[Federal Register Volume 89, Number 209 (Tuesday, October 29, 2024)]
[Notices]
[Pages 86055-86061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25049]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101410; File No. SR-NYSEARCA-2024-85]


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

October 23, 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, 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, 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 the NYSE Arca Equities Fees and 
Charges (``Fee Schedule'') to (1) increase the credits payable under 
certain Mid-Point Liquidity (``MPL'') Order pricing tiers, and (2) 
adopt a lower fee for certain Retail Orders that remove liquidity in 
securities with a per share price below $1.00. 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.

[[Page 86056]]

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 (1) increase the 
credits payable under certain MPL Order \3\ pricing tiers, and (2) 
adopt a lower fee for certain Retail Orders \4\ that remove liquidity 
in securities with a per share price below $1.00 (``Sub-Dollar 
Securities''), as described below.
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    \3\ A MPL Order is a limit order that is not displayed and does 
not route, with a working price at the lower (higher) of the 
midpoint of the Protected Best Bid/Offer or its limit price. See 
NYSE Arca Rule 7.31-E(d)(3).
    \4\ 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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    The Exchange proposes to implement the fee changes effective 
October 10, 2024.\5\
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    \5\ The Exchange originally filed to amend the Fee Schedule on 
October 1, 2024 (SR-NYSEARCA-2024-82). SR-NYSEARCA-2024-82 was 
subsequently withdrawn and replaced by this filing.
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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\
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    \6\ 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.'' \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 20% 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 12% market share of 
executed volume of equities trading.\11\
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    \7\ 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).
    \8\ See Cboe U.S Equities Market Volume Summary, available at 
https://markets.cboe.com/us/equities/market_share.
    \9\ 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.
    \10\ See Cboe Global Markets U.S. Equities Market Volume 
Summary, available at http://markets.cboe.com/us/equities/market_share/.
    \11\ 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 the firm routes order flow. Accordingly, competitive forces 
compel the Exchange to use exchange transaction fees and credits 
because market participants can readily trade on competing venues if 
they deem pricing levels at those other venues to be more favorable.
Proposed Rule Change
MPL Orders
    In response to this competitive environment, the Exchange has 
already established multiple levels of credits for MPL Orders that 
allow ETP Holders to passively interact with trading interest on the 
Exchange and offer potential price improvement to incoming marketable 
orders submitted to the Exchange.\12\ In order to provide an incentive 
for ETP Holders to provide such liquidity, the credits increase based 
on increased levels of volume directed to the Exchange. The MPL Order 
pricing tiers are intended to incentivize ETP Holders to earn increased 
credits by sending greater amounts of liquidity-providing MPL Orders in 
Tapes A, B and C securities to the Exchange.
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    \12\ See, e.g., Securities Exchange Act Release No. 54511 
(September 26, 2006), 71 FR 58460, 58461 (October 3, 2006) (SR-PCX-
2005-53).
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    As noted above, the Exchange currently provides multiple levels of 
credits, ranging from $0.0015 per share to $0.0030 per share, to ETP 
Holders that send MPL Orders that provide liquidity to the Exchange. 
For the current MPL Order pricing tier, the amount of the per share 
credit is based on an ETP Holder's ADV of provided liquidity in MPL 
Orders for Tape A, Tape B and Tape C Securities combined (``MPL Adding 
ADV'').
    Under current MPL Tier 8, for ETP Holders that have MPL Adding ADV 
during a billing month of at least 1.5 million shares, the Exchange 
currently provides a credit of $0.0015 per share in Tape A, Tape B and 
Tape C securities. Under current MPL Tier 7, for ETP Holders with MPL 
Adding ADV during a billing month of at least 2 million shares, the 
Exchange currently provides a credit of $0.0020 per share in Tape A, 
Tape B and Tape C securities. Under current MPL Tier 6, the Exchange 
provides a credit of $0.0025 per share in Tape A, Tape B and Tape C 
securities to ETP Holders that have MPL Adding ADV during a billing 
month of at least 3 million shares. ETP Holders can alternatively 
qualify for the MPL Tier 6 credit if they have MPL Adding ADV during 
the billing month of at least 1 million shares and have MPL Adding ADV, 
as a percent of Adding ADV, of at least 50%. Under current MPL Tier 5, 
the Exchange provides a credit of $0.0026 per share in Tape A, Tape B 
and Tape C securities to ETP Holders that have MPL Adding ADV during a 
billing month of at least 5 million shares. ETP Holders can 
alternatively qualify for the MPL Tier 5 credit if they have MPL Adding 
ADV during the billing month of at least 2 million shares and have MPL 
Adding ADV, as a percent of Adding ADV, of at least 50%. Under MPL Tier 
4, for ETP Holders with MPL Adding ADV during a billing month of at 
least 13 million shares, the Exchange currently provides a credit of 
$0.0027 per share in Tape A, Tape B

