[Federal Register Volume 86, Number 105 (Thursday, June 3, 2021)]
[Notices]
[Pages 29868-29876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11611]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92053; File No. SR-NYSEArca-2021-43]


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

May 27, 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 May 14, 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.
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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 the NYSE Arca Equities Fees and 
Charges (``Fee Schedule'') to replace the monthly rebate tied to the 
performance in the opening and closing auctions in NYSE Arca-listed 
Securities and the ETF Incentive Program for NYSE Arca-listed 
Securities with a new pricing incentive for Lead Market Makers and ETP 
Holders registered as Market Makers. The Exchange proposes to implement 
the fee changes effective May 14, 2021. 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 replace the 
monthly rebate tied to the performance in the opening and closing 
auctions in NYSE Arca-listed Securities and the ETF Incentive Program 
for NYSE Arca-listed Securities \4\ with a new pricing incentive that 
is tied to meeting enhanced market quality metrics. The Exchange now 
proposes to provide financial incentives for Lead Market Makers 
(``LMMs'') \5\ that are based on whether the LMM meets certain 
Performance Metrics (as described below). Specifically, the Exchange 
would provide incremental credits to LMMs based on how many Performance 
Metrics an LMM meets in each NYSE Arca-listed Security. The Exchange 
also proposes to make the additional credits available for ETP Holders 
registered as Market Maker (``Market Makers'').\6\ The Exchange 
believes that the proposed rule change would encourage LMMs and Market 
Makers to maintain better market quality in NYSE Arca-listed Securities 
in which they are registered, including in lower volume securities.
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    \4\ See Securities and Exchange Act Release No. 87978 (January 
15, 2020), 85 FR 3727 (January 22, 2020) (SR-NYSEArca-2020-03).
    \5\ The term ``Lead Market Maker'' is defined in Rule 1.1(w) to 
mean a registered Market Maker that is the exclusive Designated 
Market Maker in listings for which the Exchange is the primary 
market.
    \6\ Pursuant to Rule 7.23-E(a)(1), all registered Market Makers, 
including LMMs, have an obligation to maintain continuous, two-sided 
trading interest in those securities in which the Market Marker is 
registered to trade. In addition, pursuant to Rule 7.24-E(b), LMMs 
are held to higher performance standards in the securities in which 
they are registered as LMM. LMMs can earn additional financial 
incentives for meeting the higher performance standards specified 
from time to time in the Fee Schedule. Only one LMM can be 
registered in a NYSE-Arca listed security, but that security can 
have an unlimited number of registered Market Makers. Market Makers 
can also be registered in securities that trade on an unlisted 
trading privileges basis on the Exchange.
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    The Exchange notes that its listing business operates in a highly 
competitive market in which market participants, including issuers of 
securities, LMMs, and other liquidity providers, can readily transfer 
their listings, or direct order flow to competing venues if they deem 
fee levels, liquidity provision incentive programs, or other factors at 
a particular venue to be insufficient or excessive. The proposed rule 
change reflects the current competitive pricing environment and is 
designed to incentivize market participants to participate as LMMs or 
Market Makers, and thereby, further enhance the market quality on all 
securities listed on the Exchange and encourage issuers to list new 
products on the Exchange.
    The Exchange proposes to implement the fee changes effective May 
14, 2021.\7\
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    \7\ The Exchange originally filed to amend the Fee Schedule on 
May 3, 2021 (SR-NYSEArca-2021-33). SR-NYSEArca-2021-33 was 
subsequently withdrawn and replaced by this filing.
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Background
    As noted above, the Exchange operates in a highly competitive 
market. The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. In Regulation NMS, 
the Commission highlighted the importance of market forces in 
determining prices and SRO revenues and, also, recognized that current 
regulation of the market system ``has been remarkably successful in 
promoting market competition in its broader forms that are most 
important to investors and listed companies.'' \8\
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    \8\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (File No. S7-10-04) (Final 
Rule) (``Regulation NMS'').
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    While Regulation NMS has enhanced competition, it has also fostered 
a ``fragmented'' market structure where trading in a single stock can 
occur across multiple trading centers. When multiple trading centers 
compete for order flow in the same stock, the Commission has recognized 
that ``such competition can lead to the fragmentation of order flow in 
that stock.'' \9\ Indeed, equity trading is currently dispersed across 
16

[[Page 29869]]

