Document ID: SEC-2017-1410-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2017-08-18T04:00Z

[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Notices]
[Pages 39469-39471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17434]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81392; File No. SR-NYSEARCA-2017-89]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 

and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 

Arca Equities Schedule of Fees and Charges for Exchange Services To 

Modify the Fees and Credits for Routing Certain Orders to NYSE American 

LLC

August 14, 2017.

    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 August 4, 2017, 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.

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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 the NYSE Arca Equities Schedule of 

Fees and Charges for Exchange Services (``Fee Schedule'') to modify the 

fees and credits for routing certain orders to NYSE American LLC 

(``NYSE American'').\4\ The Exchange also proposes to make non-

substantive changes to the Fee Schedule in connection with the name 

change of its affiliate NYSE MKT LLC to NYSE American LLC. The Exchange 

proposes to implement the changes effective August 4, 2017.\5\ 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.

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    \4\ On July 24, 2017, the Exchange's affiliate, NYSE MKT LLC, 

transitioned to the Pillar trading platform and has been renamed 

NYSE American LLC. See Securities Exchange Act Release Nos. 79242 

(November 4, 2016), 81 FR 79081 (November 10, 2016) (SR-NYSEMKT-

2016-97); 79400 (November 25, 2016), 81 FR 86750 (December 1, 2016) 

(SR-NYSEMKT-2016-103); 80283 (March 21, 2017), 82 FR 15244 (March 

27, 2017) (SR-NYSEMKT-2017-14); and 80748 (May 23, 2017), 82 FR 

24764 (May 30, 2017) (SR-NYSEMKT-2017-20).

    \5\ The Exchange originally filed to amend the Fee Schedule on 

July 24, 2017 (SR-NYSEArca-2017-81) and withdrew such filing on 

August 4, 2017.

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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 amend the Fee Schedule to modify the fees 

and credits for routing certain orders to the NYSE American. The 

Exchange also proposes to make non-substantive changes to the Fee 

Schedule in connection with the name change of its affiliate NYSE MKT 

LLC to NYSE American LLC.

    In a recent rule filing, NYSE American proposed to modify its fee 

schedule for equities transactions, including changes to the rates for 

providing liquidity and for executions that occur in the opening and 

closing auction.\6\ The Exchange's current credits for routing orders 

to NYSE American are closely related to the NYSE American's rates, 

including the rates for providing liquidity, and the Exchange is 

proposing an adjustment to its rates to remain competitive with the 

rates of NYSE American. Specifically, for Tier 1 and Tier 2 PO \7\ and 

PO+ \8\ Orders, the Exchange currently provides a credit of $0.0016 per 

share for orders that are routed to NYSE American that provide 

liquidity to the NYSE American order book, which is equal to the NYSE 

American rebate for execution of customer orders that add liquidity to 

NYSE American.

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    \6\ See Securities Exchange Act Release No. 81228 (July 27, 

2017), 82 FR 36012 (August 2, 2017) (SR-NYSEMKT-2017-43) (the ``NYSE 

American Fee Filing'').

    \7\ A PO order is a Market or Limit Order that on arrival is 

routed directly to the primary listing market without being assigned 

a working time or interacting with interest on the NYSE Arca Book. 

See Rule 7.31(f)(1).

    \8\ The Exchange transitioned to the Pillar trading platform in 

2016 and on Pillar, the PO+ modifier in the Exchange's rules was 

replaced with the Primary Only Day/IOC Order, which is a Primary 

Only Order designated Day or IOC, as provided in current Rule 

7.31(f)(1(B). See Securities Exchange Act Release No. 76267 (October 

26, 2015), 80 FR 66951 (October 30, 2015) (SR-NYSEArca-2015-56). A 

Primary Only Order designated Day functions similar to what was a 

PO+ Order. Therefore, to promote clarity to the Fee Schedule and 

avoid any confusion, the Exchange proposes to remove reference to 

PO+ Orders from the Fee Schedule.

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    A PO Order is designed to route to the primary listing market of 

the security underlying the order (i.e., NYSE, NASDAQ, etc.) 

immediately upon arrival and the order therefore does not rest on the 

Exchange's order book. Because such orders do not rest on the 

Exchange's book, the Exchange charges fees or provides credits for 

those orders based on the fees or credits of the destination primary 

listing market, which are the fees and credits that the Exchange is 

charged by the primary listing market that receives the order. In the 

NYSE American Fee Filing, NYSE American proposed to not charge a fee or 

provide a credit for executions of displayed orders that provide 

liquidity on that exchange.\9\ Accordingly, the Exchange is proposing 

to amend the rates for routing Tier 1 and Tier 2 PO Orders to NYSE 

American to reflect the rates proposed by NYSE American. As proposed, 

there will be no credit for such orders routed to NYSE American that 

provide liquidity to the NYSE American book.

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    \9\ The Exchange notes that orders that are routed to NYSE 

American will be displayed on that exchange. PO Orders do not 

provide ETP Holders the ability to add non-displayed liquidity to 

away markets.

