[Federal Register Volume 83, Number 242 (Tuesday, December 18, 2018)]
[Notices]
[Pages 64904-64906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27279]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84805; File No. SR-NYSENAT-2018-25]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Schedule of Fees and Rebates

December 12, 2018.
    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 November 30, 2018, NYSE National, Inc. (the ``Exchange'' 
or ``NYSE National'') 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Schedule of Fees and Rebates to 
adopt a new Step Up Adding Tier that would set forth fees for displayed 
and non-displayed orders that add liquidity to the Exchange. The 
Exchange proposes to implement the rule change on December 3, 2018. The 
proposed rule change is available on the Exchange's website 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

[[Page 64905]]

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 Schedule of Fees and Rebates to 
adopt a new Step Up Adding Tier that would set forth fees for displayed 
and non-displayed orders that add liquidity to the Exchange.
    The Exchange proposes to implement the rule change on December 3, 
2018.
Proposed Step Up Adding Tier
    The Exchange proposes a new Step Adding Tier for displayed and non-
displayed orders in securities priced at or above $1.00.
    Under the proposed Step Up Adding Tier, the Exchange would offer 
the following fees for transactions in stocks with a per share price of 
$1.00 or more when adding liquidity to the Exchange if the ETP Holder 
has 0.04% or more of Adding ADV as a percent of US CADV over the ETP 
Holder's Adding ADV as a % of US CADV in November 2018:
     $0.0015 per share for adding displayed orders;
     $0.0015 per share for orders that set a new Exchange BBO; 
\4\
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    \4\ The term ``BBO'' is defined in Rule 1.1 to mean the best bid 
or offer that is a Protected Quotation on the Exchange. The term 
``BB'' means the best bid that is a Protected Quotation on the 
Exchange and the term ``BO'' means the best offer that is a 
Protected Quotation on the Exchange.
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     $0.0017 per share for adding non-displayed orders; and
     $0.0005 per share for MPL orders.
    For example, in a given month of 20 trading days, assume that an 
ETP Holder adds liquidity of an ADV of 3.5 million shares in a month 
where CADV is 7 billion shares, or 0.05% of US CADV in November 2018 
(the ``Baseline'').\5\ Further assume that the ETP Holder adds 
liquidity of an ADV of 7 million shares in the relevant billing month, 
or 0.10% of US CADV. That ETP Holder would qualify for the proposed 
Step Up Adding Tier based on their 0.05% step up as a percent of US 
CADV over the ETP Holder's Baseline.
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    \5\ The Exchange also proposes non-substantive changes to Adding 
Tier 1 to change the ``m'' in ``More'' to lower case and to Adding 
Tiers 2, 3 and 4 to remove superfluous commas following the word 
``share'' in the adding MPL fee.
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    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 change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes that the proposed Step Up Adding Tier fees 
for ETP Holders with 0.04% or more Adding average daily volume as a 
percentage of US CADV in addition to the ETP Holder's Adding ADV as a 
percentage of US CADV in November 2018 is reasonable because the 
proposed tier would further contribute to incentivizing ETP Holders to 
bring additional order flow to a public market. In particular, the 
Exchange believes that the tiered rates will provide an incentive for 
more active ETP Holders that do not meet the qualification for Adding 
Tiers 2, 3 and 4, which offer lower fees for adding liquidity, to add 
displayed liquidity to the Exchange, to the benefit of the investing 
public and all market participants. In addition, the Exchange believes 
that the proposed Step Up Adding Tier fees are equitable and not 
unfairly discriminatory because all similarly situated market 
participants who would submit additional liquidity to the Exchange in 
order to qualify for the fees would be subject to the same fees on an 
equal and non-discriminatory basis. The Exchange also believes that the 
proposed non-substantive changes would not be inconsistent with the 
public interest and the protection of investors because investors will 
not be harmed and in fact would benefit from increased clarity and 
transparency, thereby reducing potential confusion.
    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 the foregoing 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 
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 
changes would encourage the submission of additional liquidity to a 
public exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for ETP Holders. 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. The 
Exchange also believes that the proposed rule is designed to provide 
the public and investors with a Schedule of Fees and Rebates that is 
clear and consistent, thereby reducing burdens on the marketplace and 
facilitating investor protection.
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    \8\ 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 ETP Holders or competing order execution venues to maintain 
their competitive standing in the financial markets.

[[Page 64906]]

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-NYSENAT-2018-25 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-NYSENAT-2018-25. 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 website (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 website 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. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSENAT-2018-25 and should 
be submitted on or before January 8, 2019.

    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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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27279 Filed 12-17-18; 8:45 am]
 BILLING CODE 8011-01-P