to submit an increased number of Agency Orders to qualify for 
the increased rebate, and at the same time to encourage Users that do 
not participate in the Agency Order Incentive Program to begin to do so 
during the period of time during which the Exchange would pay the 
additional $6,000 per month. The Agency Order Incentive Program targets 
a particular segment in which the Exchange seeks to attract greater 
order flow and the Exchange believes the proposed increase to the 
monthly rebate for the remainder of this year should incentivize Users 
sufficiently to try to qualify for the rebate.
    The Exchange believes the proposed rule change would provide an 
incentive for Users to provide additional liquidity to the market and 
add competition to the existing group of liquidity providers. The 
Exchange does not expect the revenues it forgoes as a result of the 
proposal to negatively affect its ability to conduct its regulatory 
program.
    Finally, the Exchange believes that the proposed rule change is not 
unfairly discriminatory in that it would apply uniformly to all Users 
accessing NYSE Bonds. All similarly situated Users would be subject to 
the increased rebate, and each User would have the ability to determine 
the extent to which the Exchange's proposed rebate will provide it with 
an economic incentive to use NYSE Bonds, and model its business 
accordingly.

[[Page 47232]]

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

    In accordance with Section 6(b)(8) of the Act,\12\ 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. Debt securities typically trade in a decentralized 
OTC dealer market that is less liquid and transparent than the equities 
markets. The Exchange believes that the proposed change would increase 
competition with these OTC venues by creating additional incentives to 
engage in bonds transactions on the Exchange and rewarding market 
participants for actively quoting and providing liquidity in the only 
transparent bond market, which the Exchange believes will enhance 
market quality.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues that 
are not transparent. In such an environment, the Exchange must 
continually review, and consider adjusting its fees and rebates to 
remain competitive with other exchanges as well as with alternative 
trading systems and other venues that are not required to comply 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 change 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) \13\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \14\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 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 No. SR-NYSE-2018-39 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 No. SR-NYSE-2018-39. 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 No. SR-NYSE-2018-39, and should be submitted on or 
before October 9, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20195 Filed 9-17-18; 8:45 am]
BILLING CODE 8011-01-P



                                               47230                     Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices

