Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices 11027 

Exchange Act Release No. 90363 (Nov. 5, 2020), 85 

FR 71964 (Nov. 12, 2020). The comment period for 

SR–NYSE–2020–89 was extended to February 10, 

2021. See Securities Exchange Act Release No. 

90726 (Dec. 18, 2020), 85 FR 84431 (Dec. 28, 2020). 

The Exchange amended SR–NYSE–2020–89 on 

February 5, 2021 to remove the proposal from that 

filing, see Securities Exchange Act Release No. 

91095 (Feb. 10, 2021), 86 FR 9978 (Feb. 17, 2021), 

and then subsequently filed the proposal as SR– 

NYSE–2021–13 on February 13, 2021. The 

Commission notes that it received no comments on 

the proposal under SR–NYSE–2020–89. 

19For purposes only of accelerating the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

20 15 U.S.C. 78s(b)(2)(B). 

21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

believes that a waiver of the operative 

delay is consistent with the protection 

of investors and the public interest 

because the proposal was published 

previously for a substantial period time 

for public comment and no comments 

were received on the proposal, and 

because a waiver will allow the 

proposed rules to become effective in 

time for the Exchange to implement its 

related technological changes. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.19

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) 20 of the Act 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2021–13 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–2021–13. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSE–2021–13 and should 

be submitted on or before March 16, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–03545 Filed 2–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91147; File No. SR– 

NYSEARCA–2021–12] 

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 

February 17, 2021. 

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 February 

10, 2021, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘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. 

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 adopt a new pricing 

tier, Tape B Tier 3, and make nonsubstantive changes to the Fee 

Schedule. The Exchange proposes to 

implement the fee changes effective 

February 10, 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 adopt a 

new pricing tier, Tape B Tier 3, and 

make non-substantive changes to the 

Fee Schedule. 

The proposed change to adopt a new 

pricing tier responds to the current 

competitive environment where order 

flow providers have a choice of where 

to direct liquidity-providing orders by 

offering further incentives for ETP 

11028 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices 

4All references to ETP Holders in connection 

with this proposed fee change include Market 

Makers. 

5The Exchange originally filed to amend the Fee 

Schedule on February 1, 2021 (SR–NYSEArca– 

2021–10). SR–NYSEArca–2021–10 was 

subsequently withdrawn and replaced by this filing. 

6See 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’’). 

7See Securities Exchange Act Release No. 61358, 

75 FR 3594, 3597 (January 21, 2010) (File No. S7– 

02–10) (Concept Release on Equity Market 

Structure). 

8See Cboe Global Markets, 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. 

9See 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. 

10See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

11See id. 12US CADV means the United States 

Consolidated Average Daily Volume for 

transactions reported to the Consolidated Tape, 

excluding odd lots through January 31, 2014 (except 

for purposes of Lead Market Maker pricing), and 

excludes volume on days when the market closes 

early and on the date of the annual reconstitution 

of the Russell Investments Indexes. Transactions 

that are not reported to the Consolidated Tape are 

not included in US CADV. See Fee Schedule, 

footnote 3. 

13There are currently 54 firms that are both ETP 

Holders and OTP Holders. 

14For example, Tape B Tier 1 requires ETP 

Holders to execute providing volume in Tape B 

Securities that is equal to at least 1.50% of US Tape 

B CADV. While Tape B Tier 2 provides ETP Holders 

multiple ways to earn Tape B Tier 2 credit, at a 

minimum, ETP Holders must execute providing 

volume equal to at least 0.20% of the US Tape B 

CADV over the ETP Holder’s baseline, which for 

Tape B Tier 2 is the ETP Holder’s Q2 2015 

providing ADV. 

Holders 4 to send additional liquidity to 

the Exchange. 

