[Federal Register Volume 89, Number 18 (Friday, January 26, 2024)]
[Notices]
[Pages 5271-5273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01507]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99405; File No. SR-NYSEARCA-2024-04]


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, Also NYSE Arca Rules 7.31-E, 7.34-E, 
7.36-E, 7.37-E and 7.38-E

January 22, 2024.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 10, 2024, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
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\ 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 amend a rule reference related to the 
definition of Retail Orders. The Exchange is not proposing any change 
to fees and credits. The Exchange also proposes to amend NYSE Arca 
Rules 7.31-E, 7.34-E, 7.36-E, 7.37-E and 7.38-E. The proposed rule 
change is available on the Exchange's website at www.nyse.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to amend a rule 
reference related to the definition of Retail Orders. The Exchange is 
not proposing any change to fees and credits. The Exchange also 
proposes to amend NYSE Arca Rules 7.31-E, 7.34-E, 7.36-E, 7.37-E and 
7.38-E to delete references to an obsolete rule.
    Currently, the Exchange's Fee Schedule provides specified fees and 
credits for agency orders that originate from a natural person and are 
submitted to the Exchange by an ETP Holder,\3\ provided that no change 
is made to the terms of the order with respect to price or side of 
market and the order does not originate from a trading algorithm or any 
other computerized methodology.\4\ The Exchange's rules concerning such 
``retail orders'' are set out in Rule 7.31-E(i)(4).\5\ On the Fee 
Schedule, these orders are identified as Retail Orders. Specifically, 
under Section III. titled

[[Page 5272]]

Standard Rates--Transactions, footnote (c) currently states that 
``Retail Order means an order as defined in Rule 7.44-E(a)(3).''
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    \3\ See Rule 1.1 (definitions of ETP & ETP Holder).
    \4\ See Securities Exchange Act Release No. 67540 (July 30, 
2012), 77 FR 46539 (August 3, 2012) (SR-NYSEArca-2012-77).
    \5\ See Securities Exchange Act Release No. 94121 (February 1, 
2022), 87 FR 6900 (February 7, 2022) (SR-NYSEARCA-2022-07). Rule 
7.31-E(i)(4)(A) provides that an ``order designated with a 
``retail'' modifier is an agency order or a riskless principal order 
that meets the criteria of FINRA Rule 5320.03 that originates from a 
natural person and is submitted to the Exchange by an ETP Holder, 
provided that no change is made to the terms of the order with 
respect to price or side of market and the order does not originate 
from a trading algorithm or any other computerized methodology.''
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    In a recent rule filing that discontinued the Exchange's Retail 
Liquidity Program, the Exchange deleted Rule 7.44-E in its entirety, 
including Rule 7.44-E(A)(3), which defined the term Retail Order.\6\ 
Given the discontinuance of the Retail Liquidity Program on the 
Exchange, and the subsequent deletion of Rule 7.44-E(a)(3), the 
Exchange proposes to amend footnote (c) under Section III. of the Fee 
Schedule to replace the cross-reference in the footnote from now 
deleted Rule 7.44-E(A)(3) to Rule 7.31-E(i)(4). As proposed, footnote 
(c) would state that ``Retail Order means an order designated with a 
``retail'' modifier as provided in Rule 7.31-E(i)(4).'' Additionally, 
Rules 7.31-E, 7.34-E, 7.36-E, 7.37-E and 7.38-E each currently contain 
a reference to Rule 7.44-E, which, as noted above, was deleted when the 
Exchange discontinued its Retail Liquidity Program. The Exchange thus 
proposes to also delete reference to Rule 7.44-E from Rule 7.31-E, 
7.34-E, 7.36-E, 7.37-E and 7.38-E.
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    \6\ See Securities Exchange Act Release No. 98168 (August 18, 
2023), 88 FR 57980 (August 24, 2023) (SR-NYSEARCA-2023-55). There is 
no substantive difference between the definition of Retail Order 
under current Rule 7.31-E and how a Retail Order was defined under 
the now deleted Rule 7.44-E.
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    The Exchange believes the proposed change would delete reference to 
an obsolete rule from the Exchange's rules and correct a rule reference 
in the Fee Schedule by replacing a cross-reference in the Fee Schedule 
from a rule that was recently deleted and is now obsolete to Rule 7.31-
E(i)(4) which is currently in effect and which defines ``retail 
orders.''
    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,\7\ in general, and furthers the 
objectives of sections 6(b)(4) and(5) of the Act,\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    In particular, the Exchange believes its proposal to replace Rule 
7.44-E(a)(3) from footnote (c) under Section III. of the Fee Schedule 
with Rule 7.31-E(i)(4) to correct the cross-reference are consistent 
with the Act because the proposed change would update the Exchange's 
rules to delete an obsolete rule and update the Fee Schedule to correct 
a cross-reference from a recently deleted rule to a current rule. The 
proposal otherwise involves no substantive change. Additionally, the 
proposed change would promote just and equitable principles of trade 
and is designed to remove impediments to and perfect the mechanism of a 
free and open market and a national market system as it would update 
the Exchange's rules to delete reference to an obsolete rule and update 
the Fee Schedule by replacing a cross-reference from a rule that is now 
obsolete to a rule currently in effect.
    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,\9\ 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.
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    \9\ 15 U.S.C. 78f(b)(8).
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    Intramarket Competition. The Exchange believes the proposed rule 
change does not impose any burden on intramarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
Specifically, the Exchange does not believe that its proposal to amend 
the Fee Schedule to correct a cross-reference from a rule that was 
recently deleted to a current rule will have any impact on competition 
as the change is intended to update obsolete rule references and 
involves no substantive change.
    Intermarket Competition. The Exchange believes the proposed rule 
changes 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. ETP Holders have 
numerous alternative venues that they may participate on and direct 
their order flow, including other equities exchanges, off-exchange 
venues, and alternative trading systems. By amending the cross-
reference, as proposed herein, the Exchange is updating obsolete rule 
references to its rules and to the Fee Schedule. Accordingly, the 
Exchange does not believe its proposed change imposes any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.

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 Exchange has filed the proposed rule change pursuant to section 
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately. The Exchange states that 
the proposed change will not adversely impact investors and will permit 
the Exchange to amend the cross reference from an obsolete rule to a 
current rule in order to alleviate potential investor or public 
confusion. Based on the foregoing, the Commission believes that waiving 
the 30-day operative delay is

[[Page 5273]]

consistent with the protection of investors and the public interest. 
For this reason, the Commission hereby waives the 30-day operative 
delay and designates the proposal operative upon filing.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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 to 
determine whether the proposed rule change should be approved or 
disapproved.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSEARCA-2024-04 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-2024-04. 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 (https://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. Do 
not include personal identifiable information in submissions; you 
should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to File Number SR-NYSEARCA-2024-04, and 
should be submitted on or before February 16, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-01507 Filed 1-25-24; 8:45 am]
BILLING CODE 8011-01-P