                                               has promulgated Regulation 14A to                       SECURITIES AND EXCHANGE                               of the most significant parts of such
                                               regulate the solicitation of proxies or                 COMMISSION                                            statements.
                                               consents. Regulation 14A (Exchange Act                                                                        A. Self-Regulatory Organization’s
                                                                                                       [Release No. 34–84100; File No. SR–NYSE–
                                               Rules 14a–1 through 14a–21 and                          2018–39]                                              Statement of the Purpose of, and the
                                               Schedule 14A) (17 CFR 240.14a–1                                                                               Statutory Basis for, the Proposed Rule
                                               through 240.14a–21 and 240.14a–101)                     Self-Regulatory Organizations; New                    Change
                                               sets forth the requirements for the                     York Stock Exchange LLC; Notice of
                                               dissemination, content and filing of                    Filing and Immediate Effectiveness of                 1. Purpose
                                               proxy or consent solicitation materials                 a Proposed Rule Change To Amend Its                      The Exchange proposes to amend its
                                               in connection with annual or other                      Price List To Amend the Threshold                     Price List to amend the threshold levels
                                               meetings of holders of a Section 12-                    Levels and Rebate Amounts Payable                     and rebate amounts payable under the
                                               registered class of securities. We                      Under the Liquidity Provider Incentive                Liquidity Provider Incentive Program,
                                               estimate that Schedule 14A takes                        Program, and To Amend the Rebate                      and amend the rebate amount payable
                                               approximately 130.4052 hours per                        Amount Payable Under the Agency                       under the Agency Order Incentive
                                               response and will be filed by                           Order Incentive Program                               Program. The Exchange proposes to
                                               approximately 5,586 issuers annually.                                                                         implement the fee changes effective
                                                                                                       September 12, 2018.                                   September 1, 2018.
                                               In addition, we estimate that 75% of the                   Pursuant to Section 19(b)(1) 1 of the
                                               130.4052 hours per response (97.8035                    Securities Exchange Act of 1934 (the                  Liquidity Provider Incentive Program
                                               hours) is prepared by the issuer for an                 ‘‘Act’’) 2 and Rule 19b–4 thereunder,3                   Pursuant to the Liquidity Provider
                                               annual reporting burden of 546,333                      notice is hereby given that, on August                Incentive Program,4 a User 5 can qualify
                                               hours (97.89 hours per response × 5,586                 31, 2018, New York Stock Exchange                     for a daily rebate based on the number
                                               responses).                                             LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed              of qualifying CUSIPs 6 on the NYSE
                                                  Written comments are invited on: (a)                 with the Securities and Exchange                      Bonds Book for which a Unique User 7
                                               Whether this collection of information                  Commission (the ‘‘Commission’’) the                   meets prescribed quoting requirements.
                                               is necessary for the proper performance                 proposed rule change as described in                  The Exchange proposes to amend the
                                                                                                       Items I, II, and III below, which Items               threshold levels and rebate amounts
                                               of the functions of the agency, including
                                                                                                       have been prepared by the self-                       payable under the Liquidity Provider
                                               whether the information will have
                                                                                                       regulatory organization. The                          Incentive Program to encourage
                                               practical utility; (b) the accuracy of the
                                                                                                       Commission is publishing this notice to               participants to meet the quoting
                                               agency’s estimate of the burden imposed                 solicit comments on the proposed rule                 requirements in a greater number of
                                               by the collection of information; (c)                   change from interested persons.                       CUSIPs.
                                               ways to enhance the quality, utility, and                                                                        Currently, the daily rebate amount is
                                               clarity of the information collected; and               I. Self-Regulatory Organization’s                     tiered based on the number of qualifying
                                               (d) ways to minimize the burden of the                  Statement of the Terms of Substance of                CUSIPs that meet quoting requirements,
                                               collection of information on                            the Proposed Rule Change                              as follows:
                                               respondents, including through the use                     The Exchange proposes to amend its
                                               of automated collection techniques or                   Price List to amend the threshold levels              Number of qualifying CUSIPs                Daily rebate
                                               other forms of information technology.                  and rebate amounts payable under the
                                                                                                       Liquidity Provider Incentive Program,                 400–599 ................................           $500
                                               Consideration will be given to
                                               comments and suggestions submitted in                   and amend the rebate amount payable
                                                                                                                                                                4 See Securities Exchange Act Release Nos. 77591
                                               writing within 60 days of this                          under the Agency Order Incentive                      (April 12, 2016), 81 FR 22656(April 18, 2016) (SR–
                                               publication.                                            Program. The Exchange proposes to                     NYSE–2016–26); 77812 (May 11, 2016), 81 FR
                                                                                                       implement the fee changes effective                   30594 (May 17, 2016) (SR–NYSE–2016–34); 79210
                                                  An agency may not conduct or                         September 1, 2018. The proposed rule                  (November 1, 2016), 81 FR 78213 (November 7,
                                               sponsor, and a person is not required to                change is available on the Exchange’s                 2016) (SR–NYSE–2016–68); and 80934 (June 15,
                                               respond to, a collection of information                                                                       2017), 82 FR 28173 (June 20, 2017) (SR–NYSE–
                                                                                                       website at www.nyse.com, at the                       2017–27).
                                               unless it displays a currently valid                    principal office of the Exchange, and at                 5 A User is any Member or Member Organization,

