Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services, 36027-36029 [2012-14622]

Download as PDF Federal Register / Vol. 77, No. 116 / Friday, June 15, 2012 / Notices 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 such filing also will be available for inspection and copying at the principal office of CME. 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–CME–2012–23 and should be submitted on or before July 6, 2012. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–14623 Filed 6–14–12; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–67180; File No. SR– NYSEArca–2012–56] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services srobinson on DSK4SPTVN1PROD with NOTICES June 11, 2012. 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 May 31, 2012, 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 CFR 200.30–3(a)(12). 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’’). 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule, as described below, and implement the fee changes on June 1, 2012. SECURITIES AND EXCHANGE COMMISSION 8 17 by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. Passive Liquidity Orders A Passive Liquidity Order is an order to buy or sell a stated amount of a security at a specified, undisplayed price.4 Passive Liquidity Orders are available for all Equity Trading Permit (‘‘ETP’’) Holders.5 The Exchange does not currently make credits available for Passive Liquidity Orders in Exchange-listed and other Tape B securities that provide liquidity on the Exchange. The Exchange hereby proposes to implement credits for Passive Liquidity Orders in Exchange-listed and other Tape B securities that provide liquidity, as follows: • $0.0015 per share for Tier 1 and Step Up Tier 1; • $0.0010 per share for Tier 2, Tier 3, Step Up Tier 2 and Basic Rates; and 1 15 VerDate Mar<15>2010 17:05 Jun 14, 2012 4 See 5 See Jkt 226001 PO 00000 NYSE Arca Equities Rule 7.31(h)(4). NYSE Arca Equities Rule 1.1(n). Frm 00090 Fmt 4703 Sfmt 4703 36027 • For Investor Tiers 1–3, the applicable rate based on an ETP Holder’s qualifying levels. The Exchange also does not currently charge a fee for Passive Liquidity Orders in Exchange-listed securities that remove liquidity from the Exchange.6 The Exchange hereby proposes to implement fees for Passive Liquidity Orders in Exchange-listed securities that remove liquidity, which would be the same as the applicable Tier, Step Up Tier or Basic Rate and would be based on an ETP Holder’s qualifying levels, as follows: • $0.0026 per share fee for Tape B Step Up Tier; • $0.0028 per share fee for Tiers 1–3 and Step Up Tiers 1 and 2; • $0.0030 per share fee for Basic Rates; and • For Investor Tiers 1–3, the applicable rate based on an ETP Holder’s qualifying levels. The Exchange also proposes to reflect in the Fee Schedule that, as is the case today, there is neither a fee nor a credit for Passive Liquidity Orders in Tape A and Tape C securities that provide liquidity, but that Passive Liquidity Orders that remove liquidity would be charged a fee of $0.0030 per share, unless the ETP Holder qualifies for the Tape A or Tape C Step Up rate of $0.0029 per share. Finally, for Lead Market Makers (‘‘LMMs’’),7 the Exchange proposes to implement a $0.0015 per share credit for Passive Liquidity Orders that provide liquidity in securities for which they are registered as the LMM. PO and PO+ Orders The Exchange proposes to amend the Fee Schedule to increase the Tier 1, Tier 2 and Basic Rate fee for PO and PO+ Orders in Tape A securities that are routed to the New York Stock Exchange (‘‘NYSE’’) that execute in the opening or closing auction, from $0.00085 to $0.00095 per share.8 Related to this proposed increase, the Exchange proposes to explicitly state that the Tier 3 fee for PO and PO+ Orders routed to the NYSE that execute in the opening or 6 The Exchange currently charges ETP Holders for Passive Liquidity Orders in non-Exchange-listed Tape B securities based on an ETP Holder’s qualifying levels. 7 The term ‘‘Lead Market Maker’’ means a registered Market Maker that is the exclusive Designated Market Maker in listings for which the Exchange is the primary market. See NYSE Arca Equities Rule 1.1(ccc). 8 See NYSE Arca Equities Rule 7.31(x). A PO+ Order is a PO Order entered for participation in the primary market, other than for participation in the primary market opening or primary market reopening. See also NYSE Arca Equities Rule 7.31(x)(3). E:\FR\FM\15JNN1.SGM 15JNN1 36028 Federal Register / Vol. 77, No. 116 / Friday, June 15, 2012 / Notices closing auction would be $0.00095 per share. The Exchange notes that the current rate is the $0.00085 fee applicable under the Basic Rate section of the Fee Schedule. The increase from $0.00085 to $0.00095 for the Tier 3 rate would be a substantive change consistent with the proposed increase in the Basic Rate, but charging a fee for these transactions for Tier 3 ETP Holders would not be a change. Cross-Asset Tier The Exchange also proposes to provide for a new Cross-Asset Tier credit of $0.0030 for orders that provide liquidity on