Document ID: SEC-2017-1562-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2017-09-20T04:00Z

[Federal Register Volume 82, Number 181 (Wednesday, September 20, 2017)]
[Notices]
[Pages 44016-44018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19964]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81612; File No. SR-NYSE-2017-47]

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

September 14, 2017.
    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 7, 2017, New York Stock Exchange LLC (``NYSE'' 
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 its Price List for equity 
transactions in stocks with a per share stock price more than $1.00 to 
(1) revise the credit for Designated Market Makers (``DMMs'') for Mid-
Point Passive Liquidity (``MPL'') Orders that provide liquidity to the 
Exchange, and (2) make certain non-substantive, clarifying changes. The 
Exchange proposes to implement the proposed changes on September 7, 
2017.\4\ The proposed rule change is available on the Exchange's Web 
site at www.nyse.com, at the principal office of the Exchange, and at 
the Commission's Public Reference Room.
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    \4\ The Exchange originally filed to amend the Price List 
Schedule on August 29, 2017 (SR-NYSE-2017-45) and withdrew such 
filing on September 7, 2017.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

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

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

1. Purpose
    The Exchange proposes to amend its Price List to (1) revise the 
credit for DMMs for MPL Orders that provide liquidity to the Exchange, 
and (2) make certain non-substantive, clarifying changes.
    The proposed changes would only apply to transactions in securities 
priced $1.00 or more.
    The Exchange proposes to implement these changes to its Price List 
effective September 7, 2017.
Proposed Rule Change
    The Exchange proposes the following changes to its Price List.
Verbal Interest at the Close
    The current Price List provides that the Exchange charges $0.0010 
for verbal interest on the close. The Price List also provides that 
non-electronic agency transactions of Floor brokers that execute at the 
close are not charged.
    The Exchange would delete the current entry providing that there is 
no charge for non-electronic agency transactions of Floor brokers that 
execute at the close. This entry was inadvertently not deleted when the 
Exchange adopted the current charge for verbal interest on the 
close.\5\ Deleting obsolete and duplicative material would add clarity 
to the Exchange's Price List.
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    \5\ See Securities Exchange Act Release No. 77929 (May 26, 
2016), 81 FR 35406 (June 2, 2016).
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At the Opening Orders
    The Exchange currently charges $0.0010 for at the opening or at the 
opening only orders that are ``credited to both sides.'' The Exchange 
proposes to replace ``At the opening or at the opening only orders'' 
with ``Executions at the Open.'' The Exchange would also delete 
``credited to.'' The Exchange believes that the reference is redundant 
and unnecessary.
Credits for MPL Orders
    An MPL Order is an undisplayed limit order that trades at the mid-
point of the best protected bid (``PBB'') and best protected offer 
(``PBO''), as such terms are defined in Regulation NMS Rule 600(b)(57) 
(together, ``PBBO'').
    The Exchange proposes changes to the Price List to consolidate and 
streamline presentation of the credits for MPL orders that provide 
liquidity to the Exchange. Currently, credits for MPL orders that 
provide liquidity to the Exchange, excluding MPL Orders from DMMs and 
Supplemental Liquidity Providers (``SLP''), are set forth separately 
from the related credits for MPL orders that add liquidity to the 
Exchange applicable to SLPs. The credit amounts and qualifications for 
SLP and non-SLP MPL orders that add liquidity to the Exchange are the 
same.
    In order to consolidate these provisions, the Exchange proposes to 
delete (1) the phrase ``and Supplemental Liquidity Providers (`SLPs')'' 
from the provision governing credits for MPL orders that provide 
liquidity to the Exchange so as not to exclude SLP MPL orders, and (2) 
the SLP fees for MPL orders that add liquidity to the Exchange found 
under the heading ``Credit Applicable to Supplemental Liquidity 
Providers (`SLPs')'' of the Price List in their entirety. No 
substantive change would be effected since, as noted, the amount of the 
credits and qualifications for SLP and non-SLP MPL orders that add 
liquidity to the Exchange are currently the same and would remain 
unchanged.
DMM MPL Orders
    The Exchange currently provides a credit of $0.0030 to DMMs for 
executions of MPL Orders in securities priced $1.00 or more that 
provide liquidity to the NYSE. The Exchange proposes to revise the 
credit to DMMs to $0.00275.
* * * * *
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems that member 
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections

