Document ID: SEC-2021-1052-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2021-08-05T04:00Z

[Federal Register Volume 86, Number 148 (Thursday, August 5, 2021)]
[Notices]
[Pages 42907-42911]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16678]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92536; File No. SR-NYSEARCA-2021-66]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Reformat the 
Basic Rates Section of the NYSE Arca Equities Fees and Charges

July 30, 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 July 20, 2021, NYSE Arca, Inc. (``NYSE Arca'' 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 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 reformat the Basic rates section of the 
NYSE Arca Equities Fees and Charges (``Fee Schedule'') applicable to 
securities priced at or above $1.00 and the rates applicable to 
securities priced below $1.00 without making any substantive changes to 
the current fees and credits for each group of securities. The Exchange 
proposes to implement the fee changes effective July 20, 2021.\4\ 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 
July 1, 2021 (SR-NYSEArca-2021-59). SR-NYSEArca-2021-59 was 
subsequently withdrawn and replaced by SR-NYSEArca-2021-62. SR-
NYSEArca-2021-62 was subsequently withdrawn and replaced by this 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 Basic rates section of the 
Fee Schedule applicable to securities priced at or above $1.00 and the 
rates applicable to securities priced below $1.00 without making any 
substantive changes to the current fees and credits for each group of 
securities. The Exchange proposes to implement the fee changes 
effective July 20, 2021.
    The Exchange proposes the following non-substantive changes to 
reorganize the presentation of the Fee Schedule in order to enhance its 
clarity and transparency, thereby making the Fee Schedule easier to 
navigate.
    In connection with the proposed rule change, the Exchange would add 
new section I titled ``Definitions'' that would adopt several 
definitions that would apply only for purposes of the fees and credits 
on the Fee Schedule. As proposed, section I would set forth the 
following twelve definitions applicable to Exchange Transactions:
     ``ADV'' would mean average daily volume.
     ``Adding Liquidity'' would mean the execution of an order 
on the Exchange that provided liquidity.

[[Page 42908]]

     ``Auction'' would mean Early Open Auction, Core Open 
Auction, Trading Halt Auction and Closing Auction on NYSE Arca.
     ``Auction Orders'' would mean Market Orders, Market-On-
Close Orders, Limit-On-Close Orders and Auction-Only Orders executed in 
a NYSE Arca auction.
     ``Cboe BZX Auction'' would mean orders routed for 
execution in the open or closing auction on Cboe BZX.
     ``Closing Orders'' would mean Market, Market-On-Close, 
Limit-On-Close, and Auction-Only Orders executed in a Closing Auction.
     ``Nasdaq Auction'' would mean orders routed for execution 
in the open or closing auction on Nasdaq.
     ``NYSE American Auction'' would mean orders routed for 
execution in the open or closing auction on NYSE American.
     ``NYSE Auction'' would mean orders routed for execution in 
the open or closing auction on NYSE.
     ``Opening Orders'' would mean Market and Auction-Only 
Orders executed in an Early Open Auction, Core Open Auction or Trading 
Halt Auction.
     ``Removing Liquidity'' would mean the execution of an 
order that removed liquidity.
     ``US CADV'' would mean the United States consolidated 
average daily volume of transactions reported to a securities 
information processor (``SIP''). Transactions that are not reported to 
a SIP are not included in the US CADV.\5\
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    \5\ The proposed definition differs from the definition in 
current footnote 3, which is marked for deletion under this proposed 
rule change. The current definition includes a reference to odd lots 
that is no longer applicable. The current definition also includes 
references to exclusion of volume on days when the market closes 
early and the date of the annual reconstitution of the Russell 
Investments Indexes. The references to exclusion of volume appear in 
current footnote 1 and would therefore continue to apply to Exchange 
Transactions.
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    The Exchange proposes these definitions to use consistent terms 
throughout the Fee Schedule relating to Exchange Transactions. 
Specifically, the Exchange proposes to use the term ``Adding 
Liquidity'' when referring to an order that when executed, provides 
liquidity, and to use the term ``Removing Liquidity'' when referring to 
an order that when executed, takes liquidity. By consolidating 
definitions used in this part of the Fee Schedule, the Exchange would 
eliminate the need to separately define these terms within the tables 
of the Fee Schedule or in footnotes. Additionally, with the proposed 
adoption of the terms ADV and US CADV in proposed Section I of the Fee 
Schedule, the Exchange proposes to delete references to current 
footnotes 3 and 4 throughout the Fee Schedule, where footnote 3 of the 
Fee Schedule currently defines the term US CADV and footnote 4 of the 
Fee Schedule currently defines the term ADV. The Exchange further 
proposes to amend current footnote 1 to delete an internal reference to 
footnote 3 and delete the words ``average daily volume'' as the 
definition for ADV now appears in proposed Section I titled 
Definitions. The Exchange also proposes to renumber footnotes through 
the Fee Schedule in conjunction to the changes discussed herein.\6\
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    \6\ In connection with the proposed renumbering of footnotes, 
the Exchange also proposes to delete current footnote 6 in its 
entirety because the Exchange previously removed the term ``Allied 
Person'' from its rules. See Securities Exchange Act Release No. 
84857 (December 19, 2018), 83 FR 66824 (December 27, 2018) (SR-
NYSEArca-2018-97).
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    Next, the Exchange proposes to add new section II titled 
``General'' that would set forth general information regarding the way 
the Exchange has always interpreted and applied fees and credits to 
Exchange Transactions. As proposed, this section would contain the 
following general information applicable to Exchange Transactions:
     Rebates indicated by parentheses ( ).
     All fees and credits and tier requirements apply to ETP 
Holders and Market Makers.
     All fees and credits are per share unless noted otherwise.
    Next, the Exchange proposes a non-substantive change to the 
presentation of the Basic rates applicable to securities priced at or 
above $1.00 and the rates applicable to securities priced below 
$1.00.\7\ The Exchange proposes a table presentation. The proposed 
changes would appear in the Fee Schedule in two tables, one that would 
appear under proposed new section III titled ``Standard Rates--
Transactions'' and a second table that would appear under proposed new 
section V titled ``Standard Rates--Routing.'' \8\ The Exchange also 
proposes to simplify the presentation in each table by using sub-titles 
to identify the type of activity (i.e., Adding Liquidity, Adding 
Liquidity--Retail Orders, Adding Liquidity--MPL Orders, Removing 
Liquidity, Opening Orders and Closing Orders in the table titled 
``Standard Rates--Transactions'') and then listing the corresponding 
rates under each category. The proposed changes would appear as follows 
in the Fee Schedule:
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    \7\ In connection with this change, the Exchange proposes to 
amend the description of Rounds Lots and Odd Lots under Exchange 
Transactions to include both securities with a Per Share Price $1.00 
or Above and securities with a Per Share Price Below $1.00. This 
proposed change would provide consistency between the description 
and the table presentation which includes rates for both groups of 
securities.
    \8\ With this proposed rule change, the Exchange also proposes 
to use the term ``Standard'' rates rather than ``Basic'' rates.

