Document ID: SEC-2013-0510-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2013-03-15T04:00Z

[Federal Register Volume 78, Number 51 (Friday, March 15, 2013)]
[Notices]
[Pages 16551-16552]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05985]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69101; File No. SR-NYSE-2013-19]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the New York Stock Exchange LLC Price List To Increase the 
Gross FOCUS Fee

March 11, 2013.
    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 February 26, 2013, New York Stock Exchange LLC (the 
``Exchange'' or ``NYSE'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II 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 the Exchange's Price List to 
increase the gross FOCUS fee (``Gross FOCUS Fee''). 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to increase the Gross 
FOCUS Fee. The Exchange proposes to immediately reflect the proposed 
change in its Price List, but not to implement the proposed rate change 
until April 1, 2013.\3\
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    \3\ The Exchange has proposed changes to the Price List, as 
reflected in the Exhibit 5 in a manner that would permit readers of 
the Price List to identify the proposed increase to the Gross FOCUS 
Fee that would be implemented on April 1, 2013.
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    The Exchange currently charges each member organization a monthly 
Gross FOCUS Fee of $0.105 per $1,000 of gross revenue reported on its 
FOCUS Report.\4\ Member organizations are subject to certain minimum 
annual Gross FOCUS Fees, which are $500 for carrying firms and 
designated market makers (``DMMs''), $250 for introducing firms, and 
$45 for member organizations who do not conduct a public business.
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    \4\ FOCUS is an acronym for Financial and Operational Combined 
Uniform Single Report. FOCUS Reports are filed periodically with the 
Securities and Exchange Commission (the ``Commission'' or ``SEC'') 
as SEC Form X-17A-5 pursuant to Rule 17a-5 under the Act.
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    The Exchange proposes to increase the rate of the Gross FOCUS Fee 
from $0.105 per $1,000 of gross revenue to $0.12 per $1,000 of gross 
revenue.\5\ The Exchange is proposing this increase in order to offset 
increased regulatory expenses. In this regard, the Exchange notes that 
it has not increased the Gross FOCUS Fee in more than five years, since 
January 2008.\6\
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    \5\ The Exchange is also proposing to specify, as is the case 
today, that the Gross FOCUS Fee is charged monthly. The Exchange is 
not proposing to change the existing minimum annual Gross FOCUS 
Fees.
    \6\ See Securities Exchange Act Release No. 56181 (August 1, 
2007), 72 FR 44206 (August 7, 2007) (SR-NYSE-2007-70).
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    The Exchange allocates the funds collected pursuant to the Gross 
FOCUS Fee to fund the performance of its regulatory activities with 
respect to member organizations, including expenses associated with the 
regulatory functions performed both by NYSE Regulation, Inc. (``NYSE 
Regulation'') and by the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') pursuant to a regulatory services agreement, for which 
FINRA is paid by NYSE Regulation.
    The Exchange will monitor the amount of revenue collected from the 
Gross FOCUS Fee to ensure that it, in combination with its other 
regulatory fees and fines, does not exceed regulatory costs. The 
Exchange expects to monitor regulatory costs and revenues on an annual 
basis, at a minimum. If the Exchange determines that regulatory 
revenues exceed regulatory costs, the Exchange would adjust the Gross 
FOCUS Fee downward by submitting a fee change filing to the Commission.
    In addition to being included in the Exchange's Price List, the 
Gross FOCUS Fee is also set forth in NYSE Rule 129, along with the 
applicable minimum annual fees described above.\7\ The Exchange 
proposes to remove the duplicative Gross FOCUS Fee text from NYSE Rule 
129. As a result, NYSE Rule 129 would no longer include the Gross FOCUS 
Fee or the applicable annual minimums. However, NYSE Rule 129 would 
continue to provide that the Exchange's Board may, from time to time, 
impose such charge or charges on members and member organizations as it 
deems appropriate to reimburse the Exchange, in whole or in part, for

[[Page 16552]]

regulatory oversight services provided to the membership by the 
Exchange.\8\
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    \7\ See, e.g., Securities Exchange Act Release No. 57139 
(January 14, 2008), 73 FR 3503 (January 18, 2008) (SR-NYSE-2008-01).
    \8\ The Exchange is also proposing a non-substantive, 
grammatical change to this text in NYSE Rule 129.
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    The Exchange notes that 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,\9\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(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 change is reasonable 
because the increase in the Gross FOCUS Fee would permit the Exchange 
to offset increased regulatory expenses related to member 
organizations. In this regard, the Exchange notes that it has not 
increased the Gross FOCUS Fee in more than five years, since January 
2008.\11\
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    \11\ See supra note 6.
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    The Exchange further believes that the level of the Gross FOCUS Fee 
is reasonable because it is expected to generate revenues that, when 
combined with the Exchange's other regulatory fees with respect to 
member organizations, will be less than or equal to the Exchange's 
regulatory costs. The Exchange believes that this is consistent with 
the Commission's previously stated view that regulatory fees be used 
for regulatory purposes and not to support the Exchange's business 
side.
    The Exchange further believes that the proposed change is equitable 
and not unfairly discriminatory because the Gross FOCUS Fee is assessed 
in an objective manner to all member organizations based on gross 
revenue reported on their FOCUS Reports.
    The Exchange also believes that consolidating the text related to 
the Gross FOCUS Fee in the Price List is reasonable, equitable and not 
unfairly discriminatory because it would provide member organizations 
with a single location to reference the applicable fees and would 
eliminate unnecessary duplication of related text.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issues. Rather, the proposed change 
is designed to permit the Exchange to adequately fund its regulatory 
activities in light of increased regulatory expenses related to member 
organizations.

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 NYSE.
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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.

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-2013-19 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2013-19. 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-2013-19 and should be 
submitted on or before April 5, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05985 Filed 3-14-13; 8:45 am]
BILLING CODE 8011-01-P