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 To Reduce Fees for Routing Certain Retail Orders to Away Market Centers, 28735-28737 [2015-12062]

Download as PDF Federal Register / Vol. 80, No. 96 / Tuesday, May 19, 2015 / Notices tkelley on DSK3SPTVN1PROD with NOTICES also will be independently reviewed annually under the Clearing House’s model governance framework. III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act 6 directs the Commission to approve a proposed rule change of a self-regulatory organization if the Commission finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such selfregulatory organization. Section 17A(b)(3)(F) of the Act 7 requires, among other things, that the rules of a clearing agency are designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions and, in general, to protect investors and the public interest. The Commission finds that the proposed rule change is consistent with Section 17A of the Act 8 and the rules thereunder applicable to ICE Clear Europe. The proposed Haircut Policy will codify the general principles and limitations for assets accepted by ICE Clear Europe as Permitted Cover. The proposed policy also provides a framework for ensuring that appropriate prices are used to value Permitted Cover and establishes a VaR-based methodology, utilizing six different estimations for each applicable risk factor and calculating each estimation using a 99.9% confidence interval, for determining haircuts to ensure that the value of Permitted Cover held by ICE Clear Europe is sufficient to cover the Clearing House’s Margin and Guaranty Fund requirements. The policy also provides a methodology for setting absolute and relative concentration limits on particular bonds a Clearing Member may provide as Permitted Cover to guard against liquidity and concentration risks and establishes several measures designed to mitigate wrong-way-risk. In addition, the proposed policy provides procedures for the regular review and monitoring of Permitted Cover and associated haircuts and permits the Clearing House to respond promptly to changes in market conditions by modifying haircuts or other limits on Permitted Cover. Accordingly, the Commission believes that the Haircut Policy is designed to appropriately value Permitted Cover and enable ICE Clear Europe to efficiently and effectively liquidate all 6 15 U.S.C. 78s(b)(2)(C). 7 15 U.S.C. 78q–1(b)(3)(F). 8 15 U.S.C. 78q–1. VerDate Sep<11>2014 16:53 May 18, 2015 Jkt 235001 forms of accepted Permitted Cover to satisfy its payment obligations in the event of a Clearing Member default. The Commission therefore finds that the proposed rule change is designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions and, in general, to protect investors and the public interest in accordance with Section 17A(b)(3)(F) of the Act.9 IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 10 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (File No. SR– ICEEU–2015–007) be, and hereby is, approved.12 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–12032 Filed 5–18–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74947; File No. SR– NYSEArca–2015–39] 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 To Reduce Fees for Routing Certain Retail Orders to Away Market Centers May 13, 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 April 30, 2015, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission 9 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78q–1. 11 15 U.S.C. 78s(b)(2). 12 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 10 15 PO 00000 Frm 00157 Fmt 4703 Sfmt 4703 28735 (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. 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 reduce fees for routing certain retail orders to away market centers. The Exchange proposes to implement the changes on May 1, 2015. 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. 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 reduce fees for routing certain retail orders to away market centers. The Exchange proposes to implement the changes on May 1, 2015. The Exchange currently charges $0.0029 per share for all orders in Tape A Securities that are routed outside the Book to the NYSE; and $0.0035 per share for all orders in Tape B Securities and Tape C Securities that are routed outside the Book to any away market center. The Exchange proposes to reduce the fees for certain orders, i.e., for Primary Until 9:45 Orders 4 and Primary After 4 A Primary Until 9:45 Order is an Order entered for participation on the primary market until 9:45 a.m. Eastern Time (6:45 a.m. Pacific Time) after E:\FR\FM\19MYN1.SGM Continued 19MYN1 28736 Federal Register / Vol. 80, No. 96 / Tuesday, May 19, 2015 / Notices tkelley on DSK3SPTVN1PROD with NOTICES 3:55 Orders 5 that are designated as retail orders and meet the requirements of Rule 7.44(a)(3), but which are not executed in the Retail Liquidity Program 6 (‘‘Retail Orders’’). Under Rule 7.44(a)(3), a Retail Order is an agency order or a riskless principal order that meets the criteria of Financial Industry Regulatory Authority, Inc. Rule 5320.03 that originates from a natural person and is submitted to the Exchange by a Retail Member Organization (‘‘RMO’’),7 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. An ETP Holder may designate an order a Retail Order either (1) by designating certain order entry ports at the Exchange as ‘‘Retail Order Ports’’ and attesting, in a form and/or manner prescribed by the Exchange, that all orders submitted to the Exchange via such Retail Order Ports are Retail Orders; or (2) by means of a specific tag in the order entry message.8 which time the order is cancelled on the primary market and entered on the NYSE Arca Book. The Primary Until 9:45 Order may be Day only and may not be designated as GTC or GTD. Orders that return to the NYSE Arca Book after routing to the primary market retain their original order attributes. See NYSE Arca Equities Rule 7.31(f)(2). 