                                                              Standard Rates--Transactions
                                                        [Applicable when Tier Rates do not apply]
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                                                          Adding
                                   Adding liquidity     liquidity--         Adding        Removing liquidity      Opening orders        Closing orders
             Category                   (a)(b)         retail orders    liquidity-- MPL           (d)                 (e)(g)                (f)(g)
                                                            (c)             orders
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Securities priced at or above             ($0.0020)         ($0.0032)         ($0.0010)  $0.0030.............  $0.0015; $0.0005 for  $0.0012; $0.0008
 $1.00.                                                                                                         Retail Orders.        for Retail Orders.
Securities priced below $1.00....        ($0.00004)        ($0.00004)        ($0.00004)  0.295% of Dollar      0.1% of Dollar Value  0.1% of Dollar
                                                                                          Value.                                      Value.
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[[Page 42909]]

                                                                                     Standard Rates--Routing
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                                                                            Primary until
                                                                           9:45 orders and    Primary only
                                                                            primary after    (``PO'') orders    PO orders in     PO orders in     PO orders in     PO orders in    PO orders in
                                                                             3:55 orders        in tape A          tape B           tape A           tape B           tape B          tape C
                 Category                     Orders routed that remove     designated as      securities        securities       securities       securities       securities      securities
                                                      liquidity             retail orders    routed to NYSE    routed to NYSE   routed to NYSE   routed to NYSE   routed to Cboe     routed to
                                                                            and routed to       that add        American that       auction     American auction    BZX auction   NASDAQ auction
                                                                             the primary        liquidity       add liquidity
                                                                               market
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Securities priced at or above $1.00.......  $0.0035.....................           $0.0010         ($0.0012)         No Credit         $0.0010           $0.0005         $0.0030         $0.0030
Securities priced below $1.00.............  0.3% of Dollar Value (a)....               n/a               n/a               n/a             n/a               n/a             n/a             n/a
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    The Exchange notes that each of the rates that currently appear in 
the Basic rates section of the Fee Schedule, with one exception 
discussed below, and in the section of the Fee Schedule applicable to 
securities priced below $1.00 have been relocated in the tables 
proposed above and in proposed footnotes (a) through (g) for the table 
under proposed section III titled ``Standard Rates--Transactions'' and 
in proposed footnote (a) for the table under proposed section V titled 
``Standard Rates--Routing.'' The Exchange proposes to relocate certain 
of these rates in footnotes because these rates do not have a logical 
place in the proposed tables. The proposed footnotes under proposed 
section III titled ``Standard Rates--Transactions'' would be as 
follows:

    (a) For securities priced at or above $1.00, an 
additional credit in Tape B Securities shall apply to LMMs and to 
Market Makers affiliated with LMMs that provide displayed liquidity 
based on the number of Less Active ETP Securities in which the LMM 
is registered as the LMM. The applicable tiered-credits are noted 
below (See LMM Transaction Fees and Credits).
    (b) In securities priced below $1.00, this credit 
applies to all orders that provide liquidity.
    (c) Retail Order means an order as defined in Rule 
7.44-E(a)(3).
    (d) In securities priced at or above $1.00, this fee 
also applies to Non-Displayed Limit Orders that remove liquidity.
    (e) In securities priced at or above $1.00, this fee 
is capped at $20,000 per month per Equity Trading Permit ID.
    (f) Fee applies to orders in Tape A Securities, Tape 
C Securities, and NYSE Arca primary listed securities (includes all 
ETFs/ETNs).
    (g) In securities priced at or above $1.00, this fee 
applies to executions resulting from Auction Orders. In securities 
priced below $1.00, this fee applies to all orders executed in the 
Early Open Auction, Core Open Auction, Trading Halt Auction or 
Closing Auction.