[[Page 86057]]

and Tape C securities. Under MPL Tier 3, for ETP Holders with MPL 
Adding ADV during a billing month of at least 15 million shares, the 
Exchange currently provides a credit of $0.0028 per share in Tape A, 
Tape B and Tape C securities. Under MPL Tier 2, for ETP Holders with 
MPL Adding ADV during a billing month of at least 25 million shares, 
the Exchange currently provides a credit of $0.0029 per share in Tape 
A, Tape B and Tape C securities. Finally, under MPL Tier 1, for ETP 
Holders with MPL Adding ADV during a billing month of at least 30 
million shares, the Exchange currently provides a credit of $0.0030 per 
share in Tape A, Tape B and Tape C securities.\13\
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    \13\ The Exchange charges a fee of $0.0030 per share for MPL 
Orders in Tape A, Tape B and Tape C Securities that remove liquidity 
from the Exchange that are not designated as ``Retail Orders.'' MPL 
Orders removing liquidity from the Exchange that are designated as 
Retail Orders are subject to a fee of $0.0010 per share. See Fee 
Schedule.
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    The Exchange now proposes to increase the credits payable for MPL 
Tier 1, MPL Tier 2, MPL Tier 3 and MPL Tier 4, as follows:
    <bullet> Increase the credit payable for MPL Tier 1, from $0.0030 
per share to $0.0033 per share in Tape A, Tape B and Tape C securities, 
without any change to the volume requirement to qualify for the 
proposed higher MPL Tier 1 credit;
    <bullet> Increase the credit payable for MPL Tier 2, from $0.0029 
per share to $0.0032 per share in Tape A, Tape B and Tape C securities, 
without any change to the volume requirement to qualify for the 
proposed higher MPL Tier 2 credit;
    <bullet> Increase the credit payable for MPL Tier 3, from $0.0028 
per share to $0.0031 per share in Tape A, Tape B and Tape C securities, 
without any change to the volume requirement to qualify for the 
proposed higher MPL Tier 3 credit; and
    <bullet> Increase the credit payable for MPL Tier 4, from $0.0027 
per share to $0.0029 per share in Tape A, Tape B and Tape C securities, 
without any change to the volume requirement to qualify for the 
proposed higher MPL Tier 4 credit.
    With this proposed change, the MPL Order Tiers pricing tier would 
appear as follows:

----------------------------------------------------------------------------------------------------------------
                                                 MPL order tiers
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                                                Minimum requirement                    Credit for MPL adding
                                  ------------------------------------------------------------------------------
               Tier                                         MPL adding ADV as                       Tape B and
                                      MPL adding ADV      percent of adding ADV       Tape A          Tape C
----------------------------------------------------------------------------------------------------------------
MPL Tier 1.......................  30 Million.........  ........................       ($0.0033)       ($0.0033)
MPL Tier 2.......................  25 Million.........  ........................        (0.0032)        (0.0032)
MPL Tier 3.......................  15 Million.........  ........................        (0.0031)        (0.0031)
MPL Tier 4.......................  13 Million.........  ........................        (0.0029)        (0.0029)
MPL Tier 5.......................  5 Million or.......  ........................        (0.0026)        (0.0026)
                                   2 Million..........                        50
MPL Tier 6.......................  3 Million or.......  ........................        (0.0025)        (0.0025)
                                   1 Million..........                        50
MPL Tier 7.......................  2 Million..........  ........................        (0.0020)        (0.0020)
MPL Tier 8.......................  1.5 Million........  ........................        (0.0015)        (0.0015)
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    The goal of the proposed rule change is to incentivize ETP Holders 
to increase the number of MPL Orders they post on the Exchange's Book, 
which would provide additional price improvement opportunities for 
incoming orders, and thus qualify for the proposed higher per share 
credits. MPL Orders allow for additional opportunities for passive 
interaction with trading interest on the Exchange and are designed to 
offer potential price improvement to incoming marketable orders 
submitted to the Exchange. The Exchange believes that by correlating 
the level of the credit to the level of MPL Adding ADV, the Exchange's 
fee structure would incentivize ETP Holders to submit more liquidity-
providing MPL Orders to the Exchange, thereby increasing the potential 
for price improvement to incoming marketable orders submitted to the 
Exchange.
    The Exchange believes adopting increased credits payable under the 
MPL Tiers 1, 2, 3 and 4 would provide an incentive for ETP Holders to 
send increased order flow to qualify for these tiers. As noted above, 
the Exchange operates in a competitive environment, particularly as it 
relates to attracting MPL Orders that are posted on the Exchange's 
Book. Since the Exchange is not amending the volume requirement to 
qualify for MPL Tiers 1, 2, 3 and 4, the Exchange believes that the 
proposed higher credits would incentivize ETP Holders to route a 
greater number of liquidity-providing orders to the Exchange to qualify 
for the proposed higher credits.
    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 markets and off-exchange venues, 
the Exchange has no way of knowing whether the proposed fee change 
would result in any ETP Holder sending more of its liquidity-providing 
orders to the Exchange to qualify for the proposed higher credits. The 
Exchange cannot predict with certainty how many ETP Holders 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 Exchange believes 
the proposed higher credits would provide an incentive for ETP Holders 
to submit additional MPL Orders to the Exchange to qualify for such 
credits.
Sub-Dollar Retail Day Remove Tier
    As described below, the Exchange proposes to adopt a new pricing 
tier that would provide ETP Holders the ability to pay a lower fee for 
Retail Orders in Sub-Dollar Securities with a time-in-force of Day that 
remove liquidity from the Exchange. Currently, the Exchange charges a 
fee equal to 0.3% of the total dollar value for all orders in Sub-
Dollar Securities that remove liquidity.\14\
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    \14\ See Fee Schedule, Section III. Standard Rates--Transactions 
(applicable when Tier Rates do not apply).
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    Specifically, the Exchange proposes to adopt a new pricing tier 
titled Sub-Dollar Retail Day Remove Tier under Section VIII. Tier 
Rates--Round Lots and Odd Lots (Per Share Price Below $1.00). As 
proposed, ETP Holders that, during the billing month, have Retail 
Orders in Sub-Dollar Securities with a

