Document ID: SEC-2021-0937-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2021-07-08T04:00Z

[Federal Register Volume 86, Number 128 (Thursday, July 8, 2021)]
[Notices]
[Pages 36169-36172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14500]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92308; File No. SR-NYSE-2021-37]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Reformat the Section of the NYSE Price List Setting Forth Credits 
Applicable to Supplemental Liquidity Providers

July 1, 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 June 21, 2021, New York Stock Exchange LLC (``NYSE'' 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 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 reformat the section of the NYSE Price 
List setting forth Credits Applicable to Supplemental Liquidity 
Providers (``SLPs'') without any substantive changes. The Exchange 
proposes to implement the fee changes effective immediately. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to reformat the section of the NYSE Price 
List setting forth Credits Applicable to SLPs without any substantive 
changes. The Exchange proposes to implement the fee changes effective 
immediately.
    The Exchange proposes the following non-substantive changes to 
reorganize and enhance the presentation in the Price List in order to 
add clarity and transparency, thereby making the Price List easier to 
navigate.
    First, the Exchange would delete the current presentation of the 
SLP rates and requirements except for the basic rate, which would 
remain unchanged. The Exchange would also delete footnotes **, 8 and + 
that, as discussed below, would be relocated to new section marked 
``General.'' Footnote 8 would be marked ``Reserved'' to preserve the 
current footnote numbering in the Price List. Footnotes 9 and 10, which 
do not appear in the current SLP section of the Price List, would 
remain unchanged.
    Second, the Exchange proposes a table presentation of the current 
SLP rates and requirements. The proposed changes would appear in the 
Price List in two tables. The first table would appear under the new 
heading ``SLP Adding Tiers'' and the phrase ``For SLP symbols that meet 
the 10% average quoting requirement in an assigned security pursuant to 
Rule 107B, other than MPL Orders, in securities with a per share price 
of $1.00 or more:'' from the current Price List. The table would 
summarize the current rates and requirements for SLP Tiers for Adding 
Liquidity (SLP Step Up, SLP Tier 5, SLP Tier 4, SLP Tier 3, SLP Tier 2, 
SLP Tier 1A and SLP Tier [sic]) and set forth the requirements and the 
tiered display credits and non-tiered display credits. The requirements 
and credits are unchanged. The proposed changes would appear as follows 
in the Price List:

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                              Minimum requirements
 
----------------------------------------------------------------------------------------------------------------
Tier for adding liquidity                 SLP adding ADV % Tape A CADV                    Tiered          Tiered
                                                                                         display     non display
                                                                                          credit          credit
----------------------------------------------------------------------------------------------------------------
SLP Step Up...................           0.085% over April 2018 Baseline               $(0.0018)       $(0.0001)
----------------------------------------------------------------------------------------------------------------
SLP Tier 5....................    0.65% and 0.85% including Non SLP and 250,000        (0.00310)       (0.00120)
                                      ADV in Retail Price Improvement Orders
----------------------------------------------------------------------------------------------------------------
SLP Tier 4....................  First 2 calendar months  0.03% and averaging            (0.0029)       (0.00105)
                                 as an SLP OR.            less than 0.01% in
                                                          each of the prior 3
                                                          months.
----------------------------------------------------------------------------------------------------------------
SLP Tier 3....................                        0.20%                             (0.0023)        (0.0006)
----------------------------------------------------------------------------------------------------------------
SLP Tier 2....................                        0.45%                             (0.0026)        (0.0009)
----------------------------------------------------------------------------------------------------------------
SLP Tier 1A...................                        0.60%                            (0.00275)       (0.00105)
----------------------------------------------------------------------------------------------------------------
SLP Tier 1....................  0.90%..................  0.75% if qualifying for        (0.0029)        (0.0012)
                                                          SLP Cross Tape
                                                          Incentive Tier 1.
----------------------------------------------------------------------------------------------------------------

[[Page 36170]]