5 A Primary After 3:55 Order is an Order entered for participation on the Exchange until 3:55 p.m. Eastern Time (12:55 p.m. Pacific Time) after which time the order is cancelled on the Exchange and an order is entered for participation on the primary market. The Primary After 3:55 Order may be Day only and may not be designated as GTC or GTD. Orders that route to the primary market at 3:55 p.m. Eastern Time retain their original order attributes. See NYSE Arca Equities Rule 7.31(f)(2) [sic]. 6 The Retail Liquidity Program is a pilot program designed to attract additional retail order flow to the Exchange for NYSE Arca-listed securities and securities traded pursuant to unlisted trading privileges (‘‘UTP Securities’’) while also providing the potential for price improvement to such order flow. See Rule 7.44. See Securities Exchange Act Release No. 71176 (December 23, 2013), 78 FR 79524 (December 30, 2013) (SR–NYSEArca–2013– 107). 7 ‘‘RMO’’ is defined in Rule 7.44(a)(2) as an ETP Holder that is approved by the Exchange to submit Retail Orders. However, an order designated as a Retail Order of an RMO for purposes of the Retail Liquidity Program is separate from the designation of an order as a Retail Order for purposes of existing pricing tiers in the Fee Schedule. See Securities Exchange Act Release No. 71722 (March 13, 2014), 78 [sic] FR 15376 (March 19, 2014) (SR–NYSEArca– 2014–22) (‘‘Arca Retail Approval Order’’ [sic]). The proposed rule change solely concerns Retail Orders outside the Retail Liquidity Program that are currently defined in the Fee Schedule as ‘‘Retail Orders’’. 8 See, e.g., Securities Exchange Act Release No. 68322 (November 29, 2012), 77 FR 72425 (December 5, 2012) (SR–NYSEArca–2012–129). ETP Holders designating orders as Retail Orders by using a tag in the order entry message are required to have written policies and procedures reasonably designed to assure that it only designates orders as Retail Orders if all requirements of a Retail Order are met. The written policies and procedures VerDate Sep<11>2014 16:53 May 18, 2015 Jkt 235001 Specifically, the Exchange proposes to charge a fee of $0.0010 per share for all Primary Until 9:45 Orders and Primary After 3:55 Orders that are designated as Retail Orders and that are routed to the primary listing market. The Exchange proposes to include this fee in three places in the Basic Rates section of the Fee Schedule for each of Tape A, Tape B, and Tape C securities by adding text following the existing rate for routing orders that provides ‘‘except that Primary Until 9:45 Orders and Primary After 3:55 Orders that are designated as Retail Orders and routed to the primary listing market will be charged $0.0010 per share (fee).’’ 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. that markets and price discovery optimally function through the interactions of diverse flow types, it also believes that growth in internalization has required differentiation of retail order flow from other order flow types. The proposed new fee is set at a level to incentivize ETP Holders to continue to direct a subset of Retail Orders to the Exchange, rather than to an over-thecounter market. The Exchange believes that, because Retail Orders are likely to reflect long-term investment intentions, they promote price discovery and dampen volatility. Accordingly, the presence of Retail Orders on the Exchange, or if routed, on the primary listing market for those securities, has the potential to benefit all market participants. For this reason, the Exchange believes that the proposed pricing is equitable and not unfairly discriminatory and would continue to 2. Statutory Basis encourage greater retail participation on the Exchange and other registered The Exchange believes that the proposed rule change is consistent with exchanges. Section 6(b) of the Act,9 in general, and The pricing proposed herein is not furthers the objectives of Sections designed to permit unfair 6(b)(4) and (5) of the Act,10 in particular, discrimination, but instead to promote a because it provides for the equitable competitive process around retail allocation of reasonable dues, fees, and executions such that retail investors other charges among its members, would receive better prices. The issuers and other persons using its proposed change is also equitable and facilities and does not unfairly not unfairly discriminatory because it discriminate between customers, would contribute to investors’ issuers, brokers or dealers. confidence in the fairness of their The Exchange believes that the transactions and because it would proposed fee changes are reasonable as benefit all investors by deepening the they are designed to attract additional Exchange’s liquidity pool, supporting retail order flow to the Exchange that the quality of price discovery, include an instruction to route to the promoting market transparency and primary listing market at designated