[[Page 86058]]

time-in-force of Day equal to 0.20% of CADV \15\ in Sub-Dollar 
Securities that remove liquidity would be charged a fee of 0.20% of 
total dollar value. ETP Holders that meet the proposed volume 
requirement would qualify to pay the proposed lower fee for Retail 
Orders in Sub-Dollar Securities with a time-in-force of Day that remove 
liquidity.
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    \15\ Pursuant to Section I. of the Fee Schedule, the term 
``CADV'' means, unless otherwise stated, the United States 
consolidated average daily volume of transactions reported to a 
securities information processor (``SIP''). Transactions that are 
not reported to a SIP are not included in the CADV. If CADV is 
preceded by a reference to a Tape or to Sub-Dollar, then CADV would 
refer to all consolidated average daily volume of transactions 
reported to a SIP for all securities in that Tape or to all Sub-
Dollar securities.
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    The purpose of the proposed rule change is to encourage greater 
participation from ETP Holders and promote liquidity in Retail Orders. 
The Exchange believes that the proposed rule change to adopt a volume 
requirement to qualify for the proposed fee reduction would incentivize 
ETP Holders to direct a greater number of Retail Orders in Sub-Dollar 
Securities to the Exchange that remove liquidity. As described above, 
ETP Holders have a choice of where to send their Retail Orders in Sub-
Dollar Securities that remove liquidity. The Exchange believes that the 
proposed rule change to reduce fees paid by ETP Holders for Retail 
Orders in Sub-Dollar Securities could lead to more ETP Holders choosing 
to route such orders for execution to the Exchange rather than to a 
competing exchange.
    While the Exchange proposes to adopt a volume threshold for the 
proposed new pricing tier, the Exchange believes ETP Holders will to be 
able to meet the proposed requirement given the increased trading in 
Sub-Dollar Securities in recent months. ETP Holders that trade in Sub-
Dollar Securities would benefit by paying a lower fee for Retail Orders 
with a time-in-force of Day if they choose to send such orders to the 
Exchange. Based on their current trading profile on the Exchange, a 
number of ETP Holders would currently qualify for the proposed lower 
fee. However, without having a view of ETP Holders' activity on other 
markets and off-exchange venues, the Exchange has no way of knowing 
whether this proposed rule change would result in other ETP Holders 
directing orders to the Exchange in order to qualify for the proposed 
lower fee. The Exchange cannot predict with certainty how many ETP 
Holders would avail themselves of this opportunity, but increased 
activity of Retail Orders in Sub-Dollar Securities would benefit all 
market participants because it would provide greater execution 
opportunities on the Exchange.
    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,\16\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\17\ 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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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(4) and (5).
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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.'' \18\
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    \18\ See Regulation NMS, supra note 6, 70 FR at 37499.
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    As the Commission itself recognized, the market for trading 
services in NMS stocks has become ``more fragmented and competitive.'' 
\19\ Indeed, equity trading is currently dispersed across 16 
exchanges,\20\ numerous alternative trading systems,\21\ 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 (whether including or excluding auction 
volume).\22\ The Exchange believes that the ever-shifting market share 
among the exchanges from month to month demonstrates that market 
participants can shift order flow, or discontinue or reduce use of 
certain categories of products, in response to fee changes. 
Accordingly, the Exchange's fees are reasonably constrained by 
competitive alternatives and market participants can readily trade on 
competing venues if they deem pricing levels at those other venues to 
be more favorable.
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    \19\ See Securities Exchange Act Release No. 51808, 84 FR 5202, 
5253 (February 20, 2019) (File No. S7-05-18) (Final Rule).
    \20\ 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.
    \21\ 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.
    \22\ See Cboe Global Markets U.S. Equities Market Volume 
Summary, available at http://markets.cboe.com/us/equities/market_share/.
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MPL Orders
    The Exchange believes the proposed changes to MPL Tiers 1, 2, 3 and 
4 are reasonable because the increased credits payable under these 
tiers would provide an incentive for ETP Holders to route greater 
amounts of liquidity-providing orders to the Exchange. As noted above, 
the Exchange operates in a highly competitive environment, particularly 
for attracting order flow that provides liquidity on an exchange. The 
Exchange believes it is reasonable to provide the higher credits under 
MPL Tiers 1, 2, 3, and 4 for orders that provide liquidity if an ETP 
Holder meets the qualification for such pricing tiers.
    The Exchange believes the proposed increased credits are reasonable 
as they would provide an additional incentive for ETP Holders to 
qualify for these new tiers and direct their order flow to the Exchange 
and provide meaningful added levels of liquidity, thereby contributing 
to the depth, market quality, and price improvement on the Exchange.
    On the backdrop of the competitive environment in which the 
Exchange currently operates, the proposed rule change is a reasonable 
attempt by the Exchange to increase its liquidity and improve its 
market share relative to its competitors.
Sub-Dollar Retail Day Remove Tier
    The Exchange believes it is reasonable to adopt the proposed Sub-
Dollar Retail Day Remove pricing tier because the Exchange believes the 
proposed lower fee under the proposed pricing tier would encourage 
greater participation from ETP Holders, which could result in increased 
execution of Retail Orders in Sub-Dollar Securities. In this regard, an 
ETP Holder that does not qualify for the proposed lower fees would 
continue to pay the current fee applicable to Retail

