Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List, 14269-14272 [2017-05337]

Download as PDF Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Notices would not have an impact, nor impose any burden, on competition because each of such proposed changes would simply provide specificity, clarity and additional transparency within the Rules. asabaliauskas on DSK3SPTVN1PROD with NOTICES believes the proposed rule change would ‘‘promote the prompt and accurate clearance and settlement of securities transactions’’ by FICC and also ‘‘remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions’’ consistent with the requirements of the Act, cited above. (B) Clearing Agency’s Statement on Burden on Competition FICC believes that the proposed rule changes associated with the expansion of entity types eligible to be Sponsored Members would promote competition by increasing the types of entities that may participate in FICC as Sponsored Members and therefore permit more market participants to utilize FICC’s services. At the same time, participation in FICC as a Sponsored Member would continue to be limited to legal entities that are either ‘‘qualified institutional buyers’’ as defined in Rule 144A under the Securities Act of 1933, or that otherwise satisfy the financial requirements that an entity specifically listed in paragraph (a)(1)(i) of Rule 144A must satisfy in order to be a ‘‘qualified institutional buyer’’ as specified in that paragraph, and that have at least one Sponsoring Member willing to sponsor them into GSD membership. These limitations may impact institutional firms that are unable to satisfy such eligibility requirements by excluding them from being able to novate their eligible activity to FICC (and avail themselves of the commensurate benefits described in Section 3(a)(i)— Background on the Proposed Expansion of Sponsored Member Eligibility above). Nevertheless, FICC believes that any resulting burden on competition would be necessary and appropriate in furtherance of the Act, as permitted by Section 17A(b)(3)(I) of the Act,25 in light of the fact that such eligibility requirements are designed to allow FICC to ensure the financial sophistication of Sponsored Members and to prudently manage the risk associated with Sponsored Members’ participation in FICC. Moreover, FICC would not restrict the ability of institutional firms to enter into eligible transactions with Netting Members (including Sponsoring Members) outside of GSD. FICC believes that the proposed changes to Rule 1 (Definitions) and Rule 3A (Sponsoring Members and Sponsored Members) that are unrelated to the proposed expansion of entity types eligible to be Sponsored Members 25 15 U.S.C. 78q–1(b)(3)(I). VerDate Sep<11>2014 20:02 Mar 16, 2017 Jkt 241001 (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not been solicited or received. FICC will notify the Commission of any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change, and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self- regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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, as modified by Amendment No. 1, 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– FICC–2017–003 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR–FICC–2017–003. 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 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 14269 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 FICC and on DTCC’s Web site (http://dtcc.com/legal/sec-rulefilings.aspx). 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–FICC– 2017–003 and should be submitted on or before April 7, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Robert W. Errett, Deputy Secretary. [FR Doc. 2017–05403 Filed 3–16–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80222; File No. SR–NYSE– 2017–09] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List March 13, 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 1, 2017, 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 Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to 26 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\17MRN1.SGM 17MRN1 14270 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Notices 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 its Price List for equity transactions in stocks with a per share stock price more than $1.00 to (1) revise the fee for Midpoint Passive Liquidity (‘‘MPL’’) orders that remove liquidity from the Exchange and are designated with a ‘‘retail’’ modifier as defined in Rule 13, and (2) revise the requirements and credits for MPL orders that provide liquidity to the Exchange, including the related credits for Supplemental Liquidity Providers (‘‘SLP’’). The Exchange proposes to implement these changes to its Price List effective March 1, 2017. 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. asabaliauskas on DSK3SPTVN1PROD with NOTICES 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 (1) revise the fee for MPL orders that remove liquidity from the Exchange and are designated with a ‘‘retail’’ modifier as defined in Rule 13, and (2) revise the requirements and credits for MPL orders that provide liquidity to the Exchange, including the related credits for SLPs. The proposed changes would only apply to credits in transactions in securities priced $1.00 or more. The Exchange proposes to implement these changes to its Price List effective March 1, 2017. MPL Orders An MPL Order is defined in Rule 13 as an undisplayed limit order that automatically executes at the mid-point VerDate Sep<11>2014 20:02 Mar 16, 2017 Jkt 241001 of the best protected bid (‘‘PBB’’) or best protected offer (‘‘PBO’’), as such terms are defined in Regulation NMS Rule 600(b)(57) (together, ‘‘PBBO’’).4 MPL Orders That Remove Liquidity The Exchange currently does not charge a fee for MPL Orders that remove liquidity from the Exchange and that are designated with a ‘‘retail’’ modifier as defined in Rule 13. The Exchange proposes to charge a $0.00100 fee for MPL Orders that remove liquidity from the Exchange and that are designated with a ‘‘retail’’ modifier as defined in Rule 13. MPL Orders That Add Liquidity The Exchange currently provides a credit of $0.00275 per share credit for MPL Orders