                                               control number.                                         the Commission’s Public Reference                     Sponsored Participant, or Authorized Trader that is
                                                                                                                                                             authorized to access NYSE Bonds. See Rule
                                                  Please direct your written comments                  Room.                                                 86(b)(2)(M). For purposes of the Liquidity Provider
                                               to Pamela Dyson, Director/Chief                         II. Self-Regulatory Organization’s                    Incentive Program, a User is a Member or Member
                                               Information Officer, Securities and                                                                           Organization that is authorized to access NYSE
                                                                                                       Statement of the Purpose of, and                      Bonds.
                                               Exchange Commission, c/o Candace                        Statutory Basis for, the Proposed Rule                   6 CUSIP stands for Committee on Uniform
                                               Kenner, 100 F Street NE, Washington,                    Change                                                Securities Identification Procedures. A CUSIP
                                               DC 20549 or send an email to: PRA_                                                                            number identifies most financial instruments,
                                                                                                          In its filing with the Commission, the             including: stocks of all registered U.S. and
                                               Mailbox@sec.gov.
                                                                                                       self-regulatory organization included                 Canadian companies, commercial paper, and U.S.
                                                 Dated: September 12, 2018.                                                                                  government and municipal bonds. The CUSIP
                                                                                                       statements concerning the purpose of,                 system—owned by the American Bankers
                                               Eduardo A. Aleman,                                      and basis for, the proposed rule change               Association and managed by Standard & Poor’s—
                                               Assistant Secretary.                                    and discussed any comments it received                facilitates the clearance and settlement process of
                                                                                                       on the proposed rule change. The text                 securities. See http://www.sec.gov/answers/
                                               [FR Doc. 2018–20280 Filed 9–17–18; 8:45 am]                                                                   cusip.htm.
                                                                                                       of those statements may be examined at
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                                7 For purposes of the Liquidity Provider Incentive
                                               BILLING CODE 8011–01–P
                                                                                                       the places specified in Item IV below.                Program, the term ‘Unique User’ means a User, a
                                                                                                       The Exchange has prepared summaries,                  trading desk of a User, or a customer of a User, on
                                                                                                       set forth in sections A, B, and C below,              whose behalf a Member or Member Organization
                                                                                                                                                             enters quotes or orders under a Unique User ID that
                                                                                                                                                             such User requests from and is provided by the
                                                                                                         1 15 U.S.C.78s(b)(1).                               Exchange. See Securities Exchange Act Release No.
                                                                                                         2 15 U.S.C. 78a.                                    80934 (June 15, 2017), 82 FR 28173 (June 20, 2017)
                                                                                                         3 17 CFR 240.19b–4.                                 (SR–NYSE–2017–27).



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                                                                               Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices                                                47231

