[Federal Register Volume 78, Number 153 (Thursday, August 8, 2013)]
[Notices]
[Pages 48526-48528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19151]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70104; File No. SR-NYSE-2013-55]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending One of the Supplemental Liquidity Provider Credits in its 
Price List

August 2, 2013.
    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 July 22, 2013, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend one of the Supplemental Liquidity 
Provider (``SLP'') credits in its Price List. The Exchange proposes to 
implement the fee change effective August 1, 2013. 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 amend one of the SLP credits in its Price 
List. The Exchange proposes to implement the fee change effective 
August 1, 2013.
    SLPs are eligible for certain credits when adding liquidity to the 
Exchange.\3\ The amount of the credit is determined by the ``tier'' 
that the SLP qualifies for, which is generally based on the SLP's level 
of quoting and the average daily volume (``ADV'') of liquidity added by 
the SLP in assigned securities, excluding early closing days for the 
ADV calculation.
---------------------------------------------------------------------------

    \3\ The SLP program provides incentives for quoting and adds 
competition to the existing group of liquidity providers. An SLP can 
either be a proprietary trading unit of a member organization (an 
``SLP-Prop'') or a registered market maker at the Exchange (an 
``SLMM''). See NYSE Rule 107B.
---------------------------------------------------------------------------

    The Exchange provides a credit of $0.0025 per transaction, or 
$0.0020 per transaction for Non-Displayed Reserve Orders,\4\ for an SLP 
that adds liquidity to the NYSE in securities with a per share price of 
$1.00 or more if the SLP (i) Meets the 10% average or more quoting 
requirement in an assigned security pursuant to Rule 107B (quotes of an 
SLP-Prop and an SLMM of the same member organization are not 
aggregated), (ii) adds liquidity for all assigned SLP securities in the 
aggregate (including shares of both an SLP-Prop and an SLMM of the same 
member organization) of an ADV of more than 0.22% of NYSE consolidated 
ADV (``CADV''), (iii) adds liquidity for all assigned SLP securities in 
the aggregate (including shares of both an SLP-Prop and an SLMM of the 
same member organization) of an ADV during the billing month that is at 
least an 0.18% increase over the SLP's September 2012 Adding ADV \5\ 
(``SLP Baseline ADV''), and (iv) has a minimum provide ADV for all 
assigned SLP securities of 12 million shares.\6\
---------------------------------------------------------------------------

    \4\ A Non-Displayed Reserve Order is a limit order that is not 
displayed, but remains available for potential execution against all 
incoming automatically executing orders until executed in full or 
cancelled. See NYSE Rule 13 (Definitions of Orders).
    \5\ Adding ADV is ADV that adds liquidity to the NYSE during the 
billing month. Adding ADV excludes any liquidity added by a 
Designated Market Maker.
    \6\ See Securities Exchange Act Release No. 68021 (October 9, 
2012), 77 FR 63406 (October 16, 2012) (SR-NYSE-2012-50).
---------------------------------------------------------------------------

    The Exchange proposes to amend the third requirement for this 
credit to require that the SLP add liquidity for all assigned SLP 
securities in the aggregate

[[Page 48527]]

(including shares of both an SLP-Prop and an SLMM of the same member 
organization) of an ADV during the billing month that is at least equal 
to the SLP Baseline ADV plus 0.18% of NYSE CADV in the billing 
month.\7\ For example, assume that an SLP's Baseline ADV is 15 million 
shares, and NYSE CADV in the billing month is 3.5 billion shares. To 
meet the third requirement for this credit under the current Price 
List, the SLP will need to add liquidity for all assigned SLP 
securities in the aggregate (including shares of both an SLP-Prop and 
an SLMM of the same member organization) of an ADV during the billing 
month of at least 15,027,000 shares (1.0018 x the SLP's Baseline ADV of 
15 million shares). Under the proposed change, the SLP will need to add 
liquidity for all assigned SLP securities in the aggregate of an ADV 
during the billing month that is at least 6.3 million shares (3.5 
billion NYSE CADV x 0.18%) more than the SLP's Baseline ADV, or a total 
adding liquidity of at least 21.3 million shares (6.3 million shares 
plus the SLP's Baseline ADV of 15 million shares). The remaining 
requirements for this credit will remain the same.
---------------------------------------------------------------------------

    \7\ The Exchange notes that its affiliate, NYSE Arca Equities, 
Inc., recently implemented a similar requirement for its ``Tape B 
Step Up Tier.'' See Securities Exchange Act Release No. 69926 (July 
3, 2013), 78 FR 41154 (SR-NYSEArca-2013-67).
---------------------------------------------------------------------------

    The Exchange notes that the proposed change is not otherwise 
intended to address any other issues, and the Exchange is not aware of 
any problems that member organizations, including SLPs, would have in 
complying with the proposed change. The Exchange believes that it is 
subject to significant competitive forces, as described below in the 
Exchange's statement regarding the burden on competition.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to amend the requirement for 
the credit so that SLPs will be required to provide an ADV during the 
billing month that is at least equal to the SLP Baseline ADV plus 0.18% 
of NYSE CADV because the revised requirement will encourage SLPs to 
provide a higher level of liquidity in their assigned securities based 
on trading activity in that billing month, rather than relating it only 
to September 2012 activity. The Exchange believes the proposed changes 
to the requirement for the credit are equitable and not unfairly 
discriminatory because the credit is open to all SLPs on an equal 
basis. In addition, SLPs have higher quoting obligations than other 
market participants, and in turn provide higher volumes of liquidity, 
which contributes to price discovery and benefits all market 
participants. As such, it is equitable and not unfairly discriminatory 
to offer SLPs credits that are relatively higher than other market 
participants that do not have such obligations.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition. For these reasons, the Exchange 
believes that the proposal is consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\10\ 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. Specifically, the Exchange believes the 
revised credit for SLPs reflects the need for the Exchange to adjust 
financial incentives to attract order flow.
---------------------------------------------------------------------------

    \10\ 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 if they 
deem fee levels at a particular venue to be excessive or credits 
available at other venues to be more favorable. In such an environment, 
the Exchange must continually adjust its fees and credits to remain 
competitive with other exchanges and with alternative trading systems 
that have been exempted from compliance 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 trading practices, the Exchange believes that the 
degree to which fee or credit 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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 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 Number SR-NYSE-2013-55 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-2013-55. This file 
number should be included on the

[[Page 48528]]

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-NYSE-2013-55 and should be submitted on or before August 
29, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19151 Filed 8-7-13; 8:45 am]
BILLING CODE 8011-01-P