Document ID: SEC-2019-0679-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2019-05-21T04:00Z

[Federal Register Volume 84, Number 98 (Tuesday, May 21, 2019)]
[Notices]
[Pages 23109-23112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10515]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85864; File No. SR-NYSE-2019-24]

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

May 15, 2019.
    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 May 9, 2019, 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 
and II, 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 modify the (1) 
charges for transactions that remove liquidity from the Exchange; (2) 
requirements for credits related to executions of orders sent to Floor 
brokers that add liquidity on the Exchange; and (3) remove Tier

[[Page 23110]]

fee for securities traded pursuant to Unlisted Trading Privileges 
(``UTP'') (Tapes B and C). The Exchange proposes to implement these 
changes to its Price List effective May 9, 2019. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to modify the (1) 
charges for transactions that remove liquidity from the Exchange; (2) 
requirements for credits related to executions of orders sent to Floor 
brokers that add liquidity on the Exchange; and (3) Remove Tier fee for 
UTP securities.
    The Exchange proposes to implement these changes to its Price List 
effective May 9, 2019.\4\
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    \4\ The Exchange originally filed to amend the Price List on May 
1, 2019 (SR-NYSE-2019-23) and withdrew such filing on May 9, 2019. 
This filing replaces SR-NYSE-2019-23 in its entirety.
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Charges for Removing Liquidity
    Currently, the Exchange charges a fee of $0.00275 for non-Floor 
broker transactions that remove liquidity from the Exchange, including 
those of DMMs. The Exchange also currently charges $0.00280 for non-
Floor broker transactions that remove liquidity from the Exchange by 
member organizations with an Adding ADV,\5\ excluding any liquidity 
added by a DMM, that is more than 250,000 ADV on the NYSE in Tape A 
Securities and less than 500,000 ADV on the NYSE in Tape B and Tape C 
securities combined during the billing month. Finally, the Exchange 
currently charges $0.0030 for non-Floor broker transactions that remove 
liquidity from the Exchange by member organizations with an Adding ADV, 
excluding any liquidity added by a DMM, that is less than 250,000 ADV 
on the NYSE during the billing month.
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    \5\ Footnote 2 to the Price List defines ADV as ``average daily 
volume'' and ``Adding ADV'' as ADV that adds liquidity to the 
Exchange during the billing month.
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    Under the current configuration, the effective base rate is $0.0030 
because member organizations with an Adding ADV, excluding liquidity 
added by a DMM, that is less than 250,000 ADV in Tape A Securities 
during the billing month would not qualify for the $0.00275 rate, which 
applies unless one of the charges set forth immediately below it in the 
Price List applies. The Exchange proposes a reconfiguration to reflect 
the current $0.0030 base rate and a fee of $0.00275 for non-Floor 
broker transactions that remove liquidity from the Exchange by member 
organizations with an Adding ADV, excluding any liquidity added by a 
DMM, of at least 250,000 ADV on the NYSE in Tape A Securities and at 
least 500,000 ADV on the NYSE in Tape B and Tape C securities combined 
during the billing month. The charge for non-Floor broker transactions 
that remove liquidity from the Exchange by member organizations with an 
Adding ADV, excluding any liquidity added by a DMM, that is at least 
250,000 ADV on the NYSE in Tape A Securities and less than 500,000 ADV 
on the NYSE in Tape B and Tape C securities combined during the billing 
month would increase from $0.00280 to $0.00285.
Floor Broker Credits for Orders That Add Liquidity to the Exchange
    The Exchange currently provides a per share credit for executions 
of orders sent to a Floor broker for representation on the Exchange 
when adding liquidity to the Exchange if the member organization has an 
ADV that adds liquidity to the Exchange by a Floor broker during the 
billing month that is at least equal to certain thresholds. In order to 
qualify for a credit of $0.0020 per share under the first threshold, 
the member organization must have an ADV that adds liquidity to the 
Exchange by a Floor broker during the billing month that is at least 
equal to .07% of Tape A CADV. In order to qualify for a credit of 
$0.0022 per share under the second threshold, a member organization 
must have an ADV that adds liquidity to the Exchange by a Floor broker 
during the billing month that is at least equal to .33% of Tape A CADV.
    The Exchange proposes an intermediate third threshold designated 
(b) that would provide a credit of $0.0021 per share for a member 
organization must have an ADV that adds liquidity to the Exchange by a 
Floor broker during the billing month that is at least equal to .25% of 
Tape A CADV. The current second threshold would become item (c).
Remove Tier Fee for UTP Securities
    For UTP Securities, the Exchange currently charges a per tape fee 
of $0.0028 per share to remove liquidity from the Exchange for member 
organizations with an Adding ADV of at least 50,000 shares for that 
respective tape. The Exchange proposes to charge a per tape fee of 
$0.00285 per share to remove liquidity from the Exchange for member 
organizations with an Adding ADV of at least 50,000 shares for that 
respective tape.
    The proposed changes are 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,\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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Charges for Removing Liquidity
    The Exchange believes that reconfiguring the charges for non-Floor 
broker transactions that remove liquidity from the Exchange and 
introducing a slightly tiered rate of $0.00285 is reasonable, equitable 
and not unfairly discriminatory, as follows.
    The Exchange believes that the proposed rate change for member 
organizations will incentivize submission of additional liquidity in 
Tape B and Tape C securities to a public exchange to qualify for the 
lower fee of $0.00275 for removing liquidity, thereby promoting price 
discovery and transparency and enhancing order execution opportunities 
for member organizations. The Exchange also believes that the proposed 
change is equitable because it would apply to all similarly situated 
member organizations that add liquidity in Tape B or Tape C securities. 
The proposed change also is equitable and not unfairly discriminatory 
because it would be

