[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Pages 3143-3149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00979]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93973; File No. SR-NYSEAMER-2021-54]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Amend the NYSE 
American Equities Price List and Fee Schedule

January 13, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on December 30, 2021, NYSE American LLC (``NYSE American'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain Standard Rates and 
requirements for transaction fees and credits that add and remove 
liquidity in securities at or above $1 and reformat the section of the 
NYSE American Equities Price List and Fee Schedule (``Price List'') 
setting forth transactions fees for all transactions other than 
transactions using Retail Order Rates, transactions in securities below 
$1, and transactions by an Electronic Designated Market Makers 
(``eDMM'') in assigned securities. The Exchange proposes to implement 
the fee changes effective January 3, 2022. The proposed 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 amend the Standard Rates for transaction 
fees and credits that add and remove liquidity in securities at or 
above $1 and reformat the section of the Price List setting forth 
transactions fees for all transactions other than transactions using 
Retail Order Rates, transactions in securities below $1, and 
transactions by an eDMM in assigned securities.
    The proposed changes respond to the current competitive environment 
where order flow providers have a choice of where to direct liquidity-
providing and liquidity-removing orders by offering further incentives 
for ETP Holders to send additional adding and removing liquidity to the 
Exchange.
    The Exchange proposes to implement the fee changes effective 
January 3, 2022.
Competitive Environment
    The Exchange operates in a highly competitive market. The 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. In Regulation NMS, the Commission 
highlighted the importance of market forces in determining prices and 
SRO revenues and, also, recognized that current regulation of the 
market system ``has been remarkably successful in promoting market 
competition in its broader forms that are most important to investors 
and listed companies.'' \4\
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    \4\ 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.'' \5\ Indeed, cash equity trading is currently dispersed 
across 16

[[Page 3144]]

