[Federal Register Volume 84, Number 98 (Tuesday, May 21, 2019)]
[Notices]
[Pages 23109-23112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10515]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85864; File No. SR-NYSE-2019-24]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List
May 15, 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 May 9, 2019, New York Stock Exchange LLC (``NYSE'' 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 amend its Price List to modify the (1)
charges for transactions that remove liquidity from the Exchange; (2)
requirements for credits related to executions of orders sent to Floor
brokers that add liquidity on the Exchange; and (3) remove Tier
[[Page 23110]]
fee for securities traded pursuant to Unlisted Trading Privileges
(``UTP'') (Tapes B and C). The Exchange proposes to implement these
changes to its Price List effective May 9, 2019. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Price List to modify the (1)
charges for transactions that remove liquidity from the Exchange; (2)
requirements for credits related to executions of orders sent to Floor
brokers that add liquidity on the Exchange; and (3) Remove Tier fee for
UTP securities.
The Exchange proposes to implement these changes to its Price List
effective May 9, 2019.\4\
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\4\ The Exchange originally filed to amend the Price List on May
1, 2019 (SR-NYSE-2019-23) and withdrew such filing on May 9, 2019.
This filing replaces SR-NYSE-2019-23 in its entirety.
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Charges for Removing Liquidity
Currently, the Exchange charges a fee of $0.00275 for non-Floor
broker transactions that remove liquidity from the Exchange, including
those of DMMs. The Exchange also currently charges $0.00280 for non-
Floor broker transactions that remove liquidity from the Exchange by
member organizations with an Adding ADV,\5\ excluding any liquidity
added by a DMM, that is more than 250,000 ADV on the NYSE in Tape A
Securities and less than 500,000 ADV on the NYSE in Tape B and Tape C
securities combined during the billing month. Finally, the Exchange
currently charges $0.0030 for non-Floor broker transactions that remove
liquidity from the Exchange by member organizations with an Adding ADV,
excluding any liquidity added by a DMM, that is less than 250,000 ADV
on the NYSE during the billing month.
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\5\ Footnote 2 to the Price List defines ADV as ``average daily
volume'' and ``Adding ADV'' as ADV that adds liquidity to the
Exchange during the billing month.
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Under the current configuration, the effective base rate is $0.0030
because member organizations with an Adding ADV, excluding liquidity
added by a DMM, that is less than 250,000 ADV in Tape A Securities
during the billing month would not qualify for the $0.00275 rate, which
applies unless one of the charges set forth immediately below it in the
Price List applies. The Exchange proposes a reconfiguration to reflect
the current $0.0030 base rate and a fee of $0.00275 for non-Floor
broker transactions that remove liquidity from the Exchange by member
organizations with an Adding ADV, excluding any liquidity added by a
DMM, of at least 250,000 ADV on the NYSE in Tape A Securities and at
least 500,000 ADV on the NYSE in Tape B and Tape C securities combined
during the billing month. The charge for non-Floor broker transactions
that remove liquidity from the Exchange by member organizations with an
Adding ADV, excluding any liquidity added by a DMM, that is at least
250,000 ADV on the NYSE in Tape A Securities and less than 500,000 ADV
on the NYSE in Tape B and Tape C securities combined during the billing
month would increase from $0.00280 to $0.00285.
Floor Broker Credits for Orders That Add Liquidity to the Exchange
The Exchange currently provides a per share credit for executions
of orders sent to a Floor broker for representation on the Exchange
when adding liquidity to the Exchange if the member organization has an
ADV that adds liquidity to the Exchange by a Floor broker during the
billing month that is at least equal to certain thresholds. In order to
qualify for a credit of $0.0020 per share under the first threshold,
the member organization must have an ADV that adds liquidity to the
Exchange by a Floor broker during the billing month that is at least
equal to .07% of Tape A CADV. In order to qualify for a credit of
$0.0022 per share under the second threshold, a member organization
must have an ADV that adds liquidity to the Exchange by a Floor broker
during the billing month that is at least equal to .33% of Tape A CADV.
The Exchange proposes an intermediate third threshold designated
(b) that would provide a credit of $0.0021 per share for a member
organization must have an ADV that adds liquidity to the Exchange by a
Floor broker during the billing month that is at least equal to .25% of
Tape A CADV. The current second threshold would become item (c).