exchanges,\10\ numerous alternative trading systems,\11\ and broker-
dealer internalizers and wholesalers, all competing for order flow. 
Based on publicly-available information, no single exchange currently 
has more than 17% market share.\12\ Therefore, no exchange possesses 
significant pricing power in the execution of equity order flow. More 
specifically, the Exchange currently has less than 10% market share of 
executed volume of equities trading.\13\
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    \9\ See Securities Exchange Act Release No. 61358, 75 FR 3594, 
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on 
Equity Market Structure).
    \10\ See Cboe U.S. Equities Market Volume Summary, available at 
https://markets.cboe.com/us/equities/market_share. See generally 
https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
    \11\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of 
alternative trading systems registered with the Commission is 
available at https://www.sec.gov/foia/docs/atslist.htm.
    \12\ See Cboe Global Markets U.S. Equities Market Volume 
Summary, available at http://markets.cboe.com/us/equities/market_share/.
    \13\ See id.
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    The Exchange believes that the ever-shifting market share among the 
exchanges from month to month demonstrates that market participants can 
move order flow, or discontinue or reduce use of certain categories of 
products. While it is not possible to know a firm's reason for shifting 
order flow, the Exchange believes that one such reason is because of 
fee changes at any of the registered exchanges or non-exchange venues 
to which a firm routes order flow. With respect to non-marketable order 
flow that would provide liquidity on an Exchange against which market 
makers can quote, ETP Holders can choose from any one of the 16 
currently operating registered exchanges to route such order flow. 
Accordingly, competitive forces constrain exchange transaction fees 
that relate to orders that would provide liquidity on an exchange.
Proposed Rule Change
    With this proposed rule change, the Exchange proposes to reorganize 
certain existing fees and credits and introduce new pricing that is 
tied to market quality metrics provided by LMMs and Market Makers on an 
ETP basis. In doing so, the Exchange proposes four new sections that 
would be applicable to LMM Transaction Fees and Credits. The proposed 
four sections, discussed below, would be:
     Section I. Definitions for purposes of LMM Transaction 
Fees and Credits
     Section II. LMM Base Fees and Credits per Share
     Section III. LMM Performance Metrics-based Incremental 
Base Credit Adjustments
     Section IV. Additional Tape B Credits for LMMs and Market 
Makers
Section I. Definitions for purposes of LMM Transaction Fees and Credits
    In connection with the proposed rule change, the Exchange would add 
new Section I titled ``Definitions for purposes of LMM Transaction Fees 
and Credits'' that would set forth the following nine definitions:
    1. ``CADV'' would mean the consolidated average daily volume in a 
security in the prior month.
    2. ``ETP'' would mean Exchange Traded Products listed on NYSE Arca.
    3. ``ETP Price'' would mean the average Official Closing Price \14\ 
in that ETP in the prior month.
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    \14\ With respect to equities traded on the Exchange, the term 
``Official Closing Price'' means the reference price to determine 
the closing price in a security. See NYSE Arca Rule 1.1(ll). NYSE 
Arca Rule 1.1(ll) describes how the Official Closing Price is 
determined.
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    4. ``Less Active ETPs'' would mean ETPs that have a CADV in the 
prior calendar quarter that is the greater of either less than 100,000 
shares or less than 0.013% of Consolidated Tape B ADV.
    5. ``Leveraged ETP'' would mean an ETP that tracks an underlying 
index by a ratio other than on a one-to-one basis.
    6. ``Maximum LMM Spread'' would mean time-weighted average LMM 
spread (LMM Offer minus LMM Bid) divided by the average of the LMM Bid 
and LMM Offer, in basis points.
    7. ``Minimum LMM Shares within 1% of NBBO'' would mean the average 
number of LMM shares quoted throughout the trading day that are within 
1% of the National Best Bid and Best Offer divided by two.
    8. ``Minimum LMM Shares at the Core Open Auction within 1.5% of the 
Auction Reference Price'' would mean the average of LMM buy shares and 
LMM sell shares for Limit Orders quoted within 1.5% of the Auction 
Reference Price \15\ divided by two.
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    \15\ The term ``Auction Reference Price'' is defined in NYSE 
Arca Rule 7.35-E(a)(8)(A). NYSE Arca Rule 7.35-E(a)(8)(A) describes 
how the Auction Reference Price is determined.
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    9. ``Minimum LMM Shares at the Closing Auction within 1% of the 
NBBO'' would mean the average number of LMM buy shares and LMM sell 
shares for Limit Orders quoted within 1% of the National Best Bid and 
Best Offer before the end of Core Trading Hours \16\ divided by two.
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    \16\ With respect to equities traded on the Exchange, the term 
``Core Trading Hours'' means the hours of 9:30 a.m. Eastern Time 
through 4:00 p.m. (Eastern Time) or such other hours as may be 
determined by the Exchange from time to time. See NYSE Arca Rule 
1.1(j).
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    The Exchange proposes these definitions to use consistent terms 
throughout this section of the Fee Schedule relating to LMMs.
Section II. LMM Base Fees and Credits per Share
    The Exchange proposes to add new Section II titled ``LMM Base Fees 
and Credits per Share.'' The Exchange notes that the fees and credits 
in proposed Section II are current fees and credits. The Exchange 
proposes a non-substantive change to reorganize these current fees and 
credits in a table format without any change to the level of the fees 
and credits.
    Specifically, the Exchange currently charges LMMs a base fee of 
$0.0029 per share for orders that remove liquidity and provides the 
following base credits:
     $0.0033 per share for orders that provide liquidity in 
securities for which the LMM is registered as the LMM and which have a 
CADV in the previous month greater than 3,000,000 shares;
     $0.0040 per share for orders that provide liquidity in 
securities for which the LMM is registered as the LMM and which have a 
CADV in the previous month of between 1,000,000 and 3,000,000 shares; 
and
     $0.0045 per share for orders that provide liquidity in 
securities for which the LMM is registered as the LMM and which have a 
CADV in the previous month of less than 1,000,000 shares.
    Additionally, LMMs are provided a credit of $0.0030 per share for 
orders that provide undisplayed liquidity in Arca Only Orders \17\ in 
securities for which the LMM is registered as the LMM, and a credit of 
$0.0015 per share for Non-Displayed Limit Orders that provide liquidity 
in securities for which the LMM is registered as the LMM. The Exchange 
also does not charge LMMs a fee for orders executed in the Closing 
Auction.
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    \17\ The ``Arca Only Order'' has been renamed as the ``Non-
Routable Limit Order.'' See Securities Exchange Act Release No. 
83967 (August 28, 2018), 83 FR 44984 (September 4, 2018) (SR-
NYSEArca-2018-61). Accordingly, the proposed new presentation would 
utilize the new name ``Non-Routable Limit Orders'' instead of ``Arca 
Only Orders.''
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    The Exchange proposes to reorganize the presentation of the Fee 
Schedule in order to enhance its clarity and transparency, thereby 
making the Fee Schedule easier to navigate. With respect the current 
LMM fees and credits discussed above, the Exchange proposes a 
horizontal presentation in a table rather than the current vertical 
presentation. The proposed changes described above would be included in 
the new presentation under proposed

[[Page 29870]]

