Document ID: SEC-2016-0661-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-04-18T04:00Z

[Federal Register Volume 81, Number 74 (Monday, April 18, 2016)]
[Notices]
[Pages 22676-22678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08819]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77588; File No. SR-NYSEArca-2016-54]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Equities Schedule of Fees and Charges for Exchange Services

April 12, 2016.
    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 March 31, 2016, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Schedule of 
Fees and Charges for Exchange Services (``Fee Schedule''). The Exchange 
proposes to implement the fee changes effective April 1, 2016. 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 amend the Fee Schedule as follows:
Routing Fees
    The Exchange proposes to modify the fees that it charges for 
routing orders to other market centers. Currently, for the Exchange's 
Tier 1 and Tier 2 customers, the Exchange charges the following routing 
fees:
     $0.0027 per share in Tape A Securities for orders routed 
outside the Book to the NYSE;
     $0.0027 per share in Tape A Securities for Primary Only 
Plus (``PO+'') Orders \4\ routed to the NYSE that remove liquidity;
---------------------------------------------------------------------------

    \4\ A PO+ Order is a Primary Only Order (i.e., a market or limit 
order that is to be routed to the primary market) that is entered 
for participation in the primary market, other than for 
participation in the primary market opening or primary market 
reopening. See NYSE Arca Equities Rule 7.31(f)(1)(C).
---------------------------------------------------------------------------

     $0.0030 per share in Tape B Securities for orders routed 
outside the Book to any away market center;
     $0.0028 per share in Tape B Securities for Primary Only 
(``PO'') Orders \5\ and PO+ Orders routed to NYSE MKT that remove 
liquidity from the NYSE MKT Book;
---------------------------------------------------------------------------

    \5\ A PO Order is a market or limit [sic] that is routed to the 
primary, listing market, without sweeping the NYSE Arca book. See 
NYSE Arca Equities Rule 7.31(f)(1). See also NYSE Arca Equities Rule 
7.31P(f)(1).
---------------------------------------------------------------------------

     $0.0030 per share in Tape B Securities for PO+ Orders 
routed outside the Book to NASDAQ;
     $0.0030 per share in Tape A and Tape C Securities for 
orders routed outside the Book to any away market center other than 
NYSE; and
     $0.0030 per share in Tape A and Tape C Securities for PO+ 
Orders routed outside the Book to NASDAQ.

[[Page 22677]]

    For Tier 3 customers, the Exchange charges the following routing 
fees:
     $0.0027 per share in Tape A Securities for orders routed 
outside the Book to the NYSE;
     $0.0030 per share in Tape B Securities for orders routed 
outside the Book to any away market center; and
     $0.0030 per share in Tape A and Tape C Securities for 
orders routed outside the Book to any away market center.
    The Exchange proposes to modify the above routing fees by adopting 
a uniform fee of $0.0030 per share for Tier 1, Tier 2 and Tier 3 
customers in Tape A, Tape B and Tape C Securities for orders that 
remove liquidity, including PO and PO+ Orders, that are routed outside 
the Book to any away market center.
    Currently, for non-tier customers (i.e., Basic Rates), the Exchange 
charges the following routing fees:
     $0.0030 per share in Tape A Securities for orders routed 
outside the Book to any away market center other than NYSE;
     $0.0029 per share in Tape A Securities for orders routed 
outside the Book to the NYSE;
     $0.0027 per share in Tape A Securities for PO+ Orders 
routed to the NYSE that remove liquidity;
     $0.0035 per share in Tape B Securities for orders routed 
outside the Book to any away market center;
     $0.0028 per share in Tape B Securities for PO and PO+ 
Orders routed to NYSE MKT that remove liquidity from the NYSE MKT Book; 
and
     $0.0035 per share in Tape C Securities for orders routed 
outside the Book to any away market center.
    The Exchange proposes to modify the above routing fees by adopting 
a uniform fee of $0.0035 per share for Basic Rates customers in Tape A, 
Tape B and Tape C Securities for orders that remove liquidity, 
including PO and PO+ Orders, that are routed outside the Book to any 
away market center.
MPL Orders
    Currently, the Exchange provides credits under Tier 1, Tier 2 and 
Basic Rates for Mid-Point Passive Liquidity (``MPL'') Orders that 
provide liquidity.\6\ The Exchange provides different levels of credits 
based on the Average Daily Volume (``ADV'') of provided liquidity in 
MPL Orders for Tape A, Tape B and Tape C Securities combined (``MPL 
Adding ADV''). For ETP Holders and Market Makers that have MPL Adding 
ADV during the billing month of at least 3 million shares, the Exchange 
provides a credit of $0.0015 per share for Tape A Securities, $0.0020 
per share for Tape B Securities and $0.0025 per share for Tape C 
Securities.\7\
---------------------------------------------------------------------------