the Exchange, which would apply to ETP Holders that (1) provide liquidity of 0.50% or more of the U.S. Consolidated Average Daily Volume (‘‘CADV’’) 9 per month, and (2) are affiliated with an NYSE Arca Options Trading Permit (‘‘OTP’’) Holder or OTP Firm that provides an Average Daily Volume (‘‘ADV’’) of electronic posted Customer executions in Penny Pilot issues on NYSE Arca Options of at least 110,000 contracts.10 Related to the introduction of the proposed Cross-Asset Tier credit of $0.0030, the Exchange proposes to specify in the Fee Schedule that Investor Tier 3 ETP Holders would become eligible to qualify for the Tape A, Tape B and Tape C Step Up Tiers. Currently, Investor Tier 1–3 ETP Holders are ineligible to qualify for the reduced fees provided under the Tape A, Tape B and Tape C Step Up Tiers. However, Investor Tier 3 ETP Holders are currently eligible for the same $0.0030 credit for their orders that provide liquidity on the Exchange as is proposed for the Cross-Asset Tier credit. Accordingly, this proposed change would align the fees that are applicable to ETP Holders that qualify for the Cross-Asset Tier and ETP Holders that qualify for Investor Tier 3.11 srobinson on DSK4SPTVN1PROD with NOTICES NYSE Amex Name Change NYSE Amex LLC (‘‘NYSE Amex’’) recently changed the name of its 9 U.S. CADV means United States Consolidated Average Daily Volume for transactions reported to the Consolidated Tape and excludes volume on days when the market closes early. 10 An affiliate of an ETP Holder would be a person or firm that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the ETP Holder. See NYSE Arca Rule 1.1(b). As provided under NYSE Arca Options Rule 6.72, options on certain issues have been approved to trade with a minimum price variation of $0.01 as part of a pilot program that is currently scheduled to expire on June 30, 2012. 11 As is the case today, Investor Tier 1 and Investor Tier 2 ETP Holders would remain ineligible to qualify for the Tape A, Tape B or Tape C Step Up Tiers. VerDate Mar<15>2010 17:05 Jun 14, 2012 Jkt 226001 equities market to NYSE MKT LLC.12 Accordingly, the Exchange proposes to update references in the Fee Schedule from ‘‘NYSE Amex’’ to ‘‘NYSE MKT.’’ 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’), in general, and furthers the objectives of Section 6(b)(4) of the Act, 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 rule change is reasonable, equitable and not unfairly discriminatory because the credits for Passive Liquidity Orders in Exchangelisted and other Tape B securities that provide liquidity to the Exchange are designed to incentivize ETP Holders to submit orders in such securities that provide liquidity on the Exchange and could therefore increase the quality of the Exchange’s market in these securities. The Exchange also believes that the proposed rule change is reasonable, equitable and not unfairly discriminatory because the fees and credits for Passive Liquidity Orders in Exchange-listed and other Tape B securities that provide liquidity on the Exchange would apply to all ETP Holders that choose to submit this order type. With respect to the LMM credit for Passive Liquidity Orders that provide liquidity, the Exchange believes that the change is reasonable, because it will provide the LMM with incentives to increase liquidity in a security. Moreover, the Exchange believes that the LMM credit is equitable and not unfairly discriminatory because LMMs have unique quoting obligations including maintaining continuous twosided quotes, NBBO requirements, minimum displayed size requirements, minimum quoted spread requirements and participation requirements for opening and closing auctions. The undisplayed Passive Liquidity Orders add liquidity to the Book and enhance the possibility of price improvement; however, their undisplayed status does not contribute to the BBO. To the contrary, the credit LMMs receive for displayed liquidity executions is much larger, which is consistent with the added transparency created through 12 See Securities Exchange Act Release No. 67037 (May 21, 2012), 77 FR 31415 (May 25, 2012) (SR– NYSEAmex–2012–32). PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 decreased quoted spreads and increased quoted sizes of the BBO. In addition, the credit is reasonable, equitable and not unfairly discriminatory because all similarly situated LMMs would be subject to the same proposed fee structure. Additionally, the Exchange believes that the proposed rule change is reasonable, equitable and not unfairly discriminatory because it would result in a clearer and more explicit description of the fees and credits that are applicable to Passive Liquidity Orders in Tape A, Tape C, and nonExchange-listed Tape B securities. The Exchange also believes that the proposed rule change is reasonable, equitable and not unfairly discriminatory because it would result in the removal of obsolete text from the Fee Schedule related to the name change from NYSE Amex to NYSE MKT. Also, the Exchange believes that the proposed rule change is reasonable, equitable and not unfairly