Remove Tier Fee for UTP Securities
For UTP Securities, the Exchange currently charges a per tape fee
of $0.0028 per share to remove liquidity from the Exchange for member
organizations with an Adding ADV of at least 50,000 shares for that
respective tape. The Exchange proposes to charge a per tape fee of
$0.00285 per share to remove liquidity from the Exchange for member
organizations with an Adding ADV of at least 50,000 shares for that
respective tape.
The proposed changes are 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,\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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Charges for Removing Liquidity
The Exchange believes that reconfiguring the charges for non-Floor
broker transactions that remove liquidity from the Exchange and
introducing a slightly tiered rate of $0.00285 is reasonable, equitable
and not unfairly discriminatory, as follows.
The Exchange believes that the proposed rate change for member
organizations will incentivize submission of additional liquidity in
Tape B and Tape C securities to a public exchange to qualify for the
lower fee of $0.00275 for removing liquidity, thereby promoting price
discovery and transparency and enhancing order execution opportunities
for member organizations. The Exchange also believes that the proposed
change is equitable because it would apply to all similarly situated
member organizations that add liquidity in Tape B or Tape C securities.
The proposed change also is equitable and not unfairly discriminatory
because it would be
[[Page 23111]]
consistent with the applicable rate on other marketplaces. For example,
Nasdaq PSX provides a fee per share for removing liquidity, $0.0028 in
Tape A and B securities and $0.0029 in Tape C securities, if a firm
removes 0.065% or more of Consolidated Volume; otherwise, Nasdaq PSX
imposes a charge of $0.0030 per share for removing liquidity.\8\ The
Exchange notes that since the requirement is for Tape B and Tape C
securities combined, member organizations can meet the requirement by
adding liquidity in either Tape B or Tape C securities, or both. The
Exchange further notes that other marketplaces have tiers with adding
requirements in specific tapes to qualify for a rate in securities on
another tape. For example, to be eligible for a $0.0020 adding credit
in Tape C securities on Nasdaq, firms are required to average a minimum
of 250,000 shares added per day in Tape A or Tape B securities
(combined); otherwise, the Tape C credit for adding liquidity is
$0.0015.\9\
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\8\ See https://www.nasdaqtrader.com/Trader.aspx?id=PSX_Pricing.
\9\ See https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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Floor Broker Credits for Orders That Add Liquidity to the Exchange
The Exchange believes that the changes proposed additional tiered
credit for executions of orders sent to a Floor broker for
representation on the Exchange is reasonable because it would encourage
additional displayed liquidity on the Exchange. The proposed change
would also encourage the execution of such transactions on a public
exchange, thereby promoting price discovery and transparency. The
Exchange believes the proposed change is equitable and not unfairly
discriminatory because it would continue to encourage member
organizations to send orders to the Floor for execution, thereby
contributing to robust levels of liquidity on the Floor, which benefits
all market participants. The proposed change is also equitable and not
unfairly discriminatory because those member organizations that make
significant contributions to market quality and that contribute to
price discovery by providing higher volumes of liquidity would continue
to be allocated a higher credit. The Exchange believes that any member
organizations that may currently be qualifying under the lower of the
two existing thresholds, or 0.0007%, could qualify for the proposed
intermediate threshold of 0.0025% based on the levels of activity sent
to Floor brokers. The proposed change also is equitable and not
unfairly discriminatory because all similarly situated member
organizations would pay the same rate, as is currently the case, and
because all member organizations would be eligible to qualify for the
rate by satisfying the related thresholds.
Remove Tier Credit for UTP Securities
The Exchange believes that proposed Tier 1 charge of $0.00285 per
share in UTP Securities for member organizations with an Adding ADV of
at least 50,000 shares that removes liquidity from the Exchange is
reasonable, equitable and not unfairly discriminatory because the
proposed fees are in line with the fees the Exchange currently charges
for removing liquidity from the Exchange in Tape A securities and the
proposed changes thereto described above.\10\
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\10\ See pages 5-6 of the current NYSE Price List, available at
https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
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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,\11\ 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 foster liquidity provision and stability in the
marketplace, thereby promoting price discovery and transparency and
enhancing order execution opportunities for member organizations. In
this regard, the Exchange believes that the transparency and
competitiveness of attracting additional executions on an exchange
market would encourage competition.
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\11\ 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)(ii) of the Act,\12\ and subparagraph (f)(2) of Rule
19b-4\13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 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) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 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
[[Page 23112]]
Send an email to [email protected]. Please include
File Number SR-NYSE-2019-24 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-2019-24. 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-NYSE-2019-24 and should be submitted on
or before June 11, 2019.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10515 Filed 5-20-19; 8:45 am]
BILLING CODE 8011-01-P