[Federal Register Volume 89, Number 210 (Wednesday, October 30, 2024)]
[Notices]
[Pages 86390-86393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25142]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101425; File No. SR-NYSE-2024-66]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Its Price List Regarding the Gross FOCUS Fee

October 24, 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 October 10, 2024, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III 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 its Price List regarding the gross 
FOCUS fee charged to member organizations, effective October 10, 
2024.\3\ 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.
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    \3\ The Exchange previously filed to amend the Price List on 
October 1, 2024 (SR-NYSE-2024-63) and withdrew such filing on 
October 10, 2024.
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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 its Price List to (1) provide for a 
temporary waiver of the Gross FOCUS fee from October 1, 2024 through 
February 28, 2025 (the ``Waiver Period''), and (2) delete a reference 
to a superseded fee.
    The Exchange proposes to implement the fee changes effective 
October 10, 2024.
Background
    NYSE Rule 129 provides that the Exchange's Board may, from time to 
time, impose such charge(s) on members and member organizations as it 
deems appropriate to reimburse the Exchange, in whole or in part, for 
regulatory oversight services provided to the membership by the 
Exchange. Generally, the Exchange may only use regulatory fees ``to 
fund the legal, regulatory and surveillance operations'' of the 
Exchange.\4\
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    \4\ See Fourteenth Amended and Restated Operating Agreement of 
New York Stock Exchange LLC, Art. IV, Sec. 4.05, available at 
https://www.nyse.com/publicdocs/nyse/regulation/nyse/Fourteenth_Amended_and_Restated_Operating_Agreement_of_New_York_Stock_Exchange.pdf.

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[[Page 86391]]