                                               Number of qualifying CUSIPs                Daily rebate        The Exchange is not proposing any                         in the market, and by doing so, the
                                                                                                            change to the Agency Order Incentive                        Exchange will encourage the additional
                                               600–799 ................................            1,000    Program other than to change the                            utilization of, and interaction with, the
                                               800 or more ..........................              1,500    amount of the rebate for a period of four                   NYSE Bonds platform and provide
                                                                                                            months, from September 2018 to                              customers with the premier venue for
                                                  The Exchange now proposes to amend                        December 2018.                                              price discovery, liquidity, and
                                               the current tiers by: (1) Adjusting the                        The proposed rule change is intended                      competitive quotes.
                                               third tier (800 or more CUSIPs) so that                      to provide Users with a greater incentive                      The Exchange further believes that the
                                               it becomes 800–999 CUSIPs; and (2)                           to transact on NYSE Bonds.                                  rebate currently in place is reasonable
                                               adopting a new tier for 1000 or more                   2. Statutory Basis                                                because it is designed to give Users who
                                               CUSIPs with a corresponding daily                                                                                        meet quoting requirements in a
                                               rebate of $2,000. With the proposed                       The Exchange believes that the                                 minimum of 400 CUSIPs a benefit by
                                               changes to the tiers, the Exchange is                  proposed rule change is consistent with                           way of a daily rebate. The Exchange also
                                               attempting to strike the right balance                 Section 6(b) of the Act,10 in general, and                        believes that the Liquidity Provider
                                               between the number of qualifying                       furthers the objectives of Sections                               Incentive Program is equitable and not
                                               CUSIPs and its corresponding rebate to                 6(b)(4) and 6(b)(5) of the Act,11 in                              unfairly discriminatory because it
                                               ensure that the incentive program                      particular, because it provides for the                           would uniformly apply to all Users that
                                               achieves its intended purpose of                       equitable allocation of reasonable dues,                          trade bonds on NYSE Bonds.
                                               attracting liquidity in a greater number               fees, and other charges among its                                    The Exchange believes it is reasonable
                                               of CUSIPs to NYSE Bonds.                               members, issuers and other persons                                and equitable to adopt an increased
                                                                                                      using its facilities and does not unfairly                        rebate payable to Users under the
                                                  With the proposed amended tiers, the
                                                                                                      discriminate between customers,                                   Agency Order Incentive Program in
                                               CUSIP threshold and corresponding
                                                                                                      issuers, brokers or dealers.
                                               rebate would be as follows:                                                                                              order to incentivize Users to submit
                                                                                                         The Exchange believes its proposed
                                                                                                                                                                        Agency Orders to the Exchange. This in
                                                                                                      rebates pursuant to a tiered pricing
                                               Number of qualifying CUSIPs              Daily rebate
                                                                                                      structure is reasonable, equitable and                            turn would provide NYSE Bonds with
                                                                                                                                                                        potential new order flow and liquidity
                                               400–599 ................................          $500 non-discriminatory. The Exchange’s                                providers as it continues to grow its
                                               600–799 ................................         1,000 proposal to add a new tier is reasonable
                                                                                                                                                                        marketplace. The Exchange believes it is
                                               800–999 ................................         1,500 as it is designed to encourage
                                               1,000 or more .......................            2,000 participants to provide liquidity in a                            reasonable and equitable to adopt an
                                                                                                      greater number of CUSIPs on NYSE                                  increased rebate for a limited period of
                                                                                                      Bonds in order to benefit by receiving a                          time as an incentive for Users to submit
                                                  The Exchange is not proposing any
                                                                                                      larger daily rebate that was previously                           an increased number of Agency Orders
                                               change to the Liquidity Provider
                                                                                                      not available. The Exchange believes                              to qualify for the increased rebate, and
                                               Incentive Program other than to add an
                                                                                                      that with the proposed amended tiers,                             at the same time to encourage Users that
                                               additional tier and a corresponding
                                                                                                      which provides for additional volume                              do not participate in the Agency Order
                                               rebate for the new tier.
                                                                                                      thresholds, Users that meet prescribed                            Incentive Program to begin to do so
                                               Agency Order Incentive Program                         quoting requirements in a varying                                 during the period of time during which