The Exchange proposes to implement 

the fee changes effective February 10, 

2021.5

Background 

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.’’ 6

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.’’ 7 Indeed, equity trading is 

currently dispersed across 16 

exchanges,8 numerous alternative 

trading systems,9 and broker-dealer 

internalizers and wholesalers, all 

competing for order flow. Based on 

publicly-available information, no 

single exchange currently has more than 

18% market share.10 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.11

The Exchange believes that the evershifting 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 nonexchange venues to which a firm routes 

order flow. With respect to nonmarketable 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 

Tape B Tier 3 

The Exchange proposes to introduce a 

new pricing tier—Tape B Tier 3—for 

securities with a per share price of $1.00 

and above. The proposed rule change is 

designed to be available to ETP Holders 

that are affiliated with an OTP Holder 

or OTP Firm that has a market maker 

account on the Exchange’s options 

platform (‘‘NYSE Arca Options’’) and is 

intended to provide such ETP Holders 

with an incentive to direct their 

liquidity-providing orders in Tape B 

securities to the Exchange. 

As proposed, ETP Holders would 

qualify for the new Tape B Tier 3 

pricing tier if, on a daily basis, 

measured monthly, they directly 

execute providing volume in Tape B 

Securities during the billing month that 

is equal to 0.20% or more of the US 

consolidated average daily volume (‘‘US 

CADV’’) 12 in Tape B Securities and are 

affiliated with an OTP Holder or OTP 

Firm that provides an ADV of electronic 

posted executions for the account of a 

market maker in all issues on NYSE 

Arca Options of at least 0.50% of total 

Customer equity and ETF option ADV 

as reported by The Options Clearing 

Corporation (‘‘OCC’’). ETP Holders that 

qualify for the proposed Tape B Tier 3 

would receive a credit of $0.0025 per 

share for orders that provide liquidity in 

Tape B securities. 

As with the current Tape B Tier 1 and 

Tape B Tier 2 pricing tiers, Lead Market 

Makers (‘‘LMMs’’) cannot qualify for the 

proposed Tape B Tier 3 pricing tier. For 

all other fees and credits, tiered or basic 

rates would apply based on a firm’s 

qualifying levels. 

The purpose of this proposed rule 

change is to incentivize ETP Holders to 

increase the liquidity-providing orders 

they send to the Exchange, which would 

support the quality of price discovery 

on the Exchange and provide additional 

liquidity for incoming orders. The 

Exchange believes that the proposal 

would create an added incentive for 

ETP Holders to bring additional order 

flow to a public market. The Exchange 

further believes that providing credits to 

ETP Holders that are affiliated with an 

OTP Holder or OTP Firm could lead to 

increased trading on the Exchange’s 

equities and options markets.13

The Exchange believes that the 

proposed pricing tier would provide an 

incentive for a greater number of ETP 

Holders to send additional liquidity to 

the Exchange in order to qualify for the 

proposed new credit because, although 

the proposed pricing tier has a 

requirement of a minimum of options 

volume, it also requires an ETP Holder 

to provide liquidity in Tape B securities 

at a level below the requirement under 

both the Tape B Tier 1 and Tape B Tier 

2 pricing tiers.14

The Exchange believes that this 

proposed change will provide a greater 

incentive to attract additional liquidity 

from additional ETP Holders so as to 

qualify for the Tape B Tier 3 credit. The 

Exchange anticipates a small number of 

ETP Holders could qualify for Tape B 

Tier 3 if they choose to route their 

orders to the Exchange. The Exchange 

does not know how much order flow 

ETP Holders choose to route to other 

exchanges or to off-exchange venues. 

Without having a view of ETP Holders’ 

activity on other exchanges and offexchange venues, the Exchange has no 

way of knowing whether this proposed 

rule change would result in any ETP 

Holder directing orders to the Exchange 

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices 11029 

15 15 U.S.C. 78f(b). 

16 15 U.S.C. 78f(b)(4) and (5). 17See Regulation NMS, 70 FR at 37499. 

in order to qualify for the proposed new 

pricing tier. 

