[Federal Register Volume 84, Number 80 (Thursday, April 25, 2019)]
[Notices]
[Pages 17438-17439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08333]



[[Page 17438]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85697; File No. SR-NYSEArca-2019-27]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Delete NYSE Arca 
Rule 8.800-E Setting Forth the Requirements for the NYSE Arca ETP 
Incentive Program

April 19, 2019.
    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 April 10, 2019, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') 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\ 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 delete NYSE Arca Rule 8.800-E setting 
forth the requirements for the NYSE Arca ETP Incentive Program (the 
``Incentive Program''), which expired on July 31, 2017, and a related 
outdated reference to the Incentive Program in the Exchange's Schedule 
of Fee and Charges. 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 
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 delete NYSE Arca Rule 8.800-E setting 
forth the requirements for the Incentive Program, which expired on July 
31, 2017, and a related outdated reference to the Incentive Program in 
the Exchange's NYSE Arca Equities Schedule of Fee and Charges.
Proposed Rule Change
    In June 2013, the Securities and Exchange Commission (the 
``Commission'') approved the Incentive Program as a one-year pilot 
program for issuers of certain exchange-traded products (``ETPs'') 
listed on the Exchange.\4\ The Incentive Program was designed to 
incentivize Market Makers \5\ to take Lead Market Maker (``LMM'') \6\ 
assignments in certain lower volume ETPs by offering an alternative fee 
structure for such LMMs that would be funded from the Exchange's 
general revenues. The Exchange also made related amendments to its fee 
schedule to set forth the requirements for the Incentive Program.\7\ 
The pilot period was originally scheduled to expire on September 3, 
2014. The Exchange subsequently filed to extend the program in 2014,\8\ 
in 2015,\9\ and again in 2016.\10\ However, the pilot was not 
thereafter extended or made permanent and expired on July 31, 2017.
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    \4\ See Securities Exchange Act Release No. 69706 (June 6, 
2013), 78 FR 35340 (June 12, 2013) (SR-NYSEArca-2013-34) (the 
``Incentive Program Approval Order'').
    \5\ A Market Maker is an ETP Holder that acts as a Market Maker 
pursuant to NYSE Arca Rule 7-E. See NYSE Arca Rule 1.1(z). An ETP 
Holder is a sole proprietorship, partnership, corporation, limited 
liability company, or other organization in good standing that has 
been issued an ETP. See NYSE Arca Rule 1.1(o).
    \6\ A Lead Market Maker refers to registered Market Maker that 
is the exclusive Designated Market Maker in listings for which the 
Exchange is the primary listing market. See NYSE Arca Rule 1.1(w).
    \7\ See Incentive Program Approval Order, 78 FR at 35340.
    \8\ See Securities Exchange Act Release No. 72963 (September 3, 
2014), 79 FR 53492 (September 9, 2014) (SR-NYSEArca-2014-99).
    \9\ See Securities Exchange Act Release No. 75846 (September 4, 
2015), 80 FR 54646 (September 10, 2015) (SR-NYSEArca-2015-78).
    \10\ See Securities Exchange Act Release No. 78497 (August 8, 
2016), 81 FR 53524 (August 12, 2016) (SR-NYSEArca-2016-110).
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    The Exchange proposes to delete NYSE Arca Rule 8.800-E in its 
entirety as obsolete. As noted above, the Incentive Program expired at 
the end of July 2017. The Exchange proposes a related change to the 
NYSE Arca Equities Schedule of Fee and Charges to delete a reference to 
the Incentive Program in the portion of the fee schedule setting forth 
LMM transaction fees and credits.\11\
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    \11\ The Exchange filed to remove other obsolete language 
related to the Incentive Program from the Schedule of Fee and 
Charges in 2018. See Securities Exchange Act Release No. 83032 
(April 11, 2018), 83 FR 16909 (April 17, 2018) (SR-NYSEArca-2018-
20).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\12\ in general, and with Section 6(b)(1) of the Act,\13\ in 
particular, in that in that [sic] it enables the Exchange to be so 
organized as to have the capacity to be able to carry out the purposes 
of the Exchange Act and to comply, and to enforce compliance by its 
exchange members and persons associated with its exchange members, with 
the provisions of the Exchange Act, the rules and regulations 
thereunder, and the rules of the Exchange.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(1).
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    The proposed rule change is a non-substantive change that 
eliminates obsolete material from the Exchange's rulebook. The Exchange 
believes that the proposed rule change would enable the Exchange to 
continue to be so organized as to have the capacity to carry out the 
purposes of the Exchange Act and comply and enforce compliance with the 
provisions of the Act by its members and persons associated with its 
members, because ensuring that the Exchange's rules and fee schedule 
are accurate and do not contain obsolete material would contribute to 
the orderly operation of the Exchange by adding clarity and 
transparency to such documents.
    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

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because it is not designed to 
address any competitive issue or have any competitive impact, but 
rather serve to update the Exchange's rulebook to promote clarity and 
consistency, thereby alleviating possible market participant confusion.

[[Page 17439]]

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
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 prior to 
30 days from the date on which it was filed, 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 and Rule 19b-
4(f)(6)(iii) thereunder.\16\
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and 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. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6)\17\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\18\ 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 it will allow the 
Exchange to augment the accuracy of their rulebook by removing the 
expired Incentive Program and related references in its fee schedule. 
Accordingly, the Commission waives the 30-day operative delay and 
designates the proposed rule change operative upon filing.\19\
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    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ 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 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) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 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-2019-27 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-2019-27. 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. 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-NYSEArca-2019-27 and should be submitted 
on or before May 16, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-08333 Filed 4-24-19; 8:45 am]
BILLING CODE 8011-01-P