discriminatory because it would result in an increase in the per share fee for PO and PO+ Orders routed to NYSE that execute in the opening or closing auction, thereby aligning the rate that the Exchange charges to ETP Holders with the rate that the Exchange is charged by NYSE. In this regard, the Exchange notes that a related fee on NYSE was recently increased for NYSE Market At-The-Close (‘‘MOC’’) Orders and Limit At-The-Close (‘‘LOC’’) Orders.13 Accordingly, the Exchange is proposing this increase so that the rate it charges to ETP Holders corresponds to the rate that the Exchange is charged by NYSE.14 Additionally, the Exchange believes that the proposed rule change is reasonable, equitable and not unfairly discriminatory because the proposed Cross-Asset Tier would directly relate to the activity of an ETP Holder and the activity of an affiliated OTP Holder or OTP Firm on NYSE Arca Options, thereby encouraging increased trading activity on both the NYSE Arca equity and option markets. In this regard, the proposal is designed to bring additional posted order flow to NYSE Arca Options, so as to provide additional opportunities for all OTP Holders and OTP Firms to trade on NYSE Arca Options. Furthermore, the Exchange 13 See Securities Exchange Act Release No. 66600 (March 14, 2012), 77 FR 16298 (March 20, 2012) (SR–NYSE–2012–07). 14 The Exchange notes that it does not differentiate between the rate it charges to ETP Holders for PO and PO+ Orders routed to NYSE that execute in the opening auction and those that execute in the closing auction. E:\FR\FM\15JNN1.SGM 15JNN1 Federal Register / Vol. 77, No. 116 / Friday, June 15, 2012 / Notices notes that, similar to the proposed Cross-Asset Tier, the NYSE Arca Options Fee Schedule includes a credit for OTP Holders and OTP Firms that is based on both equity and option volume. Similarly, the NASDAQ Stock Market LLC (‘‘NASDAQ’’) charges certain fees based on both equity and option volume.15 Additionally, specifying that Investor Tier 3 ETP Holders would become eligible to qualify for the Tape A, Tape B and Tape C Step Up Tiers would align the fees that are applicable to ETP Holders that qualify for the Cross-Asset Tier and ETP Holders that qualify for Investor Tier 3.16 Finally, 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 reflects this competitive environment. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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. srobinson on DSK4SPTVN1PROD with NOTICES 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) 17 of the Act and subparagraph (f)(2) of Rule 19b–4 18 thereunder, because it establishes a due, fee, or other charge imposed by the NYSE Arca. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may 15 See NASDAQ Rule 7018. See also Securities Exchange Act Release Nos. 59879 (May 6, 2009), 74 FR 22619 (May 13, 2009) (SR–NASDAQ–2009–041) and 65317 (September 12, 2011), 76 FR 57778 (September 16, 2011) (SR–NASDAQ–2011–127). 16 As noted above, and as is the case today, Investor Tier 1 and Investor Tier 2 ETP Holders would remain ineligible to qualify for the Tape A, Tape B or Tape C Step Up Tiers. 17 15 U.S.C. 78s(b)(3)(A). 18 17 CFR 240.19b–4(f)(2). VerDate Mar<15>2010 17:05 Jun 14, 2012 Jkt 226001 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. 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 rulecomments@sec.gov. Please include File Number SR–NYSEArca–2012–56 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca-2012–56. 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 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– PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 36029 NYSEArca–2012–56 and should be submitted on or before July 6, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–14622 Filed 6–14–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67176; File No. SR–FINRA– 2012–027] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update Rule CrossReferences and Make Non-Substantive Technical Changes to Certain FINRA and NASD Rules June 11, 2012. 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 June 5, 2012, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (f/k/a National Association of Securities Dealers, Inc. (‘‘NASD’’)) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act, 3 which renders the proposal effective upon receipt of this filing by the Commission. 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 FINRA is proposing to update crossreferences within certain FINRA rules to reflect changes adopted in the consolidated FINRA rulebook and to make non-substantive technical changes to certain FINRA and NASD Rules. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 1 15 E:\FR\FM\15JNN1.SGM 15JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 116 (Friday, June 15, 2012)]
[Notices]
[Pages 36027-36029]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14622]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67180; File No. SR-NYSEArca-2012-56]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Equities Schedule of Fees and Charges for Exchange Services

