[Federal Register Volume 79, Number 195 (Wednesday, October 8, 2014)]
[Notices]
[Pages 60882-60883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23981]



[[Page 60882]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73288; File No. SR-NYSEArca-2014-109]


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 
Modify the Fees That It Charges for Routing Orders to the New York 
Stock Exchange LLC

October 2, 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 September 19, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 modify the 
fees that it charges for routing orders to the New York Stock Exchange 
LLC (``NYSE''). The Exchange proposes to implement the changes on 
October 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 modify the fees 
that it charges for routing orders to the NYSE. The Exchange proposes 
to implement the changes on October 1, 2014.
    The NYSE introduced modifications to its transaction fee 
structures, including changes to the rates for taking liquidity, which 
became effective on September 1, 2014.\4\ The Exchange's current fees 
for routing orders in securities with a per share price of $1.00 or 
more to the NYSE are closely related to the NYSE's fees for taking 
liquidity in such securities, and the Exchange is proposing an 
adjustment to its routing fees to maintain the existing relationship to 
the new fees in place at the NYSE.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 72960 (September 3, 
2014), 79 FR 53475 (September 9, 2014) (SR-NYSE-2014-46) (the ``NYSE 
Fee Filing'').
---------------------------------------------------------------------------

    Currently, the NYSE charges a transaction fee for certain 
transactions in securities with a per share price of $1.00 or more 
based on the characteristics of the transaction. Among other changes, 
the NYSE Fee Filing proposed to increase the charge for transactions 
that do not have a specified per share charge based on their 
characteristics (``all other'' transactions). The NYSE Fee Filing 
increased the per share charge for all other non-floor broker 
transactions (i.e., when taking liquidity from the Exchange) from 
$0.0026 to $0.0027 per transaction.
    Currently, for the Exchange's Tier 1, Tier 2, Tier 3, Step Up Tier 
1, and Step Up Tier 2 customers, the fee for routing orders in Tape A 
securities to the NYSE outside the book is equal to the previous NYSE 
fee of $0.0026 per share for all other non-floor broker transactions in 
securities with a per share price of $1.00 or more, and the fee for 
routing such orders to the NYSE for non-tier (i.e., Basic Rate) 
customers is $0.0028 per share.\5\ Consequently, the Exchange is 
proposing to increase each of those fees by $0.0001 to $0.0027 per 
share and $0.0029 per share, respectively, consistent with the $0.0001 
increase in the NYSE fee for all other non-floor broker transactions.
---------------------------------------------------------------------------

    \5\ The other tiers in the Fee Schedule do not specify a fee for 
routing orders in Tape A securities to the NYSE outside the book. 
However, such tiers provide that if a fee (or credit) is not 
included in the tier, the relevant tiered or Basic Rate applies 
based on a firm's qualifying levels. Accordingly, for orders in Tape 
A securities routed to the NYSE outside the book, ETP Holders and 
Market Makers that qualify for another tier would default to the 
Tier 1, Tier 2, Tier 3, Step Up Tier 1, Step Up Tier 2 or Basic Rate 
that applied to them based on their qualifying levels.
---------------------------------------------------------------------------

    In addition, the Exchange currently charges $0.0024 per share for 
Primary Sweep Orders \6\ in Tape A securities that are routed outside 
the book to the NYSE that remove liquidity from the NYSE.\7\ In order 
to maintain the existing relationship to the other Exchange routing 
fees that are being adjusted upward, the Exchange is also proposing to 
increase this fee by $0.0001, to $0.0025 per share.
---------------------------------------------------------------------------

    \6\ A Primary Sweep Order is a Primary Only (``PO'') Order 
(i.e., a market or limit order that is to be routed to the primary 
market) that first sweeps the NYSE Arca book. See NYSE Arca Equities 
Rules 7.31(x) and (kk).
    \7\ This charge is included in the provisions for Tier 1, Tier 
2, and the Basic Rate. The other tiers in the Fee Schedule do not 
specify a fee for Primary Sweep Orders in Tape A securities that are 
routed outside the book to the NYSE that remove liquidity from the 
NYSE. Accordingly, for such orders ETP Holders and Market Makers 
that qualify for another tier would default to the Tier 1, Tier 2 or 
Basic Rate that applied to them based on their qualifying levels. 
See supra note 5.
---------------------------------------------------------------------------

    For Primary Only Plus (``PO+'') orders,\8\ the current Exchange fee 
for orders routed to the NYSE that remove liquidity from the NYSE is 
$0.0026 per share, which is equal to the current NYSE fee for all other 
non-floor broker transactions in securities with a per share price of 
$1.00 or more.\9\ Consequently, the Exchange is proposing to increase 
its fees for routing PO+ orders to the NYSE that remove liquidity by 
the same amount ($0.0001) as the increase in the corresponding NYSE 
fees. The proposed new fee for PO+ orders routed to the NYSE that 
remove liquidity is $0.0027 per share. This change would maintain the 
current relationship with the NYSE rates.
---------------------------------------------------------------------------

    \8\ A PO+ Order is a PO Order that is entered for participation 
in the primary market, other than for participation in the primary 
market opening or primary market re-opening. See NYSE Arca Equities 
Rule 7.31(x)(3).
    \9\ This charge is included in the provisions for Tier 1, Tier 
2, and the Basic Rate. The other tiers in the Fee Schedule do not 
specify a fee for PO+ orders routed outside the book to the NYSE 
that remove liquidity. Accordingly, for such orders ETP Holders and 
Market Makers that qualify for another tier would default to the 
Tier 1, Tier 2 or Basic Rate that applied to them based on their 
qualifying levels. See supra note 4 [sic].
---------------------------------------------------------------------------

    The proposed changes are 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 changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and

[[Page 60883]]

furthers the objectives of Sections 6(b)(4) and (5) of the Act,\11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to routing fees are 
reasonable because the Exchange's fees for routing orders to the NYSE 
are closely related to the NYSE's fees for its members for taking 
liquidity, and the fee increases are consistent with the NYSE's recent 
increase for its fees for taking liquidity. The proposed changes will 
result in maintaining the existing relationship between the two sets of 
fees. In addition, the Exchange believes that the proposed rule change 
is reasonable, equitable, and not unfairly discriminatory because it 
would result in an increase in the per share fee for orders, Primary 
Sweep Orders, and PO+ Orders routed to the NYSE, thereby aligning the 
rate that the Exchange charges to ETP Holders with the rate that the 
Exchange is charged by the NYSE. Accordingly, the Exchange is proposing 
this increase so that the rate it charges to ETP Holders reflects the 
rate that the Exchange is charged by the NYSE. In addition, the 
proposed changes are equitable and not unfairly discriminatory because 
the fee increases apply uniformly across pricing tiers and all 
similarly situated ETP Holders would be subject to the same fee 
structure.
    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,\12\ 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 proposed routing fee 
changes would not place a burden on competition because the Exchange is 
seeking to align its fees with the fees charged by the NYSE.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See supra note 5 [sic].
---------------------------------------------------------------------------

    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) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \16\ 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-NYSEArca-2014-109 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEArca-2014-109. 
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 20549-1090, 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 
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-2014-109, and should be submitted on or before October 29, 
2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23981 Filed 10-7-14; 8:45 am]
BILLING CODE 8011-01-P