                                                                                                      number of CUSIPs would qualify for                                the Exchange would pay the additional
                                                  Pursuant to the Agency Order
                                                                                                      rebates. The purpose of the Liquidity                             $6,000 per month. The Agency Order
                                               Incentive Program,8 the Exchange
                                                                                                      Provider Incentive Program is to                                  Incentive Program targets a particular
                                               currently provides a monthly rebate of
                                                                                                                                                                        segment in which the Exchange seeks to
                                               $4,000 to a User that submits an average incentivize Users to provide liquidity to
                                                                                                      the Exchange. In order to achieve that                            attract greater order flow and the
                                               of 400 resting limit orders of any size
                                                                                                      objective, the Exchange believes it is                            Exchange believes the proposed
                                               per trading day during the month and
                                                                                                                                                                        increase to the monthly rebate for the
                                               that are submitted as Agency Orders 9 by reasonable to amend the tiers and
                                                                                                      rebates payable under each tier to allow                          remainder of this year should
                                               the User. In order to further incentivize
                                                                                                      Users of varying levels of participation                          incentivize Users sufficiently to try to
                                               Users to provide displayed liquidity on
                                                                                                      to qualify for the rebates payable under                          qualify for the rebate.
                                               NYSE Bonds, the Exchange proposes to
                                                                                                      the incentive program. Volume-based                                  The Exchange believes the proposed
                                               provide an increased monthly rebate of
                                                                                                      rebates such as those maintained by the                           rule change would provide an incentive
                                               $10,000 to Users that meet the
                                                                                                      Exchange for NYSE Bonds are equitable                             for Users to provide additional liquidity
                                               requirements of the incentive program.
                                                                                                                                                                        to the market and add competition to
                                               The proposed increased rebate would be because they are open to all Users on an
                                                                                                      equal basis and provide additional                                the existing group of liquidity providers.
                                               applicable for a limited period of time,
                                                                                                                                                                        The Exchange does not expect the
                                               from September 2018 to December 2018. benefits that are reasonably related to
                                                                                                                                                                        revenues it forgoes as a result of the
                                               In the absence of a proposed rule change the value of an exchange’s market
                                                                                                      quality. The proposed modification to                             proposal to negatively affect its ability
                                               filed by the Exchange, the monthly
                                                                                                      the tiers and the proposed addition of a                          to conduct its regulatory program.
                                               rebate payable under the Agency Order
                                                                                                      new tier is each intended to incentivize                             Finally, the Exchange believes that
                                               Incentive Program would revert back to
                                                                                                      Users to provide liquidity in a greater                           the proposed rule change is not unfairly
                                               $4,000 per month beginning January
                                                                                                      number of CUSIPs on NYSE Bonds in an                              discriminatory in that it would apply
                                               2019.
                                                                                                      effort to qualify for the enhanced rebate                         uniformly to all Users accessing NYSE
                                                                                                      made available by the tiers.                                      Bonds. All similarly situated Users
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                                                 8 See Securities Exchange Act Release No. 82343
                                                                                                         The Exchange believes that by                                  would be subject to the increased rebate,
                                               (December 18, 2017), 82 FR 60782 (December 22,
                                               2017) (SR–NYSE–2017–68).                               providing Users with the ability to earn                          and each User would have the ability to
                                                 9 For purposes of the Agency Order Incentive
                                                                                                      increased rebates, the Exchange is                                determine the extent to which the
                                               Program, an Agency Order is any order submitted
                                                                                                      rewarding aggressive liquidity providers                          Exchange’s proposed rebate will provide
                                               by a User that it represents as agent on NYSE                                                                            it with an economic incentive to use
                                               Bonds. See Securities Exchange Act Release No.
                                               82343 (December 18, 2017), 82 FR 60782 (December               10 15   U.S.C. 78f(b).                                    NYSE Bonds, and model its business
                                               22, 2017).                                                     11 15   U.S.C. 78f(b)(4), (5).                            accordingly.


