[Federal Register Volume 80, Number 220 (Monday, November 16, 2015)]
[Notices]
[Pages 70860-70862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28865]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76400; File No. SR-NYSE-2015-56]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Its Price List to Modify Certain Fees for Transactions that 
Remove Liquidity from the Exchange

November 9, 2015.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on November 2, 2015, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') 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 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 its Price List to modify certain 
fees for transactions that remove liquidity from the Exchange, 
effective November 2, 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 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 its Price List to increase certain 
fees that remove liquidity from the Exchange, effective November 2, 
2015. The proposed change would only apply to transactions in 
securities priced $1.00 or more.
    In particular, the Exchange currently charges $0.0027 per share for 
non-Floor broker transactions that remove liquidity from the Exchange, 
including those of Designated Market Makers (``DMM''). The Exchange 
proposes to increase this fee to $0.00275 per share.
    Similarly, the Exchange currently charges $0.0027 per share for all 
Midpoint Passive Liquidity (``MPL'') Orders \4\ that remove liquidity 
from the Exchange and are not designated with a Retail Modifier as 
defined in Rule 13. The Exchange proposes to increase the fee for 
executions of MPL Orders that remove liquidity from the NYSE to 
$0.00275 per share.
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    \4\ MPL Order is defined in Rule 13 as an undisplayed limit 
order that automatically executes at the mid-point of the protected 
best bid or offer (``PBBO'').
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    The Exchange currently charges $0.0024 per share or $0.0027 if an 
MPL Order for all other Floor broker transactions that remove liquidity 
from the Exchange. MPL orders designated with a Retail Modifier as 
defined in Rule 13 are not charged a fee. The Exchange proposes to 
increase the $0.0027 per share fee for Floor broker MPL Orders that 
take liquidity from the

[[Page 70861]]

NYSE to $0.00275 per share. The current $0.0024 per share fee for Floor 
broker transactions that take liquidity from the Exchange would remain 
unchanged.
    The proposed change is not otherwise intended to address any other 
issues, and the Exchange is not aware of any problems that member 
organizations 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 6(b)(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 fee increase for non-Floor 
broker transactions that remove liquidity is reasonable because non-
Floor brokers would continue to receive credits for their transactions 
that provide liquidity on the Exchange, including (i) for member 
organizations that add liquidity that satisfies certain thresholds 
under the Tier Adding Credits, (ii) for DMMs under the DMM credits, and 
(iii) for MPL Orders under various pricing categories in the Price 
List. The resulting fee also is equitable and not unfairly 
discriminatory because it would continue to be consistent with, and in 
some cases lower than, the applicable rate on other marketplaces. For 
example, the standard fee for removing liquidity from NASDAQ in both 
NASDAQ-listed and NYSE-listed securities is $0.0030 per share, which is 
higher than the proposed $0.00275 per share fee.\7\
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    \7\ See, e.g., NASDAQ Rule 7018(d). The fee for removing 
liquidity on NYSE Arca is also $0.0030. See NYSE Arca Equities, 
Inc., Schedule of Fees and Charges, available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf.
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    The Exchange believes that the proposed increase to the fee for 
executions of MPL Orders, including Floor broker MPL orders, that 
remove liquidity from the Exchange is reasonable because the charge 
would be the same as the $0.00275 per share fee proposed for all other 
non-Floor broker transactions that take liquidity from the NYSE. The 
proposed fee is also reasonable because it would be lower than the 
applicable rate on other marketplaces. For example, NASDAQ charges 
$0.0030 per share to execute against resting midpoint liquidity, which 
is greater than both the existing $0.0027 per share rate and the 
proposed $0.00275 per share rate that would apply to MPL Orders.\8\
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    \8\ See, e.g., NASDAQ Rule 7018(a).
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    The Exchange believes that the proposed fee increase for MPL 
Orders, including Floor broker MPL orders, that remove liquidity from 
the Exchange is equitable and not unfairly discriminatory because MPL 
Orders may provide opportunities for market participants to interact 
with orders priced at the midpoint of the PBBO, thus providing price 
improving liquidity to market participants and thereby increase the 
quality of order execution on the Exchange's market, which benefits all 
market participants. The Exchange also believes the proposed fee is 
equitable and not unfairly discriminatory because all market 
participants that use the MPL Order type will pay the same proposed 
fee.
    The Exchange also believes it is equitable and not unfairly 
discriminatory to continue to charge Floor brokers that take liquidity 
a lower fee ($0.0024) than non-Floor brokers that take liquidity 
because Floor brokers have slower access to the Exchange (via handheld 
technology) than non-Floor brokers and are prohibited from routing 
directly to other market centers from handheld devices, which prevents 
them from accessing any associated pricing opportunities that might 
exist at those away markets.
    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,\9\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, the Exchange believes that the proposed 
change would encourage the submission of additional liquidity to a 
public exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for member organizations. The 
Exchange believes that this could promote competition between the 
Exchange and other execution venues, including those that currently 
offer similar order types and comparable transaction pricing, by 
encouraging additional orders to be sent to the Exchange for execution.
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    \9\ 15 U.S.C. 78f(b)(8).
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    Finally, 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 rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees and rebates 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 
order routing practices, the Exchange believes that the degree to which 
fee 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 changes 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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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

[[Page 70862]]

Commission shall institute proceedings under Section 19(b)(2)(B) \12\ 
of the Act to determine whether the proposed rule change should be 
approved or disapproved.
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    \12\ 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-NYSE-2015-56 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-NYSE-2015-56. 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-NYSE-2015-56 and should be 
submitted on or before December 7, 2015.\13\
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28865 Filed 11-13-15; 8:45 am]
BILLING CODE 8011-01-P