    Additionally, the proposed footnote under proposed section V titled 
``Standard Rates--Routing'' would be as follows:

    (a) Applicable to orders of listed and Nasdaq 
securities routed away and executed by another market center or 
participant.

    As noted above, each of the rates that currently appear in the 
Basic rates section of the Fee Schedule have been relocated in the 
proposed new table format. With respect to MPL orders, the Exchange 
proposes to relocate the base credit of $0.0010 per share for MPL 
orders that provide liquidity \9\ to the table titled ``Standard 
Rates--Transactions'' and relocate the remaining two tiers of MPL order 
credits to the Tier Rates section of the Fee Schedule. The Exchange 
believes the proposed new location for these credits is a logical place 
as they would appear along with tiered pricing related to MPL Orders, 
i.e., MPL Orders Step Up Tier 1 and MPL Orders Step Up Tier 2.
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    \9\ The base credit of $0.0010 per share applies for MPL orders 
providing liquidity when MPL Adding ADV during the billing month is 
less than 1.5 million shares.
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    Further, the Exchange proposes to relocate and display certain 
rates in bullet form because these rates do not have a logical place in 
the proposed tables. Accordingly, the Exchange proposes new section IV 
titled ``Other Standard Rates for Securities with a Per Share Price 
$1.00 or Above'' that would provide these additional rates, as follows:
     No fee or credit for Non-Displayed Limit Orders that add 
liquidity.
     $0.0030 fee for MPL Orders removing liquidity; $0.0010 if 
such orders are designated as Retail Orders.
     $0.0006 fee for executions in an Auction other than for 
executions from Auction Orders.
    Next, the Exchange proposes to adopt the heading ``Tier Rates--
Round Lots and Odd Lots (Per Share Price $1.00 or Above)'' under 
proposed new section VI that would appear at the end of the proposed 
new section V titled ``Standard Rates--Routing'' to distinguish 
Standard Rates from Tier Rates, which begin on the Fee Schedule with 
Tier 1.
    Finally, with the proposed relocation of the rates applicable to 
securities priced below $1.00 from their current location on the Fee 
Schedule to the proposed table presentation, the Exchange proposes to 
adopt the heading ``Tier Rates--Round Lots and Odd Lots (Per Share 
Price below $1.00)'' under proposed new section VII and keep the Sub-
Dollar Adding Step Up Tier where it currently appears and that pricing 
tier would be the only pricing tier under this section.
    As noted above, the Exchange is not proposing any substantive 
change to any current fee or credit. The purpose of the proposed rule 
change is to make a non-substantive change to reorganize the 
presentation of the Fee Schedule in order to enhance its clarity and 
transparency, thereby making the Fee Schedule easier to 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.\10\ Specifically, the 
Exchange believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\11\ 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

[[Page 42910]]

consistent with the Section 6(b)(5) \12\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination 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).
    \12\ 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 
trading activity on the Exchange or to routed executions. Further, the 
changes are designed to make the Fee Schedule easier to read and make 
it more user-friendly to better display the allocation of fees and 
credits among Exchange members. The Exchange believes that this 
proposed format will provide additional transparency of Exchange fees 
and credits. The Exchange also believes that the proposal is non-
discriminatory because it applies uniformly to all ETP Holders, and 
again, the Exchange is not making any changes to existing fees and 
credits. Finally, the Exchange believes that the reformatted Fee 
Schedule, as proposed herein, will be clearer and less confusing for 
investors and will eliminate potential investor 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 Fee 
Schedule is equitable and not unfairly discriminatory because the 
resulting streamlined Fee Schedule would continue to apply to ETP 
Holders as it does currently because the Exchange is not adopting any 
new fees or credits or removing any current fees or credits from the 
Fee Schedule that impact ETP Holders. All ETP Holders 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,\13\ 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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    \13\ 15 U.S.C. 78f(b)(8).
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    Intramarket Competition. The Exchange's proposal to reformat its 
Fee Schedule will not place any undue burden on intramarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because all ETP Holders 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 Fee Schedule would 
promote clarity and reduce confusion with respect to the fees and 
credits that ETP Holders would be subject to.
    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) \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.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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-2021-66 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-NYSEARCA-2021-66. 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-NYSEARCA-2021-66 and

[[Page 42911]]

should be submitted on or before August 26, 2021.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-16678 Filed 8-4-21; 8:45 am]
BILLING CODE 8011-01-P