[Federal Register Volume 77, Number 32 (Thursday, February 16, 2012)]
[Notices]
[Pages 9277-9278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3672]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66379; File No. SR-NYSEArca-2012-11]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Equities Fee Schedule Increasing the Indication of Interest Tier 1 
Credit and the Tracking Order Tier 1 Credit for ETP Holders and Market 
Makers

February 10, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on February 1, 2012, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Fee Schedule 
(``Fee Schedule'') to increase the indication of interest (``IOI'') 
Tier 1 credit and the Tracking Order Tier 1 credit for ETP Holders and 
Market Makers. The text of the proposed rule change is available at the 
Exchange, the Commission's Public Reference Room, and www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to increase the IOI 
Tier 1 credit \3\ and the Tracking Order \4\ Tier 1 credit for ETP 
Holders and Market Makers. The credits are designed to attract trading 
interest to and promote liquidity on the Exchange. The Exchange does 
not propose to make any changes to the other IOI or Tracking Order 
Tiers.
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    \3\ An IOI is a non-displayed indication of symbol, size and 
side, which does not interact with the NYSE Arca Book. At their 
discretion, participating ETP Holders and Market Makers may send an 
IOI to the Exchange, which in turn will consider the IOI when 
determining potential destinations for outbound routes. See 
Securities Exchange Act Release No. 58397 (August 20, 2008), 73 FR 
50389 (August 26, 2008) (SR-NYSEArca-2008-83).
    \4\ A Tracking Order is an undisplayed, priced round lot order 
that is eligible for execution in the Tracking Order Process against 
orders equal to or less than the aggregate size of Tracking Order 
interest available at that price. See NYSE Arca Equities Rule 
7.31(f).
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IOI Tier 1 Credit
    Currently, an IOI Tier 1 credit is offered to each ETP Holder and 
Market Maker that send IOIs to the Exchange resulting in executions 
with an average daily share volume (``ADV'') per month greater than or 
equal to 10 million shares in Tape A, B, and C securities. The credit 
is $0.0012 per share for each share up to and including 15 million 
shares and $0.0015 per share for each share in excess of 15 million 
shares.\5\
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    \5\ See Securities Exchange Act Release No. 60495 (August 13, 
2009), 74 FR 41957 (August 19, 2009) (SR-NYSEArca-2009-72). The 
Exchange proposed an incremental credit in an effort to attract and 
enhance participation in the IOI program, by offering attractive 
rebates and volume based incentives.
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    The Exchange proposes to amend the IOI Tier 1 credit so that each 
ETP Holder and Market Maker will receive a credit of $0.0015 per share 
for all shares if its IOIs result in executions on the Exchange with an 
ADV per month greater than 15 million shares. The Exchange will 
continue to provide a $0.0012 credit per share for IOIs sent to the 
Exchange resulting in executions with an ADV per month up to and 
including 15 million shares (assuming the 10 million share threshold is 
met).
    For example, under the current Fee Schedule, if an ETP Holder sends 
IOIs to the Exchange resulting in executions with an ADV per month of 
17 million shares, the ETP Holder receives a $0.0012 per share credit 
for the first 15 million shares and a $0.0015 per share credit for the 
2 million shares in excess of the 15 million shares. Under the proposed 
Fee Schedule, the ETP Holder will receive a $0.0015 per share credit 
for all 17 million shares.
Tracking Order Tier 1
    Currently, the Tracking Order Tier 1 credit is offered to each ETP 
Holder and Market Maker that sends Tracking Orders to the Exchange 
resulting in executions with an ADV per month greater than or equal to 
5 million shares in Tape A, B, and C securities.\6\ The credit is 
$0.0012 per share for each share up to and including 15 million shares 
and $0.0015 per share for each share in excess of 15 million shares.
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    \6\ See Securities Exchange Act Release No. 60944 (November 5, 
2009), 74 FR 58668 (November 13, 2009) (SR-NYSEArca-2009-99). The 
Exchange proposed to add new transaction credits stemming from the 
use of Tracking Orders in an effort to enhance participation on the 
Exchange and to offer increased liquidity to ETP Holders and Market 
Makers.
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    The Exchange proposes to amend the Tracking Order Tier 1 credit so 
that each ETP Holder and Market Maker will receive a credit of $0.0015 
per share for all shares if its Tracking Orders result in executions on 
the Exchange with an ADV per month greater than 15 million shares. The 
Exchange will continue to credit ETP Holders $0.0012 per share for 
Tracking Orders that result in executions up to and including 15 
million shares (assuming the 5 million share threshold is met).
    For example, under the current Fee Schedule, if an ETP Holder sends 
Tracking Orders to the Exchange resulting in executions with an ADV per 
month of 17 million shares, the ETP Holder receives a $0.0012 per share 
credit for the first 15 million shares and a $0.0015 per share credit 
for the remaining 2 million shares. Under the proposed Fee Schedule, 
the ETP Holder will receive a $0.0015 per share credit for all 17 
million shares.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\7\ in general, and Section 6(b)(4) of the Act,\8\ in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities. The proposed change is

[[Page 9278]]

equitably allocated and not unfairly discriminatory because it applies 
uniformly to all similarly situated ETP Holders and Market Makers that 
send IOIs and Tracking Orders to the Exchange. The Exchange believes 
that the proposal also is reasonable and equitably allocated because it 
provides higher credits to ETP Holders and Market Makers that 
contribute to market quality by providing higher volumes of liquidity, 
and it is consistent with other tiered credits on the Exchange that pay 
a rebate on all volume and not just the incremental volume. The 
Exchange believes that increasing the credits will attract additional 
order flow and liquidity to the Exchange.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the NYSE Arca.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2012-11 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2012-11. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2012-11 and should 
be submitted on or before March 8, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3672 Filed 2-15-12; 8:45 am]
BILLING CODE 8011-01-P