Section II titled LMM Base Fees and Credits per Share, without any 
substantive change to the rate or the requirement to qualify for these 
existing fees and credits. The proposed changes would appear as follows 
in the Fee Schedule:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Credit for adding
                                                                                 Credit for adding      undisplayed
                 ETP CADV                  Credit for adding   Fee for removing    non-displayed     liquidity in non-    Fee for orders in the closing
                                               liquidity          liquidity         limit orders       routable limit                auction
                                                                                                           orders
--------------------------------------------------------------------------------------------------------------------------------------------------------
<1,000,000...............................          ($0.0045)            $0.0029          ($0.0015)            ($0.0030)  No Fee.
1,000,000 to 3,000,000...................          ($0.0040)  .................  .................  ...................  ...............................
>3,000,000...............................          ($0.0033)  .................  .................  ...................  ...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------

Section III. LMM Performance Metrics-Based Incremental Base Credit 
Adjustments
    The Exchange proposes to adopt market quality metrics that LMMs 
would be required to meet to qualify for incremental credits. Proposed 
Section III titled ``LMM Performance Metrics-based Incremental Base 
Credit Adjustments'' would provide a table of Performance Metrics that 
LMMs would be required to meet to qualify for certain incremental 
credits. LMMs that meet the Performance Metrics would be entitled to 
enhanced credits based on the quality of the market provided by an LMM 
in an ETP assigned to the LMM.
    The Exchange proposes to adopt the following four Performance 
Metrics that LMMs would be measured by:
    1. Maximum LMM Spread. Maximum LMM Spread means time-weighted 
average LMM spread (LMM Offer minus LMM Bid) divided by the average of 
the LMM Bid and LMM Offer, in basis points;
    2. Minimum LMM Shares within 1% of NBBO. Minimum LMM Shares within 
1% of NBBO means the average number of LMM shares quoted throughout the 
trading day that are within 1% of the National Best Bid and Best Offer 
divided by two;
    3. Minimum LMM Shares in Core Open Auction within 1.5% of Auction 
Reference Price. Minimum LMM Shares at the Core Open Auction within 
1.5% of the Auction Reference Price means the average of LMM buy shares 
and LMM sell shares for Limit Orders quoted within 1.5% of the Auction 
Reference Price divided by two; and
    4. Minimum LMM Shares at the Closing Auction within 1% of the NBBO. 
Minimum LMM Shares at the Closing Auction within 1% of the NBBO means 
the average number of LMM buy shares and LMM sell shares for Limit 
Orders quoted within 1% of the National Best Bid and Best Offer before 
the end of Core Trading Hours divided by two.
    As proposed, each ETP would be grouped based on its prior month 
CADV and its price. An LMM would be considered to have met a 
Performance Metric in an ETP assigned to the LMM in a billing month if 
it meets the following:

                                     Monthly Average LMM Performance Metrics
----------------------------------------------------------------------------------------------------------------
                                                                                    Minimum LMM
                                                                                  shares in core    Minimum LMM
                                                                    Minimum LMM    open auction    shares at the
           ETP CADV                 ETP price       Maximum LMM    shares within  within 1.5% of      closing
                                                   spread (bps)   1% of national      auction     auction within
                                                                        BBO          reference       1% of the
                                                                                       price       national BBO
----------------------------------------------------------------------------------------------------------------
>1,000,000....................  >$50............              55           6,000           4,000          12,250
                                $25-$50.........              45          20,000           8,500          14,250
                                Under $25.......              40          42,000          22,000          30,000
100,001-1,000,000.............  >$50............              35           2,500           2,500           3,250
                                $25-$50.........              35           3,500           4,000           4,750
                                Under $25.......              65          10,000           5,750           7,250
10,000-100,000................  >$50............              40           2,200           2,000           2,250
                                $25-$50.........              55           2,400           2,050           2,500
                                Under $25.......              70           4,000           2,200           4,500
Under 10,000..................  >$50............              50           2,000           1,750           2,000
                                $25-$50.........              60           3,000           1,800           3,000
                                Under $25.......              75           3,000           1,800           3,000
----------------------------------------------------------------------------------------------------------------

    Under the proposal, the base credit earned by an LMM for Adding 
Displayed Liquidity (as provided in Section II above) in an assigned 
ETP would be adjusted based on the number of Performance Metrics met by 
the LMM in the billing month for each assigned ETP, as follows:

------------------------------------------------------------------------
                                                             Incremental
                                               Incremental   base credit
                                               base credit   adjustment
     Numbers of performance metrics met        adjustment        per
                                                 per ETP      leveraged
                                                                 ETP
------------------------------------------------------------------------
4...........................................     ($0.0001)     ($0.0001)
3...........................................     (0.00005)     (0.00005)
2...........................................        0.0000        0.0000
1...........................................        0.0001        0.0000
0...........................................        0.0002        0.0000
------------------------------------------------------------------------

    The Performance Metrics illustrated above would apply to all ETPs, 
including Leveraged ETPs. However, for Leveraged ETPs, there would be 
no adjustment to the base credit payable to the LMM if the LMM meets 1 
or 2 Performance Metrics or if the LMM does not meet any Performance 
Metrics. LMMs that are registered as the LMM in a Leveraged ETF would 
be able to earn an incremental credit of $0.00005 per share if the LMM 
meets 3 of the 4 Performance Metrics, or earn an incremental credit of 
$0.0001 per share

[[Page 29871]]

if the LMM meets all 4 Performance Metrics.
    The following example illustrates how a LMM can earn an incremental 
credit by meeting the Performance Metrics. Assume an LMM is registered 
in an ETP that has a CADV of 500,000 shares and a price of $30, both in 
the prior month. That LMM would currently be eligible for a base credit 
for adding of $0.0045 per share.\18\ Given the profile of the ETP, 
i.e., CADV of 500,000 shares and a price of $30, the LMM would have to 
meet the following Performance Metrics to earn an incremental credit 
(as illustrated in the Performance Metrics table above):
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    \18\ Under proposed Section II. LMM Base Fees and Credits per 
Share, ETPs that have a CADV of less than 1,000,000 shares receive 
$0.0045 per share credit for adding displayed liquidity.