exchanges,\6\ numerous alternative trading systems,\7\ and broker-
dealer internalizers and wholesalers, all competing for order flow. 
Based on publicly-available information, no single exchange currently 
has more than 17% market share.\8\ Therefore, no exchange possesses 
significant pricing power in the execution of cash equity order flow. 
More specifically, the Exchange currently has less than 1% market share 
of executed volume of cash equities trading.\9\
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    \5\ 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).
    \6\ 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.
    \7\ 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.
    \8\ See Cboe Global Markets U.S. Equities Market Volume Summary, 
available at http://markets.cboe.com/us/equities/market_share/.
    \9\ 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.
    In response to this competitive environment, the Exchange has 
established incentives for ETP Holders who submit orders that provide 
liquidity on the Exchange. The proposed fee change is designed to 
attract additional order flow to the Exchange by incentivizing ETP 
Holders to send additional adding liquidity to the Exchange to qualify 
for the liquidity removing tiers and fees. The Exchange has also 
established incentives for ETP Holders to remove liquidity from the 
Exchange. In addition, as detailed below, the proposed higher credits 
for Mid-Point Liquidity Orders (``MPL Orders'') \10\ adding liquidity 
to the Exchange are intended to create incentives for price improving 
liquidity and increasing the quality of order execution on the 
Exchange's market, which benefits all market participants, insofar as 
MPL Orders provide opportunities for market participants to interact 
with orders priced at the midpoint of the Protected Best Bid and Offer 
(``PBBO'').\11\
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    \10\ See Rule 7.31E(d)(3) (description of MPL Order).
    \11\ See Rule 1.1E(dd) (definition of PBBO).
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Proposed Rule Change
    Currently, for transactions in securities priced at or above $1.00, 
other than transactions by eDMMs in assigned securities, the Exchange 
offers the following credits for displayed orders that add liquidity to 
the Exchange:
    <bullet> Displayed orders and MPL Orders that add liquidity to the 
Exchange where the ETP Holder has an average daily volume (``ADV'') of 
at least 2,500,000 shares (``Adding ADV'') \12\ currently receive a 
credit of $0.0026 per share.
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    \12\ As defined in the Fee Schedule, Adding ADV means an ETP 
Holder's average daily volume of shares executed on the Exchange 
that provided liquidity.
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    <bullet> Displayed orders and MPL Orders that add liquidity to the 
Exchange where an ETP Holder has Adding ADV of at least 750,000 shares 
currently receive a $0.0025 credit per displayed and MPL share. Where 
an ETP Holder does not have an Adding ADV of at least 750,000 shares, 
such orders currently receive a $0.0024 per share.
    <bullet> Orders that add displayed liquidity to the Exchange and 
that set a new best bid or offer (``BBO'') on NYSE American \13\ where 
an ETP Holder has an Adding ADV of at least 2,500,000 shares currently 
receive a $0.0027 per share credit. Where an ETP Holder does not have 
an Adding ADV of at least 2,500,000 shares, such orders currently 
receive a $0.0026 per share credit.
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    \13\ See Rule 1.1E(h) (definition of BBO).
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    <bullet> The current fee for orders removing liquidity from the 
Exchange where an ETP Holder has an Adding ADV of at least 10,000 
shares is $0.0026 per share. Where an ETP Holder does not have an 
Adding ADV of at least 10,000 shares, the Exchange charges $0.0030 per 
share for all executions that remove liquidity from the Exchange.
    The Exchange proposes to restructure its tier requirements, 
credits, and fees in order to attract liquidity to the Exchange. The 
Exchange has not made substantial changes to its pricing in several 
years and believes that some of the current tier requirements, credits, 
and fees no longer incentivize ETP Holders to send liquidity to the 
Exchange, and therefore should be modified. In addition, the Exchange 
believes that harmonizing the tier requirements for orders that add 
liquidity and orders that remove liquidity from the Exchange will make 
its Price List clearer and more transparent for ETP Holders. The 
Exchange believes that this combination of changes, taken together, 
will cause ETP Holders to send more liquidity to the Exchange.
    Specifically, the Exchange proposes to revise these fees and 
credits by: (a) Reorganizing the fees as ``Tier 1,'' ``Tier 2,'' or 
``Non-Tier''; (b) adjusting the Adding ADV levels required to qualify 
for Tier 1 and Tier 2 fees and credits and harmonizing such levels for 
orders adding liquidity and orders removing liquidity; (c) proposing 
separate fees and credits for MPL Orders adding liquidity; and (d) 
adjusting the fees and credits available for ETP Holders qualifying for 
proposed Tier 1, Tier 2, and Non-Tier rates, as follows.
    The Exchange proposes to define a ``Tier 1,'' pursuant to which it 
would make its best rates available to ETP Holders with Adding ADV of 
at least 3,500,000 shares. This Adding ADV requirement of 3,500,000 
shares is an increase from the current Adding ADV level of 2,500,000 
shares required for ETP Holders to access the Exchange's best rates for 
orders adding liquidity, and from the current Adding ADV level of 
10,000 shares required for ETP Holders to access the Exchange's best 
rates for orders removing liquidity. As proposed, ETP Holders that 
qualify for Tier 1 would be eligible for the following rates:
    <bullet> A credit of $0.0026 per share for orders adding displayed 
liquidity (no change from the current rate);
    <bullet> A credit of $0.0030 per share for MPL Orders adding 
liquidity (an increase from the current credit of $0.0026 per share);
    <bullet> A credit of $0.0029 per share for orders adding displayed 
liquidity that set a new BBO on the Exchange (an increase from the 
current credit of $0.0027 per share); and
    <bullet> A fee of $0.0026 per share for orders removing liquidity 
(no change from the current rate).
    The Exchange also proposes to define a ``Tier 2,'' setting out 
rates available to ETP Holders with Adding ADV of at least 700,000 
shares. This Adding ADV requirement of 700,000 is a decrease from the 
current Adding ADV level of 750,000 shares required for ETP Holders to 
access certain pricing for orders adding liquidity. (Currently, there 
is no second-tier Adding ADV requirement for orders removing 
liquidity.) As proposed, ETP Holders that qualify for Tier 2 would be 
eligible for the following rates:
    <bullet> A credit of $0.0023 per share for orders adding displayed 
liquidity (a decrease from the current credit of $0.0025 per share);
    <bullet> A credit of $0.0029 per share for MPL Orders adding 
liquidity (an increase from the current credit of $0.0025 per share);

[[Page 3145]]

