Document ID: SEC-2013-0538-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2013-03-20T04:00Z

[Federal Register Volume 78, Number 54 (Wednesday, March 20, 2013)]
[Notices]
[Pages 17247-17249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06353]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69134; File No. SR-NYSEARCA-2013-24]

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 With 
Respect to the Retail Order Tier

March 14, 2013.
    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 1, 2013, 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 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'') with respect 
to the Retail Order Tier. The Exchange proposes to implement the fee 
changes on March 1, 2013. 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.

[[Page 17248]]

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 the Fee Schedule with respect to the 
Retail Order Tier. The Exchange proposes to implement the fee changes 
on March 1, 2013.
    Currently, ETP Holders, including Market Makers, receive a $0.0032 
per share credit for Retail Orders \4\ that provide liquidity in Tape 
A, Tape B, and Tape C Securities if the ETP Holder executes an average 
daily volume (``ADV'') of Retail Orders during the month that is 0.40% 
or more of the United States Consolidated Average Daily Volume (``US 
CADV'') for transactions reported to the Consolidated Tape. For all 
other fees and credits, tiered or basic rates apply based on a firm's 
qualifying levels. The Exchange proposes to (i) lower the ADV 
requirement for the Retail Order Tier from 0.40% of US CADV to 0.20% of 
US CADV and (ii) increase the credit from $0.0032 to $0.0033 per share. 
The Exchange is proposing these changes because it wants to encourage 
participation from a greater number of ETP Holders, which would promote 
additional liquidity in Retail Orders.
---------------------------------------------------------------------------

    \4\ A Retail Order is an agency order that originates from a 
natural person and is submitted to the Exchange by an ETP Holder, 
provided that no change is made to the terms of the order with 
respect to price or side of market and the order does not originate 
from a trading algorithm or any other computerized methodology. See 
Securities Exchange Act Release No. 67540 (July 30, 2012), 77 FR 
46539 (August 3, 2012) (SR-NYSEArca-2012-77).
---------------------------------------------------------------------------

    The proposed change is not otherwise intended to address any other 
problem, and the Exchange is not aware of any significant problem that 
ETP Holders 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 Securities Exchange Act of 1934 (the 
``Act''),\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that lowering the ADV requirement for the 
Retail Order Tier from 0.40% of US CADV to 0.20% of US CADV and 
increasing the credit from $0.0032 to $0.0033 per share is reasonable 
because the Exchange believes it would encourage participation from a 
greater number of ETP Holders, which would promote additional liquidity 
in Retail Orders. In this regard, the Exchange believes that 
maintaining or increasing the proportion of Retail Orders in exchange-
listed securities that are executed on a registered national securities 
exchange (rather than relying on certain available off-exchange 
execution methods) would contribute to investors' confidence in the 
fairness of their transactions and would benefit all investors by 
deepening the Exchange's liquidity pool, supporting the quality of 
price discovery, promoting market transparency and improving investor 
protection. The Exchange also believes that lowering the threshold and 
increasing the credit is reasonable because the current threshold and 
credit have not encouraged sufficient additional liquidity and 
competition in Retail Orders on the Exchange. The Exchange believes 
that lowering the ADV requirement for the Retail Order Tier is 
equitable and not unfairly discriminatory because all similarly ETP 
Holders would be subject to the same fee structure. The Exchange also 
believes that the proposed change is equitable and not unfairly 
discriminatory because it is not the only manner in which ETP Holders 
may qualify for additional credits. The Exchange notes that certain 
other existing pricing Tiers within the Fee Schedule make credits 
available to ETP Holders that are also based on the ETP Holder's level 
of activity as a percentage of US CADV. These existing percentage 
thresholds, depending on other related factors and the level of the 
corresponding credits, are within a range that is consistent with the 
0.20% proposed herein.\7\ Lastly, the Exchange believes that lowering 
the ADV requirement for the Retail Order Tier would allow more ETP 
Holders to qualify for the $0.0033 credit, which is equitable and not 
unfairly discriminatory because the Retail Order Tier is optional and 
available to all ETP Holders on an equal and non-discriminatory basis.
---------------------------------------------------------------------------

    \7\ For example, Tier 3 requires, in part, that an ETP Holder 
provide liquidity of 0.20% or more, but less than 0.30% of the US 
CADV in order to qualify for a credit of $0.0022 or $0.0025 per 
share for orders that provide liquidity on the Exchange. However, 
Tier 3 is not limited to providing liquidity in Retail Orders.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because lowering the ADV 
requirement for the Retail Order Tier would encourage more ETP Holders 
to place Retail Orders, which would promote competition in Retail 
Orders on the Exchange. As stated above, the Exchange believes that the 
proposed change would impact all similarly situated market participants 
equally, and as such, the proposed change would not impose a disparate 
burden on competition either among or between classes of market 
participants. In addition, 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 the proposed rule change 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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due,

[[Page 17249]]

fee, or other charge imposed by the Exchange.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \10\ 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-2013-24 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-2013-24. 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 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 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-2013-24 and should 
be submitted on or before April 10, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06353 Filed 3-19-13; 8:45 am]
BILLING CODE 8011-01-P