 Maximum LMM Spread (``Spread''): 35 basis points (``bps'')
 Minimum LMM Shares within 1% of Last Bid and Offer 
(``Depth''): 3,500 shares
 Minimum LMM Shares at the Core Open Auction within 1.5% of the 
Auction Reference Price (``Open Depth''): 4,000 shares
 Minimum LMM Shares at the Closing Auction within 1% of the 
Last Bid & Offer (``Closing Depth''): 4,750 shares

    Assume in the billing month, the LMM in this ETP had a Spread of 30 
bps, Depth of 3,000 shares, Open Depth of 4,500 shares, and Closing 
Depth of 5,000 shares. The LMM in this example met 3 of the 4 
Performance Metrics (Spread, Open Depth, and Closing Depth) but did not 
meet Depth. As a result, the LMM has qualified to earn an incremental 
credit of $0.00005 per share, for a combined credit per share of 
$0.00455.
    The following example illustrates how a LMM registered as a LMM in 
a Leveraged ETP can earn an incremental credit. Assume the same LMM as 
in the example above was registered in a second ETP that is a Leveraged 
ETP that also has a CADV of 500,000 shares and a price of $30, both in 
the prior month. The LMM would currently be eligible for a base credit 
for adding of $0.0045 per share. In this example, the profile of the 
Leveraged ETP is the same as in the non-Leveraged ETP in the example 
above.
    Assume in the billing month, the LMM in the Leveraged ETP had a 
Spread of 25 bps, Depth of 3,000 shares, Open Depth of 2,000 shares, 
and Closing Depth of 2,500 shares. The LMM in this example has met just 
1 of the 4 Performance Metrics and therefore, would not earn any 
incremental credit. Since the credit payable to a LMM in a Leveraged 
ETP would not be adjusted if the LMM meets only 1 or 2 Metrics, or does 
not meet any Performance Metrics, the LMM in this example would 
continue to receive the base credit of $0.0045 per share. If the LMM 
had met at least 3 of the 4 Performance Metrics in the Leveraged ETP, 
the LMM would have qualified for an incremental credit of $0.00005 per 
share, for a combined credit of $0.00455 per share. And if the LMM had 
met all 4 Performance Metrics in the Leveraged ETP, the LMM would have 
qualified for an incremental credit of $0.0001 per share, for a 
combined credit of $0.0046 per share.
Section IV. Additional Tape B Credits for LMMs and Market Makers
    The Exchange proposes to add new Section IV titled ``Additional 
Tape B Credits for LMMs and Market Makers.'' The Exchange notes that 
the additional credits in proposed Section IV for LMMs are current; the 
Exchange is not proposing any new additional credits for LMMs under 
Section IV with this proposed rule change.
    As more fully described below, the Exchange proposes a non-
substantive change to reorganize the presentation of the credits under 
proposed Section IV. The Exchange also proposes two changes with 
respect to the Section IV credits. First, the Exchange proposes that to 
qualify for the additional credits available under Section IV, LMMs 
would be required to meet at least two Performance Metrics per Less 
Active ETP assigned to the LMM. Second, the Exchange proposes to make 
additional credits available to Market Makers who meet the specified 
Performance Metrics.
Non-Substantive Change
    The Exchange currently provides LMMs, and ETP Holders affiliated 
with such LMM, incremental credits for orders in Tape B Securities that 
provide displayed liquidity in securities for which they are registered 
as the LMM and in securities for which they are not registered as an 
LMM based on the number of securities that have a CADV in the prior 
calendar quarter of less than 100,000 shares, or 0.013% of Consolidated 
Tape B ADV, whichever is greater (``Less Active ETPs'').\19\
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    \19\ The number of Less Active ETPs for the billing month is 
based on the number of Less Active ETPs in which an LMM is 
registered as the LMM on the average of the first and last business 
day of the previous month.
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    These additional credits are as follows:
     An additional credit of $0.0004 per share if an LMM is 
registered as the LMM in at least 400 Less Active ETPs or at least 300 
Less Active ETPs if the LMM and ETP Holders and Market Makers 
affiliated with such LMM add liquidity in all securities of at least 
1.00% of US CADV. This credit would appear in the proposed Less Active 
table under proposed Section IV as Tier 1 without any substantive 
change to the amount of the credit.
     An additional credit of $0.0003 per share if an LMM is 
registered as the LMM in at least 200 but less than 400 Less Active 
ETPs or in at least 200 but less than 300 Less Active ETPs if the LMM 
and ETP Holders and Market Makers affiliated with such LMM add 
liquidity in all securities of at least 1.00% of US CADV. This credit 
would appear in the proposed Less Active table under proposed Section 
IV as Tier 2 without any substantive change to the amount of the 
credit.
     An additional credit of $0.0002 per share if an LMM is 
registered as the LMM in at least 100 but less than 200 Less Active 
ETPs. This credit would appear in the proposed Less Active table under 
proposed Section IV as Tier 3 without any substantive change to the 
amount of the credit.
     An additional credit of $0.0001 per share if an LMM is 
registered as the LMM in at least 75 but less than 100 Less Active 
ETPs. This credit would appear in the proposed Less Active table under 
proposed Section IV as Tier 4 without any substantive change to the 
amount of the credit.
     An additional credit of $0.00005 per share if an LMM is 
registered as the LMM in at least 50 but less than 75 Less Active ETPs. 
This credit would appear in the proposed Less Active table under 
proposed Section IV as Tier 5 without any substantive change to the 
amount of the credit.
    As noted above, the Exchange proposes to reorganize the 
presentation of the incremental credits described above in a table 
rather than the current vertical presentation in order to enhance its 
clarity and transparency.
Performance Metrics-Based Tape B Credits
    As noted above, the Exchange currently provides tier-based 
incremental credits to LMMs and to ETP Holders affiliated with the LMM 
that provide displayed liquidity in Tape B securities. A LMM can earn 
anywhere between $0.00005 per share to $0.0004 per share of incremental 
credits depending on the number of Less Active ETP Securities in which 
an LMM is registered as the LMM.
    As proposed, LMMs would be able to earn an additional credit on all 
Tape B Securities if the LMM meets at least two Performance Metrics in 
each of the Less

