[Federal Register Volume 90, Number 158 (Tuesday, August 19, 2025)]
[Notices]
[Pages 40400-40402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-15731]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103704; File No. SR-NYSE-2025-29]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Adopt a Fee for Limited Underwriting Members
August 14, 2025.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on August 5, 2025, New York Stock Exchange LLC (``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I and II 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 adopt a fee for Limited Underwriting
Members as defined in recently adopted Rule 310. The proposed rule
change is available on the Exchange's website at www.nyse.com and at
the principal office of the Exchange.
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 adopt a fee for Limited Underwriting
Members as defined in recently adopted Rule 310 (Limited Underwriting
Members and Associated Persons). As proposed, registered brokers or
dealers that become Limited Underwriting Members pursuant to Rule 310
would be eligible for a $350 per month fee from the month an
application is approved.
The Exchange proposes to implement the fee changes effective August
5, 2025.\4\
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\4\ The Exchange originally filed to amend the Price List on
July 28, 2025 (SR-NYSE-2025-27). SR-NYSE-2025-27 was withdrawn on
August 5, 2025, and replaced by this filing.
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Background
Current Market and Competitive Environment
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.'' \5\
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\5\ 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.'' \6\ Indeed, cash equity trading is currently dispersed
across 16 exchanges,\7\ numerous alternative trading systems,\8\ and
broker-dealer internalizers and wholesalers, all competing for order
flow. Based on publicly-available information, no single exchange
currently has more than 20% market share.\9\ Therefore, no exchange
possesses significant pricing power in the execution of cash equity
order flow. More specifically, the Exchange's share of executed volume
of equity trades in Tapes A, B and C securities is less than 12%.\10\
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\6\ 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).
\7\ 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.
\8\ 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.
\9\ See Cboe Global Markets U.S. Equities Market Volume Summary,
available at https://markets.cboe.com/us/equities/market_share/.
\10\ 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, in response to fee changes.
Moreover, in the current competitive market environment, market
participants also have a choice of where to become members.
Proposed Rule Change
The Exchange proposes to introduce a $350 per month fee for
registered brokers or dealers that qualify to become Limited
Underwriting Members pursuant to Rule 310.\11\ The proposed fee would
begin the month in which a Limited Underwriting Member's application is
approved. The proposed fee would be available to all applicants
approved as Limited Underwriting Members on an equal and non-
discriminatory basis. The proposed fee is also less than that of the
other national securities exchange that offers a limited underwriter
membership.\12\ Limited Underwriting Members would not be subject to
any other Exchange fees.
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\11\ A Limited Underwriting Member is a type of non-trading
Exchange membership solely for the limited purpose of acting as a
principal underwriter of an underwritten public offering in
connection with which a company seeks to list on the Exchange. Any
registered broker or dealer with a disciplinary history satisfactory
to the Exchange can become a Limited Underwriting Member, except
such registered brokers or dealers as are excluded under Rule 346
(Statutory Disqualification--Association of Member Organizations,
and Persons Associated With Member Organizations). A Limited
Underwriting Member is subject to Exchange jurisdiction solely for
purposes of Rule 310 and the rules enumerated in Rule 310(c)(1).
\12\ The proposed fee equals $4,200 annually. Nasdaq Limited
Underwriting Members are subject to an annual membership fee of
$5,000 plus a $2,000 application fee. See Nasdaq Equity Rule 7,
Section 10(a).
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The proposed change is not otherwise intended to address other
issues, and the Exchange is not aware of any significant problems that
market
[[Page 40401]]
participants would have in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\14\ 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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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4) & (5).
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The Proposed Change Is Reasonable
As discussed above, the Exchange operates in a highly fragmented
and competitive market where market participants have, among other
things, a choice of where to become members. Considering the
competitive environment in which the Exchange currently operates, the
Exchange believes that there is value in attracting additional brokers
or dealers to act as principal underwriters of an underwritten public
offering on the Exchange and that the proposed fee is reasonable. As
noted above, the proposed fee is less than that of the other national
securities exchange that offers a limited underwriter membership.\15\
The Exchange also believes that the proposed fee is reasonable because
Limited Underwriting Members would not be subject to any other Exchange
fees.
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\15\ See note 11, supra.
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The Proposed Fee Is Equitably Allocated and Not Unfairly Discriminatory
The Exchange believes that the proposed fee equitably allocates
fees and credits among market participants because all market
participants that participate on the Exchange as Limited Underwriting
Members would qualify for the same proposed fee on an equal basis.
Similarly, the proposed fee is equitable and not unfairly
discriminatory because it will apply uniformly to all member
organizations that are Limited Underwriting Members, and all similarly
situated member organizations will be subject to the same fee. Further,
the Exchange believes that the proposed fee is reasonable and equitable
because Limited Underwriting Members would not be subject to any other
Exchange fees.
Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\16\ 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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\16\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition. The proposed change is designed to attract
additional members to the Exchange. The proposed fee change will not
impact intramarket competition because it will apply to all similarly
situated market participants, and, as such, the proposed change would
not impose a disparate burden on competition among market participants
on the Exchange. As noted, the proposal would apply to all similarly
situated member organizations that are Limited Underwriting Members on
the same and equal terms, who would be subject to the same fee on the
same basis. Accordingly, the proposed change would not impose a
disparate burden on competition among market participants on the
Exchange.
Intermarket Competition. The Exchange's proposed membership fee
will be lower than the cost of a comparable membership on another
exchange as described above and may stimulate intermarket competition
by attracting interested participants to become Limited Underwriting
Members on the Exchange. The Exchange operates in a highly competitive
market in which market participants can readily choose to become
members of another exchange if they deem fee levels at those other
venues to be more favorable. In such an environment, the Exchange must
continually adjust its fees to remain competitive. Because competitors
are free to modify their own fees and credits in response, and because
market participants may readily select membership on a competitor over
the Exchange, the Exchange does not believe its proposed fee change can
impose any burden on intermarket competition.
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) \17\ of the Act and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\19\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSE-2025-29 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-NYSE-2025-29. 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 filing 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
[[Page 40402]]
publication submitted material that is obscene or subject to copyright
protection. All submissions should refer to file number SR-NYSE-2025-29
and should be submitted on or before September 9, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-15731 Filed 8-18-25; 8:45 am]
BILLING CODE 8011-01-P