[Federal Register Volume 77, Number 179 (Friday, September 14, 2012)]
[Notices]
[Pages 56895-56896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22639]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67814; File No. SR-NYSE-2012-41]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the New York Stock Exchange LLC Price List To Make Changes to 
Certain Transaction Fees To Eliminate the Step-Up Rate for Non-Floor 
Broker Transactions

September 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 August 31, 2012, New York Stock Exchange LLC (the ``Exchange'' 
or ``NYSE'') 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 make changes to certain transaction fees 
within its Price List to eliminate the step-up rate for non-Floor 
broker transactions. The text of the proposed rule change is available 
on the Exchange's Web site 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to make changes to certain transaction fees 
within its Price List to eliminate the step-up rate for non-Floor 
broker transactions. The Exchange proposes to make the rule change 
operative on September 1, 2012.
    Member organizations are currently charged $0.0023 per share for 
all non-Floor broker transactions (i.e., when taking liquidity from the 
NYSE) that are not otherwise specified in the Price List. In addition, 
non-Floor broker member organizations that add specified amounts of 
liquidity to the NYSE above their normal amount (``step-up'') are 
charged a lower rate of $0.0022 per share per transaction. The lower 
rate applies to non-Floor broker member organizations if the member 
organization's ADV adds liquidity to the NYSE during the billing month 
(``Adding ADV'') \3\ that is at least the greater of (i) the member 
organization's January 2012 Adding ADV (``Baseline ADV'') plus 0.075% 
of consolidated average daily volume in NYSE-listed securities during 
the billing month (``NYSE CADV'') or (ii) the member organization's 
Baseline ADV plus 20%. Additionally, if a member organization's ratio 
of Baseline ADV-to-total ADV during January 2012 is less than 10%, this 
rate only applies to the member organization's shares that are executed 
in an amount up to and including 0.75% of NYSE CADV. The rate of 
$0.0023 per-share applies to the member organization's remaining shares 
that are executed, unless the member organization's Adding ADV is 
greater than its Baseline ADV by at least 0.25% of NYSE CADV.
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    \3\ With respect to this lower rate, calculations of Adding ADV 
exclude early closing days as well as any liquidity added by a 
Designated Market Maker.
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    The Exchange proposes to eliminate this step-up rate so that member 
organizations are charged $0.0023 per share for all non-Floor broker 
transactions that are not otherwise specified in the Price List, 
regardless of the level of adding liquidity.
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''),\4\ in general, and furthers the objectives of Section 6(b)(4)

[[Page 56896]]

of the Act,\5\ in particular, because it provides for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and 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).
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    The Exchange believes that the proposed rule change is reasonable, 
equitable and not unfairly discriminatory because it would streamline 
the Price List with respect to determining the particular credit 
applicable to non-Floor broker transactions that are not otherwise 
specified in the Price List. Specifically, the Exchange believes that 
eliminating the step-up rate would simplify the method by which member 
organizations are charged for non-Floor broker transactions. In 
addition, the criteria for non-Floor broker transactions are 
transparent and quantitative. The Exchange also believes that 
eliminating the step-up rate is reasonable because member organizations 
will be charged the same fee that was previously charged by Exchange 
for all transactions that are not otherwise specified in the Price 
List.\6\ The Exchange believes that the proposed rule change is 
reasonable because eliminating the step-up rate would remove a pricing 
tier from the Price List that member organizations have generally not 
utilized. The Exchange believes it is reasonable, equitable, and not 
unfairly discriminatory to charge $0.0023 for non-Floor broker 
transactions that take liquidity and $0.0022 for Floor broker 
transactions that take liquidity, because Floor brokers have slower 
access to the Exchange via handheld technology, and Floor brokers are 
prohibited from routing directly to other market centers from handheld 
devices, which prevents them from accessing any associated pricing 
opportunities that might exist at those away markets.
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    \6\ See Securities Exchange Act Release No. 63642 (January 4, 
2011), 76 FR 1653 (January 11, 2011) (SR-NYSE-2010-87).
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues. In such an environment, the Exchange must continually 
review, and consider adjusting, its fees and credits to remain 
competitive with other exchanges. For the reasons described above, the 
Exchange believes that the proposed rule change reflects this 
competitive environment.

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) \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 NYSE.
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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.

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-2012-41 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-NYSE-2012-41. 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 
a.m. and 3 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-NYSE-2012-41 and should be 
submitted on or before October 5, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22639 Filed 9-13-12; 8:45 am]
BILLING CODE 8011-01-P