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[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Notices]
[Pages 51698-51700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19971]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92936; File No. SR-NYSEArca-2021-78]

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

September 10, 2021.
    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 September 1, 2021, NYSE Arca, Inc. (``NYSE Arca'' 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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[[Page 51699]]

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 eliminate the Step Up Tier 3 and Step Up 
Tier 5 pricing tiers. The Exchange proposes to implement the fee 
changes effective September 1, 2021. The proposed rule change is 
available on the Exchange's website at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to eliminate the 
Step Up Tier 3 and Step Up Tier 5 pricing tiers. The Exchange proposes 
to implement the fee changes effective September 1, 2021.
    Currently, to qualify for the Step Up Tier 3 credit, an ETP Holder 
\4\ must execute providing ADV \5\ per month of 0.15% or more, but less 
than 0.20% of the US CADV \6\ and directly execute providing ADV that 
is an increase of no less than 0.075% of US CADV for that month over 
the ETP Holder's providing ADV in May 2018.\7\ If an ETP Holder meets 
the Step Up Tier 3 requirement, such ETP Holder is eligible to earn a 
credit of $0.0025 per share for orders that provide displayed liquidity 
in Tape A and Tape C securities, and a credit of $0.0022 per share for 
orders that provide displayed liquidity in Tape B securities.
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    \4\ All references to ETP Holders in connection with this 
proposed fee change include Market Makers.
    \5\ ADV means average daily volume. See Fee Schedule, Section I. 
Definitions.
    \6\ US CADV means 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 US CADV. See Fee Schedule, Section I. 
Definitions.
    \7\ See Securities Exchange Act Release No. 84103 (September 12, 
2018), 83 FR 47216 (September 8, 2018) (SR-NYSEArca-2018-66).
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    Additionally, to qualify for the Step Up Tier 5 credits, an ETP 
Holder must execute providing ADV per month that is at least 0.20% of 
US CADV and execute providing ADV per month as a percentage of US CADV 
that is at least two times more than that ETP Holder's providing ADV in 
April 2020 as a percentage of US CADV.\8\ If an ETP Holder meets the 
Step Up Tier 5 requirement, such ETP Holder is eligible to earn a 
credit of $0.0032 per share for orders that provide liquidity in Tape 
A, Tape B and Tape C securities.
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    \8\ See Securities Exchange Act Release No. 88833 (May 7, 2020), 
85 FR 28676 (May 13, 2020) (SR-NYSEArca-2020-39).
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    The Exchange proposes to eliminate both the Step Up Tier 3 and Step 
Up Tier 5 pricing tiers and remove each pricing tier from the Fee 
Schedule because the pricing tiers have been underutilized by ETP 
Holders. The Exchange has observed that not a single ETP Holder has 
qualified for either of the pricing tiers proposed for elimination in 
the last six months. Since both the Step Up Tier 3 and Step Up Tier 5 
pricing tiers have not been effective in accomplishing their intended 
purpose, which is to incent ETP Holders to increase their liquidity 
adding activity on the Exchange, the Exchange has determined to 
eliminate each of these pricing tiers from the Fee Schedule.
    With the proposed elimination of Step Up Tier 3 and Step Up Tier 5, 
the Exchange proposes to rename current Step Up Tier 4 as Step Up Tier 
3.
    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,\9\ in general, and furthers the 
objectives of Sections 6(b)(4) and(5) of the Act,\10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed rule change to eliminate 
the Step Up Tier 3 and Step Up Tier 5 pricing tiers is reasonable 
because each of the pricing tiers that are the subject of this proposed 
rule change have been underutilized and have not incentivized ETP 
Holders to bring liquidity and increase trading on the Exchange. No ETP 
Holder has availed itself of either of the pricing tiers in the last 
six months. The Exchange does not anticipate any ETP Holder in the near 
future to qualify for either of the tiers that are the subject of this 
proposed rule change. The Exchange believes it is reasonable to 
eliminate requirements and credits, and even entire pricing tiers, when 
such incentives become underutilized. The Exchange believes eliminating 
underutilized incentive programs would also simplify the Fee Schedule. 
The Exchange further believes that removing reference to the pricing 
tiers that the Exchange proposes to eliminate from the Fee Schedule 
would also add clarity to the Fee Schedule. The Exchange believes that 
eliminating requirements and credits, and even entire pricing tiers, 
from the Fee Schedule when such incentives become ineffective is 
equitable and not unfairly discriminatory because the requirements, and 
credits, and even entire pricing tiers, would be eliminated in their 
entirety and would no longer be available to any ETP Holder. All ETP 
Holders would continue to be subject to the same fee structure, and 
access to the Exchange's market would continue to be offered on fair 
and nondiscriminatory terms. The Exchange also believes that the 
proposed change would protect investors and the public interest because 
the deletion of underutilized pricing tiers would make the Fee Schedule 
more accessible and transparent and facilitate market participants' 
understanding of the fees charged for services currently offered by the 
Exchange.
    For the foregoing reasons, the Exchange believes that the proposal 
is consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\11\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.
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    \11\ 15 U.S.C. 78f(b)(8).
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    Intramarket Competition. The Exchange's proposal to eliminate 
requirements and credits, and pricing tiers in their entirety, will not 
place any

[[Page 51700]]

undue burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act given that not a 
single ETP Holder has qualified for the credits under either of the 
pricing tiers that are the subject of this proposed rule change for the 
last six months. To the extent the proposed rule change places a burden 
on competition, any such burden would be outweighed by the fact that 
none of the pricing tiers proposed for deletion have served their 
intended purpose of incentivizing ETP Holders to more broadly 
participate on the Exchange. Moreover, ETP Holders can choose to trade 
on other venues to the extent they believe that the credits provided 
are too low or the qualification criteria are not attractive.
    Intermarket Competition. The Exchange believes the proposed rule 
change does not impose any burden on intermarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The Exchange operates in a highly competitive market in which market 
participants can readily choose to send their orders to other exchanges 
and off-exchange venues if they deem fee levels at those other venues 
to be more favorable. Market share statistics provide ample evidence 
that price competition between exchanges is fierce, with liquidity and 
market share moving freely from one execution venue to another in 
reaction to pricing changes. In such an environment, the Exchange must 
continually adjust its fees and rebates to remain competitive with 
other exchanges and with off-exchange venues. Because competitors are 
free to modify their own fees and credits in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange does not believe this proposed fee change would impose any 
burden on intermarket competition.

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) \12\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(2).
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    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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2021-78 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2021-78. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEArca-2021-78, and should be 
submitted on or before October 7, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19971 Filed 9-15-21; 8:45 am]
BILLING CODE 8011-01-P
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