Non-Substantive Change 

The Exchange proposes to make a 

non-substantive change by deleting the 

words ‘‘to the Book,’’ ‘‘from the Book,’’ 

and ‘‘outside the Book’’ from the Fee 

Schedule. Specifically, in the context of 

a credit provided by the Exchange, a fee 

charged by the Exchange, or routing fees 

charged by the Exchange, the Fee 

Schedule currently utilizes the words 

‘‘to the Book,’’ ‘‘from the Book,’’ and 

‘‘outside the Book,’’ respectively. The 

Exchange believes these phrases are 

superfluous. ETP Holders understand 

that when they provide liquidity, they 

provide it ‘‘to the Book.’’ And when 

they take liquidity, they take it ‘‘from 

the Book.’’ Similarly, when their orders 

are routed, they are routed ‘‘outside the 

Book.’’ Therefore, the Exchange 

proposes to delete these three phrases 

from the Fee Schedule. The Exchange 

believes this non-substantive change 

would streamline the Fee Schedule and 

promote clarity. 

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,15 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,16 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 Proposed Fee Change Is Reasonable 

As discussed above, the Exchange 

operates in a highly fragmented and 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, 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.’’ 17

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow, or discontinue to 

reduce use of certain categories of 

products, in response to fee changes. 

With respect to non-marketable orders 

that provide liquidity on an Exchange, 

ETP Holders can choose from any one 

of the 16 currently operating registered 

exchanges to route such order flow. 

Accordingly, competitive forces 

reasonably constrain exchange 

transaction fees that relate to orders that 

would provide liquidity on an 

exchange. Stated otherwise, changes to 

exchange transaction fees can have a 

direct effect on the ability of an 

exchange to compete for order flow. 

Tape B Tier 3 

Given this competitive environment, 

the proposed rule change represents a 

reasonable attempt to attract additional 

order flow to the Exchange. In 

particular, the Exchange believes the 

proposed introduction of the Tape B 

Tier 3 pricing tier is reasonable because 

it provides ETP Holders affiliated with 

an OTP Holder or OTP Firm that has a 

market maker account on NYSE Arca 

Options with an opportunity to qualify 

for the Tape B Tier 3 credit through 

equity and options orders. The 

Exchange believes that the proposed 

pricing tier utilizing a lower equity 

adding volume requirement coupled 

with a minimum options volume 

requirement is reasonable because the 

proposal provides firms with greater 

flexibility to reach volume tiers across 

asset classes, thereby creating an added 

incentive for ETP Holders affiliated with 

an OTP Holder or OTP Firm that has a 

market maker account on NYSE Arca 

Options to bring additional order flow 

to a public exchange, consequently 

encouraging greater participation and 

liquidity. 

The Exchange notes that volumebased incentives and discounts have 

been widely adopted by exchanges, 

including the Exchange. They also 

provide additional benefits or discounts 

that are reasonably related to the value 

of the Exchange’s market quality and 

associated higher levels of market 

activity, such as higher levels of 

liquidity provision and/or growth 

patterns. Additionally, as noted above, 

the Exchange operates in a highly 

competitive market. The Exchange is 

one of many venues and off-exchange 

venues to which market participants 

may direct their order flow, and it 

represents a small percentage of the 

overall market. Competing exchanges 

offer similar tiered pricing structures to 

that of the Exchange, including 

schedules of rebates and fees that apply 

based on members achieving certain 

volume thresholds across asset classes. 

Moreover, the Exchange believes the 

proposed pricing tier is a reasonable 

means to encourage ETP Holders 

affiliated with an OTP Holder or OTP 

Firm that has a market maker account 

on NYSE Arca Options to increase their 

liquidity on the Exchange and their 

participation on NYSE Arca Options. 

The Exchange believes adopting the 

proposed pricing tier may encourage 

those ETP Holders who could not 

previously achieve the requirements to 

qualify for Tape B credits to increase 

their order flow on both the Exchange 

and on NYSE Arca Options. Increased 

liquidity benefits all investors by 

deepening the Exchange’s liquidity 

pool, offering additional flexibility for 

all investors to enjoy cost savings, 

supporting the quality of price 

discovery, promoting market 

transparency and improving investor 

protection. 

Non-Substantive Change 

The Exchange believes that the 

proposed rule change to delete the 

phrases ‘‘to the Book,’’ ‘‘from the Book,’’ 

and ‘‘outside the Book’’ from the Fee 

Schedule is reasonable because each of 

the phrases are superfluous and 

extraneous. As noted above, ETP 

Holders understand that when they 

provide liquidity, they provide it ‘‘to the 

Book,’’ when they take liquidity, they 

take it ‘‘from the Book,’’ and when their 

orders are routed, they are routed 

‘‘outside the Book.’’ The Exchange 

believes it is reasonable to delete these 

phrases in an effort to streamline the 

Fee Schedule. The Exchange believes 

deleting these phrases would also 

promote clarity to the Fee Schedule and 

simplify the Fee Schedule. 