[[Page 29872]]

Active ETPs in which they are registered as the LMM.
    The number of Less Active ETPs for a billing month would be 
calculated as the average number of Less Active ETPs in which an LMM is 
registered on the first and last business day of the previous month.
    To determine which Less Active ETP Tier would apply to an LMM, the 
Exchange would count the number of Less Active ETPs assigned to that 
LMM, as follows:
    Each Less Active ETP in which an LMM is registered and meets at 
least two Performance Metrics would count as one Less Active ETP. Each 
Less Active ETP that is a Leveraged ETP in which an LMM is registered 
would count as one Less Active ETP regardless of the number of 
Performance Metrics met.
    The Exchange also proposes that Market Makers would be eligible to 
earn this additional credit on all Tape B securities if:
     The Market Maker notifies the Exchange on or before the 
first trading day that the additional credit is available in a calendar 
month of which new Less Active ETPs for which the Marker Maker is 
registered that it would be seeking to count towards or remove from 
qualifying for this additional credit in that month.
     The Market Maker cannot also be the registered LMM in a 
Less Active ETP that it is seeking to count to qualify for the 
additional credit as a Market Maker.
     Every two Less Active ETPs that a Market Maker identifies 
and meets at least two Performance Metrics will count as one Less 
Active ETP for purposes of determining the applicable additional 
credit.
     If an ETP Holder is both an LMM and a Market Maker in Less 
Active ETPs and has notified the Exchange of Less Active ETPs that it 
seeking to count for the additional credit as a Market Maker, the 
number of Less Active ETPs calculated for the Market Maker above will 
be combined with the number of Less Active ETPs in which the LMM is 
registered.
    The Exchange believes that offering this incentive program to 
Market Makers would promote the additional display of liquidity in Less 
Active ETPs that list and trade on the Exchange. The Exchange notes 
that Market Makers would need to meet Performance Metrics in more Less 
Active ETPs than the assigned LMMs in order to achieve the same level 
of additional credit.
    The changes described above would be included under proposed new 
Section IV and would appear as follows on the Fee Schedule:

------------------------------------------------------------------------
                                                            Additional
                                  Number of less active    credit on all
     Less active ETP tiers         ETPs per LMM/Market        Tape B
                                          Maker             Securities
------------------------------------------------------------------------
Tier 5.........................  50-74 ETPs.............      ($0.00005)
Tier 4.........................  75-99 ETPs.............        (0.0001)
Tier 3.........................  100-199 ETPs...........        (0.0002)
Tier 2.........................  200-399 ETPs, or 200-          (0.0003)
                                  299 ETPs if the LMM or
                                  Market Maker and its
                                  affiliates add
                                  liquidity of at least
                                  1.00% of US CADV.
Tier 1.........................  At Least 400 ETPs, or          (0.0004)
                                  at least 300 ETPs if
                                  the LMM or Market
                                  Maker and its
                                  affiliates add
                                  liquidity of at least
                                  1.00% of US CADV.
------------------------------------------------------------------------

    The following example illustrates the applicability of the expanded 
eligibility of additional Tape B credits to LMMs and Market Makers that 
meet a certain number of Performance Metrics.
    Assume a LMM is registered in 120 Less Active ETPs. Currently, that 
LMM would qualify for an additional credit of $0.0002 per share for 
adding liquidity in all Tape B Securities under the Less Active ETP 
Tier 3 in the table above. Assume further that of those 120 Less Active 
ETPs, the LMM meets at least two Performance Metrics in 90 of those 
Less Active ETPs, and does not meet at least two Performance Metric in 
the other 30 Less Active ETPs. The LMM in this example would qualify 
for Less Active ETP Tier 4 and would receive an incremental credit of 
$0.0001 per share for adding liquidity on all Tape B Securities. If the 
LMM in this example seeks to qualify as a Market Maker in another 50 
Less Active ETPs, and as a Market Maker, the LMM meets at least two 
Performance Metrics in 40 of its non-registered Less Active ETPs, then 
those 40 Less Active ETPs would count as 20 Less Active ETPs for a 
combined total number of Less Active ETPs of 110 Less Active ETPs (90 
Less Active ETPs as LMM + 20 Less Active ETPs as Market Maker). The LMM 
would then qualify for Less Active ETP Tier 3 and would receive an 
incremental credit of $0.0002 per share for adding liquidity on all 
Tape B Securities.
    The following example illustrates how a Market Maker that is not an 
LMM can receive the incremental credits. Assume a Market Maker notifies 
the Exchange that it is seeking to qualify in 180 Less Active ETPs. 
Assume further that the Market Maker meets at least 2 Performance 
Metrics in 160 Less Active ETPs, and does not meet at least 2 
Performance Metrics in the other 20 Less Active ETPs, for a total of 80 
Less Active ETPs since every two Less Active ETPs that a Market Maker 
identifies and meets at least two Performance Metrics count as one Less 
Active ETP for purposes of determining which Less Active ETP tier 
applies to the Market Maker. The Market Maker in this example would 
qualify under Less Active Tier 4 for an incremental credit of $0.0001 
per share for adding liquidity in all Tape B securities.
    The Exchange believes the proposed rule change would enhance market 
quality on all NYSE Arca-listed Securities by incentivizing LMMs and 
Market Makers to meet the Performance Metrics across all Less Active 
ETPs, which would support the quality of price discovery in such 
securities on the Exchange and provide additional liquidity for 
incoming orders for the benefit of all market participants. The 
Exchange believes that providing increased credits to LMMs and ETP 
Holders that are affiliated with a LMM that add liquidity in Tape B 
Securities to the Exchange could lead to more LMMs to register to quote 
and trade in Less Active ETP Securities. The Exchange believes the 
proposed financial incentives could also encourage competition in Tape 
B Securities quoted and traded on the Exchange.
    The Exchange does not know how much order flow LMMs and Market 
Makers choose to route to other exchanges or to off-exchange venues. 
The proposed credits in NYSE Arca-listed Securities would be available 
to all LMMs and Market Makers that are registered in those securities 
and are subject to the obligations specified in Rule 7.23-E relating to 
Market Makers. There are currently seven LMMs that