that provide liquidity from a member organization that has Adding ADV 5 in MPL Orders of at least 0.04% of NYSE consolidated ADV (‘‘CADV’’),6 excluding liquidity added by a Designated Market Maker (‘‘DMM’’). The Exchange provides a $0.0015 per share transaction credit for MPL Orders that provide liquidity from a member organization that does not meet the Adding ADV threshold. The Exchange proposes that member organizations qualifying for the $0.00275 credit have an Adding ADV in MPL orders that is at least 0.140% of NYSE CADV, excluding any liquidity added by a DMM. The Exchange also proposes a new credit of $0.0025 for member organizations that have Adding ADV in MPL orders that is at least 0.030% of NYSE CADV, excluding any liquidity added by a DMM. Finally, the Exchange proposes that MPL Orders that provide liquidity from a member organization that does not meet the above Adding ADV thresholds receive a per share transaction credit of $0.0010. The Exchange proposes the same changes to the credits applicable to SLPs for MPL Orders described above. In addition, the Exchange proposes to conform the Adding ADV requirement in MPL Orders for SLPs to qualify for the proposed $0.00275 credit of at least 0.140% of NYSE CADV, excluding liquidity added by a DMM, in place of the fixed share amount. * * * * * 4 See Rule 13. See also 17 CFR 242.600(b)(57). ADV’’ is when a member organization has ADV that adds liquidity to the Exchange during the billing month. Adding ADV excludes any liquidity added by a Designated Market Maker. 6 NYSE CADV is defined in the Price List as the consolidated average daily volume of NYSE-listed securities. 5 ‘‘Adding PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 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,7 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,8 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. The Exchange believes that the proposed increase to the fee for executions of MPL Orders that remove liquidity and that are designated with a ‘‘retail’’ modifier as defined in Rule 13, the proposed changes to the credits for MPL Orders that provide liquidity, the proposed additional credit tier, and conforming the Adding ADV requirement and credit for SLPs in MPL Orders are reasonable. MPL Orders provide opportunities for market participants to interact with orders priced at the midpoint of the PBBO, thus providing price improving liquidity to market participants and increasing the quality of order execution on the Exchange’s market, which benefits all market participants. Specifically, the Exchange believes that charging a fee for MPL Orders that remove liquidity from the Exchange and that are designated with a ‘‘retail’’ modifier as defined in Rule 13 is reasonable because the charge is substantially lower than the $0.0030 fee for MPL orders that remove liquidity and are not designated with a Retail Modifier as defined in Rule 13. The Exchange believes that the proposed additional tier credit for MPL Orders is reasonable because the proposed MPL Order Tier credit of $0.00250 per share that would apply if the member organization has Adding ADV in MPL Orders that is at least 0.030% of NYSE CADV excluding any liquidity added by a DMM would relate to volume that provides liquidity, which would be identical to the type of volume to which the credit would apply. The new credit is also reasonable because it would be similar or higher than the rates on the NASDAQ Stock Market, LLC (‘‘NASDAQ’’). For example, on NASDAQ, firms that 7 15 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(4) & (5). E:\FR\FM\17MRN1.SGM 17MRN1 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Notices average 1 million or more shares of midpoint liquidity receive a credit of $0.0010 per share in Tape C securities and $0.0018 in Tape A and B securities to execute against resting midpoint liquidity, which is lower than the proposed $0.0025 per share rate for MPL orders that is at least 0.030% of NYSE CADV, excluding any liquidity added by a DMM.9 The proposed change is equitable and not unfairly discriminatory because MPL Orders increase the quality of order execution on the Exchange’s market, which benefits all market participants. The Exchange also believes that the proposed changes are equitable and not unfairly discriminatory because all market participants—customers, Floor brokers, DMMs, and SLPs—may use MPL Orders on the Exchange and because all market participants that use MPL Orders may receive credits for MPL Orders, as is currently the case. The Exchange also believes that the credit of $0.0010 for MPL Orders that provide liquidity from a member organization that does not meet the above Adding ADV thresholds is also reasonable as it would be similar to the $0.0010 credit on NASDAQ for midpoint liquidity in Tape C, or NASDAQ Listed Securities, for firms that adds less than 1 million shares of midpoint liquidity.10 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. asabaliauskas on DSK3SPTVN1PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,11 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 changes 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 9 See NASDAQ Price List, available at http:// nasdaqtrader.com/ Trader.aspx?id=PriceListTrading2. 10 See id. 11 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 20:02 Mar 16, 2017 Jkt 241001 similar order types and comparable transaction pricing, by encouraging additional orders to be sent to the Exchange for execution. 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 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) 12 of the Act and subparagraph (f)(2) of Rule 19b–4 13 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 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) 14 of the Act to 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 14 15 U.S.C. 78s(b)(2)(B). 13 17 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 14271 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2017–09 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–2017–09. 