Document ID: SEC-2014-0430-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2014-03-17T04:00Z

[Federal Register Volume 79, Number 51 (Monday, March 17, 2014)]
[Notices]
[Pages 14772-14774]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05753]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71689; File No. SR-NYSE-2014-11]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending its Price List To Modify the Current Adding Credit Tiers and 
Add a New Adding Credit Tier

March 11, 2014.
    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 February 28, 2014, 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 modify the current 
adding credit tiers and add a new adding credit tier. The proposed fees 
would be operative on March 1, 2014. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to modify the current 
adding credit tiers and add a new adding credit tier. The proposed fees 
would be operative on March 1, 2014.
    Under the current Tier 1 Adding Credit, the Exchange offers a 
credit of $0.0020 per share ($0.0010 if a Non-Displayed Reserve Order 
or $0.0015 if a Midpoint Passive Liquidity (``MPL'') order) for 
transactions in stocks with a per share price of $1.00 or more when 
adding liquidity to the Exchange if:
    (i) The member organization has average daily trading volume 
(``ADV'') that adds liquidity to the NYSE during the billing month 
(``Adding ADV,'' which shall exclude any liquidity added by a 
Designated Market Maker (``DMM'')) that is at least 1.5% of 
consolidated average daily volume in NYSE-listed securities during the 
billing month (``NYSE CADV''), and executes market at-the-close 
(``MOC'') and limit at-the-close (``LOC'') orders of at least 0.375% of 
NYSE CADV;
    (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 NYSE 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 0.15% of NYSE CADV; or
    (iii) the member organization has ADV that adds liquidity in 
customer electronic orders to the NYSE (``Customer Electronic Adding 
ADV,'' which shall exclude any liquidity added by a Floor broker, 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 plus 15%.
    The Exchange proposes to modify the first method by which a member 
organization may qualify for the current Tier 1 Adding Credit. 
Specifically, a member organization would qualify for the credit of 
$0.0020 per share ($0.0010 if a Non-Displayed Reserve Order or $0.0015 
if an MPL order) for transactions in stocks with a per share price of 
$1.00 or more when adding liquidity to the Exchange if the member 
organization has Customer Electronic Adding ADV that is at least 1.1% 
of NYSE CADV, and executes MOC and LOC orders of at least 0.375% of 
NYSE CADV. The Exchange does not propose to modify the second or third 
methods by which a member organization may qualify for the current Tier 
1 Adding Credit.
    The Exchange also proposes to establish a new adding credit tier, 
which would provide a credit of $0.0022 per share ($0.0010 if a Non-
Displayed Reserve Order or $0.0015 if an MPL order) for transactions in 
stocks with a per share price of $1.00 or more when adding liquidity to 
the Exchange if:
    (i) The member organization has Customer Electronic Adding ADV 
during the billing month that is at least 1.25% of NYSE CADV, and 
executes MOC and LOC orders of at least 0.12% of NYSE CADV; or
    (ii) the member organization has Customer Electronic Adding ADV 
during the billing month that is at least 0.85% of NYSE CADV, executes 
MOC and LOC orders of at least 0.12% of NYSE CADV, and either (a) adds 
liquidity to the NYSE as an 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 0.3% of NYSE CADV or (b) adds 
liquidity to the NYSE as a Floor broker of more than 0.3% of NYSE CADV.
    The Exchange proposes to name the new adding credit tier the ``Tier 
1 Adding Credit'' and would rename the current Tier 1 Adding Credit and 
Tier 2 Adding Credit, the ``Tier 2 Adding Credit'' and ``Tier 3 Adding 
Credit,'' respectively. The Exchange also proposes to make certain non-
substantive, conforming changes to the Price List.\4\
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    \4\ The Exchange notes that it has previously filed with the 
Securities and Exchange Commission a proposed rule change to amend 
the Price List (File No. SR-NYSE-2014-09). Exhibit 5 to SR-NYSE-
2014-09 specified an effective date for the revised Price List of 
March 1, 2014 (changed from February 1, 2014). Exhibit 5 to the 
instant proposed rule change also specifies an effective date of 
March 1, 2014. SR-NYSE-2014-09 also modified the credit for 
executions of orders sent to the Floor broker for representation on 
the Exchange when adding liquidity to the Exchange. When updating 
the Price List, the Exchange will include the fee changes described 
in both this filing and the fee changes reflected in SR-NYSE-2014-
09, which are reflected in the Exhibit 5 to this proposed rule 
change.

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[[Page 14773]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that modifying the first method by which 
member organizations may qualify for the credit of $0.0020 per share 
under the current Tier 1 Adding Credit by basing the threshold on 
Customer Electronic Adding ADV that is at least 1.1% of NYSE CADV is 
reasonable because it would encourage the submission of customer 
electronic orders that add liquidity to the Exchange. 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 that do not have a DMM, SLP, or Floor 
broker unit with an additional method to qualify for the credit. As is 
currently the case, member organizations would continue to have three 
distinct methods of qualifying for the $0.0020 per share credit.
    The Exchange believes that the new Tier 1 Adding Credit of $0.0022 
per share for transactions in stocks with a per share stock price of 
$1.00 or more when adding liquidity is reasonable because it would 
further contribute to incenting member organizations to provide 
additional amounts of liquidity on the Exchange. The Exchange believes 
that the proposed new Tier 1 Adding Credit of $0.0022 is equitable and 
not unfairly discriminatory because all member organizations would 
benefit from such increased levels of liquidity. In addition, the new 
Tier 1 Adding Credit would provide a higher credit to member 
organizations that is reasonably related to the value to the Exchange's 
market quality associated with higher volumes of liquidity. In 
addition, the Exchange believes that the proposed new Tier 1 Adding 
Credit is equitable and not unfairly discriminatory because it would 
provide several methods of qualifying for the credit, which would 
attract multiple sources of liquidity to the Exchange.

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

    In accordance with Section 6(b)(8) of the Act,\7\ 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.
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    \7\ 15 U.S.C. 78f(b)(8).
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    The proposed changes to the adding credit tiers would not burden 
competition, but rather would encourage multiple sources of liquidity, 
including both member organizations with an SLP or Floor broker unit 
and those without. In addition, the proposed new Tier 1 Adding Credit 
would not burden competition; rather, it is designed to encourage 
member organizations to submit additional amounts of liquidity on the 
Exchange.
    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 or credit levels at a particular 
venue to be unattractive. In such an environment, the Exchange must 
continually review, and consider adjusting, its fees and credits to 
remain competitive with other exchanges. For these reasons, the 
Exchange believes that the proposed rule change reflects this 
competitive environment and is therefore consistent with 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) \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
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2014-11 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-2014-11. 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 will also be available 
for Web site viewing and printing at the NYSE's principal office and on 
its Internet Web site at www.nyse.com. 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-

[[Page 14774]]

2014-11 and should be submitted on or before April 7, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-05753 Filed 3-14-14; 8:45 am]
BILLING CODE 8011-01-P