Document ID: SEC-2017-0599-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2017-04-13T04:00Z

[Federal Register Volume 82, Number 70 (Thursday, April 13, 2017)]
[Notices]
[Pages 17899-17901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07454]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80397; File No. SR-NYSEMKT-2017-18]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Change Amending Its Price List

April 7, 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 March 28, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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 its Price List to provide that the 
monthly DMM credit for certain securities will be prorated to the 
number of trading days in a month that a security is assigned to a DMM. 
The Exchange proposes to implement this change to its Price List 
effective March 29, 2017. The proposed 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to provide that the 
monthly DMM credit for certain securities will be prorated to the 
number of trading days in a month that a security is assigned to a DMM. 
The proposed change is the same as that adopted by the Exchange's 
affiliate New York Stock Exchange LLC for its DMMs.\4\
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    \4\ See Securities Exchange Act Release No. 73021 (September 9, 
2014), 79 FR 55047 (September 15, 2014) (SR-NYSE-2014-47).
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    The proposed changes would apply to both credits in transactions in 
securities priced $1.00 or more and those priced below $1.00.

[[Page 17900]]

    The Exchange proposes to implement this change to its Price List 
effective March 29, 2017.
    Currently, DMMs are eligible for a monthly credit of $100 for each 
security whose consolidated average daily volume or CADV during the 
current month is less than 50,000 shares per day and for which the DMM 
has met its 10% quoting requirement in that month. The flat dollar 
credit supplements the DMM credit in securities that do not trade 
actively and is applicable to all Exchange-listed securities regardless 
of price.
    The Exchange proposes to revise its Price List to provide that the 
rebate would be prorated to the number of trading days in a month that 
a stock is assigned to a DMM. The Exchange believes prorating the 
rebate to the number of trading days that a stock is assigned to a DMM 
would [sic] to ensure that the monthly rebate has a nexus to the time 
for which a DMM has affirmative obligations for that stock pursuant to 
Rule 104--Equities. For example, if a stock is assigned to more than 
one DMM unit within a month, such as when a stock is transferred 
temporarily from one DMM to another and then returned to the original 
DMM, the Exchange does not believe that it is appropriate that both 
DMMs that were assigned that stock in a given month should both be 
eligible for the full monthly rebate.
    Similarly, if a stock begins trading at the Exchange mid-month, 
because of an initial public offering or transfer of a listed security 
from another exchange, the Exchange does not believe it is appropriate 
for a DMM to receive a full monthly credit. For example, in a month 
with 20 trading days, assume a less active security transfers from DMM 
1 to DMM 2 after the 15th trading day. The DMM monthly rebate would be 
prorated for the two DMM firms as follows: DMM 1 would be rebated $75 
(15 assigned trading days/20 trading days in the month x $100) and DMM 
2 would be rebated $25 (5 assigned trading days/20 trading days in the 
month x $100).
    The Exchange believes that prorating the rebate for the number of 
trading days in a month that a stock is assigned to a DMM is 
appropriate and would ensure that the DMM with responsibility for the 
stock receives the appropriate rebate for the responsibilities 
performed for that symbol in the month.\5\
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    \5\ The Exchange also proposes a non-substantive change to the 
heading ``Fees and Credits applicable to Designated Market Makers on 
Transactions in Securities with a Per Share Price of $1.00 or more'' 
to capitalize the letter ``a'' in ``applicable.''
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* * * * *
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems that member 
organizations 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 Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes that the proposed prorating of the DMM 
monthly rebate is reasonable because it would provide a nexus between 
the rebate paid to a DMM and the number of days that a DMM has been 
assigned a stock. The Exchange therefore believes that the proposed 
prorating of the monthly DMM rebate is equitable and not unfairly 
discriminatory because it directly ties the monthly rebate to the 
number of trading days for which a DMM has regulatory responsibility 
for a stock pursuant to Rule 104--Equities. The Exchange also believes 
that the proposed prorating is equitable and not unfairly 
discriminatory because all DMMs would be treated the same.
    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 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. Instead, the Exchange believes that the proposed 
change would not burden competition because it would be applicable to 
DMMs only and ensures that an existing rebate is associated more 
closely with when a DMM is assigned a stock, which may be shorter than 
a full month.
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    \8\ 15 U.S.C. 78f(b)(8).
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive or rebate 
opportunities available at other venues to be more favorable. In such 
an environment, the Exchange must continually adjust its fees and 
rebates to remain competitive with other exchanges and with alternative 
trading systems that have been exempted from compliance with the 
statutory standards applicable to exchanges. Because competitors are 
free to modify their own fees and credits in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited. As a 
result of all of these considerations, the Exchange does not believe 
that the proposed changes will impair the ability of member 
organizations or competing order execution venues to maintain their 
competitive standing in the financial markets.

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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[[Page 17901]]

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-NYSEMKT-2017-18 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-NYSEMKT-2017-18. 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-NYSEMKT-2017-18, and should 
be submitted on or before May 4, 2017.

    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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07454 Filed 4-12-17; 8:45 am]
 BILLING CODE 8011-01-P