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–NYSE– 2017–09, and should be submitted on or before April 7, 2017. E:\FR\FM\17MRN1.SGM 17MRN1 14272 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Eduardo A. Aleman, Assistant Secretary. places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. [FR Doc. 2017–05337 Filed 3–16–17; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80229; File No. SR– NASDAQ–2017–024] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Data Collection Requirements in Rule 4470 March 13, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 28, 2017, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, and II, below, which Items have been prepared by the Exchange. 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 Rule 4770 to modify the date of Appendix B Web site data publication pursuant to the Regulation NMS Plan to Implement a Tick Size Pilot Program (‘‘Plan’’). The text of the proposed rule change is available on the Exchange’s Web site at http://nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. asabaliauskas on DSK3SPTVN1PROD with NOTICES 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 Exchange 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 these statements may be examined at the 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 1 15 VerDate Sep<11>2014 20:02 Mar 16, 2017 Jkt 241001 1. Purpose Rule 4770(b) (Compliance with Data Collection Requirements) 3 implements the data collection and Web site publication requirements of the Plan.4 Commentary .08 to Rule 4770 provides, among other things, that the requirement that the Exchange make certain data publicly available on the Nasdaq Web site pursuant to Appendix B and C to the Plan shall commence at the beginning of the Pilot Period,5 and that Nasdaq shall make data for the PrePilot Period publicly available on the Nasdaq Web site pursuant to Appendix B and C to the Plan by February 28, 2017.6 Nasdaq is proposing amendments to Commentary .08 to Rule 4770 to delay the date by which Pre-Pilot and Pilot Appendix B data is to be made publicly available on Nasdaq’s Web site from February 28, 2017, until April 28, 2017. Appendix C data for the Pre-Pilot Period through the month of January 2017 will be published on the Nasdaq Web site on February 28, 2017, and, thereafter, on the original 30-day schedule.7 As some 3 See Rule 4770(b). See also Securities Exchange Act Release No. 77456 (March 28, 2016), 81 FR 18925 (April 1, 2016) (SR–NASDAQ–2016–043). 4 The Participants filed the Plan to comply with an order issued by the Commission on June 24, 2014. See Letter from Brendon J. Weiss, Vice President, Intercontinental Exchange, Inc., to Secretary, Commission, dated August 25, 2014 (‘‘SRO Tick Size Plan Proposal’’). See Securities Exchange Act Release No 72460 (June 24, 2014), 79 FR 36840 (June 30, 2014); see also Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015). 5 Unless otherwise defined herein, capitalized terms have the meaning ascribed to them in Rule 4770. 6 On November 30, 2016, the SEC granted exemptive relief to the Participants to, among other things, delay the publication of Web site data pursuant to Appendices B and C to the Plan until February 28, 2017, and to delay the ongoing Web site publication by ninety days such that data would be published within 120 calendar days following the end of the month. See Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Marcia E. Asquith, Senior Vice President and Corporate Secretary, FINRA, dated November 30, 2016; see also Securities Exchange Act Release No. 79546 (December 14, 2016), 81 FR 92932 (December 20, 2016) (SR–NASDAQ–2016–165). 7 Since, under Rule 4770(b)(4), Nasdaq is not independently publishing Market Maker profitability data collected pursuant to Item I of Appendix C of the Plan, no corresponding change to the language of Rule 4770(b)(4) relating to the PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 of the data reporting requirements set forth in Rule 4770 require members to report data to their Designated Examining Authority (‘‘DEA’’), which may not be Nasdaq, the Exchange is also proposing to add references in Commentary .08 to reflect the fact that the Exchange or the DEA may be publishing such data. In the SRO Tick Size Plan Proposal, the Participants stated that the public data will be made available for free ‘‘on a disaggregated basis by trading center’’ on the Web sites of the Participants and the Designated Examining Authorities.8 However, market participants have expressed confidentiality concerns regarding this approach for over-thecounter (‘‘OTC’’) data.9 Thus, Nasdaq is filing the instant proposed rule change to provide additional time to assess a means of addressing the confidentiality concerns raised in connection with the publication of Appendix B data related to OTC activity in furtherance of the objectives of the Plan.10 Pursuant to this amendment, Appendix B data publication will be delayed until April 28, 2017. The Participants anticipate filing additional proposed rule changes to address Appendix B data publication. Nasdaq has filed the proposed rule change for immediate effectiveness. The operative date of the proposed rule change will be the date of filing. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,11 in general, and furthers the objectives of Section 6(b)(5) of the Act,12 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in timing of the publication of Appendix C data for the Pilot Period is needed. 8 See Securities Exchange Act Release No. 73511 (November 3, 2014), 79 FR 66423 (November 7, 2014) (Notice of Filing of Proposed National Market System Plan to Implement a Tick Size Pilot Program on a One-Year Pilot Basis, File No. 4–657) (‘‘Tick Size Plan Proposal’’). 9 See letters from Adam C. Cooper, Senior Managing Director and Chief Legal Officer, Citadel Securities, to Brent J. Fields, Secretary, Commission, dated December 21, 2016 (‘‘Citadel letter’’); and William Hebert, Managing Director, Financial Information Forum, to Robert W. Errett, Deputy Secretary, Commission, dated December 21, 2016 (‘‘FIF letter’’). 10 In connection with its filing to implement a similar change in its rules, the Financial Industry Regulatory Authority, Inc. is also submitting an exemptive request to the SEC on behalf of all Plan Participants requesting relief from the relevant requirements of the Plan. 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). E:\FR\FM\17MRN1.SGM 17MRN1

