83 FR 568 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List To Waive New Firm Application Fees for Applicants Seeking Only To Obtain a Bond Trading License for 2018 and Waive the BTL Fee for 2018

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 3 (January 4, 2018)

[Federal Register Volume 83, Number 3 (Thursday, January 4, 2018)]
[Notices]
[Pages 568-569]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-28440]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82418; File No. SR-NYSE-2017-70]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Its Price List To Waive New Firm Application Fees for Applicants 
Seeking Only To Obtain a Bond Trading License for 2018 and Waive the 
BTL Fee for 2018

December 28, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on December 21, 2017, New York Stock Exchange LLC (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 (i) waive new firm 
application fees for applicants seeking only to obtain a bond trading 
license (``BTL'') for 2018; and (ii) waive the BTL fee for 2018. The 
Exchange proposes to implement the fee changes effective January 2, 
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 (i) waive new firm 
application fees for applicants seeking only to obtain a BTL for 2018; 
and (iii) [sic] waive the BTL fee for 2018. The Exchange proposes to 
implement the fee changes effective January 2, 2018.
    The Exchange currently charges a New Firm Fee ranging from $2,500 
to $20,000, depending on the type of firm, that is charged per 
application for any broker-dealer that applies to be approved as an 
Exchange member organization. The Exchange proposes to waive the New 
Firm Fee for 2018 for new member organization applicants that are 
seeking only to obtain a BTL and not trade equities at the Exchange. 
The proposed waiver of the New Firm Fee would be available only to 
applicants seeking approval as a new member organization, including 
carrying firms, introducing firms, or non-public organizations, that 
would be seeking to obtain a BTL at the Exchange and not trade 
equities. Further, if a new firm that is approved as a member 
organization and has had the New Firm Fee waived converts a BTL to a 
full trading license within one year of approval, the New Firm Fee 
would be charged retroactively. The Exchange believes that charging the 
New Firm Fee retroactively within a year of approval is appropriate 
because it would discourage applicants to claim that they are applying 
for a BTL solely to avoid New Firm Fees.
    Additionally, the Exchange currently charges a BTL fee of $1,000 
per year. The Exchange proposes to amend the Price List to waive the 
BTL fee for 2018.
    The Exchange believes that the proposed fee changes would provide 
increased incentives for bond trading firms that are not currently 
Exchange member organizations to apply for Exchange membership and a 
BTL. The Exchange believes that having more member organizations 
trading on the Exchange's bond platform would benefit investors through 
the additional display of liquidity and increased execution 
opportunities in Exchange-traded bonds at the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\5\ in 
particular, because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities and does not unfairly discriminate 
between customers, issuers, brokers or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4), (5).
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    The Exchange believes that it is reasonable to waive the New Firm 
Fee and the annual BTL fee for 2018 to provide an incentive for bond 
trading firms to apply for Exchange membership and a BTL. The Exchange 
believes that providing an incentive for bond trading firms that are 
not currently Exchange member organizations to apply for membership and 
a BTL would encourage market participants to become members of the 
Exchange and bring additional liquidity to the only

[[Page 569]]

transparent bond market. To the extent the existing New Firm Fees or 
the BTL fee serves as a disincentive for bond trading firms to become 
Exchange member organizations, the Exchange believes that the proposed 
fee change could expand the number of firms eligible to trade bonds on 
the Exchange. The Exchange believes creating incentives for bond 
trading firms to trade bonds on the Exchange protects investors and the 
public interest by increasing the competition and liquidity on the only 
transparent market for bond trading. The proposed waiver of the New 
Firm Fee and BTL fee is equitable and not unfairly discriminatory 
because it would be offered to all market participants that wish to 
trade at the Exchange the narrower class of debt securities only.

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

    In accordance with Section 6(b)(8) of the Act,\6\ 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 
over-the-counter (``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 
reducing the cost of being approved as and operating as an Exchange 
member organization that solely trades bonds at the Exchange, which the 
Exchange believes will enhance market quality through the additional 
display of liquidity and increased execution opportunities in Exchange-
traded bonds at the Exchange.
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    \6\ 15 U.S.C. 78f(b)(8).
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues 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) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \9\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2017-70 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2017-70. 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 such filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. 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-2017-70, and should be submitted on 
or before January 25, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-28440 Filed 1-3-18; 8:45 am]
BILLING CODE 8011-01-P