[Federal Register Volume 78, Number 29 (Tuesday, February 12, 2013)]
[Notices]
[Pages 9985-9987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-03105]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68848; File No. SR-NYSEARCA-2013-09]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Proposing To Amend 
the NYSE Arca Equities Schedule of Fees and Charges for Exchange 
Services

 February 6, 2013.
    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 January 29, 2013, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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 the NYSE Arca Equities Schedule of 
Fees and Charges for Exchange Services (``Fee Schedule'') to (i) 
eliminate the Tape B Step Up Tier and (ii) modify the rebate for Mid-
Point Passive Liquidity (``MPL'') Orders that provide liquidity in Tape 
C Securities. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to (i) eliminate 
the Tape B Step Up Tier and (ii) modify the rebate for MPL Orders that 
provide liquidity in Tape C Securities. The Exchange proposes to 
implement the fee changes on February 1, 2013.
    The Tape B Step Up Tier currently provides for a $0.0026 per share 
fee for orders of qualifying ETP Holders that take liquidity from the 
Book in Tape B Securities. The Exchange has determined to eliminate the 
Tape B Step Up Tier because it generally has not incentivized ETP 
Holders to submit additional liquidity in Tape B Securities as 
intended.\4\
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    \4\ See Securities Exchange Act Release No. 66568 (March 9, 
2012), 77 FR 15819, 15822 (March 16, 2012) (SR-NYSEArca-2012-17).
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    Currently, under Tier 1,\5\ Tier 2,\6\ and the Basic Rates \7\ of 
the Fee Schedule, the Exchange offers a $0.0015 credit per share for 
MPL Orders \8\ that provide

[[Page 9986]]

liquidity in Tape C Securities, except that for certain Tape C 
Securities deemed ``Active Tape C Securities,'' a $0.0025 credit per 
share is offered. The Active Tape C Securities are:
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    \5\ Tier 1 rates are available to ETP Holders and Market Makers 
that provide liquidity an average daily share volume per month of 
0.70% or more of the US consolidated average daily volume (``CADV'') 
or (2) that (a) provide liquidity an average daily share volume per 
month of 0.15% or more of the US CADV and (b) are affiliated with an 
OTP Holder or OTP Firm that provides an ADV of electronic posted 
executions (including all account types) in Penny Pilot issues on 
NYSE Arca Options of at least 100,000 contracts, of which at least 
25,000 contracts must be for the account of a market maker.
    \6\ Tier 2 rates are available to ETP Holders and Market Makers 
that provide liquidity an average daily share volume per month of 
0.30% or more, but less than 0.70% of the US CADV.
    \7\ Basic Rates are applicable when tier rates do not apply. The 
Exchange notes that the Active Tape C Securities are erroneously 
referred to as the ``Most Active Tape C Securities'' in the Basic 
Rate section of the Fee Schedule. See SR-NYSEArca-2012-104, Exhibit 
5, at 26, available at http://www.sec.gov/rules/sro/nysearca/2012/34-67986-ex5.pdf. The changes proposed herein will remove the 
erroneous reference.
    \8\ See Rules 7.31(h)(4) and (5). MPL Orders allow for 
additional opportunities for passive interaction with trading 
interest on the Exchange and are designed to offer potential price 
improvement to incoming marketable orders submitted to the Exchange. 
See Securities Exchange Act Release No. 67986 (October 4, 2012), 77 
FR 61803 (October 11, 2012) (SR-NYSEArca-2012-104) (``2012 
Release'').

------------------------------------------------------------------------
               Company name                            Symbol
------------------------------------------------------------------------
Cisco Systems, Inc........................  CSCO
Dell Inc..................................  DELL
Facebook, Inc.............................  FB
Intel Corporation.........................  INTC
Microsoft Corporation.....................  MSFT
Micron Technology Inc.....................  MU
Oracle Corporation........................  ORCL
Research In Motion Limited................  RIMM
SIRIUS XM Radio Inc.......................  SIRI
Zynga, Inc................................  ZNGA
------------------------------------------------------------------------

    The Exchange proposes to remove the distinction between MPL Orders 
that provide liquidity in Active Tape C Securities and MPL Orders that 
provide liquidity in other Tape C Securities by eliminating the Active 
Tape C Securities MPL Order credit. At the same time, the Exchange 
proposes to increase the existing credits for MPL Orders that provide 
liquidity in all Tape C Securities from $0.0015 to $0.0020 per share. 
The Exchange believes that the proposed change will increase the 
liquidity available on the Exchange in Tape C Securities generally, and 
therefore could increase the potential price improvement to incoming 
marketable orders submitted to the Exchange in Tape C Securities.
    The proposed change is not otherwise intended to address any other 
problem, and the Exchange is not aware of any significant problem that 
the affected market participants would have in complying with the 
proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\9\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that eliminating the Tape B Step Up Tier is 
reasonable because such tier has generally not incentivized ETP Holders 
to submit additional liquidity in Tape B Securities as intended.\11\ 
The Exchange believes that removal of the Tape B Step Up Tier is 
equitable and not unfairly discriminatory because it would be 
eliminated for all ETP Holders.
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    \11\ See note 4, supra.
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    In addition, the Exchange believes that the proposed change to have 
the same credit apply to liquidity providing MPL Orders in Active Tape 
C Securities and MPL Orders that provide liquidity in other Tape C 
Securities is reasonable because the Exchange believes that it will 
incentivize ETP Holders to submit more liquidity providing MPL Orders 
to the Book for all Tape C Securities, thereby increasing the liquidity 
available on the Exchange in Tape C Securities generally, and therefore 
could increase the potential price improvement and benefit all market 
participants. The Exchange also believes the change to the MPL Order 
credit in Tape C Securities is reasonable because the $0.0025 credit 
for just the Active Tape C Securities has not generally incentivized 
ETP Holders to submit additional liquidity in Active Tape C Securities 
as intended.\12\ The Exchange, however, believes that that the 
increased $0.0020 MPL credit in all Tape C Securities will have the 
desired effect of incentivizing ETP holders to increase liquidity in 
Tape C Securities because ETP Holders will not be limited to Active 
Tape C Securities only to receive the higher MPL credit. The Exchange 
believes the proposed change also is equitable and not unfairly 
discriminatory because it will apply uniformly to all ETP Holders and 
all MPL Orders in Tape C Securities will be eligible for the credit.
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    \12\ See 2012 Release, supra note 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. 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 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. In particular, the removal 
of the Tape B Step Up Tier will not impose a burden on competition 
because the tier will be removed in its entirety and generally has not 
encouraged liquidity as intended. In addition, because the Tape B Step 
Up Tier did not operate as intended--which was to increase liquidity in 
Tape B Securities--the Exchange does not believe that firms will be 
adversely affected as they generally were not availing themselves of 
that tier in any event. Eliminating the Active Tape C Securities MPL 
Order credit and replacing it with a MPL Order credit in all Tape C 
Securities will not impose a burden in competition because now all Tape 
C Securities will eligible for the credit, albeit at a slightly reduced 
level than for Active Tape C Securities.

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 NYSE Arca.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 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-NYSEArca-2013-09 on the subject line.

[[Page 9987]]

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-2013-09. 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-2013-09 and should 
be submitted on or before March 5, 2013.

    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).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03105 Filed 2-11-13; 8:45 am]
BILLING CODE 8011-01-P