    Following the proposed chart, the Exchange would include three 
bullets, as follows.
    Bullet 1 would clarify that for SLPs that are also DMMs and subject 
to Rule 107B(i)(2)(A), the above SLP Tier 1, Tier 1A, Tier 2, Tier 3, 
Tier 4, Tier 5 and Step Up Tier requirements are after a discount of 
the percentage for the prior quarter of NYSE CADV in DMM assigned 
securities as of the last business day of the prior month. This is 
unchanged from the current Price List.
    Bullet 2 would include text clarifying that SLPs that meet the 
requirements of one of the above tiers (Tiers 1A, 2, 3, 4 and the SLP 
Step Up Tier) and add liquidity in Tapes B and C securities of at least 
0.25% of Tape B and Tape C CADV combined, will receive an additional 
credit of $0.0001 if at SLP Step Up Tier, SLP Tier 3, SLP Tier 2, SLP 
Tier 1A OR $0.00005 if at SLP Tier 1, SLP Tier 4 and SLP Tier 5. This 
is unchanged from the current Price List.
    Bullet 3 would provide that in SLP Tier 1 and Tier 5, SLPs will 
receive an additional $0.00005 per share for adding liquidity, other 
than MPL and Non-Display Reserve orders, in securities where they are 
not assigned as an SLP or do not meet the 10% average or more quoting 
requirement in an assigned security pursuant to Rule 107B. This 
information will be transposed without change from current SLP Tiers 1 
and 5 in the Price List.
    Following this proposed text, the Exchange would summarize the 
current Incremental SLP Step Up Tiers 1, 2 and 3 credits and 
requirements, renamed ``SLP Incremental Tier,'' in the following chart:

------------------------------------------------------------------------
                                          SLP adding ADV
                                           % Tape A CADV  Tiered display
                  Tier                     step up over     incremental
                                             baseline        credit *
------------------------------------------------------------------------
SLP Incremental Tier 3..................           0.100      $(0.00010)
SLP Incremental Tier 2..................           0.150       (0.00020)
SLP Incremental Tier1...................           0.250       (0.00030)
------------------------------------------------------------------------

    The requirements and tiered displayed incremental credits 
applicable to each incremental step up are unchanged from the current 
Price List.
    Proposed footnote * in the proposed chart would provide that the 
combined SLP credits shall not exceed $0.0032 per share in a billing 
month, which is the same languages used in the current Price List. The 
footnote would also clarify that the Baseline for SLP Incremental Step 
Up Tiers is the second quarter of 2018, third quarter of 2018, or the 
month of January 2021, whichever is lowest.
    The Exchange would next set forth the current SLP NBBO Setter Tier 
Credits'' and requirements in the following chart under a new heading 
titled ``SLP NBBO Setter Tier Credits:

----------------------------------------------------------------------------------------------------------------
                                                  Minimum requirements for tapes
                                                            A, B and C
                                                 --------------------------------
   SLP NBBO setter tier credit tier for adding                     NBBO setting    Tiered credit   Tiered credit
                    liquidity                      Adding ADV %   ADV % Tape ABC    for Setting      for other
                                                  Tape ABC CADV,       CADV,        NBBO  (ASP)    displayed add
                                                   including DMM   including DMM
                                                        ADV             ADV
----------------------------------------------------------------------------------------------------------------
Setter Tier 4...................................            0.55            0.05      $(0.00350)      $(0.00305)
Setter SLP Tier 3...............................            0.65            0.09       (0.00360)       (0.00310)
Setter SLP Tier 2...............................            0.95            0.18       (0.00370)       (0.00320)
Setter SLP Tier 1...............................            1.25            0.30       (0.00380)       (0.00330)
----------------------------------------------------------------------------------------------------------------