times. In addition, the proposed fees are improving investor protection. equitable and not unfairly Finally, the Exchange believes that it discriminatory because they will apply is subject to significant competitive uniformly to all similarly situated ETP forces, as described below in the Holders. Exchange’s statement regarding the The Exchange notes that a significant burden on competition. For these percentage of the orders of individual reasons, the Exchange believes that the investors are executed over-theproposal is consistent with the Act. counter.11 While the Exchange believes require the ETP Holder to (i) exercise due diligence before entering a Retail Order to assure that entry as a Retail Order is in compliance with the requirements specified by the Exchange, and (ii) monitor whether orders entered as Retail Orders meet the applicable requirements. If the ETP Holder represents Retail Orders from another broker-dealer customer, the ETP Holder’s supervisory procedures must be reasonably designed to assure that the orders it receives from such broker-dealer customer that it designates as Retail Orders meets the definition of a Retail Order. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4) and (5). 11See Concept Release on Equity Market Structure, Securities Exchange Act Release No. 61358 (January 14, 2010), 75 FR 3594 (January 21, 2010) (‘‘Concept Release’’) (noting that dark pools and internalizing broker-dealers executed PO 00000 Frm 00158 Fmt 4703 Sfmt 4703 approximately 25.4% of share volume in September 2009). See also Mary Jo White, Focusing on Fundamentals: The Path to Address Equity Market Structure (Speech at the Security Traders Association 80th Annual Market Structure Conference, Oct. 2, 2013) (available on the Commission’s Web site) (‘‘White Speech’’); Mary L. Schapiro, Strengthening Our Equity Market Structure (Speech at the Economic Club of New York, Sept. 7, 2010) (available on the Commission’s Web site) (‘‘Schapiro Speech’’). In her speech, Chair White noted a steadily increasing percentage of trading that occurs in ‘‘dark’’ venues, which appear to execute more than half of the orders of long-term investors. Similarly, in her speech, only three years earlier, Chair Schapiro noted that nearly 30 percent of volume in U.S.-listed equities was executed in venues that do not display their liquidity or make it generally available to the public and the percentage was increasing nearly every month. E:\FR\FM\19MYN1.SGM 19MYN1 Federal Register / Vol. 80, No. 96 / Tuesday, May 19, 2015 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,12 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 fees would increase competition for retail order flow among execution venues and encourage additional execution opportunities on the Exchange and other registered exchanges. The Exchange believes the proposed fee change also would not impose any burden on competition among market participants. To the contrary, because Primary Until 9:45 Orders and Primary After 3:55 Orders are designed to route to the primary listing market during designated times, the Exchange believes that the proposed fee would promote inter-exchange competition by proving an incentive for ETP Holders to route such orders to the Exchange, which would also benefit the primary listing markets that would receive the orders when routed. 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. tkelley on DSK3SPTVN1PROD with NOTICES 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) 13 of the Act and subparagraph (f)(2) of Rule 19b–4 14 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. 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 12 15 U.S.C. 78f(b)(8). U.S.C. 78s(b)(3)(A). 14 17 CFR 240.19b–4(f)(2). 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) 15 of the Act to determine whether the proposed rule change should be approved or disapproved. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2015–39 on the subject line. Paper Comments • Send paper comments in triplicate to Robert W. Errett, Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2015–39. 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 (https://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 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–2015–39 and should be submitted on or before June 9, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–12062 Filed 5–18–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Closed Meeting on Thursday, May 21, 2015 at 2:00 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matter at the Closed Meeting. Commissioner Stein, as duty officer, voted to consider the items listed for the Closed Meeting in closed session. The subject matter of the Closed Meeting will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Adjudicatory matter; and Other matters relating to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551–5400. Dated: May 14, 2015. Brent J. Fields, Secretary. [FR Doc. 2015–12183 Filed 5–15–15; 11:15 am] BILLING CODE 8011–01–P 13 15 VerDate Sep<11>2014 16:53 May 18, 2015 15 15 Jkt 235001 PO 00000 U.S.C. 78s(b)(2)(B). Frm 00159 Fmt 4703 16 17 Sfmt 9990 28737 E:\FR\FM\19MYN1.SGM CFR 200.30–3(a)(12). 19MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 80, Number 96 (Tuesday, May 19, 2015)]
[Notices]
[Pages 28735-28737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12062]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74947; File No. SR-NYSEArca-2015-39]

