[Federal Register Volume 86, Number 15 (Tuesday, January 26, 2021)]
[Notices]
[Pages 7135-7137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01591]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90953; File No. SR-NYSEArca-2021-05]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Equities Fees and Charges

January 19, 2021.
    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 January 13, 2021, 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, 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 the NYSE Arca Equities Fees and 
Charges (``Fee Schedule'') to (1) eliminate credits

[[Page 7136]]

and fees associated with Self Trade Prevention Modifiers, and (2) 
eliminate the Market Data Revenue Sharing Credits. 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 the Fee Schedule to (1) eliminate 
credits and fees associated with Self Trade Prevention (``STP'') 
Modifiers, and (2) eliminate the Market Data Revenue Sharing Credits. 
The Exchange proposes to implement the fee changes effective January 
13, 2021.\4\
---------------------------------------------------------------------------

    \4\ The Exchange originally filed to amend the Fee Schedule on 
January 4, 2021 (SR-NYSEArca-2021-01). SR-NYSEArca-2021-01 was 
subsequently withdrawn and replaced by this filing.
---------------------------------------------------------------------------

    The Exchange currently provides STP Modifiers that allow ETP 
Holders entering orders to elect to prevent those orders from executing 
against other orders entered on the Exchange by the same ETP Holder.\5\ 
In connection with the STP functionality, in 2009, the Exchange adopted 
the following credits and fees for orders returned to an ETP Holder 
using the STP Modifiers: ETP Holders entering an incoming order with 
either the STP Cancel Both (``STPC'') or the STP Decrement and Cancel 
(``STPD'') Modifier were charged $0.0030 per share for orders returned 
to the ETP Holder. The ETP Holder's corresponding resting order marked 
with any of the STP Modifiers that interacts with an incoming STPC or 
STPD Modifier were credited $0.0029 per share for orders returned to 
the ETP Holder. ETP Holders entering an incoming order with either the 
STP Cancel Newest (``STPN'') or the STP Cancel Oldest (``STPO'') 
Modifier were not credited or charged any fees.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 60191 (June 30, 
2009), 74 FR 32660 (July 8, 2009) (SR-NYSEArca-2009-58).
    \6\ See Securities Exchange Act Release No. 60322 (July 16, 
2009), 74 FR 36794 (July 24, 2009) (SR-NYSEArca-2009-68).
---------------------------------------------------------------------------

    In 2018, the Exchange modified the credit from $0.0029 per share to 
$0.0030 per share for an ETP Holder's resting order that is returned to 
the ETP Holder.\7\ With that change, both the fee and the credit 
associated with the STPC and STPD Modifiers is currently the same, 
$0.0030 per share. Additionally, the Exchange continues to not charge a 
fee or provide a credit to ETP Holders that enter an order with the 
STPN Modifier or with the STPO Modifier.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 83032 (April 11, 
2018), 83 FR 16909 (April 17, 2018) (SR-NYSEArca-2018-20).
---------------------------------------------------------------------------

    As a result of the standardization of the credits and fees 
associated with the STPC and STPD Modifiers, ETP Holders no longer pay 
a fee or receive a credit for this activity. Coupled with the zero 
credits and fees associated with the STPN and STPO Modifiers, there is 
currently no revenue generated by the Exchange when ETP Holders utilize 
the STP Modifiers when entering their orders on the Exchange. As a 
result, the Exchange proposes to eliminate the credits and fees 
associated with STP Modifiers and remove them from the Fee Schedule. 
The Exchange also proposes to renumber footnotes through the Fee 
Schedule in conjunction to the changes discussed herein.
    Additionally, the Fee Schedule currently provides for Market Data 
Revenue Sharing Credits for Cross Orders in Tape A, Tape B and Tape C 
Securities. Due to a lack of demand, the Exchange eliminated Cross 
Orders in 2019.\8\ As a result, the Market Data Revenue Sharing Credits 
program has become obsolete and the Exchange no longer collects revenue 
pursuant to the program. Therefore, the Exchange proposes to eliminate 
the Market Data Revenue Sharing Credits program and remove it, along 
with footnote 11,\9\ from the Fee Schedule.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 87519 (November 13, 
2019), 84 FR 63917 (November 19, 2019) (SR-NYSEArca-2019-80).
    \9\ The Exchange notes that footnote 11 contains rule text that 
is outdated, left over from the time when the Exchange employed a 
Directed Order Process, which it no longer does, and which limited 
the participation of LMMs in the program. The same applies to GTC 
orders, which are also no longer available on the Exchange. The 
Exchange, therefore, proposes to delete the rule text in footnote 11 
in its entirety.
---------------------------------------------------------------------------