    \6\ An MPL Order is a limit order priced at the midpoint of the 
Protected Best Bid and Offer (``PBBO'') and not displayed. See Rule 
7.31(d)(4). An MPL Order on Pillar is a limit order that is not 
displayed and does not route, with a working price at the midpoint 
of the PBBO. See Rule 7.31P(d)(3).
    \7\ ETP Holders and Market Makers with MPL Adding ADV during the 
billing month of at least 1.5 million shares but less than 3 million 
shares are provided a credit of $0.0015 per share for Tape A, Tape B 
and Tape C Securities. ETP Holders and Market Makers with MPL Adding 
ADV during the billing month of less than 1.5 million shares are 
provided a credit of $0.0010 per share for Tape A, Tape B and Tape C 
Securities. See Fee Schedule.
---------------------------------------------------------------------------

    The Exchange proposes to modify the per share credit payable under 
Tier 1, Tier 2 and Basic Rates from $0.0025 per share to $0.0020 per 
share for MPL Orders that provide liquidity in Tape C Securities for 
ETP Holders and Market Makers that have MPL Adding ADV during the 
billing month of at least 3 million shares. The Exchange does not 
propose to make any other change to credits for MPL Orders.
Non-Substantive Changes to the Fee Schedule
    The Exchange recently amended the Fee Schedule to reflect the 
migration of securities to Pillar, the Exchange's new trading 
technology platform.\8\ The Exchange proposes to make two non-
substantive changes to the Fee Schedule that that [sic] the Exchange 
intended to make in the Pillar Fee Filing but inadvertently failed to 
do so. First, in the section for Tier 2 fees, under Tape B Securities, 
the Exchange proposes to add a second asterisk (``*'') so that the 
footnote for Market Order Auction appears as ``**Market Order Auction 
in [sic] named Core Open Auction in Pillar.'' Second, in the Pillar Fee 
Filing, the Exchange noted that Mid-Point Passive Liquidity Order is 
named Mid-Point Liquidity Order on Pillar. In connection with that name 
change, the Exchange further noted that orders designated as retail 
orders for securities traded on Pillar would need to meet the 
requirements of Rule 7.44P(a)(3). The Exchange proposes to add the 
reference to Rule 7.44P(a)(3) in the section for Basic Rates, under 
Tape C Securities.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 74124 [sic] 
(February 12, 2016), 81 FR 8548 (February 19, 2016) (SR-NYSEArca-
2016-18) (``Pillar Fee Filing'').
---------------------------------------------------------------------------

    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any significant problems 
that market participants 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 Act,\9\ in general, and furthers the 
objectives of sections 6(b)(4) and (5) of the Act,\10\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed change to adopt uniform 
routing fees for Tier 1, Tier 2, Tier 3 and Basic Rate customers in 
Tape A, Tape B and Tape C Securities for orders that remove liquidity, 
including PO and PO+ Orders, that are routed outside the Book to any 
away market center is equitable and not unfairly discriminatory because 
it will standardize the routing fee, meaning that the fee would apply 
uniformly within pricing tiers and all similarly situated ETP Holders 
and Market Makers would be subject to the same fee. This aspect of the 
proposed change would therefore result in a more streamlined Fee 
Schedule.
    In addition, the Exchange believes the decrease in the per share 
credit payable under Tier 1, Tier 2 and Basic Rates for MPL Orders that 
provide liquidity in Tape C Securities for ETP Holders and Market 
Makers that have MPL Adding ADV during the billing month of at least 3 
million shares is reasonable as it is comparable to the tiered credit 
available on the NASDAQ Stock Market (``NASDAQ'') for midpoint 
liquidity, which is currently $0.0017 per share for Tape C Securities 
when a firm adds greater than 3 million shares of midpoint 
liquidity.\11\ The Exchange also believes that the proposed change is 
equitable and not unfairly discriminatory because the proposed credit 
would be applicable to all market participants that use MPL Orders and 
meet the requirements for the credit on the Exchange and each such 
participant would be subject to the same credit.
---------------------------------------------------------------------------

    \11\ See NASDAQ Pricing at http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
---------------------------------------------------------------------------

    The Exchange believes that the proposed non-substantive changes to 
the Fee Schedule are reasonable, equitable and not unfairly 
discriminatory because the changes are designed to make the Fee 
Schedule more logical and comprehensive, and therefore easier for 
market participants to navigate and digest, which is in the public 
interest.

[[Page 22678]]

    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. For these reasons, the Exchange 
believes that the proposal is consistent with the Act.
    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,\12\ 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. In particular, the routing fees would not place a 
burden on competition because the Exchange is standardizing the fee so 
that each participant would pay a uniform fee. Further, the proposed 
change to credits applicable to MPL Orders would also not place a 
burden on competition as the modified credit is comparable to the level 
of credit for Tape C Securities provided by at least one other 
exchange.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See supra, note 11.
---------------------------------------------------------------------------

    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 
this proposal promotes a competitive environment.

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) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEArca-2016-54 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2016-54. 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 such 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-NYSEArca-2016-54, and should 
be submitted on or before May 9, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08819 Filed 4-15-16; 8:45 am]
 BILLING CODE 8011-01-P