[[Page 29873]]

would qualify for the incremental credits. Without having a view of 
their activity on other markets and off-exchange venues, the Exchange 
has no way of knowing whether this proposed rule change would result in 
more LMMs and Market Makers sending their orders in NYSE Arca-listed 
Securities to the Exchange to qualify for the existing credits or 
whether this proposed rule change would result in these members sending 
more of their orders in NYSE Arca-listed Securities to the Exchange to 
qualify for the proposed incremental credits. The Exchange cannot 
predict with certainty how many LMMs and Market Makers would avail 
themselves of this opportunity, but additional liquidity-providing 
orders would benefit all market participants because it would provide 
greater execution opportunities on the Exchange.
    The proposed rule change is also intended to incentivize LMMs to 
increase auction liquidity in less liquid NYSE Arca-listed Securities 
to support price discovery in the Exchange's opening and closing 
auctions for the benefit of all market participants. The Exchange 
believes that the proposed rule change could lead to more LMMs to 
register in less liquid securities and encourage greater participation 
in the opening and closing auctions on the Exchange.
    The Exchange believes the proposed rule change would also to 
provide superior market quality and price discovery for NYSE Arca-
listed Securities, specifically securities that are less active, 
through a quoting size requirement that would promote liquidity in the 
opening and closing auction in such securities. The proposed rule 
change is intended to provide a more meaningful incentive to both LMMs 
and ETP Holders to provide liquidity in less active securities by 
providing financial incentives to the Exchange's members as long as 
they meet certain prescribed quoting criteria. The Exchange believes 
that a performance-driven incentive would encourage such members to 
provide meaningful quotes and size in less active securities listed and 
traded on the Exchange.
    Additionally, for newly listed and low volume ETPs, the cost to a 
firm for making a market, such as holding inventory in the security, is 
often not fully offset by the revenue through rebates provided by the 
Exchange. In some cases, firms may even operate at a loss in new and 
low volume ETPs. The Exchange believes the proposed credits, which 
would compensate members as long as they meet the prescribed 
performance metrics, is a more deterministic program from a member's 
perspective. The member would decide how many, if any, low volume 
securities it wants to provide tight and deep markets in. The more 
securities the member provides heightened quoting in, the more the 
member could collect in the form of a rebate.
    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,\20\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\21\ 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. The Exchange also notes that 
its ETP listing business operates in a highly-competitive market in 
which market participants, which includes LMMs and ETP Holders, as well 
as ETP issuers, can readily transfer their listings or opt not to 
participate, respectively, if they deem fee levels, liquidity provision 
incentive programs, or any other factor at a particular venue to be 
insufficient or excessive. The proposed rule change reflects a 
competitive pricing structure designed to incentivize issuers to list 
new products and transfer existing products to the Exchange and market 
participants to enroll and participate as LMMs on the Exchange, which 
the Exchange believes will enhance market quality in all ETPs listed on 
the Exchange.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposed Fee Change is Reasonable
    The Exchange believes that the proposal to adopt market quality-
based incentives is a reasonable means to incentivize liquidity 
provision in ETPs listed on the Exchange. The marketplace for listings 
is extremely competitive and the Exchange is not the only venue for 
listing ETPs. Competition in ETPs is further exacerbated by the fact 
that listings can and do transfer from one listing market to another. 
The proposed rule change is intended to help the Exchange compete as a 
listing venue for ETPs. Further, the Exchange notes that the proposed 
incentives are not transaction fees, nor are they fees paid by 
participants to access the Exchange. Rather, the proposed rebates are 
based on achieving certain objective market quality metrics. The 
Exchange believes providing rebates that are based on the quality of 
the market in individual ETPs that generally have low volume will allow 
ETP Holders to anticipate their revenue and will incentivize them to 
provide tight and deep markets in those securities.
    Given the novelty of the proposed rule change, the Exchange cannot 
be certain that LMMs and Market Makers will choose to actively compete 
for these incentives. For LMMs and Market Makers that do choose to 
actively participate by providing deep and tight markets in Less Active 
ETP Securities, the Exchange expects those members to receive payments 
comparable to what they currently receive, with the potential for 
additional upside when they meet the Performance Metrics in a greater 
number of less active securities. The Exchange believes the proposed 
credits, which would compensate LMMs and Market Makers as long as they 
meet the prescribed Performance Metrics, is also reasonable because it 
is a more deterministic program from an ETP Holder's perspective.
    The Exchange believes the proposed rule change is intended to 
encourage LMMs and Market Makers to promote price discovery and market 
quality in Less Active ETP Securities for the benefit of all market 
participants. The Exchange believes the proposed rule change is 
reasonable and appropriate in that the credits are based on the amount 
of business transacted on the Exchange. The Exchange notes that the 
proposed incremental credits offered by the Exchange is similar to 
market quality incentive programs already in place on other markets, 
such as the Designated Liquidity Provider incentives on the Nasdaq 
Stock Market LLC (``Nasdaq''), which requires a member on that exchange 
to provide meaningful and consistent support to market quality and 
price discovery in low volume exchange-traded products by quoting at 
the National Best Bid and Offer and adding liquidity in a minimum 
number of such securities. In return, Nasdaq provides the member with 
an incremental rebate.\22\ The Exchange believes that providing 
increased credits to LMMs and Market Makers that add liquidity in Tape 
B Securities to the Exchange is reasonable because the Exchange 
believes that by providing