June 11, 2012.
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 May 31, 2012, 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''). 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
Statutory Basis for, the Proposed Rule Change

1. Purpose
The Exchange proposes to amend the Fee Schedule, as described
below, and implement the fee changes on June 1, 2012.
Passive Liquidity Orders
A Passive Liquidity Order is an order to buy or sell a stated
amount of a security at a specified, undisplayed price.\4\ Passive
Liquidity Orders are available for all Equity Trading Permit (``ETP'')
Holders.\5\
---------------------------------------------------------------------------

\4\ See NYSE Arca Equities Rule 7.31(h)(4).
\5\ See NYSE Arca Equities Rule 1.1(n).
---------------------------------------------------------------------------

The Exchange does not currently make credits available for Passive
Liquidity Orders in Exchange-listed and other Tape B securities that
provide liquidity on the Exchange. The Exchange hereby proposes to
implement credits for Passive Liquidity Orders in Exchange-listed and
other Tape B securities that provide liquidity, as follows:
$0.0015 per share for Tier 1 and Step Up Tier 1;
$0.0010 per share for Tier 2, Tier 3, Step Up Tier 2 and
Basic Rates; and
For Investor Tiers 1-3, the applicable rate based on an
ETP Holder's qualifying levels.
The Exchange also does not currently charge a fee for Passive
Liquidity Orders in Exchange-listed securities that remove liquidity
from the Exchange.\6\ The Exchange hereby proposes to implement fees
for Passive Liquidity Orders in Exchange-listed securities that remove
liquidity, which would be the same as the applicable Tier, Step Up Tier
or Basic Rate and would be based on an ETP Holder's qualifying levels,
as follows:
---------------------------------------------------------------------------

\6\ The Exchange currently charges ETP Holders for Passive
Liquidity Orders in non-Exchange-listed Tape B securities based on
an ETP Holder's qualifying levels.
---------------------------------------------------------------------------

$0.0026 per share fee for Tape B Step Up Tier;
$0.0028 per share fee for Tiers 1-3 and Step Up Tiers 1
and 2;
$0.0030 per share fee for Basic Rates; and
For Investor Tiers 1-3, the applicable rate based on an
ETP Holder's qualifying levels.
The Exchange also proposes to reflect in the Fee Schedule that, as
is the case today, there is neither a fee nor a credit for Passive
Liquidity Orders in Tape A and Tape C securities that provide
liquidity, but that Passive Liquidity Orders that remove liquidity
would be charged a fee of $0.0030 per share, unless the ETP Holder
qualifies for the Tape A or Tape C Step Up rate of $0.0029 per share.
Finally, for Lead Market Makers (``LMMs''),\7\ the Exchange
proposes to implement a $0.0015 per share credit for Passive Liquidity
Orders that provide liquidity in securities for which they are
registered as the LMM.
---------------------------------------------------------------------------

\7\ The term ``Lead Market Maker'' means a registered Market
Maker that is the exclusive Designated Market Maker in listings for
which the Exchange is the primary market. See NYSE Arca Equities
Rule 1.1(ccc).
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PO and PO+ Orders
The Exchange proposes to amend the Fee Schedule to increase the
Tier 1, Tier 2 and Basic Rate fee for PO and PO+ Orders in Tape A
securities that are routed to the New York Stock Exchange (``NYSE'')
that execute in the opening or closing auction, from $0.00085 to
$0.00095 per share.\8\ Related to this proposed increase, the Exchange
proposes to explicitly state that the Tier 3 fee for PO and PO+ Orders
routed to the NYSE that execute in the opening or

