Document ID: SEC-2021-1409-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2021-10-12T04:00Z

[Federal Register Volume 86, Number 194 (Tuesday, October 12, 2021)]
[Notices]
[Pages 56737-56740]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22076]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93263; File No. SR-NYSE-2021-58]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Reformat the Designated Market Makers Section of the NYSE Price List

October 5, 2021.
    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, 2021, 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 
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\ 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 reformat the section of the NYSE Price 
List setting forth Fees and Credits Applicable to Designated Market 
Makers (``DMMs'') without any substantive changes. The Exchange 
proposes to implement the fee changes effective immediately.\4\ The 
Exchange proposes to implement the fee changes effective immediately. 
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.
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    \4\ The Exchange originally filed to amend the Fee Schedule on 
September 24, 2021 (SR-NYSE-2021-55). SR-NYSE-2021-55 was 
subsequently withdrawn and replaced by this filing.
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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 reformat the section of the NYSE Price 
List setting forth Fees and Credits Applicable to DMMs without any 
substantive changes. The Exchange proposes to implement the fee changes 
effective immediately.
    The Exchange proposes the following non-substantive changes to 
reorganize and enhance the presentation in the Price List in order to 
add clarity and transparency, thereby making the Price List easier to 
navigate.
    First, the Exchange would delete the current presentation of the 
DMM rates and requirements in its entirety. The Exchange would also 
delete footnotes 5, 6, 7, and * that would be relocated to new 
footnotes or the new section marked ``General.'' In order to maintain 
the current numbering of the footnotes, the Exchange would mark 
footnotes 5, 6 and 7 ``Reserved.''
    Second, the Exchange proposes a table presentation of the current 
DMM rates and requirements. The proposed changes would appear in the 
Price List in six tables.
    Under the existing heading ``Fees and Credits applicable to 
Designated Market Makers (``DMMs'')'' and before the first table, the 
Exchange would include a heading marked ``General'' followed by 7 
bullets, as follows.
    Bullet 1 would clarify that ``DMM Additional Quoting'' refers to 
DMM increased quoting at the National Best Bid or Offer (``NBBO'') by 
at least 5% over the DMM's quoting at the NBBO in September 2019, in at 
least 300 assigned securities. This information is unchanged from the 
current Price List.
    Bullet 2 would clarify that ``DMM Providing Liquidity'' refer to 
DMM orders that provide liquidity to the NYSE as a percentage of the 
NYSE's total intraday adding liquidity. This information is also 
unchanged from the current Price List.
    Bullet 3 would clarify that ``DMM NBBO Quoting'' means DMM quoting 
at the NBBO.
    Bullet 4 would clarify that ``DMM Quoted Size'' is calculated by 
multiplying the average number of shares of the applicable security 
quoted at the NBBO by the DMM by the percentage of time during which 
the DMM quoted at the NBBO.
    Bullet 5 would clarify that ``Less Active Securities'' refers to 
securities

[[Page 56738]]

that have an average daily consolidated volume (``Security CADV'') of 
less than 1,000,000 shares per month in the previous month.
    Bullet 6 would clarify that ``NYSE Quoted Size'' is calculated by 
multiplying the average number of shares quoted on the NYSE at the NBBO 
by the percentage of time the NYSE had a quote posted at the NBBO.
    The final bullet would clarify that ``More Active Securities'' 
refers to securities with a Security CADV in the previous month at 
least 1,000,000 (shares per month).
    The information in these bullets would be transposed from the 
current Price List without change.
    The first table would follow the proposed General section and 
appear under the phrase ``Rebate Per Share* when adding liquidity, 
other than MPL Orders for stock price of at least $1.00 for DMM symbols 
that meet the following requirements:'' from the current Price List. 
The table would summarize the current DMM rebates and requirements for 
providing liquidity to the Exchange as well as the additional credits 
available to DMMs if the additional quoting requirements are met. The 
requirements and credits are unchanged. The proposed table would appear 
as follows in the Price List:

                                              Minimum Requirements
----------------------------------------------------------------------------------------------------------------
                                                                                                    Additional
                                                                                                   credit if DMM
                                     DMM NBBO       DMM quoted     DMM providing                       meets
            Security                quoting (%)      size (%)      liquidity (%)      Credit        additional
                                                                                                      quoting
                                                                                                    requirement
----------------------------------------------------------------------------------------------------------------
More Active Securities..........              10               5  ..............         $0.0027         $0.0004
                                              20              10            ** 5          0.0031          0.0003
                                              30              15           ** 15          0.0034          0.0001
                                              50              25           ** 15          0.0035  ..............
                                                                                          0.0015          0.0012
Less Active Securities..........              15  ..............  ..............          0.0035          0.0010
                                              30  ..............  ..............          0.0045  ..............
                                                                                          0.0015          0.0020
----------------------------------------------------------------------------------------------------------------