    <bullet> A credit of $0.0024 per share for orders adding liquidity 
that set a new BBO on the Exchange (a decrease from the current credit 
of $0.0026 per share); and
    <bullet> A fee of $0.0027 for orders removing liquidity (an 
increase from the current fee of $0.0026 per share).
    The Exchange also proposes to define ``Non-Tier'' rates, which 
would specify the rates available to ETP Holders that do not qualify 
for either Tier 1 or Tier 2, as follows:
    <bullet> A credit of $0.0020 per share for orders adding displayed 
liquidity (a decrease from the current credit of $0.0024 per share);
    <bullet> A credit of $0.0024 per share for MPL Orders adding 
liquidity (no change from the current rate);
    <bullet> A credit of $0.0020 per share for orders adding liquidity 
that set a new BBO on the Exchange (a decrease from the current credit 
of $0.0026 per share); and
    <bullet> A fee of $0.0030 per share for orders removing liquidity 
(no change from the current rate).
    The Exchange proposes to keep the current credit of $0.0020 per 
share for non-displayed orders adding liquidity and the current fee of 
$0.0005 per share for orders executing in the opening or closing 
auctions, without any change. Neither of those rates depends on an ETP 
Holder achieving a certain level of Adding ADV.
    These proposed changes are intended 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 by correlating the level of credits to the level of executed 
adding volume on the Exchange, the Exchange's fee structure would 
encourage ETP Holders to submit more liquidity-providing orders to the 
Exchange that are likely to be executed, thereby increasing the 
potential for incoming marketable orders submitted to the Exchange to 
receive an execution. As noted above, the Exchange operates in a 
competitive environment, particularly as it relates to attracting non-
marketable orders that add liquidity to the Exchange. The Exchange 
believes that the proposed tiering of credits applicable to displayed 
orders, MPL Orders, and orders setting a new NYSE American BBO for ETP 
Holders that meet the proposed Adding ADV requirements would serve as 
an additional incentive for ETP Holders to send liquidity to and 
improve quoting on the Exchange in order to qualify for such credits.
    In addition, the Exchange believes that the proposed changes to the 
fees for removing liquidity, taken together, will incentivize 
submission of additional liquidity to a public exchange, thereby 
promoting price discovery and transparency and enhancing order 
execution opportunities for ETP Holders. As noted, the Exchange 
operates in a competitive environment, particularly as it relates to 
attracting non-marketable orders, which add liquidity 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. Because the 
proposed reconfiguration of fees for removing liquidity from the 
Exchange involves the introduction of new fees and/or new requirements, 
the Exchange does not know how many ETP Holders could qualify for such 
new fees based on their current trading profile on the Exchange and if 
they choose to direct order flow to the Exchange. Without having a view 
of 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 orders to the Exchange.
    The proposed rule change is designed to be available to all ETP 
Holders on the Exchange and is intended to provide ETP Holders a 
greater incentive to direct more of their orders to the Exchange.
    Finally, the Exchange would delete the current presentation of the 
Standard Rates for liquidity adding and removing orders and replace it 
with the following table in the Price List, reflecting all of the rates 
proposed above:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Fees and credits per share
                                          Minimum adding -----------------------------------------------------------------------------------------------
                                                ADV           Adding        Setting new                       Adding
                                            requirement     liquidity--    NYSE American    MPL adding      liquidity--      Removing      Executions at
                                             (shares)        displayed          BBO          liquidity     non-displayed     liquidity    open and close
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tier 1..................................       3,500,000       $(0.0026)       $(0.0029)       $(0.0030)       $(0.0020)         $0.0026         $0.0005
Tier 2..................................         700,000        (0.0023)        (0.0024)        (0.0029)        (0.0020)          0.0027          0.0005
Non-Tier................................             N/A        (0.0020)        (0.0020)        (0.0024)        (0.0020)          0.0030          0.0005
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Exchange proposes this non-substantive change to reorganize and 
enhance the presentation in the Price List in order to add clarity and 
transparency, thereby making the Price List easier to navigate.
    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,\14\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\15\ 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, is designed to prevent fraudulent and 
manipulative acts and practices and to promote just and equitable 
principles of trade, and does not unfairly discriminate between 
customers, issuers, brokers or dealers.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4) and (5).
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    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.'' \16\
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    \16\ See Regulation NMS, supra note 6, 70 FR at 37499.
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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 
shift order flow, or discontinue to reduce use of certain categories of 
products, in response to fee changes.