[[Page 29874]]

increased rebates to such members, more of them will register to quote 
and trade in Less Active ETP Securities. The Exchange believes the 
proposed incremental credit for adding liquidity is also reasonable 
because it will encourage liquidity and competition in Tape B 
Securities quoted and traded on the Exchange. Moreover, the Exchange 
believes that the proposed fee change will incentivize LMMs and Market 
Maker to register as either an LMM or Market Maker in Less Active ETP 
Securities and thus, add more liquidity in Tape B Securities to the 
benefit of all market participants.
---------------------------------------------------------------------------

    \22\ See Equity 7 Pricing Schedule, Section 114. Market Quality 
Incentive Programs, at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Equity%207#section_114_market_quality_incentive_programs.
---------------------------------------------------------------------------

    The Exchange believes that providing additional credits to Market 
Makers that add liquidity in Less Active ETPs is reasonable because the 
Exchange believes that by providing such additional credits, more 
Market Makers would choose to register in Less Active ETP Securities on 
the Exchange, which the Exchange believes would benefit all market 
participants. As noted above, because Market Makers registered in a 
security must meet the quoting obligations specified in Rule 7.23-E, 
expanding eligibility to Market Makers to receive credits is a 
reasonable attempt to increase participation on the Exchange and 
provide an incentive for Market Makers to meet additional standards for 
their registered Less Active ETPs.
    Submission of additional liquidity to the Exchange would promote 
price discovery and transparency and enhance order execution 
opportunities for LMMs and Market Makers from the substantial amounts 
of liquidity present on the Exchange. All participants would benefit 
from the greater amounts of liquidity that will be present on the 
Exchange, which would provide greater execution opportunities.
    The Exchange believes that eliminating the existing monthly rebate 
tied to the performance in the opening and closing auctions in NYSE 
Arca-listed Securities and the ETF Incentive Program for NYSE Arca-
listed Securities is reasonable because those pricing incentives did 
not the achieve their intended purpose of incentivizing LMMs and ETP 
Holders to send a greater number of their orders in Tape B Securities 
to the Exchange. The Exchange believes replacing the monthly rebate 
program and the ETF Incentive Program with pricing incentives tied to 
Performance Metrics discussed above will allow the Exchange to better 
maintain its competitive standing. On the backdrop of the competitive 
environment in which the Exchange currently operates, the proposed rule 
change is a reasonable attempt to increase liquidity on the Exchange 
and improve the Exchange's market share relative to its competitors.
    Finally, the Exchange believes the proposed non-substantive changes 
to relocate existing fees and credits into a table format is reasonable 
and 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 of the Fee 
Schedule, thereby reducing potential confusion.
The Proposed Fee Change is an Equitable Allocation of Fees and Credits
    The Exchange believes the proposed rule change is equitable because 
the proposal would provide discounts that are reasonably related to the 
value to the Exchange's market quality associated with higher volumes 
in Less Active ETP Securities. The Exchange further believes that the 
proposed incremental rebate is equitable because it is consistent with 
the market quality and competitive benefits associated with the fee 
program and because the magnitude of the additional rebate is not 
unreasonably high in comparison to the rebate paid with respect to 
other displayed liquidity-providing orders. The Exchange believes that 
it is equitable to offer increased rebates to LMMs and Market Makers as 
both are currently subject to obligations specified in Rule 7.23-E, 
which are not applicable to non-Market Maker ETP Holders, and they 
would be subject to additional requirements and obligations (such as 
meeting Performance Metrics) that other market participants are not.
    The Exchange believes that the proposal to offer rebates tied to 
market quality metrics represents an equitable allocation of payments 
because LMMs and Market Makers would be required to not only meet their 
Rule 7.23-E obligations, but also meet prescribed quoting requirements 
in order to qualify for the payments, as described above. Where an LMM 
or Market Maker does not meet at least two Performance Metrics, that 
member will not receive any additional financial benefit. Further, all 
LMMs and Market Makers on the Exchange are eligible to participate and 
could do so by simply registering in a Less Active ETP and meeting the 
proposed market quality metrics. The Exchange has designed the proposed 
pricing incentives to be sustainable over the long-term and generally 
expects that payments made to LMMs and Market Makers will be comparable 
to payments the Exchange currently makes to its members and comparable 
to pricing incentives offered by the Exchange's competitors. As such, 
the Exchange believes that the proposal represents an equitable 
allocation of dues, fees and credits.
    The Exchange believes that eliminating the existing monthly rebate 
tied to the performance in the opening and closing auctions in NYSE 
Arca-listed Securities and the ETF Incentive Program for NYSE Arca-
listed Securities is equitable because the Exchange is eliminating 
those pricing incentives for all participants.
The Proposed Fee Change is not Unfairly Discriminatory
    The Exchange believes that the proposed rule change is not unfairly 
discriminatory. In the prevailing competitive environment, LMMs and 
Market Makers are free to disfavor the Exchange's pricing if they 
believe that alternatives offer them better value.
    The Exchange believes it is not unfairly discriminatory to adopt 
incremental credits applicable to LMMs and Market Makers because both 
are already subject to additional obligations, as specified in Rule 
7.23-E, and the proposed additional credits would be provided on an 
equal basis to all similarly situated participant provided each such 
participant meets the prescribed market quality metrics. If an LMM or 
Market Maker does not meet the required number of Performance Metrics, 
the member would not receive any incremental credit. Further, the 
Exchange believes the incremental credit would incentivize each of 
these participants to register in Less Active ETPs and send more orders 
to the Exchange to qualify for higher credits. The Exchange also 
believes that the proposed rule change is not unfairly discriminatory 
because it is reasonably related to the value to the Exchange's market 
quality associated with higher volume.
    The proposal to offer an additional credit tied to meeting certain 
market quality requirements neither targets nor will it have a 
disparate impact on any particular category of market participant. The 
proposal does not permit unfair discrimination because LMMs and Market 
Makers already have increased obligations vis-[agrave]-vis non-Market 
Maker ETP Holders, as specified in Rule 7.23-E, and the proposed 
requirements would be applied to all similarly-situated LMMs and Market 
Maker equally. In addition, the proposed incentives for LMMs replace 
the existing incentive structure, which is already available only for 
LMMs. The Exchange does not believe it would be unfairly discriminatory 
to extend the availability of additional credits for