[[Page 36028]]

closing auction would be $0.00095 per share. The Exchange notes that
the current rate is the $0.00085 fee applicable under the Basic Rate
section of the Fee Schedule. The increase from $0.00085 to $0.00095 for
the Tier 3 rate would be a substantive change consistent with the
proposed increase in the Basic Rate, but charging a fee for these
transactions for Tier 3 ETP Holders would not be a change.
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\8\ See NYSE Arca Equities Rule 7.31(x). A PO+ Order is a PO
Order entered for participation in the primary market, other than
for participation in the primary market opening or primary market
re-opening. See also NYSE Arca Equities Rule 7.31(x)(3).
---------------------------------------------------------------------------

Cross-Asset Tier
The Exchange also proposes to provide for a new Cross-Asset Tier
credit of $0.0030 for orders that provide liquidity on the Exchange,
which would apply to ETP Holders that (1) provide liquidity of 0.50% or
more of the U.S. Consolidated Average Daily Volume (``CADV'') \9\ per
month, and (2) are affiliated with an NYSE Arca Options Trading Permit
(``OTP'') Holder or OTP Firm that provides an Average Daily Volume
(``ADV'') of electronic posted Customer executions in Penny Pilot
issues on NYSE Arca Options of at least 110,000 contracts.\10\
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\9\ U.S. CADV means United States Consolidated Average Daily
Volume for transactions reported to the Consolidated Tape and
excludes volume on days when the market closes early.
\10\ An affiliate of an ETP Holder would be a person or firm
that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the
ETP Holder. See NYSE Arca Rule 1.1(b). As provided under NYSE Arca
Options Rule 6.72, options on certain issues have been approved to
trade with a minimum price variation of $0.01 as part of a pilot
program that is currently scheduled to expire on June 30, 2012.
---------------------------------------------------------------------------

Related to the introduction of the proposed Cross-Asset Tier credit
of $0.0030, the Exchange proposes to specify in the Fee Schedule that
Investor Tier 3 ETP Holders would become eligible to qualify for the
Tape A, Tape B and Tape C Step Up Tiers. Currently, Investor Tier 1-3
ETP Holders are ineligible to qualify for the reduced fees provided
under the Tape A, Tape B and Tape C Step Up Tiers. However, Investor
Tier 3 ETP Holders are currently eligible for the same $0.0030 credit
for their orders that provide liquidity on the Exchange as is proposed
for the Cross-Asset Tier credit. Accordingly, this proposed change
would align the fees that are applicable to ETP Holders that qualify
for the Cross-Asset Tier and ETP Holders that qualify for Investor Tier
3.\11\
---------------------------------------------------------------------------

\11\ As is the case today, Investor Tier 1 and Investor Tier 2
ETP Holders would remain ineligible to qualify for the Tape A, Tape
B or Tape C Step Up Tiers.
---------------------------------------------------------------------------

NYSE Amex Name Change
NYSE Amex LLC (``NYSE Amex'') recently changed the name of its
equities market to NYSE MKT LLC.\12\ Accordingly, the Exchange proposes
to update references in the Fee Schedule from ``NYSE Amex'' to ``NYSE
MKT.''
---------------------------------------------------------------------------