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    The Exchange proposes to make corresponding changes to the Basic 

Rate pricing section of the Fee Schedule.

    Additionally, in the NYSE American Fee Filing, NYSE American 

proposed to charge a fee of $0.0005 per share for executions at the 

open or close.

[[Page 39470]]

Accordingly, the Exchange proposes to amend the Fee Schedule to lower 

the Tier 1, Tier 2 and Basic Rate fee for PO Orders in Tape B 

securities that are routed to NYSE American that execute in the opening 

or closing auction, from $0.00085 per share to $0.0005 per share.

    As noted above, the Exchange's affiliate, NYSE MKT LLC, has been 

renamed NYSE American LLC. Accordingly, in the Fee Schedule, under 

``NYSE Arca Marketplace: Trade Related Fees and Credits,'' under 

``Round Lots and Odd Lots (Per Share Price $1.00 or Above), and ``Co-

location Fees,'' in General Notes 1 and 4, the Exchange proposes to 

change references to ``NYSE MKT Book'' to ``NYSE American Book''; 

``NYSE MKT'' to ``NYSE American''; ``NYSE MKT LLC'' to ``NYSE American 

LLC''; and ``NYSE Amex Options'' to ``NYSE American Options.'' None of 

the foregoing changes are substantive.

    The proposed changes are not otherwise intended to address any 

other issues, and the Exchange is not aware of any problems that ETP 

Holders 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,\10\ in general, and furthers the 

objectives of Sections 6(b)(4) and (5) of the Act,\11\ 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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    \10\ 15 U.S.C. 78f(b).

    \11\ 15 U.S.C. 78f(b)(4) and (5).

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    The Exchange believes that the proposed changes to routing credits 

for PO Orders that provide liquidity to NYSE American and routing fees 

for such orders that execute in the opening or closing auction on NYSE 

American are reasonable because the Exchange's rates for routing such 

orders are closely related to NYSE American's rates for its members, 

and the proposed change is consistent with the change proposed by NYSE 

American to not provide a rebate for providing liquidity and to charge 

a lower fee for executions in the opening or closing auction. While the 

proposed rule change would result in a decrease in the per share credit 

for PO Orders routed to NYSE American that provide liquidity to NYSE 

American, and a decrease in the per share fee for such routed orders 

that execute in the opening or closing auction, the Exchange would 

remain competitive with NYSE American as that exchange also no longer 

provides a credit to its members for providing liquidity and charges a 

lower fee for executions in the opening or closing auction. Further, 

the proposed change is equitable and not unfairly discriminatory 

because the proposed elimination of routing credits for PO Orders that 

provide liquidity to NYSE American and the proposed decrease of routing 

fees for such orders that execute in the opening or closing auction on 

NYSE American would apply uniformly across pricing tiers and all 

similarly situated ETP Holders.

    The Exchange believes that the proposed rule change regarding the 

name change from NYSE MKT LLC to NYSE American LLC is consistent with 

Section 6(b) of the Act,\12\ in general, and with Section 6(b)(1) \13\ 

in particular, in that it enables the Exchange to be so organized as to 

have the capacity to be able to carry out the purposes of the Act and 

to comply, and to enforce compliance by its exchange members and 

persons associated with its exchange members, with the provisions of 

the Act, the rules and regulations thereunder, and the rules of the 

Exchange. The proposed rule change would ensure that the Fee Schedule 

accurately reflects the name change of the Exchange's affiliate from 

NYSE MKT to NYSE American and the rebranding of NYSE Amex Options to 

NYSE American Options and would contribute to the orderly operation of 

the Exchange by adding clarity and transparency to the Fee Schedule.

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    \12\ 15 U.S.C. 78f(b).

    \13\ 15 U.S.C. 78f(b)(1).

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    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.

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

    In accordance with Section 6(b)(8) of the Act,\14\ 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 proposed routing credit and fee 

changes would not place a burden on competition because the Exchange is 

lowering the credit it provides and fees it charges to ETP Holders to 

match the credits and fees provided by NYSE American.\15\

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    \14\ 15 U.S.C. 78f(b)(8).

    \15\ See supra note 6.

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    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) \16\ of the Act and subparagraph (f)(2) of Rule 

19b-4 \17\ thereunder, because it establishes a due, fee, or other 

charge imposed by the Exchange.

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    \16\ 15 U.S.C. 78s(b)(3)(A).

    \17\ 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) \18\ of the Act to determine whether the proposed 

rule change should be approved or disapproved.

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    \18\ 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-NYSEARCA-2017-89 on the subject line.

[[Page 39471]]

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-NYSEARCA-2017-89. 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-2017-89 and should 

be submitted on or before September 8, 2017.

    For the Commission, by the Division of Trading and Markets, 

pursuant to delegated authority.\19\

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    \19\ 17 CFR 200.30-3(a)(12).

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Eduardo A. Aleman,

Assistant Secretary.

[FR Doc. 2017-17434 Filed 8-17-17; 8:45 am]

BILLING CODE 8011-01-P