[[Page 86059]]

Orders in Sub-Dollar Securities that remove liquidity. The proposed new 
pricing tier would create an added financial incentive for ETP Holders 
to bring additional retail flow to a public market. The proposed new 
pricing tier is also reasonable because it would reduce the costs of 
ETP Holders that represent retail flow and potentially also reduce 
costs to their customers.
    The Exchange believes that it is reasonable that only Retail Orders 
in Sub-Dollar Securities with a time-in-force designation of Day that 
remove liquidity would count toward qualifying for the Sub-Dollar 
Retail Day Remove Tier. The Exchange notes that it currently offers 
lower fees for Retail Orders with a time-in-force of Day that remove 
liquidity in securities with a per share price of $1.00 or above under 
Retail Tiers 1, 2, and 3 and under Retail Step-Up Tier.\23\ The 
Exchange believes that the proposed volume requirement to qualify for 
the proposed lower fee is reasonable because it is within a range that 
the Exchange believes would continue to incentivize ETP Holders to 
submit Retail Orders in Sub-Dollar Securities to the Exchange to 
qualify for the proposed lower fee.
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    \23\ See Fee Schedule, Retail Tiers under Section VII. Tier 
Rates--Round Lots and Odd Lots (Per Share Price $1.00 or Above).
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The Proposed Fee Change is an Equitable Allocation of Credits and Fees
MPL Orders
    The Exchange believes that the adoption of increased credits under 
MPL Tiers 1, 2, 3 and 4 is equitable because the magnitude of the 
additional credit is not unreasonably high in comparison to the credit 
paid with respect to other pricing tiers on the Exchange, and in 
comparison to the credits paid by other exchanges for orders that 
provide midpoint liquidity. For example, ETP Holders currently receive 
credits in Tape A, Tape B and Tape C securities that range between 
$0.0010 per share and $0.0038 per share under Standard and Tiered 
rates. With respect to credits paid by the Exchange's competitors, the 
Nasdaq Stock Market LLC provides a credit of $0.0028 per share to add 
non-displayed midpoint liquidity in Tape A, Tape B and Tape C 
Securities on that market for firms that add midpoint liquidity that 
represents 0.30% TCV or more \24\ NYSE American LLC, an affiliate of 
the Exchange, also currently provides a credit of $0.0030 per share to 
add MPL liquidity on that market for members that add greater than 3.5 
million shares.\25\
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    \24\ See Rebate to Add Non-Displayed Midpoint Liquidity, at 
http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
    \25\ See Standard Rates under I. Transaction Fees (other than 
for Transactions by an eDMM in Securities Assigned to an eDMM), at 
https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf.
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    The Exchange believes the proposed rule change would improve market 
quality for all market participants on the Exchange and, as a 
consequence, attract more liquidity to the Exchange thereby improving 
market-wide quality. ETP Holders that currently qualify for credits 
associated with MPL Orders will continue to receive credits when they 
provide liquidity to the Exchange. The Exchange believes that 
recalibrating the credits for providing liquidity will continue to 
attract order flow and liquidity to the Exchange, thereby providing 
additional price improvement opportunities on the Exchange and 
benefiting investors generally. As to those market participants that do 
not presently qualify for the credits associated with MPL Orders, the 
proposal will not adversely impact their existing pricing or their 