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                                               47232                        Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices

                                               B. Self-Regulatory Organization’s                          subparagraph (f)(2) of Rule 19b–4 14                   Washington, DC 20549, on official
                                               Statement on Burden on Competition                         thereunder, because it establishes a due,              business days between the hours of
                                                  In accordance with Section 6(b)(8) of                   fee, or other charge imposed by the                    10:00 a.m. and 3:00 p.m. Copies of the
                                               the Act,12 the Exchange believes that the                  Exchange.                                              filing also will be available for
                                                                                                             At any time within 60 days of the                   inspection and copying at the principal
                                               proposed rule change would not impose
                                                                                                          filing of such proposed rule change, the               office of the Exchange. All comments
                                               any burden on competition that is not
                                                                                                          Commission summarily may                               received will be posted without change.
                                               necessary or appropriate in furtherance
                                                                                                          temporarily suspend such rule change if                Persons submitting comments are
                                               of the purposes of the Act. Debt
                                                                                                          it appears to the Commission that such                 cautioned that we do not redact or edit
                                               securities typically trade in a
                                                                                                          action is necessary or appropriate in the              personal identifying information from
                                               decentralized OTC dealer market that is
                                                                                                          public interest, for the protection of                 comment submissions. You should
                                               less liquid and transparent than the
                                                                                                          investors, or otherwise in furtherance of              submit only information that you wish
                                               equities markets. The Exchange believes
                                                                                                          the purposes of the Act. If the                        to make available publicly. All
                                               that the proposed change would
                                                                                                          Commission takes such action, the                      submissions should refer to File No.
                                               increase competition with these OTC
                                                                                                          Commission shall institute proceedings                 SR–NYSE–2018–39, and should be
                                               venues by creating additional incentives
                                                                                                          under Section 19(b)(2)(B) 15 of the Act to             submitted on or before October 9, 2018.
                                               to engage in bonds transactions on the
                                                                                                          determine whether the proposed rule                      For the Commission, by the Division of
                                               Exchange and rewarding market
                                                                                                          change should be approved or                           Trading and Markets, pursuant to delegated
                                               participants for actively quoting and
                                                                                                          disapproved.                                           authority.16
                                               providing liquidity in the only
                                                                                                                                                                 Eduardo A. Aleman,
                                               transparent bond market, which the                         IV. Solicitation of Comments
                                               Exchange believes will enhance market                                                                             Assistant Secretary.
                                                                                                            Interested persons are invited to                    [FR Doc. 2018–20195 Filed 9–17–18; 8:45 am]
                                               quality.                                                   submit written data, views, and
                                                  The Exchange notes that it operates in                  arguments concerning the foregoing,
                                                                                                                                                                 BILLING CODE 8011–01–P
                                               a highly competitive market in which                       including whether the proposed rule
                                               market participants can readily favor                      change is consistent with the Act.
                                               competing venues that are not                                                                                     SECURITIES AND EXCHANGE
                                                                                                          Comments may be submitted by any of                    COMMISSION
                                               transparent. In such an environment,                       the following methods:
                                               the Exchange must continually review,                                                                             [Release No. 34–84099; File No. SR–
                                               and consider adjusting its fees and                        Electronic Comments                                    NYSEARCA–2018–64]
                                               rebates to remain competitive with other                     • Use the Commission’s internet
                                               exchanges as well as with alternative                      comment form (http://www.sec.gov/                      Self-Regulatory Organizations; NYSE
                                               trading systems and other venues that                      rules/sro.shtml); or                                   Arca, Inc.; Notice of Filing and
                                               are not required to comply with the                          • Send an email to rule-comments@                    Immediate Effectiveness of Proposed
                                               statutory standards applicable to                          sec.gov. Please include File No. SR–                   Rule Change To Modify the NYSE Arca
                                               exchanges. Because competitors are free                    NYSE–2018–39 on the subject line.                      Options Fee Schedule
                                               to modify their own fees and credits in                                                                           September 12, 2018.
                                                                                                          Paper Comments
                                               response, and because market                                                                                         Pursuant to Section 19(b)(1) 1 of the
                                               participants may readily adjust their                         • Send paper comments in triplicate
                                                                                                                                                                 Securities Exchange Act of 1934 (the
                                               order routing practices, the Exchange                      to Secretary, Securities and Exchange
                                                                                                                                                                 ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                               believes that the degree to which fee                      Commission, 100 F Street NE,
                                                                                                                                                                 notice is hereby given that, on August
                                               changes in this market may impose any                      Washington, DC 20549–1090.
                                                                                                                                                                 29, 2018, NYSE Arca, Inc. (the
                                               burden on competition is extremely                         All submissions should refer to File No.               ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
                                               limited. As a result of all of these                       SR–NYSE–2018–39. This file number                      the Securities and Exchange
                                               considerations, the Exchange does not                      should be included on the subject line                 Commission (the ‘‘Commission’’) the
                                               believe that the proposed change will                      if email is used. To help the                          proposed rule change as described in
                                               impair the ability of member                               Commission process and review your                     Items I, II, and III below, which Items
                                               organizations or competing order                           comments more efficiently, please use                  have been prepared by the self-
                                               execution venues to maintain their                         only one method. The Commission will                   regulatory organization. The
                                               competitive standing in the financial                      post all comments on the Commission’s                  Commission is publishing this notice to
                                               markets.                                                   internet website (http://www.sec.gov/                  solicit comments on the proposed rule
                                                                                                          rules/sro.shtml). Copies of the                        change from interested persons.
                                               C. Self-Regulatory Organization’s
                                                                                                          submission, all subsequent
                                               Statement on Comments on the                                                                                      I. Self-Regulatory Organization’s
                                                                                                          amendments, all written statements
                                               Proposed Rule Change Received From                                                                                Statement of the Terms of Substance of
                                                                                                          with respect to the proposed rule
                                               Members, Participants, or Others                                                                                  the Proposed Rule Change
                                                                                                          change that are filed with the
                                                 No written comments were solicited                       Commission, and all written                               The Exchange proposes to modify the
                                               or received with respect to the proposed                   communications relating to the                         NYSE Arca Options Fee Schedule (‘‘Fee
                                               rule change.                                               proposed rule change between the                       Schedule’’). The Exchange proposes to
                                               III. Date of Effectiveness of the                          Commission and any person, other than                  implement the fee change effective
                                               Proposed Rule Change and Timing for                        those that may be withheld from the                    September 1, 2018. The proposed rule
                                                                                                          public in accordance with the                          change is available on the Exchange’s
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                                               Commission Action
                                                                                                          provisions of 5 U.S.C. 552, will be                    website at www.nyse.com, at the
                                                 The foregoing rule change is effective                   available for website viewing and                      principal office of the Exchange, and at
                                               upon filing pursuant to Section                            printing in the Commission’s Public
                                               19(b)(3)(A) 13 of the Act and                              Reference Room, 100 F Street NE,                         16 17 CFR 200.30–3(a)(12).
                                                                                                                                                                   1 15 U.S.C. 78s(b)(1).
                                                 12 15   U.S.C. 78f(b)(8).                                  14 17   CFR 240.19b–4(f)(2).                           2 15 U.S.C. 78a.
                                                 13 15   U.S.C. 78s(b)(3)(A).                               15 15   U.S.C. 78s(b)(2)(B).                           3 17 CFR 240.19b–4.




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Document Created: 2018-09-18 01:18:31
Document Modified: 2018-09-18 01:18:31
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 47230 

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