[[Page 3146]]

ETP Holders can choose from any one of the 16 currently operating 
registered exchanges, and numerous off-exchange venues, to route such 
order flow. Accordingly, competitive forces constrain exchange 
transaction fees that relate to orders 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.
The Proposed Fee Change Is Reasonable
    In light of the competitive environment in which the Exchange 
currently operates, the proposed rule change is a reasonable attempt to 
increase liquidity on the Exchange and improve the Exchange's market 
share relative to its competitors. The Exchange believes the proposed 
change is also reasonable because it is designed to attract higher 
volumes of orders transacted on the Exchange by ETP Holders, which 
would benefit all market participants by offering greater price 
discovery and an increased opportunity to trade on the Exchange.
Proposed Tier Requirements
    The Exchange believes that aligning the Adding ADV tier 
requirements for Tier 1 and Tier 2 for orders adding liquidity and 
orders removing liquidity will be clearer for investors and will 
eliminate potential investor confusion, thereby removing impediments to 
and perfecting the mechanism of a free and open market and a national 
market system, and, in general, protecting investors and the public 
interest.
    The Exchange believes that the proposed change increasing to 
3,500,000 shares the minimum Adding ADV required for ETP Holders to 
access its best pricing for orders adding and removing liquidity under 
proposed Tier 1 is a reasonable attempt to increase liquidity on the 
Exchange and improve the Exchange's market share relative to its 
competitors. Currently, ETP Holders may qualify for the Exchange's best 
pricing for orders adding liquidity by achieving an Adding ADV of 
2,500,000 shares, and may qualify for the Exchange's best pricing for 
orders removing liquidity by achieving an Adding ADV of 10,000 shares. 
The Exchange believes that these current levels are not a sufficient 
incentive, and that raising these Adding ADV requirements to the 
proposed level of 3,500,000 shares would incentivize ETP Holders to 
send more of their liquidity-adding orders to the Exchange as opposed 
to other venues, so that they may qualify for the Exchange's best 
pricing for adding and removing liquidity.
    Similarly, the Exchange believes that adjusting the current Adding 
ADV requirement of 750,000 shares to 700,000 shares for orders adding 
displayed liquidity under proposed Tier 2, and adding specified fees 
under proposed Tier 2 for orders removing liquidity for ETP Holders 
with at least 700,000 shares, will enable more ETP Holders to qualify 
for this tier, thereby incentivizing more ETP Holders to send their 
orders to the Exchange. This, in turn, would increase liquidity on the 
Exchange and improve the Exchange's market share relative to its 
competitors. The proposed 700,000 share Adding ADV requirement is a 
reduction from the current requirement of 750,000 shares to qualify for 
certain credits for orders adding liquidity, and would introduce a Tier 
2 Adding ADV requirement for orders removing liquidity. The Exchange 
believes that establishing the Tier 2 Adding ADV requirement at this 
level would incentivize ETP Holders to send more of their liquidity-
adding orders to the Exchange, so that they may qualify for Tier 2 
pricing for adding and removing liquidity.
Proposed Fees and Credits
    The Exchange believes that the proposed changes to the credits 
available for orders adding liquidity to the Exchange are reasonable. 
The Exchange believes it is reasonable to increase the credits 
available under Tier 1 and Tier 2 for MPL Orders adding liquidity as it 
is expected to create incentives for ETP Holders to add price-improving 
liquidity to the Exchange and increase the quality of order execution 
on the Exchange's market, which benefits all market participants, as 
MPL Orders provide opportunities for market participants to interact 
with orders priced at the midpoint of the PBBO. The Exchange also 
believes it is reasonable to increase the credits available under Tier 
1 for orders setting a new BBO on the Exchange, as it is expected 
provide incentives for ETP Holders to provide aggressively-priced 
orders that improve the market by setting the BBO on the Exchange. 
Similarly, the Exchange believes that lowering the credits available 
under Tier 2 and at the Non-Tier level for orders adding displayed 
liquidity and for orders setting a new BBO on the Exchange is 
reasonable because the current higher credits did not result in greater 
liquidity as the Exchange had anticipated. The Exchange believes it is 
reasonable to revise credits when such incentives become underutilized.
    The Exchange believes that the proposed changes to the fees for 
orders removing liquidity to the Exchange are reasonable. The purpose 
of these changes is to encourage additional liquidity on the Exchange 
because market participants benefit from the greater amounts of 
displayed liquidity present on a public exchange. The Exchange believes 
that the proposed new fees will incentivize additional liquidity on a 
public exchange to qualify for lower fees for removing liquidity, 
thereby promoting price discovery and transparency and enhancing order 
execution opportunities for ETP Holders. The proposal is thus 
reasonable because all ETP Holders would benefit from such increased 
levels of liquidity.
    Because the proposal involves the introduction of new requirements 
as well as new fee and credit levels, the Exchange does not know how 
many ETP Holders could qualify for the new fees and credits based on 
their current trading profile on the Exchange and if they choose to 
direct order flow to the Exchange. As previously noted, without a view 
of ETP Holder activity on other exchanges and off-exchange venues, the 
Exchange has no way of knowing whether the proposed rule change would 
result in any ETP Holder qualifying for a particular tier, credit, or 
fee. The Exchange believes the proposed changes are reasonable as it 
would provide an incentive for ETP Holders to direct their order flow 
to the Exchange and provide meaningful added levels of liquidity in 
order to qualify for the credits, thereby contributing to depth and 
market quality on the Exchange.
Proposed Non-Substantive Reformatting
    The Exchange believes that the proposed changes are reasonable 
because they are clarifying and non-substantive. The changes are 
designed to make the Price List easier to read and more user-friendly. 
The Exchange believes that this proposed format will provide additional 
transparency of Exchange fees and credits, to the benefit of market 
participants and the investing public. The Exchange believes the change 
is reasonable and 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 and transparency on 
the Price List, thereby reducing potential confusion.
The Proposed Change Is an Equitable Allocation of Fees and Credits
    The Exchange believes its proposal equitably allocates its fees 
among its market participants. The Exchange believes its proposal 
equitably allocates its fees among its market participants by