The Proposed Fee Change Is an 

Equitable Allocation of Fees and Credits 

Tape B Tier 3 

The Exchange believes the proposed 

rule change to adopt a new pricing tier 

equitably allocates its fees and credits 

among market participants because it is 

reasonably related to the value of the 

Exchange’s market quality associated 

with higher equities and options 

volume. 

The proposed pricing tier would be 

available to ETP Holders that are 

affiliated with OTP Holders or OTP 

Firms that have a market maker account 

11030 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices 

18See supra note 13. 

19 15 U.S.C. 78f(b)(8). 

20See Regulation NMS, 70 FR at 37498–99. 

on NYSE Arca Options. A number of 

ETP Holders have a reasonable 

opportunity to satisfy the tier’s 

criteria.18 The Exchange does not know 

how much order flow ETP Holders 

choose to route to other exchanges or to 

off-exchange venues. Without having a 

view of an ETP Holder’s activity on 

other markets and off-exchange venues, 

the Exchange has no way of knowing 

whether this proposed rule change 

would result in any ETP Holder 

affiliated with an OTP Holder or OTP 

Firm that has a market maker account 

on NYSE Arca Options to increase 

participation in the Exchange’s equities 

and options markets to qualify for the 

proposed Tape B Tier 3 credit. The 

Exchange believes the proposed pricing 

tier could provide an incentive for other 

ETP Holders that are affiliated with an 

OTP Holder or OTP Firm that has a 

market maker account on NYSE Arca 

Options to submit additional liquidity 

on the Exchange and on NYSE Arca 

Options to qualify for the Tape B Tier 

3 credit. To the extent that such 

participants direct significant order flow 

to the Exchange’s equities and options 

markets, the Exchange believes such 

participants should receive the credit 

proposed by the new pricing tier. To the 

extent an ETP Holder participates on the 

Exchange but not on NYSE Arca 

Options, the Exchange believes that the 

proposal is still reasonable, equitable 

and not unfairly discriminatory with 

respect to such ETP Holder based on the 

overall benefit to the Exchange resulting 

from the success of NYSE Arca Options. 

In particular, such success would allow 

the Exchange to continue to provide and 

potentially expand its existing incentive 

programs to the benefit of all 

participants on the Exchange, whether 

they participate on NYSE Arca Options 

or not. 

While the proposal is intended to 

incentivize ETP Holders that are 

affiliated with an OTP Holder or OTP 

Firm that has a market maker account 

on NYSE Arca Options, ETP Holders 

that do not meet the criteria for the 

proposed tier can still qualify for credits 

available under the other Tape B pricing 

tiers which do not require it to have any 

affiliation with an OTP Holder or OTP 

Firm and conduct options trading on 

NYSE Arca Options. 

Non-Substantive Change 

The Exchange believes that the 

proposed rule change to delete the 

phrases ‘‘to the Book,’’ ‘‘from the Book,’’ 

and ‘‘outside the Book’’ from the Fee 

Schedule is equitable because the 

resulting streamlined Fee Schedule 

would continue to apply to ETP Holders 

as it does currently because the 

Exchange is not adopting any new fees 

or credits or removing any current fees 

or credits from the Fee Schedule. All 

ETP Holders would continue to be 

subject to the same fees and credits that 

currently apply to them. 

The Proposed Fee Change Is Not 

Unfairly Discriminatory 

Tape B Tier 3 

The Exchange believes that the 

proposal is not unfairly discriminatory. 

In the prevailing competitive 

environment, ETP Holders 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 the 

Tape B Tier 3 pricing tier as it would 

be available on an equal basis to ETP 

Holders that are affiliated with an OTP 

Holder or OTP Firm that has a market 

maker account on NYSE Arca Options 

that meet the requirement of the 

proposed Tape B Tier 3 pricing tier. 