    Consistent with the foregoing, the Exchange currently charges each 
member organization a monthly regulatory fee of $0.11 per $1,000 of 
gross revenue reported on its FOCUS Report (``Gross FOCUS Fee'').\5\ 
Member organizations are subject to certain minimum annual Gross FOCUS 
Fees, which are $500 for carrying firms and designated market makers, 
$250 for introducing firms, and $45 for member organizations who do not 
conduct a public business.
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    \5\ The current Gross FOCUS fee of $0.11 per $1,000 Gross FOCUS 
Revenue was adopted in October 2020, effective January 1, 2021. 
Given that the new rate was not proposed to be implemented until 
January 1, 2021, both rates were reflected in the Price List. As 
discussed below, the Exchange proposes to delete as obsolete the old 
rate and the language following the current $0.11 rate.
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    The revenue collected pursuant to the Gross FOCUS Fee funds the 
performance of the Exchange's regulatory activities with respect to 
member organizations. More specifically, the Gross FOCUS Fee funds a 
material portion, but not all, of the Exchange's expenses related to 
its regulatory program, including legal expenses associated with 
regulation, the costs related to in-house staff, third-party service 
providers, and technology that facilitates regulatory functions such as 
surveillance, investigation, examinations, and enforcement. Gross FOCUS 
Fee funds may also be used for indirect expenses such as human 
resources and other administrative costs (collectively, ``Regulatory 
Costs'').
    The Exchange monitors the amount of revenue collected from the 
Gross FOCUS Fee to ensure that these funds, in combination with its 
other regulatory fees and fines, do not exceed Regulatory Costs. The 
Exchange monitors Regulatory Costs and revenues on an annual basis, at 
a minimum. If the Exchange determines that regulatory revenues exceed 
or are projected to exceed Regulatory Costs, the Exchange will adjust 
the Gross FOCUS Fee downward or seek a partial waiver of the fee by 
submitting a filing to the Commission. As described below, the Exchange 
has determined that continued collection of Gross FOCUS Fees at the 
current rate for the proposed Waiver Period would exceed a material 
portion of the Exchange's anticipated Regulatory Costs (as noted 
above), justifying the proposed waiver of the Gross FOCUS Fee for 
member organizations through the end of February 2025.
Proposed Rule Change
    Based on the Exchange's recent review of current and anticipated 
Regulatory Costs and Gross FOCUS Fee revenue, the Exchange proposes to 
waive the Gross FOCUS Fee from October 1, 2024 through February 28, 
2025 in order to help ensure that the amounts collected from the Gross 
FOCUS Fee, in combination with other regulatory fees and fines, do not 
exceed the Exchange's total projected Regulatory Costs. The Exchange 
proposes to reduce the Gross FOCUS Fee because it believes that if the 
fee is not adjusted, Gross FOCUS Fee revenue to the Exchange year-over-
year could exceed a material portion of the Exchange's Regulatory 
Costs. The Exchange's position is based on its periodic analysis of 
actual and anticipated costs to fund its regulatory program and revenue 
to offset those costs, including the Gross FOCUS Fee, and takes into 
consideration both that the last Gross FOCUS Fee adjustment was more 
than three years ago, and the projected regulatory spending landscape 
going forward. Moreover, the Exchange believes that a five-month waiver 
rather than adjusting the fee would most efficiently accomplish the 
goal of reasonably ensuring that Gross FOCUS Fee collection does not 
exceed anticipated Regulatory Costs, and allow for further 
consideration of the appropriate Gross FOCUS Fee rate going forward.
    The Exchange would announce the proposed waiver of the Gross FOCUS 
Fee by Trader Update.
    Finally, as noted above, the Exchange adopted the current Gross 
FOCUS Fee of $0.11 per $1,000 Gross FOCUS Revenue in October 2020, 
effective January 1, 2021. Given that the new rate was not proposed to 
be implemented until January 1, 2021, both rates were reflected in the 
Price List. The Exchange proposes to delete as obsolete the old rate 
and the language following the current $0.11 rate that reads ``as of 
January 1, 2021.''
    The proposed change is not otherwise intended to address 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,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) & (5).
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The Proposed Change Is Reasonable
    The Exchange believes the proposed fee change is reasonable because 
it would help ensure that revenue collected from the Gross FOCUS Fee 
does not exceed a material portion of the Exchange's projected 
Regulatory Costs. The Exchange has targeted the Gross FOCUS Fee to 
generate revenues that would be less than or equal to the Exchange's 
regulatory costs, which is consistent with both Rule 129 and the 
Commission's view that regulatory fees be used for regulatory purposes. 
As noted above, the principle that the Exchange may only use regulatory 
fees ``to fund the legal, regulatory, and surveillance operations'' of 
the Exchange is reflected in the Exchange's operating agreement.\8\ In 
this regard, the Gross FOCUS Fee has been calculated to recover a 
material portion, but not all, of the Exchange's Regulatory Costs. As 
also noted above, based on the Exchange's recent review of current and 
projected regulatory costs and Gross FOCUS Fee collections, a five-
month waiver of the Gross FOCUS Fee, which was last adjusted more than 
three years ago, would be the most efficient way to lessen the 
potential for generating excess funds that may otherwise occur using 
the current rate and allow for further consideration of the appropriate 
Gross FOCUS Fee rate going forward. The Exchange thus believes that the 
proposed waiver would be a fair and reasonable method for ensuring that 
the amounts collected from the Gross FOCUS Fee, in combination with 
other regulatory fees and fines, do not potentially exceed Regulatory 
Costs. The Exchange further believes that resuming the current rate as 
of March 1, 2025 would be reasonable because it would permit the 
Exchange to resume assessing the Gross FOCUS Fee in a way that is 
designed to recover a material portion, but not all, of the Exchange's 
projected Regulatory Costs. The Exchange would continue monitoring 
Regulatory Costs in advance of the fee resumption next year and, if the 
Exchange determines that the rate should be further modified to help 
ensure that Gross FOCUS Fee collections would not exceed a material 
portion of Regulatory Costs, would

[[Page 86392]]