ability to qualify for other credits provided by the Exchange.
Sub-Dollar Retail Day Remove Tier
    The Exchange believes that the proposed adoption of the Sub-Dollar 
Retail Day Remove pricing tier is equitable. The proposed new pricing 
tier is intended to provide ETP Holders an incentive to send a greater 
number of Retail Orders in Sub-Dollar Securities to the Exchange in 
order to pay a lower fee for such orders when removing liquidity from 
the Exchange, thereby increasing the number of orders that are executed 
on the Exchange, promoting price discovery and transparency and 
enhancing order execution opportunities and improving overall liquidity 
on a public exchange. The Exchange also believes that the proposed 
change is equitable because the proposed new pricing tier would apply 
to all similarly situated ETP Holders that remove liquidity. As 
previously noted, the Exchange operates in a competitive environment, 
particularly as it relates to attracting Retail Orders to the Exchange.
    The Exchange believes that a number of ETP Holders could qualify 
for the proposed lower fee based on their current trading profile on 
the Exchange if they choose to direct more of their order flow to the 
Exchange. However, without having a view of an ETP Holder's activity on 
other exchanges and off-exchange venues, the Exchange has no way of 
knowing whether this proposed rule change would result in any ETP 
Holder directing Retail Orders to the Exchange in order to qualify for 
the proposed lower fee. The Exchange believes the proposed rule change 
would improve market quality for all market participants on the 
Exchange and, as a consequence, attract more Retail Orders to the 
Exchange, thereby improving market-wide quality and price discovery.
    The Exchange also believes the proposed Sub-Dollar Retail Day 
Remove Tier is equitable and not unfairly discriminatory because it is 
available to all ETP Holders on an equal basis. The Exchange does not 
believe that it is unfairly discriminatory to offer lower fees to ETP 
Holders as these participants would be subject to meeting prescribed 
volume requirements. The Exchange believes that the proposed rule 
change is also equitable and not unfairly discriminatory because 
maintaining or increasing the proportion of Retail Orders in exchange-
listed securities that are executed on a registered national securities 
exchange (rather than relying on certain available off-exchange 
execution methods) would contribute to investors' confidence in the 
fairness of their transactions and would benefit all investors by 
deepening the Exchange's liquidity pool, supporting the quality of 
price discovery, promoting market transparency and improving investor 
protection.
The Proposed Fee Change Is Not Unfairly Discriminatory
MPL Orders
    The Exchange believes that the adoption of increased credits under 
MPL Tiers 1, 2, 3 and 4 is not unfairly discriminatory. Moreover, the 
proposed higher credits neither targets nor will it have a disparate 
impact on any particular category of market participant. The Exchange 
believes it is not unfairly discriminatory to provide the increased per 
share credits under MPL Tiers 1, 2, 3, and 4 as each such credit would 
be provided on an equal basis to all ETP Holders that add liquidity by 
meeting the volume requirement of MPL Tiers 1, 2, 3, and 4. The 
Exchange believes the proposed increased per share credits would 
incentivize ETP Holders to send more of their MPL Orders to the 
Exchange to qualify for such credits. The proposed higher credits would 
apply equally to all ETP Holders as each would be required to provide 
liquidity in MPL Orders for Tape A, Tape B and Tape C Securities 
combined during the billing month regardless of whether an ETP Holder 
currently meets the requirement of another pricing tier.