Further, the Exchange believes the 

proposed pricing tier would incentivize 

such ETP Holders to send their options 

orders to the Exchange to qualify for the 

proposed new credit. The Exchange 

believes that, to the extent that ETP 

Holders affiliated with an OTP Holder 

or OTP Firm that has a market maker 

account on NYSE Arca Options, direct 

significant order flow to the Exchange’s 

equities and options markets, such 

participants should receive the credit 

proposed by the new pricing tier. The 

Exchange also believes that the 

proposed change is not unfairly 

discriminatory because it is reasonably 

related to the value to the Exchange’s 

market quality associated with higher 

volume. 

The proposed rule change is intended 

to incentivize ETP Holders that are 

affiliated with an OTP Holder or OTP 

Firm that has a market maker account 

on NYSE Arca Options. As such, it does 

not permit unfair discrimination 

because the requirement to qualify for 

the new pricing tier would be applied 

to all similarly situated ETP Holders, 

who would all be eligible for the same 

credit on an equal basis. 

Non-Substantive Change 

The Exchange believes that the 

proposed rule change to delete the 

phrases ‘‘to the Book,’’ ‘‘from the Book,’’ 

and ‘‘outside the Book’’ from the Fee 

Schedule is not unfairly discriminatory 

because the resulting streamlined Fee 

Schedule would continue to apply to 

ETP Holders as it does currently 

because the Exchange is not adopting 

any new fees or credits or removing any 

current fees or credits from the Fee 

Schedule. All ETP Holders would 

continue to be subject to the same fees 

and credits that currently apply to them. 

Finally, the submission of orders to 

the Exchange is optional for ETP 

Holders in that they could choose 

whether to submit orders to the 

Exchange and, if they do, the extent of 

its activity in this regard. 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,19 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 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.’’ 20

Intramarket Competition. The 

proposed change is designed to attract 

additional equities and options order 

flow to the Exchange. The Exchange 

believes that the proposed introduction 

of the Tape B Tier 3 pricing tier would 

incentivize market participants to direct 

providing order flow to the Exchange 

and greater participation on NYSE Arca 

Options. Greater liquidity benefits all 

market participants on the Exchange by 

providing more trading opportunities 

and encourages ETP Holders affiliated 

with an OTP Holder or OTP Firm that 

has a market maker account on NYSE 

Arca Options to send orders to the 

Exchange, thereby contributing to robust 

levels of liquidity, which benefits all 

market participants. The proposed 

volume requirement would be 

applicable to all similarly-situated 

market participants, and, as such, the 

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices 11031 

21 15 U.S.C. 78s(b)(3)(A). 

22 17 CFR 240.19b–4(f)(2). 

23 15 U.S.C. 78s(b)(2)(B). 

24 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

proposed change would not impose a 

disparate burden on competition among 

market participants on the Exchange. As 

such, the Exchange believes the 

proposed new pricing tier would not 

impose any burden on intramarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Exchange does 

not believe the proposed rule change 

places a burden on competition among 

participants that are not affiliated with 

an OTP Holder or OTP Firm with a 

market maker account on NYSE Arca 

Options because such participants can 

avail themselves to credits available 

under other Tape B pricing tiers that do 

not require participation on NYSE Arca 

Options. Additionally, the Exchange’s 

proposal to delete the phrases ‘‘to the 

Book,’’ ‘‘from the Book,’’ and ‘‘outside 

the Book’’ from the Fee Schedule will 

not place any undue burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because the 

proposed change does not impact any 

fees charged or credits provided by the 

Exchange. All ETP Holders would 

continue to be subject to the same fees 

and credits that currently apply to them. 

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 offexchange 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 similar order types 

and 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) 21 of the Act and 

subparagraph (f)(2) of Rule 19b–4 22

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

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) 23 of the Act 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEARCA–2021–12 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEARCA–2021–12 This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEARCA–2021–12 and 

should be submitted on or before March 

16, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–03547 Filed 2–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91142; File No. SR–Phlx– 

2021–08] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 3304 

February 17, 2021. 

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 February 

4, 2021, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘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