[Federal Register Volume 79, Number 27 (Monday, February 10, 2014)]
[Notices]
[Pages 7724-7726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-02747]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71475; File No. SR-NYSEArca-2014-09]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Equities Schedule of Fees and Charges for Exchange Services To 
Eliminate the Tape B Adding Tier and Modify the Tape B Step Up Tier

February 4, 2014.
    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 23, 2014, 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 the 
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 eliminate 
the Tape B Adding Tier and modify the Tape B Step Up Tier. The Exchange 
proposes to implement the changes on February 1, 2014. 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 the Fee Schedule to eliminate the 
Tape B Adding Tier and modify the Tape B Step Up Tier. The Exchange 
proposes to implement the changes on February 1, 2014.
    Currently, under the Tape B Adding Tier, the Exchange provides a 
$0.0002 per share credit for ETP holders, including Market Makers, that 
provide liquidity of 0.675% or more of U.S. consolidated ADV (``CADV'') 
in Tape B Securities (``U.S. Tape B CADV'') for the billing month. When 
the Exchange proposed the Tape B Adding Tier credit, the Exchange 
expected it to incentivize ETP Holders to provide additional liquidity 
to the Exchange in Tape B Securities; \4\ however, the credit has not 
had the intended effect. Accordingly, the Exchange proposes to 
eliminate the Tape B Adding Tier.
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    \4\ See Securities Exchange Act Release No. 69926 (July 3, 
2013), 78 FR 41154 (July 9, 2013) (SR-NYSEArca-2013-67).

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[[Page 7725]]

    The Exchange also proposes to revise the Tape B Step Up Tier. 
Currently, ETP Holders, including Market Makers, that, on a daily 
basis, measured monthly, directly execute providing volume in Tape B 
Securities during the billing month (``Tape B Adding ADV'') that is 
equal to at least the ETP Holder's May 2013 Tape B Adding ADV plus 
0.275% of U.S. Tape B CADV for the billing month receive a credit of 
$0.0004 per share for orders that provide liquidity to the Exchange in 
Tape B Securities, which is in addition to the ETP Holder's Tiered or 
Basic Rate credit(s). The Exchange proposes to revise the threshold for 
qualifying for the tier by requiring ETP Holders, including Market 
Makers, on a daily basis, measured monthly, to directly execute Tape B 
Adding ADV that is equal to at least 0.275% of the U.S. Tape B CADV for 
the billing month over the ETP Holder's or Market Maker's May 2013 Tape 
B Adding ADV taken as a percentage of Tape B CADV (``Tape B Baseline % 
CADV''). The Exchange believes that the revised threshold criteria are 
more logical and fairer in that they take into account a change in a 
Member's volume relative to CADV. The Tape B Step Up Tier would 
continue to be a credit of $0.0004 per share in addition to the ETP 
Holder's Tiered or Basic Rate credit(s).
    For example, under the proposed Fee Schedule, if the ETP Holder's 
Tape B Baseline % CADV during May 2013 was 0.10%, the ETP Holder would 
need to have a Tape B Adding ADV of at least 0.375% in order to qualify 
for the applicable credit of $0.0004 per share (i.e., 0.10% Tape B 
Baseline % CADV plus 0.275% of the U.S. Tape B CADV for the billing 
month).
    The proposed change is not otherwise intended to address any other 
issues, and the Exchange is not aware of any problems that ETP Holders 
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 Act,\5\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that eliminating the Tape B Adding Tier is 
reasonable because it has generally not incentivized ETP Holders to 
provide additional liquidity in Tape B Securities as intended.\7\ The 
Exchange believes that removal of the Tape B Adding Tier is equitable 
and not unfairly discriminatory because it would be eliminated for all 
ETP Holders.
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    \7\ See supra note 4.
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    The Exchange believes that revising the Tape B Step Up Tier is 
reasonable because it would make the eligibility requirement consistent 
with the Exchange's other variable eligibility requirements that also 
are based on percentage of volume while still incenting ETP Holders and 
Market Makers to provide liquidity in Tape B Securities. The Exchange 
believes that the revised threshold criteria for this tier are more 
logical and fairer in that they take into account a change in a 
Member's volume relative to CADV. The Exchange believes that the 
revised Tape B Step Up Tier is equitable and not unfairly 
discriminating because the $0.0004 credit will remain the same and 
would continue to be available for all ETP Holders, including Market 
Makers, on an equal and non-discriminatory basis.
    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,\8\ 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 Adding 
Tier will not impose a burden on competition because the tier will be 
removed in its entirety and generally has not encouraged liquidity on 
the Exchange, as intended. The revised Tape B Step Up Tier will not 
place a burden on competition because it will apply uniformly to all 
ETP Holders and Market Makers, and the Exchange does not propose to 
change the level of the credit.
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    \8\ 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. 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 promotes a competitive environment.

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 Exchange.
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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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 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-2014-09 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-2014-09. This 
file number should be included on the subject line if email is used.

[[Page 7726]]

    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 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 offices of NYSE. 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-2014-09, and should be submitted on or before 
March 3, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02747 Filed 2-7-14; 8:45 am]
BILLING CODE 8011-01-P