    Current footnote 6 would be transposed to new footnote * without 
change. The DMM providing liquidity requirement to qualify for the 
three eligible credits in a month where NYSE CADV is at least 5.5 
billion shares and the notation that, unless otherwise stated, the NYSE 
total intraday adding liquidity will be totaled monthly and includes 
all NYSE adding liquidity, by all NYSE participants, would be 
consolidated into a new footnote ** without substantive change.
    The second table would set forth the rates and requirements for the 
DMM incremental rebate for more active securities. The chart and 
presentation would be unchanged from the current Price List, as 
follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Incremental Rebate Per Share for each More        $0.0002 per share in
 Active Security with a stock price of at least    each eligible
 $1.00 on current rebates of $0.0034 or less, in   assigned More Active
 a month where NYSE CADV is equal to or greater    Security.
 than 4.0 billion shares, when adding liquidity
 with orders, other than MPL Orders, in such
 securities and the DMM has providing liquidity
 in all assigned securities as a percentage of
 NYSE CADV that is an increase of 0.30% more
 than the DMM's April 2020 providing liquidity
 in all assigned securities as a percentage of
 NYSE CADV.
------------------------------------------------------------------------

    The third table would appear under the phrase ``DMM NBBO Setter 
Tier Credit--Incremental Rebate Per Share for securities with a stock 
price of at least $1.00 in Tape A, B and C Securities, when adding 
liquidity, other than MPL Orders, for DMMs with providing liquidity in 
all assigned securities as a percentage of NYSE CADV of all assigned 
securities as follows'' and would set forth the current DMM setter tier 
credits and requirements unchanged from the current Price List, as 
follows:

----------------------------------------------------------------------------------------------------------------
        Minimum requirement as a percentage of NYSE CADV            Credit for      Credit for    Credit for all
-----------------------------------------------------------------  adding orders   adding orders   other adding
                                                                   that set the    that set the    orders, other
                                                     Providing         NBBO             BBO          than MPL
                                                     liquidity   --------------------------------     Orders
               Providing liquidity                  setting the                      Liquidity   ---------------
                                                    NBBO or BBO      Liquidity      Indicator:
                                                     combined     indicator: ASP     ASB, AJP
----------------------------------------------------------------------------------------------------------------
0.65............................................           0.120  ..............        $0.00005  ..............
0.90............................................           0.225         $0.0002        0.000075         0.00005
1.25............................................           0.375          0.0003          0.0001          0.0001
----------------------------------------------------------------------------------------------------------------

    The fourth table would set forth other equity per share charges 
unchanged from the current Price List and would appear as follows under 
the heading ``Other Equity Per Share Charges'':

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Taking liquidity..........................  $0.00275.
At the opening, at the opening only orders  No Charge.
 or executions at the close.
Routing Fee ***...........................  $0.0030.
Routing Fee--in any stock with a per share  0.3% of the total dollar
 stock price below $1.00.                    value of the transaction.

[[Page 56739]]

 
Rebate per Share *--for all MPL orders in   $0.00275.
 securities with a per share price of at
 least $1.00 that add liquidity.
Rebate * when adding liquidity in shares    $0.0004.
 of More Active Securities if the More
 Active Security has a stock price of less
 than $1.00.
Rebate * when adding liquidity in shares    $0.0004.
 of Less Active Securities if the Less
 Active Security has a stock price of less
 than $1.00.
------------------------------------------------------------------------

    Current footnotes * and 5 would be transposed to footnote + and 
***, respectively, without change. As noted above, footnote 6 would be 
transposed from the current Price List to new footnote * without 
change.
    The fifth table would set forth the rates and requirements for the 
DMM rebate for less active securities. The rates and requirements would 
be unchanged from the current Price List and would appear as follows:

----------------------------------------------------------------------------------------------------------------
                                       Minimum requirement for DMM quoting at the NBBO and credit per symbol
  Security CADV in the previous  -------------------------------------------------------------------------------
              month                     15%             20%             30%             40%             50%
----------------------------------------------------------------------------------------------------------------
250,000 up to 1,500,000 shares..         $200.00         $275.00         $350.00         $425.00         $500.00
100,000 up to 250,000 shares....          150.00          225.00          300.00          375.00          450.00
less than 100,000 shares........          100.00          175.00          250.00          325.00          400.00
----------------------------------------------------------------------------------------------------------------

