[Federal Register Volume 80, Number 80 (Monday, April 27, 2015)]
[Notices]
[Pages 23310-23312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09627]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74774; File No. SR-NYSEArca-2015-31]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Modifying the 
Manner in Which It Calculates Volume, Liquidity and Quoting Thresholds 
Applicable to Billing on the Exchange on March 31, 2015

April 21, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 10, 2015, 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 and II 
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\ 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 modify the manner in which it calculates 
volume, liquidity and quoting thresholds applicable to billing on the 
Exchange in connection with an interruption in trading in certain 
securities on the Exchange on March 31, 2015. 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

[[Page 23311]]

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 modify the manner by which it calculates 
volume, liquidity and quoting thresholds applicable to billing on the 
Exchange due to issues relating to trading on the Exchange in certain 
securities on March 31, 2015.
    Specifically, on March 31, 2015, trading was unavailable in a range 
of symbols on the Exchange for a period of more than two hours, 
resulting in a more than 30% decrease in trading volume on the Exchange 
(Tape A, B and C securities combined) for that day as compared to 
average daily volume (``ADV'') on the Exchange for all of the prior 
trading days in March 2015. In addition, once trading and quoting 
resumed on the Exchange, market participants were advised to use market 
data from the Consolidated Tape Association (SIP) feed rather than from 
the NYSE Arcabook feed as the NYSE ArcaBook feed data may have been 
compromised as a result of the issues with trading.\3\ The Exchange 
believes that these issues impacted the ability of ETP Holders, 
including Market Makers, to engage in typical trading, quoting and 
liquidity in their assigned securities on March 31, 2015, leading to 
decreased quoting and trading volume compared to ADV and U.S. 
consolidated average daily volume (``CADV'') for the previous trading 
days combined in March 2015.
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    \3\ See NYSE Arca Equities Trader Update, ``March 31, 2015, NYSE 
Arca Equities Trading Interruption in Tape B Symbol Range ``UTG-
ZSML,'' April 2, 2015, available at https://www.nyse.com/trader-update/history.
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    As provided for in the Exchange's Schedule of Fees and Charges for 
Exchange Services (``Equities Fee Schedule''), several of the 
Exchange's transaction fees and credits are based on trading, quoting 
and liquidity thresholds that ETP Holders must satisfy in order to 
qualify for the particular rates (i.e., percentage of CADV and ADV 
thresholds). The Exchange believes that the issues that occurred on 
March 31, 2015 impacted the ability of ETP Holders to meet these 
thresholds during March 2015.\4\ The Exchange therefore proposes to 
exclude March 31, 2015 from any CADV or ADV calculation described in 
the Equities Fee Schedule in order to reasonably ensure that an ETP 
Holder that would otherwise qualify for a particular threshold during 
March 2015, and the corresponding transaction rate, would not be 
negatively impacted by issues that occurred on March 31, 2015.
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    \4\ The Exchange notes that it does not perform the calculations 
necessary to determine whether these thresholds have been met until 
after the particular billing month has ended.
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    The proposed change is not otherwise intended to address any other 
issues relating to fees 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 the proposed rule change is reasonable 
because excluding March 31, 2015 from any CADV or ADV calculation 
described in the Equities Fee Schedule would reasonably ensure that an 
ETP Holder that would otherwise qualify for a particular threshold 
during March 2015, and the corresponding transaction rate, would not be 
negatively impacted by the issues that occurred on March 31, 2015. The 
Exchange also believes that the proposed rule change is equitable and 
not unfairly discriminatory because the issue with trading on the 
Exchange, which lasted more than two hours, resulted in significant 
decreases in trading volume and also impacted the ability of ETP 
Holders on the Exchange, including Market Makers, to engage in typical 
trading, quoting and liquidity in their assigned securities on March 
31, 2015, leading to decreased quoting and trading volume compared to 
ADVs and CADVs for the previous trading days in March 2015. Therefore, 
excluding March 31, 2015 from any CADV or ADV calculation described in 
the Equities Fee Schedule would reasonably ensure than any market 
participant on the Exchange would not be negatively impacted by the 
issues that occurred on March 31, 2015 with respect to billing on the 
Exchange. The proposed rule change is also equitable and not unfairly 
discriminatory because it would result in all market participants on 
the Exchange being treated equally by excluding March 31, 2015 from any 
CADV or ADV calculation described in the Equities Fee Schedule.
    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,\7\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. The proposed rule change would treat all market 
participants on the Exchange equally by excluding March 31, 2015 from 
any CADV or ADV calculation described in the Equities Fee Schedule. 
Moreover, the Exchange believes that the proposed change would enhance 
competition between competing marketplaces by enabling the Exchange to 
exclude March 31, 2015 from any CADV or ADV calculation described in 
the Equities Fee Schedule.
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    \7\ 15 U.S.C. 78f(b)(8).
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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

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days after the date of the filing, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) 
thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.

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[[Page 23312]]

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the 
Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. As 
represented by the Exchange, excluding March 31, 2015 from any CADV or 
ADV calculation described in the Equities Fee Schedule would reasonably 
ensure that any market participant on the Exchange would not be 
negatively impacted by the issues that occurred on March 31, 2015 with 
respect to billing on the Exchange. Accordingly, waiving the 30-day 
operative delay would eliminate the potential for confusion among ETP 
Holders and the public regarding how the Exchange will calculate 
volume, liquidity, and quoting thresholds related to billing for 
activity on the Exchange during March 2015 and, more specifically, on 
March 31, 2015, and permit the Exchange to determine transaction fees 
and credits for ETP Holders in a timely manner after the end of the 
billing month of March 2015. Therefore, the Commission hereby 
designates the proposed rule change operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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) of the Act \13\ to determine whether the proposed 
rule should be approved or disapproved.
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    \13\ 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-2015-31 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEArca-2015-31. 
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 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-2015-31, and should be submitted on or before May 18, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-09627 Filed 4-24-15; 8:45 am]
 BILLING CODE 8011-01-P