    Once again, the rates and requirements are unchanged from the 
current Price List.
    The Exchange would transpose the last two current credits and 
requirements in the SLP section of the Price List for SLPs adding 
liquidity with orders designated as ``retail'' and in all assigned SLP 
securities without change under a new heading titled ``Other Credits.''
    Finally, the Exchange would introduce a section titled ``General'' 
that would summarize information from the current Price List in the 
form of the following four bullets.
    Bullet 1 would provide that Adding shares of both an SLP-Prop and 
an SLMM of the same or an affiliated member organization are aggregated 
and that quotes of an SLP-Prop and an SLMM of the same member 
organization are not be aggregated. This information will also be 
transposed without change from the current SLP tiers.
    Bullet 2 would provide that affiliated member organizations that 
are SLPs are eligible for the most favorable rate for any such security 
traded in an applicable month provided that one or both affiliated 
member organizations request and are approved for aggregation of 
eligible activity pursuant to the requirements set forth in this Price 
List. This information will also be transposed without change from 
current footnote +, which the Exchange proposes to delete.
    Bullet 3 would provide that in a month where NYSE CADV equals or 
exceeds 5.5 billion shares per day for the billing month, NYSE CADV for 
that month will be subject to a cap of 5.5 billion shares per day for 
the billing month. In a month where Tape B and Tape C CADV combined 
equals or exceeds 6.0 billion shares per day for the billing month, 
Tape B and Tape C CADV combined for that month will be subject to a cap 
of 6.0 billion shares per day for the billing month. This information 
will also be transposed without change from current footnote **, which 
will be deleted as redundant.
    Finally, bullet 4 would provide that SLPs becoming DMMs after the 
beginning of a billing month would not be eligible until the next full 
billing month. This information will also be transposed without change 
from current footnote 8 of the Price List. As noted, current footnote 8 
will be deleted and marked ``Reserved'' to maintain the current 
footnote numbering.

[[Page 36171]]

    As noted above, the Exchange is not proposing any substantive 
change to any current SLP fee, credit or requirement. The purpose of 
the proposed rule change is to make a non-substantive change to 
reorganize the presentation of the Price List in order to enhance its 
clarity and transparency, thereby making the Price List easier to 
comprehend and navigate.
    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 the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\5\ which provides that Exchange rules may provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \6\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed changes are reasonable and 
equitable because they are clarifying and non-substantive, and the 
Exchange is not changing any current fees or credits that apply to SLP 
trading activity on the Exchange or to routed executions. The changes 
are designed to make the Price List easier to read and more user-
friendly. The Exchange believes that this proposed format will provide 
additional transparency of Exchange fees and credits for SLPs, to the 
benefit of market participants and the investing public. The Exchange 
believes the change is reasonable and would not be inconsistent with 
the public interest and the protection of investors because investors 
will not be harmed and in fact would benefit from increased clarity and 
transparency on the Price List, thereby reducing potential confusion.
    The Exchange also believes that the proposal is non-discriminatory 
because it applies uniformly to all member organizations that are SLPs, 
and again, the Exchange is not making any changes to existing fees and 
credits. Finally, the Exchange believes that the reformatted Price 
List, as proposed, will be clearer and less confusing for investors and 
will eliminate potential confusion, 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.
    The Exchange believes that the proposed reformatted the Price List 
is equitable and not unfairly discriminatory because the resulting 
streamlined Price List would continue to apply to all SLPs as it does 
currently because the Exchange is not adopting any new fees or credits 
or removing any current fees or credits that impact SLPs. All SLPs 
would continue to be subject to the same fees and credits that 
currently apply to them.
    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,\7\ 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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    \7\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Intramarket Competition. The Exchange's proposal to reformat its 
Price List will not place any undue burden on intramarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because all SLPs would continue to be subject to the same fees 
and credits that currently apply to them. The Exchange notes that the 
proposal does not change the amount of any current fees or rebates, but 
rather makes clarifying and formatting changes, and therefore does not 
raise any competitive issues. To the extent the proposed rule change 
places a burden on competition, any such burden would be outweighed by 
the fact that a streamlined Price List would promote clarity and reduce 
confusion with respect to the fees and credits that SLPs would be 
subject to. As noted, the proposal would apply to all similarly 
situated member organizations on the same and equal terms, who would 
benefit from the changes on the same basis. Accordingly, the proposed 
change would not impose a disparate burden on competition among market 
participants on the Exchange.
    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.

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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 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

[[Page 36172]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2021-37 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-NYSE-2021-37. 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-NYSE-2021-37 and should be submitted on 
or before July 29, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-14500 Filed 7-7-21; 8:45 am]
BILLING CODE 8011-01-P