[[Page 44017]]

6(b)(4) and (5) of the Act,\7\ in particular, because it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members, issuers and other persons using its facilities and 
does not unfairly discriminate between customers, issuers, brokers or 
dealers and is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes that the proposed non-substantive changes to 
its Price List deleting obsolete entry relating to non-electronic 
agency transactions of Floor brokers at the close; clarifying that the 
charge for at the opening or at the opening only orders are 
``credited'' to both sides; replacing ``At the opening or at the 
opening only orders'' with ``Executions at the Open''; and 
consolidating and streamlining the presentation of the credits for MPL 
orders that provide liquidity to the Exchange are designed to provide 
greater specificity and clarity to the Price List, 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. Eliminating obsolete and redundant material also 
reduces potential confusion and adds transparency and clarity to the 
Exchange's rules, thereby ensuring that members, regulators, and the 
public can more easily navigate and understand the Exchange's rulebook.
    Finally, the Exchange believes that the proposed change to the 
credit for DMMs for MPL Orders that provide liquidity to the Exchange 
to $0.00275 per share is reasonable because the credit is in line with 
the best credit for member organizations of $0.00275 when the member 
organization has Adding ADV \8\ in MPL orders that is at least 0.140% 
of NYSE CADV.\9\ The proposed $0.00275 credit is also comparable to 
credits provided by other markets. For example, NASDAQ's best credit to 
add non-displayed midpoint liquidity is $0.0025.\10\ Moreover, the 
requirement is equitable and not unfairly discriminatory because DMMs 
on the Exchange have heightened quoting and other obligations that 
other market participants do not have. As such, it is equitable and not 
unfairly discriminatory to offer DMMs a credit that is in line with the 
best credit for other member organizations that do not have such 
obligations. The requirement is also equitable and not unfairly 
discriminatory because it would apply equally to all DMM firms.
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    \8\ ``Adding ADV'' is when a member organization has ADV that 
adds liquidity to the Exchange during the billing month. Adding ADV 
excludes any liquidity added by a DMM.
    \9\ NYSE CADV is defined in the Price List as the consolidated 
average daily volume of NYSE-listed securities.
    \10\ See NASDAQ Price List, available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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    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,\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. Instead, the proposed rule change is designed to 
eliminate obsolete and redundant material from the Exchange's Price 
List and provide the public and investors with a Price List that is 
clear and transparent. Further, the Exchange believes that the proposed 
change to the credit for DMMs for MPL Orders would not place a burden 
on competition because the lower credit is comparable to credits 
provided by other exchanges.
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    \11\ 15 U.S.C. 78f(b)(8).
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive or rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees and rebates to remain competitive with other exchanges and 
with alternative trading systems that have been exempted from 
compliance with the statutory standards applicable to exchanges. 
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 believes that the degree to which 
fee changes in this market may impose any burden on competition is 
extremely limited. As a result of all of these considerations, the 
Exchange does not believe that the proposed changes will impair the 
ability of member organizations or competing order execution venues to 
maintain their competitive standing in the financial markets.

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 rule-comments@sec.gov. Please include 
File Number SR-NYSE-2017-47 on the subject line.

Paper Comments

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

[[Page 44018]]

All submissions should refer to File Number SR-NYSE-2017-47. 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 Web site (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 Web site 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSE-2017-47 and should be 
submitted on or before October 11, 2017.

    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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19964 Filed 9-19-17; 8:45 am]
BILLING CODE 8011-01-P