[Federal Register Volume 84, Number 100 (Thursday, May 23, 2019)]
[Notices]
[Pages 23818-23821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10751]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85887; File No. SR-NYSENAT-2019-12]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its
Schedule of Fees and Rebates
May 17, 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 8, 2019, NYSE National, Inc. (``NYSE National'' or
the ``Exchange'') 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
(1) increase the current adding tier fees (Adding Tier 1, Adding Tier
2, Adding Tier 3, and Adding Tier 4) for adding displayed liquidity in
Tape A, Tape B and Tape C securities and renumber the tiers in order of
favorability; and (2) adopt a new Step Up Adding Tier 1 that would set
forth fees for displayed and non-displayed orders that add liquidity to
the Exchange and renumber the current Step Up Adding Tier. The Exchange
proposes to implement the rule change on May 8, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Schedule of Fees and Rebates to
(1) increase the current adding tier fees (Adding Tier 1, Adding Tier
2, Adding Tier 3, and Adding Tier 4) for adding displayed liquidity in
Tape A, Tape B and Tape C securities and renumber the tiers in order of
favorability; and (2) adopt a new Step Up Adding Tier 1 that would set
forth fees for displayed and non-displayed orders that add liquidity to
the Exchange and renumber the current Step Up Adding Tier.
The Exchange proposes to implement the rule change on May 8,
2019.\4\
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\4\ The Exchange originally filed to amend the Schedule of Fees
and Rebates on April 30, 2019 (SR-NYSENAT-2019-11). SR-NYSENAT-2019-
11 was subsequently withdrawn and replaced by this filing.
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Proposed Changes To Adding Tiers
Current Adding Tier 1 (Proposed Adding Tier 4)
Under current Adding Tier 1, the Exchange offers 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 at least 0.015%
of Adding average daily volume (``ADV'') as a percent of US
consolidated ADV (``CADV'') \5\:
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\5\ The Adding Tier 1 volumes are currently waived. See footnote
* in the current Schedule of Fees and Rebates.
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$0.0020 per share for displayed orders in Tapes B and C
securities and $0.0022 per share for displayed orders in Tape A
securities;
$0.0018 per share for orders that set a new Exchange BBO
in Tapes B and C securities and $0.0020 per share in Tape A securities;
$0.0022 per share for non-displayed orders in Tapes B and
C securities and $0.0024 per share for non-displayed orders in Tape A
securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 1 fees as follows:
$0.0023 per share for displayed orders in Tapes B and C
securities and $0.0025 per share for displayed orders in Tape A
securities;
$0.0021 per share for orders that set a new Exchange BBO
in Tapes B and C securities and $0.0023 per share in Tape A securities;
$0.0025 per share for non-displayed orders in Tapes B and
C securities and $0.0027 per share for non-displayed orders in Tape A
securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 1 would be renumbered and become Adding Tier 4.
As noted, the current Adding Tier 1 volumes are waived. Footnote * of
the Schedule of Fees and Rebates would be amended to reflect the
renumbering of current Adding Tier 1.\6\
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\6\ See note 4, supra.
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Adding Tier 2 (Proposed Adding Tier 1)
Under current Adding Tier 2, the Exchange offers 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 quotes: (i) At least
5% of the NBBO \7\ in 1,000 or more symbols on an average daily basis,
calculated monthly, and 0.20% or more Adding ADV as a percentage of US
CADV, or (ii) at least 5% of the NBBO in 2,500 or more symbols on an
average daily basis, calculated monthly, and 0.10% or more Adding ADV
as a % of US CADV:
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\7\ See footnote ** in the current Schedule of Fees and Rebates.
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$0.0005 per share for adding displayed orders in Tape B
and C securities and $0.0008 per share in Tape A securities;
$0.0005 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0008 per share in Tape A securities;
$0.0007 per share for adding non-displayed orders in Tape
B and C securities and $0.0010 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 2 fees as follows:
$0.0008 per share for adding displayed orders in Tape B
and C securities and $0.0011 per share in Tape A securities;
$0.0008 per share for orders that set a new Exchange BBO
in Tape B and C
[[Page 23819]]
securities and $0.0011 per share in Tape A securities;
$0.0010 per share for adding non-displayed orders in Tape
B and C securities and $0.0013 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 2 would also be renumbered and become Adding
Tier 1.
Adding Tier 3 (Proposed Adding Tier 2)
Under current Adding Tier 3, the Exchange offers 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 quotes at least 5%
of the NBBO in 2000 or more symbols on an average daily basis,
calculated monthly, and executes 0.10% or more Adding ADV as a
percentage of US CADV:
$0.0009 per share for adding displayed orders in Tape B
and C securities and $0.0012 per share in Tape A securities;
$0.0009 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0012 per share in Tape A securities;
$0.0011 per share for adding non-displayed orders in Tape
B and C securities and $0.0014 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 3 fees as follows:
$0.0012 per share for adding displayed orders in Tape B
and C securities and $0.0015 per share in Tape A securities;
$0.0012 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0015 per share in Tape A securities;
$0.0014 per share for adding non-displayed orders in Tape
B and C securities and $0.0017 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 3 would be renumbered and become Adding Tier 2.