    The proposed rule changes are intended to streamline the Fee 
Schedule by eliminating credits and fees that have become obsolete.
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any significant problems 
that market participants would have in complying with the proposed 
changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Sections 6(b)(4) and(5) of the Act,\11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to eliminate credits and 
fees associated with STP Modifiers and Market Data Revenue Sharing 
Credits when such fees and credits become obsolete. In particular, the 
Exchange believes that the proposed rule change to eliminate the 
credits and fees associated with STP Modifiers is reasonable because 
this activity has become revenue neutral since the Exchange 
standardized the credits and fees associated with the STPC and STPD 
Modifiers in 2018. While ETP Holders may continue to utilize this 
functionality, they are no longer subject to any fees or credits for 
doing so. The Exchange notes that no other market provides for fees and 
credits associated with the use of STP Modifiers and this proposed rule 
change would align the Exchange's billing practice with those of its 
competitors. Additionally, the Exchange believes that the proposed rule 
change to eliminate the Market Data Revenue Sharing Credits program 
applicable to Cross Orders is reasonable because, with the elimination 
of Cross Orders, the Exchange no longer generates revenue to share with 
ETP Holders under the program.
    The Exchange believes that amending the Fee Schedule to remove 
credits and fees associated with STP Modifiers and to remove the Market 
Data Revenue Sharing Credits for Cross Orders that are no longer 
functional would promote the protection of investors and the public 
interest because it would promote clarity and transparency in the Fee 
Schedule.
    The Exchange believes that the proposed rule changes are reasonable 
because they would also streamline the Fee Schedule by deleting 
obsolete rule text. The Exchange believes deleting

[[Page 7137]]

obsolete rule text would promote clarity to the Fee Schedule and reduce 
confusion to ETP Holders as to which fees and credits are applicable to 
their trading activity on the Exchange. The Exchange believes it is 
reasonable to delete the obsolete fees and credits from the Fee 
Schedule and thereby, streamline the Fee Schedule, to promote clarity 
and reduce confusion as to the applicability of fees and credits that 
ETP Holders would be subject to. The Exchange believes deleting 
obsolete fees and credits would also simplify the Fee Schedule.
    The Exchange believes that deleting obsolete fees and credits from 
the Fee Schedule is equitable and not unfairly discriminatory because 
the resulting streamlined Fee Schedule would continue to apply to ETP 
Holders as it does currently because the Exchange is not adopting any 
new fees or credits or removing any current fees or credits from the 
Fee Schedule that impact ETP Holders. All ETP Holders would continue to 
be subject to the same fees and credits that currently apply to them.
    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,\12\ 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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Intramarket Competition. The Exchange's proposal to delete obsolete 
fees and credits from the Fee Schedule will not place any undue burden 
on intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because all ETP Holders would 
continue to be subject to the same fees and credits that currently 
apply to them. To the extent the proposed rule change places a burden 
on competition, any such burden would be outweighed by the fact that a 
streamlined Fee Schedule would promote clarity and reduce confusion 
with respect to the fees and credits that ETP Holders would be subject 
to.
    Intermarket Competition. The Exchange believes the proposed rule 
change does not impose any burden on intermarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The Exchange operates in a highly competitive market in which market 
participants can readily choose to send their orders to other exchanges 
and off-exchange venues if they deem fee levels at those other venues 
to be more favorable. Market share statistics provide ample evidence 
that price competition between exchanges is fierce, with liquidity and 
market share moving freely from one execution venue to another in 
reaction to pricing changes.

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) \13\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \14\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 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-NYSEArca-2021-05 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-2021-05. 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-2021-05 and should be submitted 
on or before February 16, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01591 Filed 1-25-21; 8:45 am]
BILLING CODE 8011-01-P