Agencies

[Federal Register Volume 82, Number 51 (Friday, March 17, 2017)]
[Notices]
[Pages 14269-14272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05337]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80222; File No. SR-NYSE-2017-09]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Its Price List

March 13, 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 1, 2017, 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 Items I, 
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to

[[Page 14270]]

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.
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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 for equity 
transactions in stocks with a per share stock price more than $1.00 to 
(1) revise the fee for Midpoint Passive Liquidity (``MPL'') orders that 
remove liquidity from the Exchange and are designated with a ``retail'' 
modifier as defined in Rule 13, and (2) revise the requirements and 
credits for MPL orders that provide liquidity to the Exchange, 
including the related credits for Supplemental Liquidity Providers 
(``SLP''). The Exchange proposes to implement these changes to its 
Price List effective March 1, 2017. 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 (1) revise the fee 
for MPL orders that remove liquidity from the Exchange and are 
designated with a ``retail'' modifier as defined in Rule 13, and (2) 
revise the requirements and credits for MPL orders that provide 
liquidity to the Exchange, including the related credits for SLPs.
    The proposed changes would only apply to credits in transactions in 
securities priced $1.00 or more.
    The Exchange proposes to implement these changes to its Price List 
effective March 1, 2017.
MPL Orders
    An MPL Order is defined in Rule 13 as an undisplayed limit order 
that automatically executes at the mid-point of the best protected bid 
(``PBB'') or best protected offer (``PBO''), as such terms are defined 
in Regulation NMS Rule 600(b)(57) (together, ``PBBO'').\4\
---------------------------------------------------------------------------

    \4\ See Rule 13. See also 17 CFR 242.600(b)(57).
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MPL Orders That Remove Liquidity
    The Exchange currently does not charge a fee for MPL Orders that 
remove liquidity from the Exchange and that are designated with a 
``retail'' modifier as defined in Rule 13. The Exchange proposes to 
charge a $0.00100 fee for MPL Orders that remove liquidity from the 
Exchange and that are designated with a ``retail'' modifier as defined 
in Rule 13.
MPL Orders That Add Liquidity
    The Exchange currently provides a credit of $0.00275 per share 
credit for MPL Orders that provide liquidity from a member organization 
that has Adding ADV \5\ in MPL Orders of at least 0.04% of NYSE 
consolidated ADV (``CADV''),\6\ excluding liquidity added by a 
Designated Market Maker (``DMM''). The Exchange provides a $0.0015 per 
share transaction credit for MPL Orders that provide liquidity from a 
member organization that does not meet the Adding ADV threshold.
---------------------------------------------------------------------------