[[Page 3147]]

fostering liquidity provision and stability in the marketplace.
Proposed Tier Requirements
    The Exchange believes its proposal equitably allocates its fees and 
credits among its market participants because all ETP Holders that 
participate on the Exchange may receive the proposed fees and credits 
if they elect to send their orders to the Exchange and meet the minimum 
Adding ADV requirement corresponding to the fee or credit. 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 any ETP Holder sending more of 
their orders to the Exchange. The Exchange cannot predict with 
certainty how many ETP Holders would avail themselves of this 
opportunity, but additional orders would benefit all market 
participants because it would provide greater execution opportunities 
on the Exchange. The Exchange anticipates that multiple ETP Holders 
would endeavor to send more of their orders for execution on the 
Exchange in order to meet the proposed requirements for Tier 1 and/or 
Tier 2 pricing, thereby earning the proposed higher credits and paying 
the proposed lower fees.
    The Exchange further believes that the proposed change is equitable 
because it is reasonably related to the value to the Exchange's market 
quality associated with higher volume in orders. The Exchange believes 
that the proposed pricing adjustments would attract order flow and 
liquidity to the Exchange, thereby contributing to price discovery on 
the Exchange and benefiting investors generally.
    The Exchange believes that the proposed rule change is equitable 
because maintaining or increasing the proportion of 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 proposal neither targets nor will it have a disparate impact on 
any particular category of market participant. All ETP Holders would be 
eligible to qualify for the proposed credits if they meet the proposed 
Adding ADV requirements for each proposed tier. The Exchange believes 
that offering 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 meet the Adding ADV requirements to qualify for the 
Exchange's best prices, the proposal would provide a second tier with 
lower requirements that could allow those ETP Holders to still qualify 
for preferential credits and fees. The proposal will also not adversely 
impact their ability to qualify for other credits or fees provided by 
the Exchange.
Proposed Fees and Credits
    The Exchange believes the proposal equitably allocates fees and 
credits among market participants because all ETP Holders that 
participate on the Exchange may qualify for the proposed credits and 
fees. The Exchange believes that the proposed changes, taken together, 
will incentivize ETP Holders to send additional adding liquidity to 
achieve lower fees 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 it would apply to all similarly situated ETP Holders 
that add or remove liquidity. The proposed change also is equitable 
because it would be consistent with the applicable rate on other 
marketplaces.\17\
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    \17\ For example, Cboe EDGX offers credits for adding non-retail 
displayed liquidity ranging from $0.0016 to $0.0034 and fees for 
removing liquidity from $0.00275 to $0.0030. See https://www.cboe.com/us/equities/membership/fee_schedule/edgx/.
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    As previously noted, the Exchange operates in a competitive 
environment, particularly as it relates to attracting orders that add 
liquidity 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. Because the proposed reconfiguration of the fees involves the 
introduction of requirements as well as new fees and credits, the 
Exchange does not know how many ETP Holders could qualify for the new 
rates based on their current trading profiles on the Exchange and if 
they choose to direct order flow to the Exchange. Without having a view 
of 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 orders to the Exchange.
Proposed Non-Substantive Reformatting
    The Exchange believes that the proposed changes are equitable 
because they are clarifying and non-substantive. The changes are 
designed to make the Price List easier to read and more user-friendly. 
The Exchange believes that this proposed format will provide additional 
transparency of Exchange fees and credits, to the benefit of market 
participants and the investing public. The Exchange believes the change 
is reasonable and 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 and transparency on 
the Price List, thereby reducing potential confusion. The Exchange 
believes that the proposed reformatted the Price List is equitable 
because the resulting streamlined Price List would continue to apply to 
all ETP Holders on an equal basis.
The Proposed Fee Change Is Not Unfairly Discriminatory
Proposed Tier Requirements
    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 provide revised requirements and 
corresponding tiered fees and credits, as the proposed fees and credits 
would be provided on an equal basis to all ETP Holders that meet the 
proposed tier requirements. Further, the Exchange believes the proposed 
fees and credits would incentivize ETP Holders that meet the new tiered 
requirements to send more orders to the Exchange. Since the minimum 
Adding ADV requirements and some of the proposed fees and credits would 
be new, no ETP Holder currently qualifies for them. As noted, without a 
view of ETP Holder 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 Holders qualifying for the proposed adding 
tiers. The Exchange believes the proposal is reasonable as it would 
provide an incentive for ETP Holders to direct their order flow to the 
Exchange and provide meaningful added levels of liquidity in order to 
qualify for the credits, thereby