[[Page 29875]]

Tape B securities to Market Makers because Market Makers have 
obligations under Rule 7.23-E, and pursuant to the proposed change, 
would need to meet additional performance requirements in order to 
qualify for the additional credit.
    The Exchange believes that the proposed rule change is not unfairly 
discriminatory because all LMMs and Market Makers that choose to 
qualify for the incremental credits would be required to meet a minimum 
number of Performance Metrics in order to receive the credits. Where a 
participant does not achieve a certain number of Performance Metrics, 
it will not receive any incremental credits. Further, all LMMs and 
Market Makers on the Exchange are eligible to participate in the 
program and could do so by simply registering in Less Active ETPs and 
meeting a minimum number of Performance Metrics. The Exchange has 
designed the pricing incentives proposed herein to be sustainable over 
the long-term and generally expects that payments made to LMMs and 
Market Makers would be comparable to payments the Exchange currently 
makes to its LMMs and comparable to pricing incentives offered by the 
Exchange's competitors. As such, the Exchange believes that the 
proposal is not unfairly discriminatory.
    The Exchange believes that eliminating the existing monthly rebate 
tied to the performance in the opening and closing auctions in NYSE 
Arca-listed Securities and the ETF Incentive Program for NYSE Arca-
listed Securities is not unfairly discriminatory because the Exchange 
is eliminating both pricing incentives for all participants.
    Finally, subject to their obligations specified in Rule 7.23-E, the 
submission of additional orders to the Exchange is optional for LMMs 
and Market Makers in that they could choose the level of trading 
activity on the Exchange. 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,\23\ 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, as discussed above, the Exchange believes 
that the proposed changes would encourage the submission of additional 
liquidity to a public exchange, thereby promoting market depth, price 
discovery and transparency and enhancing order execution opportunities 
for LMMs and ETP Holders. As a result, the Exchange believes that the 
proposed change furthers the Commission's goal in adopting Regulation 
NMS of fostering integrated competition among orders, which promotes 
``more efficient pricing of individual stocks for all types of orders, 
large and small.'' \24\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b)(8).
    \24\ See Securities Exchange Act Release No. 51808, 70 FR 37495, 
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    Intramarket Competition. The proposed change is designed to attract 
additional order flow to the Exchange. The Exchange believes that the 
proposed Performance Metrics-based incremental credit applicable to 
LMMs and Market Makers in Less Active ETPs in which they are registered 
would continue to incentivize market participants to direct their 
displayed order flow to the Exchange. Greater liquidity benefits all 
market participants on the Exchange by providing more trading 
opportunities and encourages LMMs and Market Makers to send additional 
orders to the Exchange, thereby contributing to robust levels of 
liquidity, which benefits all market participants. The proposed pricing 
incentive would be applicable to all similarly-situated market 
participants that have obligations under Rule 7.23-E to meet specified 
obligations, and, as such, the proposed changes would not impose a 
disparate burden on competition among market participants on the 
Exchange. The Exchange believes the proposed adoption of Performance 
Metrics would enhance competition as it is intended to increase the 
Exchange's competitiveness in Less Active ETPs, and all LMMs and Market 
Makers would be able to participate on an equal basis. Accordingly, the 
Exchange does not believe that the proposed change will impair the 
ability of ETP Holders to maintain their competitive standing. The 
Exchange does not believe that the proposed change represents a 
significant departure from previous pricing offered by the Exchange or 
its competitors. The Exchange also does not believe the proposed rule 
change to eliminate underutilized pricing incentives will impose any 
burden on intramarket competition because the proposed change would 
impact all LMMs and Market Makers uniformly.
    Intermarket Competition. The Exchange operates in a highly 
competitive market in which market participants can readily choose to 
send their orders to other exchange and off-exchange venues if they 
deem fee levels at those other venues to be more favorable. As noted 
above, the Exchange's market share of intraday trading (i.e., excluding 
auctions) is currently less than 10%. In such an environment, the 
Exchange must continually adjust its fees and rebates to remain 
competitive with other exchanges and with off-exchange venues. 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 does not believe its proposed fee change can 
impose any burden on intermarket competition. The Exchange believes 
that the proposed rule change could promote competition between the 
Exchange and other execution venues, including those that currently 
offer comparable transaction pricing, by encouraging additional orders 
to be sent to the Exchange for execution.

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) \25\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \26\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 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) \27\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78s(b)(2)(B).

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

[[Page 29876]]

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 No. SR-NYSEArca-2021-43 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 No. NYSEArca-2021-43. 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 No. NYSEArca-2021-43, and should be submitted on 
or before June 24, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11611 Filed 6-2-21; 8:45 am]
BILLING CODE 8011-01-P