44446 Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See 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’’). 

5See Securities Exchange Act Release No. 61358, 

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

02–10) (Concept Release on Equity Market 

Structure). 

6See 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/divisionsmarket

regmrexchangesshtml.html. 

7See 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. 

8See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at http://

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

9See id. 

notice to five directors and executive 

officers at an estimated 5 minutes per 

notice (1,230 blackout period × 5 notices 

× 5 minutes) for a total reporting burden 

of 512 hours. The combined annual 

reporting burden is (1,845 hours + 512 

hours) 2,357 hours. 

Written comments are invited on: (a) 

Whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden imposed by the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

Please direct your written comment to 

David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Cynthia 

Roscoe, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: August 6, 2021. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17159 Filed 8–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92592; File No. SR– 

NYSEAMER–2021–35] 

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 

August 6, 2021. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on July 30, 

2021, NYSE American LLC (‘‘NYSE 

American’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE American Equities Price List and 

Fee Schedule (‘‘Price List’’) to offer an 

optional monthly per security credit to 

Electronic Designated Market Makers 

(‘‘eDMM’’) that elect to receive a lower 

transaction credit per share credit for 

adding liquidity to the Exchange. 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 

Price List to offer an optional monthly 

per security credit to eDMMs that elect 

to receive a lower transaction credit per 

share credit for adding liquidity to the 

Exchange. 

The proposed changes respond to the 

current competitive environment where 

order flow providers have a choice of 

where to direct liquidity-providing 

orders by offering further incentives for 

eDMMs to increase quoting on, and 

send additional displayed liquidity to, 

the Exchange. 

The Exchange proposes to implement 

the fee changes effective August 2, 2021. 

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

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 

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

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can move order flow, or discontinue or 

reduce use of certain categories of 

products. While it is not possible to 

know a firm’s reason for shifting order 

flow, the Exchange believes that one 

such reason is because of fee changes at 

any of the registered exchanges or nonexchange venues to which the firm 


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Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices 44447 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4) and (5). 

12See Regulation NMS, supra note 6, 70 FR at 

37499. 

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 

The Exchange proposes an optional 

monthly credit per security (‘‘Credit Per 

Security’’) to eDMMs, up to a maximum 

credit of $550 per month across all 

assigned securities, provided that the 

eDMM agrees to a lower transaction 

credit of $0.0030, from $0.0045 

currently, for adding displayed liquidity 

for all assigned securities. An eDMM 

electing the additional Credit Per 

Security must notify the Exchange prior 

to the start of a month if the eDMM 

elects to change their credit either to or 

from the Credit Per Security for all the 

eDMM’s assigned securities. 

The Credit Per Security will be 

available for the following month for 

each assigned security where the eDMM 

meets the following quoting 

requirements: 

• An eDMM quoting at the National 

Best Bid or Offer (‘‘NBBO’’) for a 

minimum average of 25% of the time 

would be entitled a $100 Credit Per 

Security per month, or 

• An eDMM quoting at the NBBO for 

a minimum average of 40% of the time 

would be entitled a $250 Credit Per 

Security per month, or 

• Finally, an eDMM quoting at the 

NBBO for a minimum average of 50% of 

the time would be entitled to the 

maximum $550 Credit Per Security per 

month. 

The Exchange believes that providing 

Exchange eDMMs with the option to 

receive a lower per share transaction 

credit for increased quoting and adding 

displayed liquidity in exchange for 

monthly rebates per assigned security 

would foster liquidity provision and 

stability in the marketplace and lessen 

eDMM reliance on transaction fees, to 

the benefit of the marketplace and all 

market participants. 

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,10 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,11 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. 

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.’’ 12

Given this competitive environment, 

the proposal represents a reasonable 

attempt to attract additional order flow 

to the Exchange by offering further 

incentives for eDMMs to quote on, and 

send additional displayed liquidity to, 

the Exchange. 

The Exchange believes that providing 

eDMMs with the option to receive a 

lower per share transaction credit for 

adding displayed liquidity in exchange 

for monthly rebates per assigned 

security, up to a maximum credit of 

$550 per month across all eDMM 

assigned securities, is reasonable 

because it would foster liquidity 

provision and stability in the 

marketplace and lessen eDMM reliance 

on transaction fees, to the benefit of the 

marketplace and all market participants. 

