Document ID: SEC-2015-1627-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2015-10-09T04:00Z

[Federal Register Volume 80, Number 196 (Friday, October 9, 2015)]
[Notices]
[Pages 61260-61261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25698]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76071; File No. SR-NYSEMKT-2015-72]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Its Price List 
To Change the Monthly Fees for the Use of Certain Ports

October 5, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 23, 2015, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Price List to change the monthly 
fees for the use of certain ports. The Exchange proposes to implement 
the fee change effective October 1, 2015. The text of 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.

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 change the monthly 
fees for the use of certain ports.\3\ The Exchange proposes to 
implement the fee changes on October 1, 2015.
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    \3\ The Exchange has a Common Customer Gateway (``CCG'') that 
accesses the equity trading systems that it shares with its 
affiliates, New York Stock Exchange LLC (``NYSE'') and NYSE Arca, 
Inc. (``NYSE Arca''), and all ports connect to the CCG See, e.g., 
Securities Exchange Act Release No. 64543 (May 25, 2011), 76 FR 
31667 (June 1, 2011) (SR-NYSEAmex-2011-20). All NYSE MKT member 
organizations are also NYSE member organizations and, accordingly, a 
member organization utilizes its ports for activity on both NYSE 
and/or NYSE MKT and is charged port fees based on the total number 
of ports connected to the CCG, whether the ports are used to quote 
and trade on NYSE, NYSE MKT, and/or both, because those trading 
systems are integrated. See Supplementary Material .10 to Rule 2. 
The NYSE Arca trading platform is not integrated in the same manner. 
Therefore, it does not share its ports with NYSE or NYSE MKT.
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    The Exchange currently makes ports available that provide 
connectivity to the Exchange's trading systems (i.e., ports for entry 
of orders and/or quotes (``order/quote entry ports'')) and charges $200 
per port per month for users of 1-5 ports, and $500 per port per month 
for users of 6 or more ports. The Exchange also currently makes ports 
available for drop copies and charges $500 per port per month.\4\
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    \4\ Only one fee per drop copy port applies, even if receiving 
drop copies from multiple order/quote entry ports. In addition, the 
Price List provides that (i) users of the Exchange's Risk Management 
Gateway service (``RMG'') are not charged for order/quote entry 
ports if such ports are designated as being used for RMG purposes, 
and (ii) Designated Market Makers (``DMMs'') are not charged for 
order/quote entry ports that connect to the Exchange via the DMM 
Gateway. See Securities Exchange Act Release No. 68261 (November 19, 
2012), 77 FR 70522 (November 26, 2012) (SR-NYSEMKT-2012-64). Two 
methods are available to DMMs to connect to the Exchange: DMM 
Gateway and CCG. Only DMMs may connect to the DMM Gateway and only 
when acting in their capacity as a DMM. DMMs are required to use the 
DMM Gateway for certain DMM-specific functions that relate to the 
DMM's role on the Exchange and the obligations attendant therewith, 
which are not applicable to other market participants on the 
Exchange. By contrast, non-DMMs as well as DMMs may use the CCG. Use 
of the CCG by a DMM is optional, and a DMM that connects to the 
Exchange via CCG can use the relevant order/quote entry port for 
orders and quotes both in its capacity as a DMM and for orders and 
quotes in other securities. Because DMMs are required to utilize DMM 
Gateway, but not CCG, to fulfill their functions as DMMs, DMMs are 
not charged for order/quote entry ports that connect to the Exchange 
via the DMM Gateway. However, DMMs, like other market participants, 
are charged for order/entry ports that connect to the Exchange via 
the CCG.
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    The Exchange proposes to standardize the port fee for connecting to 
CCG and charge $550 per port per month, regardless of the number of 
users and whether the port is used for order/quote entry or for drop 
copies. The Exchange believes that standardizing the port fees will 
permit the Exchange to offset, in part, its infrastructure costs 
associated with making such ports available. The proposed change would 
also encourage users to become more efficient with their usage of the 
ports thereby resulting in a corresponding increase in the efficiency 
that the Exchange would be able to realize with respect to managing its 
own infrastructure. In this regard, as users decrease the number of 
ports that they utilize, the Exchange would similarly be able to 
decrease the amount of its hardware that it is required to support to 
interface with such ports.
    The proposed change is 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,\5\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\6\ in 
particular, because it provides for the

[[Page 61261]]

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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposal to amend the port fees 
constitutes an equitable allocation of fees because all similarly 
situated member organizations and other market participants would be 
charged the same rates. The Exchange believes that the proposed change 
to the monthly rates is reasonable because the proposed port fees are 
expected to permit the Exchange to offset, in part, its infrastructure 
costs associated with making such ports available, including costs 
based on gateway software and hardware enhancements and resources 
dedicated to gateway development, quality assurance, and support. In 
this regard, the Exchange believes that the proposed fees are 
competitive with those charged by other exchanges.\7\ The proposed 
change is also reasonable because the proposed per port rates would 
encourage users to become more efficient with, and reduce the number of 
ports used, thereby resulting in a corresponding increase in the 
efficiency that the Exchange would be able to realize with respect to 
managing its own infrastructure.
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    \7\ For example, the charge on the NASDAQ for a FIX Trading Port 
is $550 per port per month. See NASDAQ Rule 7015. A separate charge 
for Pre-Trade Risk Management ports also is applicable, which ranges 
from $400 to $600 and is capped at $25,000 per firm per month. See 
NASDAQ Rule 7016.
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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,\8\ 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. Rather, the Exchange believes that the proposed 
change will permit the Exchange to set fees for ports that are 
competitive with those charged by other exchanges.\9\ Moreover, the 
Exchange believes that the proposal to amend the port fees would 
encourage users to become more efficient with, and reduce the number of 
ports used. In this regard, the Exchange believes that the proposal 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
Exchange believes that a reduction in the number of ports would result 
in a decrease in the infrastructure that the Exchange is required to 
support for connectivity to its trading systems. This would also 
provide incentive for users to become more efficient with their use of 
ports and could therefore result in such users becoming more 
competitive due to decreased costs.
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    \8\ 15 U.S.C. 78f(b)(8).
    \9\ See supra note 7.
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues. In 
such an environment, the Exchange must continually review, and consider 
adjusting, its fees and credits to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
this proposal promotes a competitive environment.

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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 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-NYSEMKT-2015-72 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.

All submissions should refer to File Number SR-NYSEMKT-2015-72. 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 such filing also will be available 
for inspection and copying at the principal offices 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-NYSEMKT-2015-
72, and should be submitted on or before October 30, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-25698 Filed 10-8-15; 8:45 am]
BILLING CODE 8011-01-P