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 To
Reduce Fees for Routing Certain Retail Orders to Away Market Centers

May 13, 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 April 30, 2015, 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'') to reduce
fees for routing certain retail orders to away market centers. The
Exchange proposes to implement the changes on May 1, 2015. 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.

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 reduce fees for
routing certain retail orders to away market centers. The Exchange
proposes to implement the changes on May 1, 2015.
The Exchange currently charges $0.0029 per share for all orders in
Tape A Securities that are routed outside the Book to the NYSE; and
$0.0035 per share for all orders in Tape B Securities and Tape C
Securities that are routed outside the Book to any away market center.
The Exchange proposes to reduce the fees for certain orders, i.e.,
for Primary Until 9:45 Orders \4\ and Primary After

[[Page 28736]]

3:55 Orders \5\ that are designated as retail orders and meet the
requirements of Rule 7.44(a)(3), but which are not executed in the
Retail Liquidity Program \6\ (``Retail Orders''). Under Rule
7.44(a)(3), a Retail Order is an agency order or a riskless principal
order that meets the criteria of Financial Industry Regulatory
Authority, Inc. Rule 5320.03 that originates from a natural person and
is submitted to the Exchange by a Retail Member Organization
(``RMO''),\7\ 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. An ETP Holder may designate an order a Retail Order either
(1) by designating certain order entry ports at the Exchange as
``Retail Order Ports'' and attesting, in a form and/or manner
prescribed by the Exchange, that all orders submitted to the Exchange
via such Retail Order Ports are Retail Orders; or (2) by means of a
specific tag in the order entry message.\8\
---------------------------------------------------------------------------

\4\ A Primary Until 9:45 Order is an Order entered for
participation on the primary market until 9:45 a.m. Eastern Time
(6:45 a.m. Pacific Time) after which time the order is cancelled on
the primary market and entered on the NYSE Arca Book. The Primary
Until 9:45 Order may be Day only and may not be designated as GTC or
GTD. Orders that return to the NYSE Arca Book after routing to the
primary market retain their original order attributes. See NYSE Arca
Equities Rule 7.31(f)(2).
\5\ A Primary After 3:55 Order is an Order entered for
participation on the Exchange until 3:55 p.m. Eastern Time (12:55
p.m. Pacific Time) after which time the order is cancelled on the
Exchange and an order is entered for participation on the primary
market. The Primary After 3:55 Order may be Day only and may not be
designated as GTC or GTD. Orders that route to the primary market at
3:55 p.m. Eastern Time retain their original order attributes. See
NYSE Arca Equities Rule 7.31(f)(2) [sic].
\6\ The Retail Liquidity Program is a pilot program designed to
attract additional retail order flow to the Exchange for NYSE Arca-
listed securities and securities traded pursuant to unlisted trading
privileges (``UTP Securities'') while also providing the potential
for price improvement to such order flow. See Rule 7.44. See
Securities Exchange Act Release No. 71176 (December 23, 2013), 78 FR
79524 (December 30, 2013) (SR-NYSEArca-2013-107).
\7\ ``RMO'' is defined in Rule 7.44(a)(2) as an ETP Holder that
is approved by the Exchange to submit Retail Orders. However, an
order designated as a Retail Order of an RMO for purposes of the
Retail Liquidity Program is separate from the designation of an
order as a Retail Order for purposes of existing pricing tiers in
the Fee Schedule. See Securities Exchange Act Release No. 71722
(March 13, 2014), 78 [sic] FR 15376 (March 19, 2014) (SR-NYSEArca-
2014-22) (``Arca Retail Approval Order'' [sic]). The proposed rule
change solely concerns Retail Orders outside the Retail Liquidity
Program that are currently defined in the Fee Schedule as ``Retail
Orders''.
\8\ See, e.g., Securities Exchange Act Release No. 68322
(November 29, 2012), 77 FR 72425 (December 5, 2012) (SR-NYSEArca-
2012-129). ETP Holders designating orders as Retail Orders by using
a tag in the order entry message are required to have written
policies and procedures reasonably designed to assure that it only
designates orders as Retail Orders if all requirements of a Retail
Order are met. The written policies and procedures require the ETP
Holder to (i) exercise due diligence before entering a Retail Order
to assure that entry as a Retail Order is in compliance with the
requirements specified by the Exchange, and (ii) monitor whether
orders entered as Retail Orders meet the applicable requirements. If
the ETP Holder represents Retail Orders from another broker-dealer
customer, the ETP Holder's supervisory procedures must be reasonably
designed to assure that the orders it receives from such broker-
dealer customer that it designates as Retail Orders meets the
definition of a Retail Order.
---------------------------------------------------------------------------

