Document ID: SEC-2012-1825-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2012-11-09T05:00Z

[Federal Register Volume 77, Number 218 (Friday, November 9, 2012)]
[Notices]
[Pages 67431-67433]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27353]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68150; File No. SR-NYSE-2012-56]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Proposing To Make Changes to Certain Fees and Credits Within the New 
York Stock Exchange LLC Price List

November 5, 2012.
    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 October 22, 2012, 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, 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 make changes to certain fees and credits 
within its Price List, which the Exchange proposes to become operative 
on November 1, 2012. 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 make changes to certain fees and credits 
within its Price List, which the Exchange proposes to become operative 
on November 1, 2012.
    Currently, for transactions in stocks with a per share stock price 
of $1.00 or more, the Exchange charges a transaction fee of $0.00055 
per share for all market at-the-close (``MOC'') and limit at-the-close 
(``LOC'') orders from any member organizations that execute an average 
daily trading volume (``ADV'') of MOC and LOC activity on the Exchange 
in that month of at least 14 million shares. Member organizations that 
do not execute an ADV of MOC and LOC activity on the Exchange of at 
least 14 million shares are charged a transaction fee of $0.00095 per 
share. The Exchange proposes to modify the threshold for the $0.00055 
transaction fee for MOC and LOC orders from an ADV of at least 14 
million shares to an ADV of at least 0.375% of consolidated average 
daily volume in NYSE-listed securities during the billing month (``NYSE 
CADV'').
    The Exchange believes that modifying the transaction fee threshold 
for MOC and LOC orders with a per share stock price of $1.00 or more as 
proposed would provide a more flexible method by which member 
organizations may qualify for the lower fee for MOC and LOC orders by 
changing from a fixed volume to one that will adjust automatically 
based on higher or lower NYSE CADV. The Exchange believes that the 
proposed change would continue to allocate a lower fee to member 
organizations that make significant contributions to market quality by 
providing higher volumes of liquidity.
    Currently, the Exchange provides a credit of $0.0018 per share for 
transactions in stocks with a per share stock price of $1.00 or more 
when adding displayed liquidity to the Exchange if either:
    (i) The member organization has ADV that adds liquidity to the 
Exchange during the billing month (``Adding ADV,'' which excludes any 
liquidity added by a Designated Market Maker (``DMM'')) that is at 
least 1.5% of NYSE CADV, and executes MOC and LOC orders of at least 
0.375% of NYSE CADV; or
    (ii) The member organization has Adding ADV that is at least 0.8% 
of NYSE CADV, executes MOC and LOC orders of at least 0.12% of NYSE 
CADV, and adds liquidity to the Exchange as a Supplemental Liquidity 
Provider (``SLP'') for all assigned SLP securities in the aggregate 
(including shares of both an SLP proprietary trading unit (``SLP-
Prop'') and an SLP market maker (``SLMM'') of the same member 
organization) of more than 0.25% of NYSE CADV.
    The Exchange proposes to modify the second method by which member 
organizations may qualify for the credit and add a third method by 
which member organizations may qualify for the credit when adding 
displayed liquidity. More specifically, the Exchange proposes to revise 
the second method to qualify for the credit such that a member 
organization would qualify for the credit if the member organization 
has Adding ADV that is at least 0.8% of NYSE CADV, executes MOC and LOC 
orders of at least 0.12% of NYSE CADV, and adds liquidity to the 
Exchange as a SLP for all assigned SLP securities in the aggregate 
(including shares of both an SLP-Prop and an SLMM of the same member 
organization) of more than 0.15% of NYSE CADV. Currently, a member 
organization would have to provide liquidity to the Exchange as an SLP 
for all assigned SLP securities in the aggregate of more than 0.25% of 
NYSE CADV, as opposed to the proposed 0.15% of NYSE CADV. The Exchange 
believes that reducing the threshold to 0.15% of NYSE CADV would allow 
more member organizations to qualify for the higher credit, and 
therefore, in turn, attract multiple sources of liquidity to the 
Exchange.
    Finally, the Exchange proposes that a member organization would 
qualify for the credit of $0.0018 per share if the member organization 
has ADV that adds liquidity in customer electronic orders to the 
Exchange (``Customer Electronic Adding ADV,'' which would exclude any 
liquidity added by a Floor broker,

[[Page 67432]]