[[Page 23111]]

consistent with the applicable rate on other marketplaces. For example, 
Nasdaq PSX provides a fee per share for removing liquidity, $0.0028 in 
Tape A and B securities and $0.0029 in Tape C securities, if a firm 
removes 0.065% or more of Consolidated Volume; otherwise, Nasdaq PSX 
imposes a charge of $0.0030 per share for removing liquidity.\8\ The 
Exchange notes that since the requirement is for Tape B and Tape C 
securities combined, member organizations can meet the requirement by 
adding liquidity in either Tape B or Tape C securities, or both. The 
Exchange further notes that other marketplaces have tiers with adding 
requirements in specific tapes to qualify for a rate in securities on 
another tape. For example, to be eligible for a $0.0020 adding credit 
in Tape C securities on Nasdaq, firms are required to average a minimum 
of 250,000 shares added per day in Tape A or Tape B securities 
(combined); otherwise, the Tape C credit for adding liquidity is 
$0.0015.\9\
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    \8\ See https://www.nasdaqtrader.com/Trader.aspx?id=PSX_Pricing.
    \9\ See https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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Floor Broker Credits for Orders That Add Liquidity to the Exchange
    The Exchange believes that the changes proposed additional tiered 
credit for executions of orders sent to a Floor broker for 
representation on the Exchange is reasonable because it would encourage 
additional displayed liquidity on the Exchange. The proposed change 
would also encourage the execution of such transactions on a public 
exchange, thereby promoting price discovery and transparency. The 
Exchange believes the proposed change is equitable and not unfairly 
discriminatory because it would continue to encourage member 
organizations to send orders to the Floor for execution, thereby 
contributing to robust levels of liquidity on the Floor, which benefits 
all market participants. The proposed change is also equitable and not 
unfairly discriminatory because those member organizations that make 
significant contributions to market quality and that contribute to 
price discovery by providing higher volumes of liquidity would continue 
to be allocated a higher credit. The Exchange believes that any member 
organizations that may currently be qualifying under the lower of the 
two existing thresholds, or 0.0007%, could qualify for the proposed 
intermediate threshold of 0.0025% based on the levels of activity sent 
to Floor brokers. The proposed change also is equitable and not 
unfairly discriminatory because all similarly situated member 
organizations would pay the same rate, as is currently the case, and 
because all member organizations would be eligible to qualify for the 
rate by satisfying the related thresholds.
Remove Tier Credit for UTP Securities
    The Exchange believes that proposed Tier 1 charge of $0.00285 per 
share in UTP Securities for member organizations with an Adding ADV of 
at least 50,000 shares that removes liquidity from the Exchange is 
reasonable, equitable and not unfairly discriminatory because the 
proposed fees are in line with the fees the Exchange currently charges 
for removing liquidity from the Exchange in Tape A securities and the 
proposed changes thereto described above.\10\
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    \10\ See pages 5-6 of the current NYSE Price List, available at 
https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
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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,\11\ 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, the Exchange believes that the proposed 
changes would foster liquidity provision and stability in the 
marketplace, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for member organizations. In 
this regard, the Exchange believes that the transparency and 
competitiveness of attracting additional executions on an exchange 
market would encourage competition.
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    \11\ 15 U.S.C. 78f(b)(8).
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive or rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees and rebates to remain competitive with other exchanges and 
with alternative trading systems that have been exempted from 
compliance with the statutory standards applicable to exchanges. 
Because competitors are free to modify their own fees and credits in 
response, and because market participants may readily adjust their 
order routing practices, the Exchange believes that the degree to which 
fee changes in this market may impose any burden on competition is 
extremely limited. As a result of all of these considerations, the 
Exchange does not believe that the proposed changes will impair the 
ability of member organizations or competing order execution venues to 
maintain their competitive standing in the financial markets.

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)(ii) of the Act,\12\ and subparagraph (f)(2) of Rule 
19b-4\13\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 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 23112]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2019-24 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-2019-24. 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-2019-24 and should be submitted on 
or before June 11, 2019.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10515 Filed 5-20-19; 8:45 am]
 BILLING CODE 8011-01-P