Specifically, the Exchange proposes to charge a fee of $0.0010 per
share for all Primary Until 9:45 Orders and Primary After 3:55 Orders
that are designated as Retail Orders and that are routed to the primary
listing market. The Exchange proposes to include this fee in three
places in the Basic Rates section of the Fee Schedule for each of Tape
A, Tape B, and Tape C securities by adding text following the existing
rate for routing orders that provides ``except that Primary Until 9:45
Orders and Primary After 3:55 Orders that are designated as Retail
Orders and routed to the primary listing market will be charged $0.0010
per share (fee).''
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,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\10\ 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.
---------------------------------------------------------------------------

\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Exchange believes that the proposed fee changes are reasonable
as they are designed to attract additional retail order flow to the
Exchange that include an instruction to route to the primary listing
market at designated times. In addition, the proposed fees are
equitable and not unfairly discriminatory because they will apply
uniformly to all similarly situated ETP Holders.
The Exchange notes that a significant percentage of the orders of
individual investors are executed over-the-counter.\11\ While the
Exchange believes that markets and price discovery optimally function
through the interactions of diverse flow types, it also believes that
growth in internalization has required differentiation of retail order
flow from other order flow types. The proposed new fee is set at a
level to incentivize ETP Holders to continue to direct a subset of
Retail Orders to the Exchange, rather than to an over-the-counter
market. The Exchange believes that, because Retail Orders are likely to
reflect long-term investment intentions, they promote price discovery
and dampen volatility. Accordingly, the presence of Retail Orders on
the Exchange, or if routed, on the primary listing market for those
securities, has the potential to benefit all market participants. For
this reason, the Exchange believes that the proposed pricing is
equitable and not unfairly discriminatory and would continue to
encourage greater retail participation on the Exchange and other
registered exchanges.
---------------------------------------------------------------------------

\11\See Concept Release on Equity Market Structure, Securities
Exchange Act Release No. 61358 (January 14, 2010), 75 FR 3594
(January 21, 2010) (``Concept Release'') (noting that dark pools and
internalizing broker-dealers executed approximately 25.4% of share
volume in September 2009). See also Mary Jo White, Focusing on
Fundamentals: The Path to Address Equity Market Structure (Speech at
the Security Traders Association 80th Annual Market Structure
Conference, Oct. 2, 2013) (available on the Commission's Web site)
(``White Speech''); Mary L. Schapiro, Strengthening Our Equity
Market Structure (Speech at the Economic Club of New York, Sept. 7,
2010) (available on the Commission's Web site) (``Schapiro
Speech''). In her speech, Chair White noted a steadily increasing
percentage of trading that occurs in ``dark'' venues, which appear
to execute more than half of the orders of long-term investors.
Similarly, in her speech, only three years earlier, Chair Schapiro
noted that nearly 30 percent of volume in U.S.-listed equities was
executed in venues that do not display their liquidity or make it
generally available to the public and the percentage was increasing
nearly every month.
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The pricing proposed herein is not designed to permit unfair
discrimination, but instead to promote a competitive process around
retail executions such that retail investors would receive better
prices. The proposed change is also equitable and not unfairly
discriminatory because it would contribute to investors' confidence in
the fairness of their transactions and because it would benefit all
investors by deepening the Exchange's liquidity pool, supporting the
quality of price discovery, promoting market transparency and improving
investor protection.
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.

[[Page 28737]]

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

In accordance with Section 6(b)(8) of the Act,\12\ 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
fees would increase competition for retail order flow among execution
venues and encourage additional execution opportunities on the Exchange
and other registered exchanges. The Exchange believes the proposed fee
change also would not impose any burden on competition among market
participants. To the contrary, because Primary Until 9:45 Orders and
Primary After 3:55 Orders are designed to route to the primary listing
market during designated times, the Exchange believes that the proposed
fee would promote inter-exchange competition by proving an incentive
for ETP Holders to route such orders to the Exchange, which would also
benefit the primary listing markets that would receive the orders when
routed.
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\12\ 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. 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) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2015-39 on the subject line.

Paper Comments

Send paper comments in triplicate to Robert W. Errett,
Deputy Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2015-39. 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 (https://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 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-2015-39 and should
be submitted on or before June 9, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12062 Filed 5-18-15; 8:45 am]
BILLING CODE 8011-01-P

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