DMM, or SLP) during the billing month that is at least 0.5% of NYSE 
CADV, executes MOC and LOC orders of at least 0.12% of NYSE CADV, and 
has Customer Electronic Adding ADV during the billing month that, taken 
as a percentage of NYSE CADV, is at least equal to the member 
organization's Customer Electronic Adding ADV during September 2012 as 
a percentage of consolidated average daily volume in NYSE-listed 
securities during September 2012 (``September 2012 NYSE CADV'') plus 
15%.\3\ For example, if a member organization's Customer Electronic 
Adding ADV during September 2012 was 0.10% of September 2012 NYSE CADV, 
then the member organization's Customer Electronic Adding ADV during 
the billing month must be at least 0.115% of NYSE CADV in order to 
qualify for the proposed credit.
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    \3\ For purposes of determining whether a firm that becomes a 
member organization after September 2012 qualifies for this proposed 
third method by which member organizations may qualify for the 
$0.0018 per share credit, the new member organization's September 
2012 NYSE CADV would be zero, and therefore, the member organization 
would only need to have Customer Electronic Adding ADV of at least 
0.5% of NYSE CADV and execute MOC and LOC orders of at least 0.12% 
of NYSE CADV to qualify for the credit of $0.0018 per share. 
Additionally, the September 2012 NYSE CADV of a firm that becomes a 
member organization during September 2012 would be calculated based 
on the number of trading days during September 2012, not the number 
of trading days during September 2012 during which the firm was a 
member organization.
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    The Exchange believes that adding this third method by which member 
organizations may qualify for the $0.0018 per share credit would 
encourage additional displayed liquidity on the Exchange. In addition, 
the method would provide discounts that are reasonably related to the 
value to the Exchange's market quality associated with higher volumes 
and would encourage multiple sources of liquidity by providing member 
organizations without a DMM, SLP, or Floor broker unit an alternative 
method to qualify for the credit when adding displayed liquidity.
    The proposed changes are not otherwise intended to address any 
other problem, and the Exchange is not aware of any significant problem 
that the affected member organizations would have in complying with the 
proposed changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\4\ in general, and furthers the objectives of Section 6(b)(4) 
of the Act,\5\ in particular, because it provides for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities and does not 
unfairly discriminate 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).
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    The Exchange believes that modifying the transaction fee threshold 
for MOC and LOC orders with a per share stock price of $1.00 or more is 
reasonable because it provides a more flexible method by which member 
organizations may qualify for the lower fee for MOC and LOC orders. In 
addition, the proposed change is reasonable because the threshold would 
adjust automatically based on higher or lower NYSE CADV. The Exchange 
believes that the proposed change to MOC and LOC orders is equitable 
and not unfairly discriminatory because all similarly situated member 
organizations would be subject to the same fee structure, which 
automatically adjusts based on prevailing market conditions, and would 
continue to allocate a lower fee to member organizations that make 
significant contributions to market quality by providing higher volumes 
of liquidity.
    The Exchange believes that modifying the second method by which 
member organizations may qualify for the credit of $0.0018 per share 
for transactions in stocks with a per share stock price of $1.00 or 
more when adding displayed liquidity is reasonable because lowering the 
threshold for SLP provide volume to 0.15% of NYSE CADV would allow more 
member organizations to qualify for the reduced fee, which in turn 
would attract multiple sources of liquidity to the Exchange. In 
addition, the proposed change is equitable and not unfairly 
discriminatory because it would continue to provide a higher credit to 
member organizations that is reasonably related to the value to the 
Exchange's market quality associated with higher volumes.
    The Exchange believes the new method by which member organizations 
may qualify for the credit for transactions in stocks with a per share 
stock price of $1.00 or more when adding displayed liquidity is 
reasonable because it would encourage additional displayed liquidity on 
the Exchange. The Exchange believes the new method is equitable and not 
unfairly discriminatory because it is open to all member organizations 
on an equal basis and provides discounts that are reasonably related to 
the value to the Exchange's market quality associated with higher 
volumes. In addition, the Exchange believes that the proposed change is 
equitable and not unfairly discriminatory because it would encourage 
multiple sources of liquidity by providing member organizations without 
a DMM, SLP, or Floor broker unit an alternative method to qualify for 
the credit.
    Finally, 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 the proposed rule change reflects this 
competitive environment.

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.

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) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge 
imposed by the NYSE.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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:

[[Page 67433]]

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-2012-56 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-2012-56. 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-2012-56 and should be 
submitted on or before November 30, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27353 Filed 11-8-12; 8:45 am]
BILLING CODE 8011-01-P