[[Page 3148]]

contributing to depth and market quality on the Exchange.
    In addition, the Exchange believes that the proposal is not 
unfairly discriminatory because it neither targets nor will it have a 
disparate impact on any particular category of market participant. All 
ETP Holders that provide liquidity could be eligible to qualify for the 
proposed credits under Tier 1 or Tier 2 if they meet the proposed 
Adding ADV requirements. The Exchange believes that offering 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 adding liquidity credits, the proposal will not 
adversely impact their ability to qualify for other credits provided by 
the Exchange. Finally, the submission of orders is optional for ETP 
Holders in that they could choose whether to submit orders to the 
Exchange and, if they do, they can choose the extent of their 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.
Proposed Fees and Credits
    The Exchange believes that that the proposed fees and credits for 
ETP Holders that add or remove liquidity will incentivize submission of 
additional liquidity to a public exchange to qualify for the revised 
fees and credits, thereby promoting price discovery and transparency 
and enhancing order execution opportunities for ETP Holders. The 
proposal does not permit unfair discrimination because the proposed 
rates would be applied to all similarly situated ETP Holders and other 
market participants, who would all be eligible for the same rates on an 
equal basis. Accordingly, no ETP Holder already operating on the 
Exchange would be disadvantaged by this allocation of fees and credits.
    Finally, the Exchange notes that 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.
Proposed Non-Substantive Reformatting
    The Exchange believes that the proposed reformatted the Price List 
is not unfairly discriminatory because the resulting streamlined Price 
List would continue to apply to all ETP Holders equally. The Exchange 
believes that the reformatted Price List, as proposed, will be clearer 
and less confusing for investors and will eliminate potential 
confusion, thereby removing impediments to and perfecting the mechanism 
of a free and open market and a national market system, and, in 
general, protecting investors and the public interest. The Exchange 
believes the change is reasonable and 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 and 
transparency on the Price List, thereby reducing potential confusion.
    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,\18\ 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 fee change 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.'' \19\
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    \18\ 15 U.S.C. 78f(b)(8).
    \19\ See Securities Exchange Act Release No. 51808, 70 FR 37495, 
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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    Intramarket Competition. The Exchange believes the proposed change 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
change is designed to attract additional orders to the Exchange. The 
Exchange believes that the proposed changes would incentivize market 
participants to direct their orders to the Exchange. Greater overall 
order flow, trading opportunities, and pricing transparency benefit all 
market participants on the Exchange by enhancing market quality and 
continuing to encourage ETP Holders to send orders, thereby 
contributing towards a robust and well-balanced market ecosystem.
    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 currently has less than 1% market share of executed 
volume of equities trading. In such an environment, the Exchange must 
continually adjust its fees and credits 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 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) \20\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \21\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \22\ of the Act to determine whether the proposed 
rule

[[Page 3149]]

change should be approved or disapproved.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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#a0d2d5ccc58dc3cfcdcdc5ced4d3e0d3c5c38ec7cfd6"><span class="__cf_email__" data-cfemail="a2d0d7cec78fc1cdcfcfc7ccd6d1e2d1c7c18cc5cdd4">[email protected]</span></a>. Please include 
File Number SR-NYSEAMER-2021-54 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-NYSEAMER-2021-54. 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. 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-NYSEAMER-2021-54 and should 
be submitted on or before February 10, 2022.
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00979 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P


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