Document ID: SEC-2016-0013-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2016-01-05T05:00Z

[Federal Register Volume 81, Number 2 (Tuesday, January 5, 2016)]
[Notices]
[Pages 281-283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-33116]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76789; File No. SR-NYSE-2015-66]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Its Price List To Modify Certain Fees for Executions at the 
Close

December 29, 2015.
    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 December 16, 2015, 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

[[Page 282]]

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 modify certain 
fees for executions at the close, effective January 4, 2016. 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.

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 change certain 
fees for executions at the close, effective January 4, 2016. The 
proposed change would only apply to transactions in securities priced 
$1.00 or more.
    Other than for market at-the-close (``MOC'') and limit at-the-close 
(``LOC'') orders, the Exchange does not charge for orders executed at 
the close, including Floor broker orders swept into the close. However, 
member organizations that execute during the billing month average 
daily volume (``ADV'') of at least 1,000,000 shares through orders 
executed at the close (except MOC and LOC orders) and Floor broker 
orders swept into the close, are charged $0.0003 per share for such 
orders. The Exchange proposes to increase this fee to $0.00035 per 
share, but to apply that fee only to shares executed in excess of 
750,000 ADV during the billing month. For example, a member 
organization that has an ADV of 3 million shares during a billing month 
consisting of 20 trading days would pay the $0.00035 per share fee on 
the 2.25 million shares that exceed 750,000 on average each day. For 
the 20 trading days, this would be a total of 45 million shares for 
that month, and a total fee of $15,750. By comparison with the current 
fee, the member organization that has an ADV of 3 million shares would 
pay the $0.0003 per share fee on an ADV of 3 million shares over 20 
trading days, or a total of 60 million shares for that month, for a 
total fee of $18,000. Member organizations with execution volumes below 
an ADV of 750,000 shares during the billing month would continue not to 
be charged for these trades.
    The proposed change is 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,\4\ in general, and furthers the 
objectives of sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed fee increases for certain 
executions at the close are reasonable. The Exchange's closing auction 
is a recognized industry benchmark,\6\ and member organizations receive 
a substantial benefit from the Exchange in obtaining high levels of 
executions at the Exchange's closing price on a daily basis.
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    \6\ For example, the pricing and valuation of certain indices, 
funds, and derivative products require primary market prints.
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    The Exchange believes that it is equitable and not unfairly 
discriminatory to modify fees for executions at the close (other than 
MOC and LOC orders) and Floor broker executions swept into the close 
for member organizations that execute an ADV of at least 750,000 of 
such executions on a combined basis, by increasing the applicable fee 
but to apply that fee only to shares executed over 750,000 ADV during 
the billing month, because member organizations that reach 750,000 ADV 
threshold are generally larger member organizations that are deriving a 
substantial benefit from this high volume of closing executions. 
Nonetheless, the Exchange must continue to encourage liquidity from 
multiple sources. Allowing member organizations with execution volumes 
of an ADV below 750,000 shares during the billing month to continue to 
obtain executions at the close at no charge, and to charge the fee only 
with respect to shares executed over 750,000 ADV during the billing 
month, continues to encourage member organizations to send orders to 
the Exchange for the closing auction. The Exchange believes that its 
proposal would equitably balance these interests and continue to 
encourage order flow from multiple sources, which helps to maintain the 
quality of the Exchange's closing auctions for the benefit of all 
market participants. The proposed fee is also reasonable, in that it is 
lower than applicable closing rates on the NASDAQ Stock Market, LLC 
(``NASDAQ'').\7\ For example, the default fee for executions in 
NASDAQ's ``Closing Cross'' is $0.0008 per share.
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    \7\ See NASDAQ Rule 7018(d).
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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,\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 encourage the submission of additional liquidity to a 
public exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for member organizations. The 
Exchange believes that this could promote competition between the 
Exchange and other execution venues, including those that currently 
offer similar order types and comparable transaction pricing, by 
encouraging additional orders to be sent to the Exchange for execution.
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    \8\ 15 U.S.C. 78f(b)(8).
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    Finally, 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

[[Page 283]]

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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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-NYSE-2015-66 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-NYSE-2015-66. 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 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 will also be available 
for inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. 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-NYSE-2015-66 and should be submitted on or before 
January 26, 2016.

    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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-33116 Filed 1-4-16; 8:45 am]
 BILLING CODE 8011-01-P