[[Page 86060]]

Sub-Dollar Retail Day Remove Tier
    The Exchange believes that the adoption of the proposed Sub-Dollar 
Retail Day Remove pricing tier is not unfairly discriminatory. The 
Exchange also believes that the proposal to adopt a volume requirement 
to qualify for the proposed fee reduction is not unfairly 
discriminatory. In the prevailing competitive environment, ETP Holders 
are free to disfavor the Exchange's pricing if they view the proposed 
fee as excessive. Moreover, the proposal neither targets nor will it 
have a disparate impact on any particular category of market 
participant. The Exchange believes that the proposed rule change will 
incentivize ETP Holders to direct a greater number of Retail Orders to 
a public exchange to qualify for the proposed reduced fee for removing 
liquidity, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for ETP Holders. The proposal 
does not permit unfair discrimination because the proposed volume 
requirement for removing liquidity would be applied to all similarly 
situated ETP Holders, who would all be eligible to pay a reduced fee on 
an equal basis. Accordingly, no ETP Holder already operating on the 
Exchange would be disadvantaged by this allocation of fees. The 
Exchange believes it is not unfairly discriminatory to provide lower 
fees for removing liquidity as the proposed fee would be provided on an 
equal basis to all ETP Holders that remove liquidity by meeting the 
proposed volume requirement. Further, the Exchange believes the 
proposed reduced fee would provide an incentive for ETP Holders to 
execute more of their Retail Orders on the Exchange.
    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,\26\ 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.'' \27\
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    \26\ 15 U.S.C. 78f(b)(8).
    \27\ See Regulation NMS, supra note 6, 70 FR 37498-99.
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    Intramarket Competition. The proposed changes are designed to 
attract additional order flow to the Exchange. The Exchange believes 
that the adoption of higher credits under MPL Tiers 1, 2, 3 and 4, 
would continue to incentivize market participants to direct more orders 
to the Exchange, and in particular, liquidity-providing MPL Orders. 
Greater liquidity benefits all market participants on the Exchange by 
providing more trading opportunities. The proposed changes to the MPL 
Order pricing tiers should incentivize ETP Holders to send liquidity-
providing orders to the Exchange, thereby contributing to robust levels 
of liquidity, which would benefit all market participants on the 
Exchange. The proposed higher credits would be available to all 
similarly-situated market participants, and, as such, the proposed 
changes would not impose a disparate burden on competition among market 
participants on the Exchange. The proposed rule change is also designed 
to attract Retail Orders in Sub-Dollar Securities to the Exchange. The 
Exchange believes that the proposed change would incentivize market 
participants to direct retail order flow to a public market. Greater 
overall order flow, trading opportunities, and pricing transparency 
would benefit all market participants on the Exchange by enhancing 
market quality and would continue to encourage ETP Holders to send 
their orders to the Exchange, thereby contributing towards a robust and 
well-balanced market ecosystem. The proposed fee reduction would be 
available 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. Additionally, the proposed 
change would apply to all ETP Holders equally in that all ETP Holders 
would have a reasonable opportunity to meet the volume requirement to 
qualify for the proposed fee reduction and would pay a lower fee for 
removing liquidity if such criteria is met.
    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 12%. In such an environment, the 
Exchange must continually review, and consider adjusting 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, the Exchange does not believe its proposed fee 
change can impose any burden on intermarket competition.
    The Exchange believes that the proposed changes 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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act,\28\ and Rule 19b-
4(f)(2) thereunder \29\ 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 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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    \28\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \29\ 17 CFR 240.19b-4.

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[[Page 86061]]

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#f183849d94dc929e9c9c949f8582b1829492df969e87"><span class="__cf_email__" data-cfemail="b9cbccd5dc94dad6d4d4dcd7cdcaf9cadcda97ded6cf">[email protected]</span></a>. Please include 
file number SR-NYSEARCA-2024-85 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-NYSEARCA-2024-85. 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-2024-85, and 
should be submitted on or before November 19, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-25049 Filed 10-28-24; 8:45 am]
BILLING CODE 8011-01-P


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