Document ID: SEC-2021-1226-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NewYork Stock Exchange LLC
Posted Date: 2021-09-14T04:00Z

[Federal Register Volume 86, Number 175 (Tuesday, September 14, 2021)]
[Notices]
[Pages 51201-51203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19730]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92898; File No. SR-NYSE-2021-49]

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

September 8, 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 August 31, 2021, 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 to eliminate the (1) 
underutilized monthly rebate payable to Designated Market Makers 
(``DMM'') with 750 or fewer assigned securities in the previous month, 
and (2) underutilized Supplemental Liquidity Provider (``SLP'') Tier 5. 
The Exchange proposes to implement the rule change on 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to eliminate the (1) 
underutilized monthly rebate payable to Designated Market Makers 
(``DMM'') with 750 or fewer assigned securities in the previous month, 
and (2) underutilized SLP Tier 5.
    The Exchange proposes to implement the rule change on September 1, 
2021.
Proposed Rule Change
    The Exchange proposes to eliminate an underutilized DMM rebate and 
an underutilized adding tier for SLPs, as follows.
Underutilized DMM Rebate
    Currently, the Exchange offers an additional per share credit to 
DMMs in each eligible assigned More Active Security with a stock price 
of at least $1.00 on current rebates of $0.0034 or less, i.e., adding 
credits of $0.0015, $0.0027, $0.0031, and $0.0034 per share. 
Specifically, DMMs are eligible for an incremental rebate $0.0002 per 
share in each eligible assigned More

[[Page 51202]]