    The final table would set forth the DMM share of the market data 
quote revenue, known as the Quoting Share, received by the Exchange 
from the Consolidated Tape Association under the Revenue Allocation 
Formula of Regulation NMS unchanged from the current Price List and 
would appear as follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
DMM share of the market data quote revenue (the ``Quoting Share'')
 received by the Exchange from the Consolidated Tape Association under
 the Revenue Allocation Formula of Regulation NMS with respect to any
 security that has a Security CADV of less than 1,500,000 shares in the
 previous month (regardless of whether the stock price exceeds $1.00) in
 any month in which the DMM quotes at the NBBO at least 20% of the time
 in the applicable month as follows:....................................
------------------------------------------------------------------------
Minimum requirement: DMM NBBO Quoting...             15%             20%
DMM share of the Quoting Share if                    50%            100%
 meeting the above DMM NBBO Quoting
 Requirement............................
------------------------------------------------------------------------

    As noted above, the Exchange is not proposing any substantive 
change to any current DMM fee, credit or requirement. The purpose of 
the proposed rule change is to make a non-substantive change to 
reorganize the presentation of the Price List in order to enhance its 
clarity and transparency, thereby making the Price List easier to 
comprehend and navigate.
    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 the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\6\ which provides that Exchange rules may provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \7\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination 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).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed changes are reasonable and 
equitable because they are clarifying and non-substantive, and the 
Exchange is not changing any current fees or credits that apply to DMM 
trading activity on the Exchange or to routed executions. The changes 
are designed to make the Price List easier to read and more user-
friendly. The Exchange believes that this proposed format will provide 
additional transparency of Exchange fees and credits for DMMs, to the 
benefit of market participants and the investing public. The Exchange 
believes the change is reasonable and would not be inconsistent with 
the public interest and the protection of investors because investors 
will not be harmed and in fact would benefit from increased clarity and 
transparency on the Price List, thereby reducing potential confusion.
    The Exchange also believes that the proposal is non-discriminatory 
because it applies uniformly to all member organizations that are DMMs, 
and again, the Exchange is not making any changes to existing fees and 
credits. Finally, the Exchange believes that the reformatted Price 
List, as proposed, will be clearer and less confusing for investors and 
will eliminate potential confusion, thereby removing impediments to and 
perfecting the mechanism of a free and open market and a national 
market system, and, in general, protecting investors and the public 
interest.
    The Exchange believes that the proposed reformatted the Price List 
is equitable and not unfairly discriminatory because the resulting 
streamlined Price List would continue to apply to all DMMs as it does 
currently because the Exchange is not adopting any new fees or credits 
or removing any current fees or credits that impact DMMs. All DMMs 
would continue to be subject to the same fees and credits that 
currently apply to them.
    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,\8\ 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.
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    \8\ 15 U.S.C. 78f(b)(8).
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    Intramarket Competition. The Exchange's proposal to reformat its 
Price List will not place any undue burden on intramarket competition 
that is not necessary or appropriate in

[[Page 56740]]

furtherance of the purposes of the Act because all DMMs would continue 
to be subject to the same fees and credits that currently apply to 
them. The Exchange notes that the proposal does not change the amount 
of any current fees or rebates, but rather makes clarifying and 
formatting changes, and therefore does not raise any competitive 
issues. To the extent the proposed rule change places a burden on 
competition, any such burden would be outweighed by the fact that a 
streamlined Price List would promote clarity and reduce confusion with 
respect to the fees and credits that DMMs would be subject to. As 
noted, the proposal would apply to all similarly situated member 
organizations on the same and equal terms, who would benefit from the 
changes on the same basis. Accordingly, the proposed change would not 
impose a disparate burden on competition among market participants on 
the Exchange.
    Intermarket Competition. The Exchange believes the proposed rule 
change does not impose any burden on intermarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The Exchange operates in a highly competitive market in which market 
participants can readily choose to send their orders to other exchanges 
and off-exchange venues if they deem fee levels at those other venues 
to be more favorable. Market share statistics provide ample evidence 
that price competition between exchanges is fierce, with liquidity and 
market share moving freely from one execution venue to another in 
reaction to pricing changes.

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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 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 [email protected]. Please include 
File Number SR-NYSE-2021-58 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-2021-58. 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-2021-58, and should be submitted on 
or before November 2, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22076 Filed 10-8-21; 8:45 am]
BILLING CODE 8011-01-P