[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]
=======================================================================
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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 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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
$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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) & (5).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\11\ 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-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\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27279 Filed 12-17-18; 8:45 am]
BILLING CODE 8011-01-P