Active Security with a stock price of at least $1.00 where NYSE CADV is 
equal to or greater than 4.0 billion shares, when adding liquidity with 
orders, other than Mid-Point Liquidity (``MPL'') Orders, in such 
securities and the DMM either:
    1. Has providing liquidity in all assigned securities as a 
percentage of NYSE CADV that is an increase of 0.30% more than the 
DMM's April 2020 providing liquidity in all assigned securities as a 
percentage of NYSE CADV, or
    2. has providing liquidity in all assigned securities as a 
percentage of NYSE CADV that is an increase of at least 40% more than 
the DMM's April 2020 providing liquidity in all assigned securities as 
a percentage of NYSE CADV for DMMs with 750 or fewer assigned 
securities in the previous month.
    The Exchange proposes to eliminate the second alternative way to 
qualify for the incremental rebate in its entirety and to remove it 
from the Price List. The second qualification method has been 
underutilized by member organizations insofar as no DMMs with 750 or 
fewer assigned securities has qualified for the incremental rebate in 
the past six months. As such, Exchange does not anticipate any member 
organization in the near future would qualify for the rebate that is 
the subject of this proposed rule change.
Underutilized SLP Tier 5
    Under current SLP Tier 5, an SLP adding liquidity in securities 
with a per share price of $1.00 or more with orders, other than MPL 
Orders, is eligible for a per share credit of $0.0031 (or $0.0012 if a 
Non-Displayed Reserve Order) if the SLP: (1) Meets the 10% average or 
more quoting requirement in an assigned security pursuant to Rule 107B; 
(2) adds liquidity for all assigned SLP securities in the aggregate 
(including shares of both an SLP-Prop and an SLMM of the same or an 
affiliated member organization) of an average daily volume (``ADV'') of 
more than 0.60%% of Tape A consolidated ADV (``CADV'') \4\ (for SLPs 
that are also DMMs and subject to Rule 107B(i)(2)(A), more than 0.60% 
after a discount of the percentage for the prior quarter of Tape A CADV 
in DMM assigned securities as of the last business day of the prior 
month); (3) has Adding ADV,\5\ including non-SLP Adding ADV but 
excluding any liquidity added by a DMM, that is at least 0.80% of Tape 
A CADV; and (4) executes an ADV, including non-SLP Adding ADV but 
excluding any liquidity added by a DMM, of at least 250,000 shares in 
Retail Price Improvements Orders.
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    \4\ The terms ``ADV'' and ``CADV'' are defined in footnote * of 
the Price List.
    \5\ Footnote 2 to the Price List defines ``Adding ADV'' as ADV 
that adds liquidity to the Exchange during the billing month.
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    The Exchange proposes to eliminate SLP Tier 5 in its entirety and 
to remove it from the Price List. The tier has been underutilized by 
member organizations insofar as no SLP has qualified for the tiered 
display or tiered non-display credit in the past two months. As such, 
Exchange does not anticipate any member organization in the near future 
would qualify for the rebate that is the subject of this proposed rule 
change. As a result of the deletion of SLP Tier 5, the Exchange would 
renumber the remaining SLP tiers as follows. Current SLP Tier 1A would 
become new SLP Tier 2. Current SLP Tier 2 would become new SLP Tier 3. 
Current SLP Tier 3 would become new SLP Tier 4. Finally, current SLP 
Tier 4 would become new SLP Tier 5.
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 6(b)(4) and 6(b)(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.
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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 Proposed Change Is Reasonable
    The Exchange believes that the proposed elimination of the 
incremental rebate for DMMs with 750 or fewer assigned securities is 
reasonable because DMMs have underutilized the alternative 
qualification for this incentive. No DMM has qualified for the rebate 
in the past six months. The Exchange does not anticipate any member 
organization in the near future qualifying for the rebate that is the 
subject of this proposed rule change. Similarly, the Exchange believes 
that the proposed elimination of SLP Tier 5 is reasonable. No SLP has 
qualified for the rebate in the past two months, and the Exchange does 
not anticipate any member organization in the near future qualifying 
for SLP Tier 5. The Exchange believes it is reasonable to eliminate 
rebates and credits when such incentives become underutilized. The 
Exchange also believes eliminating underutilized incentive programs 
would also simplify the Price List. The Exchange further believes that 
removing the alternative qualification for the incremental DMM rebate 
and SLP Tier 5 from the Price List, as well as renumbering the 
remaining SLP tiers, would add clarity and transparency to the Price 
List.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes the proposal equitably allocates fees among 
its market participants because the underutilized alternative 
qualification for a DMM rebate and SLP tier the Exchange proposes to 
eliminate would be eliminated in their entirety, and would no longer be 
available to any member organization in any form. Similarly, the 
Exchange believes the proposal equitably allocates fees among its 
market participants because elimination of the underutilized rebate and 
credits would apply to all similarly-situated member organizations on 
an equal basis. All such member organizations 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 Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory. The proposal is not unfairly discriminatory because it 
neither targets nor will it have a disparate impact on any particular 
category of market participant. The Exchange believes that the proposal 
is not unfairly discriminatory because the proposed elimination of the 
alternative qualification for the incremental DMM rebate and SLP Tier 5 
credits would affect all similarly-situated market participants on an 
equal and non-discriminatory basis. The Exchange believes that 
eliminating rebates and credits that are underutilized and ineffective 
would no longer be available to any DMM or SLP, respectively, on an 
equal basis. The Exchange also believes that the proposed change would 
protect investors and the public interest because the deletion of 
underutilized fees would make the Price List more accessible and 
transparent and facilitate market participants' understanding of the 
fees charged for services currently offered by the Exchange.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.

[[Page 51203]]

    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. Instead, as discussed above, the proposal relates 
solely to elimination of an underutilized DMM rebate and SLP tiered 
credits and, as such, would not have any impact on intra- or inter-
market competition because the proposed change is solely designed to 
accurately reflect the services that the Exchange currently offers, 
thereby adding clarity to the Price List.
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    \8\ 15 U.S.C. 78f(b)(8).
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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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 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-2021-49 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-2021-49. 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-2021-49 and should be submitted on 
or before October 5, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19730 Filed 9-13-21; 8:45 am]
BILLING CODE 8011-01-P