Moreover, the proposal is reasonable 

because it would balance the increased 

risks and heightened quoting and other 

obligations that eDMMs on the 

Exchange have and that other market 

participants do not. The Exchange also 

believes that assigning a maximum 

credit of $550 per month for the Credit 

Per Security is reasonable and will 

provide a further incentive for eDMMs 

to quote and trade a greater number of 

securities on the Exchange and will 

generally allow the Exchange and 

eDMMs to better compete for order flow, 

and thus enhance competition. 

The Proposed Fee Change Is an 

Equitable Allocation of Fees and Credits 

The Exchange believes its proposal 

equitably allocates its fees and credits 

among its market participants. The 

Exchange believes that it is equitable to 

offer eDMMs the option to receive a 

lower per share transaction credit for 

adding displayed liquidity in exchange 

for monthly rebates per assigned 

security because it would balance the 

increased risks and heightened quoting 

and other obligations that eDMMs on 

the Exchange have and that other 

market participants do not have. As 

such, it is equitable to offer eDMMs the 

option to receive a flat per security 

credit based on the eDMM’s quoting in 

that symbol, coupled with a lower 

transaction fee. The requirement is also 

equitable because it would apply 

equally to all eDMM firms, who would 

have the option to elect (or not elect) to 

participate on a monthly basis. 

Moreover, the Exchange believes that 

the proposal is equitable because 

eDMMs would be required to meet 

prescribed quoting requirements in 

order to qualify for the payments, as 

described above. All eDMMs would be 

eligible to elect to receive a Credit Per 

Security and could do so by notifying 

the Exchange and meeting the per 

symbol quoting requirement. 

The Proposed Fee Change Is Not 

Unfairly Discriminatory 

The Exchange believes that the 

proposed rule change is not unfairly 

discriminatory. In the prevailing 

competitive environment, market 

participants, including eDMMs, 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 offer eDMMs 

the option to receive a flat per security 

credit coupled with a lower transaction 

fee for orders that provide displayed 

liquidity assigned securities as the 

proposed credits would be provided on 

an equal basis to all such participants. 

The Credit Per Security would apply 

equally to all eDMM firms, who would 

have the option to elect (or not elect) to 

participate on a monthly basis. Further, 

the Exchange believes the proposed 

incremental credits would incentivize 

eDMMs that meet the proposed quoting 

requirements to send more orders to the 

Exchange to qualify for a higher Credit 

Per Security. The proposal to introduce 

an additional eDMM credit neither 

targets nor will it have a disparate 

impact on any particular category of 

market participant. The proposal does 

not permit unfair discrimination 


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44448 Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices 

13 15 U.S.C. 78f(b)(8). 

14See Securities Exchange Act Release No. 51808, 

70 FR 37495, 37498–99 (June 29, 2005) (S7–10–04) 

(Final Rule). 

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

16 17 CFR 240.19b–4(f)(2). 

17 15 U.S.C. 78s(b)(2)(B). 18 17 CFR 200.30–3(a)(12). 

because the proposed threshold would 

be applied to all similarly situated 

eDMMs, who would all be eligible for 

the same credit on an equal basis. 

Accordingly, no eDMM already 

operating on the Exchange would be 

disadvantaged by this allocation of fees. 

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,13 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 market participants. 

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.’’ 14

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 

liquidity to the Exchange. The Exchange 

believes that the proposed credit and 

lower fee would incentivize eDMMs to 

increase quoting on the Exchange in 

assigned securities and to direct 

liquidity providing orders to the 

Exchange. Increased eDMM quoting and 

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 wellbalanced 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 offexchange 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 greater quoting on, and 

additional orders being sent to, the 

Exchange. 

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) 15 of the Act and 

subparagraph (f)(2) of Rule 19b–4 16

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 17 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2021–35 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAMER–2021–35. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAMER–2021–35 and 

should be submitted on or before 

September 2, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17176 Filed 8–11–21; 8:45 am] 

BILLING CODE 8011–01–P 


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