make an appropriate rule filing with the Commission.
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    \8\ See note 4, supra.
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    The Exchange further believes that the proposed deletion of 
references to a superseded Gross FOCUS Fee would increase the clarity 
and transparency of the Exchange's rules and remove impediments to and 
perfect the mechanism of a free and open market by ensuring that 
persons subject to the Exchange's jurisdiction, regulators, and the 
investing public could more easily navigate and understand the Exchange 
rules. The Exchange further believes that the proposed change 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, thereby reducing potential confusion.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal is an equitable allocation of 
fees among its market participants. The Exchange further believes that 
the proposed Gross FOCUS Fee waiver would benefit all member 
organizations because all member organizations would be eligible for 
the waiver, and would benefit from the waiver, on full and equal terms. 
For the same reasons, the proposed waiver neither targets nor will it 
have a disparate impact on any particular category of market 
participant. All member organizations would qualify for the waiver of 
the Gross FOCUS Fee on an equal and non-discriminatory basis. The 
Exchange also believes that recommencing the Gross FOCUS Fee effective 
March 1, 2025, at the current rate, unless the Exchange determines it 
would be necessary to further adjust the fee, is equitable because the 
Gross FOCUS Fee would resume applying to all member organizations on an 
equal basis.
    The Exchange further believes the proposed change supports an 
equitable allocation of fees and credits among its market participants 
because it would eliminate obsolete text from the Price List describing 
pricing that is no longer applicable to any market participants. 
Accordingly, the Exchange believes the proposal would impact all 
similarly situated member organizations on an equal basis. The Exchange 
also believes that the proposed change would promote investor 
protection and the public interest because the deletion of superseded 
fees from the Price List would enhance the clarity of the Price List 
and reduce confusion regarding fees and credits currently applicable to 
market participants who transact on the Exchange.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory. The proposed waiver of the Gross FOCUS Fee would 
benefit all similarly-situated market participants on an equal and non-
discriminatory basis. Moreover, the proposal neither targets nor will 
it have a disparate impact on any particular category of market 
participant. The proposed fee change is designed to pause collection of 
a fee that applies to member organizations on an equal and non-
discriminatory basis, waiver of which would apply to and benefit all 
member organizations equally. The Exchange also believes that 
recommencing the Gross FOCUS Fee on March 1, 2025 at the current rate, 
unless the Exchange determines it would be necessary to further adjust 
the rate to ensure that collections do not exceed a material portion of 
its Regulatory Costs, is not unfairly discriminatory because the 
resumed fee would apply equally to all member organizations.
    In addition, the proposed elimination of obsolete pricing would 
affect all market participants on an equal and non-discriminatory 
basis, as the fee with which such pricing is associated is no longer 
available to any market participants. The Exchange also believes that 
the proposed change would protect investors and the public interest 
because the deletion of superseded pricing programs would facilitate 
market participants' understanding of the pricing currently applicable 
on the Exchange.
    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 fee 
change would not impose an undue burden on competition as the fee 
waiver would apply to all member organizations on an equal and non-
discriminatory basis. The Exchange believes that the proposed waiver 
would also not place certain market participants at an unfair 
disadvantage because all member organizations would be eligible for the 
same waiver. For the same reasons, the proposed fee waiver neither 
targets nor will it have a disparate impact on any particular category 
of market participant. All similarly-situated member organizations 
would be eligible for the proposed waiver. The Exchange also believes 
recommencing the Gross FOCUS Fee on March 1, 2025 at the same current 
rate (unless the Exchange determines it necessary at that time to 
adjust the fee to ensure that collections do not exceed a material 
portion of its Regulatory Costs) would not impose an undue burden on 
competition because the proposed rate would apply equally to all member 
organizations subject to the Gross FOCUS Fee and would permit the 
Exchange to resume assessing a fee that is designed to recover a 
material portion, but not all, of the Exchange's projected Regulatory 
Costs.
    Intermarket Competition. The proposed fee change is not designed to 
address any competitive issues. Rather, the proposed change is designed 
to help the Exchange adequately fund its regulatory activities while 
seeking to ensure that total collections from regulatory fees do not 
exceed total Regulatory Costs.
    Finally, that portion of the proposal that relates to elimination 
of a reference to a superseded fee would not have any impact on intra- 
or inter-market competition because the proposed change is solely 
designed to enhance the clarity and transparency of the Price List and 
alleviate possible customer confusion that may arise from inclusion of 
a reference to a superseded fee.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act,\10\ and Rule 19b-
4(f)(2) thereunder \11\ the Exchange has designated this proposal as 
establishing or changing a due, fee, or other charge imposed on any 
person, whether or not the person is a member of the self-regulatory 
organization, which renders the proposed rule change effective upon 
filing. 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

[[Page 86393]]

action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4.
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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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#295b5c454c044a4644444c475d5a695a4c4a074e465f"><span class="__cf_email__" data-cfemail="4133342d246c222e2c2c242f3532013224226f262e37">[email protected]</span></a>. Please include 
file number SR-NYSE-2024-66 on the subject line.

Paper Comments

    <bullet> 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-2024-66. 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 
a.m. and 3 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-NYSE-2024-66, and should be 
submitted on or before November 20, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-25142 Filed 10-29-24; 8:45 am]
BILLING CODE 8011-01-P


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