    \5\ ``Adding ADV'' is when a member organization has ADV that 
adds liquidity to the Exchange during the billing month. Adding ADV 
excludes any liquidity added by a Designated Market Maker.
    \6\ NYSE CADV is defined in the Price List as the consolidated 
average daily volume of NYSE-listed securities.
---------------------------------------------------------------------------

    The Exchange proposes that member organizations qualifying for the 
$0.00275 credit have an Adding ADV in MPL orders that is at least 
0.140% of NYSE CADV, excluding any liquidity added by a DMM.
    The Exchange also proposes a new credit of $0.0025 for member 
organizations that have Adding ADV in MPL orders that is at least 
0.030% of NYSE CADV, excluding any liquidity added by a DMM.
    Finally, the Exchange proposes that MPL Orders that provide 
liquidity from a member organization that does not meet the above 
Adding ADV thresholds receive a per share transaction credit of 
$0.0010.
    The Exchange proposes the same changes to the credits applicable to 
SLPs for MPL Orders described above. In addition, the Exchange proposes 
to conform the Adding ADV requirement in MPL Orders for SLPs to qualify 
for the proposed $0.00275 credit of at least 0.140% of NYSE CADV, 
excluding liquidity added by a DMM, in place of the fixed share amount.
* * * * *
    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,\7\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes that the proposed increase to the fee for 
executions of MPL Orders that remove liquidity and that are designated 
with a ``retail'' modifier as defined in Rule 13, the proposed changes 
to the credits for MPL Orders that provide liquidity, the proposed 
additional credit tier, and conforming the Adding ADV requirement and 
credit for SLPs in MPL Orders are reasonable. MPL Orders provide 
opportunities for market participants to interact with orders priced at 
the midpoint of the PBBO, thus providing price improving liquidity to 
market participants and increasing the quality of order execution on 
the Exchange's market, which benefits all market participants.
    Specifically, the Exchange believes that charging a fee for MPL 
Orders that remove liquidity from the Exchange and that are designated 
with a ``retail'' modifier as defined in Rule 13 is reasonable because 
the charge is substantially lower than the $0.0030 fee for MPL orders 
that remove liquidity and are not designated with a Retail Modifier as 
defined in Rule 13.
    The Exchange believes that the proposed additional tier credit for 
MPL Orders is reasonable because the proposed MPL Order Tier credit of 
$0.00250 per share that would apply if the member organization has 
Adding ADV in MPL Orders that is at least 0.030% of NYSE CADV excluding 
any liquidity added by a DMM would relate to volume that provides 
liquidity, which would be identical to the type of volume to which the 
credit would apply.
    The new credit is also reasonable because it would be similar or 
higher than the rates on the NASDAQ Stock Market, LLC (``NASDAQ''). For 
example, on NASDAQ, firms that

[[Page 14271]]

average 1 million or more shares of midpoint liquidity receive a credit 
of $0.0010 per share in Tape C securities and $0.0018 in Tape A and B 
securities to execute against resting midpoint liquidity, which is 
lower than the proposed $0.0025 per share rate for MPL orders that is 
at least 0.030% of NYSE CADV, excluding any liquidity added by a 
DMM.\9\
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    \9\ See NASDAQ Price List, available at http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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    The proposed change is equitable and not unfairly discriminatory 
because MPL Orders increase the quality of order execution on the 
Exchange's market, which benefits all market participants. The Exchange 
also believes that the proposed changes are equitable and not unfairly 
discriminatory because all market participants--customers, Floor 
brokers, DMMs, and SLPs--may use MPL Orders on the Exchange and because 
all market participants that use MPL Orders may receive credits for MPL 
Orders, as is currently the case.
    The Exchange also believes that the credit of $0.0010 for MPL 
Orders that provide liquidity from a member organization that does not 
meet the above Adding ADV thresholds is also reasonable as it would be 
similar to the $0.0010 credit on NASDAQ for midpoint liquidity in Tape 
C, or NASDAQ Listed Securities, for firms that adds less than 1 million 
shares of midpoint liquidity.\10\
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    \10\ See id.
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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 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,\11\ 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 
changes 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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    \11\ 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 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) \12\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 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-2017-09 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-2017-09. 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-NYSE-2017-09, and should be 
submitted on or before April 7, 2017.


[[Page 14272]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05337 Filed 3-16-17; 8:45 am]
 BILLING CODE 8011-01-P