Document ID: SEC-2010-1569-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2010-10-14T04:00Z

[Federal Register: October 14, 2010 (Volume 75, Number 198)]
[Notices]               
[Page 63233-63235]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14oc10-129]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63056; File No. SR-NYSEArca-2010-87]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its Fee 
Schedule

October 6, 2010.
    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 September 30, 2010, NYSE Arca, Inc. (``NYSE Arca'' 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 through its wholly-owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities'') proposes to amend the NYSE Arca 
Equities Schedule of Fees and Charges for Exchange Services (the 
``Schedule''). While changes to the Schedule pursuant to this proposal 
will be effective on filing, the changes will become operative on 
October 1, 2010. The text of the proposed rule change is available at 
the Exchange, the Commission's Public Reference Room, and the 
Exchange's Web site at http://www.nyse.com.

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.

[[Page 63234]]

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Effective October 1, 2010, the Exchange proposes to amend the 
Schedule to modify the structure of the transaction credits it provides 
to Lead Market Makers (``LMMs'') for providing displayed liquidity in 
the NYSE Arca marketplace primary listed securities in which they are 
registered as the LMM. Currently, an LMM receives a rebate of $0.004 
per share for execution of orders that provide displayed liquidity in 
such a security, regardless of the trading volume in the security. The 
Exchange is proposing to replace this with a tiered rebate structure 
that is based on the consolidated average daily volume (``CADV'') of 
the security in the previous month. Specifically, the transaction 
credits under the new structure would be as follows:
     $0.0035 per share for orders that provide displayed 
liquidity in securities that have a CADV in the previous month greater 
than 5 million shares
     $0.004 per share for orders that provide displayed 
liquidity in securities that have a CADV in the previous month of 
between 1 million and 5 million shares inclusive
     $0.0045 per share for orders that provide displayed 
liquidity in securities that have a CADV in the previous month of less 
than 1 million shares
    In addition, for each rate level of trade related fees in the 
Schedule, the Exchange proposes to institute a fee of $0.0005 per share 
for orders executed in the Opening Auction or Market Order Auction, as 
those terms are defined in NYSE Arca Equities Rule 7.35. The fee will 
be applicable to Tape A, Tape B and Tape C securities, and will be 
capped at $10,000 per month per Equity Trading Permit ID.
    Additionally, the Exchange proposes to change the pricing for Mid-
Point Passive Liquidity (``MPL'') Orders. Currently the rebate for MPL 
Orders that provide liquidity, as well as the fee for orders that take 
liquidity, is $0.0010 in Tape A, Tape B and Tape C securities. Under 
this proposal, MPL orders will receive a rebate of $0.0015 for orders 
that provide liquidity and be charged a fee of $0.0025 for orders that 
take liquidity in Tape A, Tape B and Tape C securities. These changes 
apply to all pricing levels.
    Finally, the Exchange proposes to assess monthly fees for the use 
of all ports that provide connectivity to its equity trading systems. A 
number of other markets already charge such fees, but the Exchange has 
not previously done so.
    The level of activity with respect to a particular port will not 
affect the assessment of monthly fees, so even if a particular port 
that is available to a participant is not used, the participant will 
still be billed for that port. The monthly fee for ports will be $100 
per pair per month up to five pairs, then $500 for each additional five 
pairs. For example, the fee for seven pairs of ports will be $1,000 per 
month. Billing for ports will be based on the number of ports on the 
third business day prior to the end of the month.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Securities Exchange Act of 1934 
(the ``Act''),\4\ in general, and Section 6(b)(4) of the Act,\5\ in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities. The Exchange believes 
that the proposal does not constitute an inequitable allocation of 
fees, as all similarly situated member organizations and other market 
participants will be charged the same amount and access to the 
Exchange's market is offered on fair and non-discriminatory terms.
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    \4\ 15 U.S.C. 78f(b). [sic]
    \5\ 15 U.S.C. 78f(b)(4).
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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 on its members by NYSE Arca.
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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 the 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:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2010-87 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-NYSEArca-2010-87. This 
file number should be included on the subject line if e-mail 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 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 a.m. and 3 p.m. Copies of the filing also will be 
available for inspection and copying at the principal office of the 
Exchange.\8\ All comments received will be posted without change; the 
Commission does not edit personal identifying information from

[[Page 63235]]

submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSEArca-2010-87 and should be submitted on or before November 4, 2010.
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    \8\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov.

For the Commission, by the Division of Trading and Markets, pursuant 
to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-25746 Filed 10-13-10; 8:45 am]
BILLING CODE 8011-01-P