Adding Tier 4 (Proposed Adding Tier 3)
Under current Adding Tier 4, the Exchange offers 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 quotes at least 5%
of the NBBO in 600 or more symbols on an average daily basis,
calculated monthly:
$0.0012 per share for adding displayed orders in Tape B
and C securities and $0.0014 per share in Tape A securities;
$0.0012 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0014 per share in Tape A securities;
$0.0014 per share for adding non-displayed orders in Tape
B and C securities and $0.0016 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 4 fees as follows:
$0.0015 per share for adding displayed orders in Tape B
and C securities and $0.0017 per share in Tape A securities;
$0.0015 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0017 per share in Tape A securities;
$0.0017 per share for adding non-displayed orders in Tape
B and C securities and $0.0019 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 4 would be renumbered and become Adding Tier 3.
Proposed Step Up Adding Tier 1
The Exchange proposes a new Step Up Adding Tier 1 for displayed and
non-displayed orders in securities priced at or above $1.00.
Under the proposed Step Up Adding Tier 1, 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 0.07% or more of Adding ADV as a percentage of US CADV over the ETP
Holder's Adding ADV as a % of US CADV in November 2018:
$0.0012 per share for adding displayed orders in Tapes B
and C securities and $0.0015 per share in Tape A securities;
$0.0012 per share for orders that set a new Exchange BBO
\8\ in Tapes B and C securities and $0.0015 per share in Tape A
securities;
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\8\ 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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$0.0014 per share for adding non-displayed orders in Tapes
B and C securities and $0.0017 per share in Tape A securities; 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 3.8 million shares in a month
where CADV is 7.6 billion shares, or 0.05% of US CADV in November 2018
(the ``Baseline''). Further assume that the ETP Holder adds liquidity
of an ADV of 9.5 million shares in the relevant billing month with the
same US CADV of 7.6 billion shares, or 0.125% of US CADV. That ETP
Holder would qualify for the proposed Step Up Adding Tier 1 based on
their 0.075% step up as a percent of US CADV over the ETP Holder's
Baseline.
Finally, the existing Step Up Adding Tier would be renumbered Step
Up Adding Tier 2.
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,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) & (5).
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Proposed Changes To Adding Tiers
The Exchange believes that the proposed changes to the tiered
adding requirements for displayed and non-displayed orders in Tape A,
Tape B and Tape C securities priced at or above $1.00 are reasonable,
equitable and not unfairly discriminatory, as follows.
The proposed changes to the Adding Tier 1, Adding Tier 2, Adding
Tier 3, and Adding Tier 4 fees for adding liquidity in Tapes A, B and C
securities for ETP Holders meeting the current requirements for each
tier, which the Exchange does not propose to change, are reasonable
because the proposed fee will incentivize submission of additional
liquidity to a public exchange, thereby benefiting all ETP Holders by
achieving higher tiers. Specifically, the Exchange believes that higher
charges would incentivize ETP Holders to send additional liquidity to
the Exchange in order to avoid the proposed fee by meeting the Adding
Tier liquidity requirements.
The proposed fees are also equitable and not unfairly
discriminatory because those fees would be consistent with or lower
than the applicable rate on other marketplaces that charge for adding
liquidity. For example, Cboe BYX charges a standard fee of $0.0019 per
share, and their lowest fee for adding is
[[Page 23820]]
$0.0012, while Cboe EDGA charges a standard fee of $0.0030 per share,
and their lowest fee for adding is $0.0022. In addition, the Exchange
believes that the proposed Adding Tier fees are equitable and not
unfairly discriminatory as all similarly situated market participants
will be subject to the same fees on an equal and non-discriminatory
basis.
Proposed Step Up Adding Tier 1
The Exchange believes that the proposed Step Up Adding Tier 1 fees
for ETP Holders with 0.07% 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 proposed new tiered rates will provide an
incentive for more active ETP Holders, including those that meet the
current Step Up Adding Tier 2 as well as those that do not, to add
displayed liquidity to the Exchange in excess of the current Step Up
Adding Tier 2 level, to the benefit of the investing public and all
market participants. In addition, the Exchange believes that the
proposed Step Up Adding Tier 1 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
renumbering 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,\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 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.
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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 ETP Holders 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) \12\ of the Act 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).
\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
Send an email to [email protected]. Please include
File Number SR-NYSENAT-2019-12 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-2019-12. 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
[[Page 23821]]
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-2019-12 and should be submitted
on or before June 13, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10751 Filed 5-22-19; 8:45 am]
BILLING CODE 8011-01-P