\12\ See Securities Exchange Act Release No. 67037 (May 21,
2012), 77 FR 31415 (May 25, 2012) (SR-NYSEAmex-2012-32).
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),
in general, and furthers the objectives of Section 6(b)(4) of the Act,
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 rule change is reasonable,
equitable and not unfairly discriminatory because the credits for
Passive Liquidity Orders in Exchange-listed and other Tape B securities
that provide liquidity to the Exchange are designed to incentivize ETP
Holders to submit orders in such securities that provide liquidity on
the Exchange and could therefore increase the quality of the Exchange's
market in these securities. The Exchange also believes that the
proposed rule change is reasonable, equitable and not unfairly
discriminatory because the fees and credits for Passive Liquidity
Orders in Exchange-listed and other Tape B securities that provide
liquidity on the Exchange would apply to all ETP Holders that choose to
submit this order type.
With respect to the LMM credit for Passive Liquidity Orders that
provide liquidity, the Exchange believes that the change is reasonable,
because it will provide the LMM with incentives to increase liquidity
in a security. Moreover, the Exchange believes that the LMM credit is
equitable and not unfairly discriminatory because LMMs have unique
quoting obligations including maintaining continuous two-sided quotes,
NBBO requirements, minimum displayed size requirements, minimum quoted
spread requirements and participation requirements for opening and
closing auctions. The undisplayed Passive Liquidity Orders add
liquidity to the Book and enhance the possibility of price improvement;
however, their undisplayed status does not contribute to the BBO. To
the contrary, the credit LMMs receive for displayed liquidity
executions is much larger, which is consistent with the added
transparency created through decreased quoted spreads and increased
quoted sizes of the BBO. In addition, the credit is reasonable,
equitable and not unfairly discriminatory because all similarly
situated LMMs would be subject to the same proposed fee structure.
Additionally, the Exchange believes that the proposed rule change
is reasonable, equitable and not unfairly discriminatory because it
would result in a clearer and more explicit description of the fees and
credits that are applicable to Passive Liquidity Orders in Tape A, Tape
C, and non-Exchange-listed Tape B securities. The Exchange also
believes that the proposed rule change is reasonable, equitable and not
unfairly discriminatory because it would result in the removal of
obsolete text from the Fee Schedule related to the name change from
NYSE Amex to NYSE MKT.
Also, the Exchange believes that the proposed rule change is
reasonable, equitable and not unfairly discriminatory because it would
result in an increase in the per share fee for PO and PO+ Orders routed
to NYSE that execute in the opening or closing auction, thereby
aligning the rate that the Exchange charges to ETP Holders with the
rate that the Exchange is charged by NYSE. In this regard, the Exchange
notes that a related fee on NYSE was recently increased for NYSE Market
At-The-Close (``MOC'') Orders and Limit At-The-Close (``LOC'')
Orders.\13\ Accordingly, the Exchange is proposing this increase so
that the rate it charges to ETP Holders corresponds to the rate that
the Exchange is charged by NYSE.\14\
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\13\ See Securities Exchange Act Release No. 66600 (March 14,
2012), 77 FR 16298 (March 20, 2012) (SR-NYSE-2012-07).
\14\ The Exchange notes that it does not differentiate between
the rate it charges to ETP Holders for PO and PO+ Orders routed to
NYSE that execute in the opening auction and those that execute in
the closing auction.
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Additionally, the Exchange believes that the proposed rule change
is reasonable, equitable and not unfairly discriminatory because the
proposed Cross-Asset Tier would directly relate to the activity of an
ETP Holder and the activity of an affiliated OTP Holder or OTP Firm on
NYSE Arca Options, thereby encouraging increased trading activity on
both the NYSE Arca equity and option markets. In this regard, the
proposal is designed to bring additional posted order flow to NYSE Arca
Options, so as to provide additional opportunities for all OTP Holders
and OTP Firms to trade on NYSE Arca Options. Furthermore, the Exchange

[[Page 36029]]

notes that, similar to the proposed Cross-Asset Tier, the NYSE Arca
Options Fee Schedule includes a credit for OTP Holders and OTP Firms
that is based on both equity and option volume. Similarly, the NASDAQ
Stock Market LLC (``NASDAQ'') charges certain fees based on both equity
and option volume.\15\ Additionally, specifying that Investor Tier 3
ETP Holders would become eligible to qualify for the Tape A, Tape B and
Tape C Step Up Tiers would align the fees that are applicable to ETP
Holders that qualify for the Cross-Asset Tier and ETP Holders that
qualify for Investor Tier 3.\16\
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\15\ See NASDAQ Rule 7018. See also Securities Exchange Act
Release Nos. 59879 (May 6, 2009), 74 FR 22619 (May 13, 2009) (SR-
NASDAQ-2009-041) and 65317 (September 12, 2011), 76 FR 57778
(September 16, 2011) (SR-NASDAQ-2011-127).
\16\ As noted above, and as is the case today, Investor Tier 1
and Investor Tier 2 ETP Holders would remain ineligible to qualify
for the Tape A, Tape B or Tape C Step Up Tiers.
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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. 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 reflects this
competitive environment.

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

The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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) \17\ of the Act and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because it establishes a due, fee, or other
charge imposed by the NYSE Arca.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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.

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-2012-56 on the subject line.

Paper Comments

Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2012-56. 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 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-NYSEArca-2012-56 and should
be submitted on or before July 6, 2012.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14622 Filed 6-14-12; 8:45 am]
BILLING CODE 8011-01-P

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