[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