Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Implementing Certain Changes to the Credits Within the New York Stock Exchange Price List That Are Applicable to Supplemental Liquidity Providers, 47471-47472 [2012-19364]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 153 (Wednesday, August 8, 2012)]
[Notices]
[Pages 47471-47472]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19364]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67585; File No. SR-NYSE-2012-33]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Implementing Certain Changes to the Credits Within the New York Stock 
Exchange Price List That Are Applicable to Supplemental Liquidity 
Providers

 August 2, 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 July 25, 2012, New York Stock Exchange LLC (the ``Exchange'' 
or ``NYSE'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 certain changes to the credits within its 
Price List that are applicable to Supplemental Liquidity Providers 
(``SLPs''), which the Exchange proposes to become operative on August 
1, 2012. 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 is proposing certain changes to the credits within its 
Price List that are applicable to SLPs, which the Exchange proposes to 
become operative on August 1, 2012.
    SLPs are eligible for credits when adding liquidity to the NYSE.\3\ 
The amount of the credit is currently determined by the ``tier'' that 
the SLP qualifies for, which is based on the SLP's level of quoting and 
the average daily volume (``ADV'') \4\ of liquidity added by the SLP in 
assigned securities.
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    \3\ SLP credits are not applicable to executions of securities 
with a per share price of $1.00 or more at the close.
    \4\ For purposes of SLP liquidity credits, ADV calculations 
exclude early closing days.
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    The Exchange proposes to amend the Price List, such that only the 
following three credit rates would apply to SLPs: \5\
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    \5\ SLP execution of securities with a per share price of $1.00 
or more at the close would continue to be free.
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    1. [sic] The current standard credit of $0.0015 per share (or 
$0.0010 per share if a Non-Displayed Reserve Order) would apply when 
adding liquidity to the Exchange in securities with a per share price 
of $1.00 or more, if the SLP does not qualify for the higher credit set 
forth in paragraph 2, below.
    2. [sic] The current credit of $0.0020 per share (or $0.0015 per 
share if a Non-Displayed Reserve Order) would be increased to $0.0021 
per share (or $0.0016 per share if a Non-Displayed Reserve Order) and 
would apply when adding liquidity to the Exchange in securities with a 
per share price of $1.00 or more if the SLP (i) meets the 10% average 
or more quoting requirement in the assigned security pursuant to Rule 
107B \6\ and (ii) adds liquidity of an ADV of more than 10 million 
shares for all assigned SLP securities in the aggregate.\7\ The current 
requirement related to adding liquidity of a certain percentage of 
consolidated ADV (``CADV'') for an assigned security in the applicable 
month would no longer be applicable.
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    \6\ Quotes of an SLP that is a proprietary trading unit of a 
member organization (``SLP-Prop'') and an SLP registered as a market 
maker at the Exchange (``SLMM'') of the same member organization are 
not aggregated for purposes of this calculation.
    \7\ This calculation includes shares of both an SLP-Prop and an 
SLMM of the same member organization.
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    3. [sic] The current credit of $0.005 per share when adding 
liquidity to the Exchange in securities with a per share price of less 
than $1.00 if the SLP (i) meets the 10% average or more quoting 
requirement in an assigned security pursuant to Rule 107B \8\ and (ii) 
adds liquidity of an ADV of more than 10 million shares for all 
assigned SLP securities in the aggregate.\9\
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    \8\ See supra note 3.
    \9\ See supra note 4.
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    The result of this proposed change is that the current credit tiers 
of $0.0021 per share (or $0.0016 per share if a Non-Displayed Reserve 
Order) and $0.0024 per share (or $0.0019 per share if a Non-Displayed 
Reserve Order) will be removed from the Price List, as will the 
corresponding threshold requirements that are currently applicable to 
these credits.
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''),\10\ in general, and furthers the objectives of Section 
6(b)(4) of the Act,\11\ in particular, because it provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and issuers and other persons using its facilities and does 
not unfairly discriminate between customers, issuers, brokers or 
dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed rule change is reasonable, 
equitable and not unfairly discriminatory because it would encourage 
SLPs to send additional orders to the Exchange for execution in order 
to qualify for an incrementally higher credit for such executions that 
add liquidity on the Exchange. In this regard, the Exchange believes 
that this may incentivize SLPs to increase the orders sent directly to 
the Exchange and therefore provide liquidity that supports the quality 
of price discovery and promotes market transparency.

[[Page 47472]]

    The Exchange also believes that the proposed rule change is 
reasonable, equitable and not unfairly discriminatory because it would 
streamline the Price List with respect to determining the particular 
credit applicable to an SLP. Specifically, the Exchange believes that 
eliminating the requirement that an SLP add liquidity of a certain 
percentage of CADV for an assigned security in the applicable month, as 
well as the additional tiers that currently correspond to such 
percentages, would simplify the method by which SLPs are provided with 
credits for adding liquidity.
    The Exchange believes that the rate of $0.0021 per share (or 
$0.0016 per share if a Non-Displayed Reserve Order) is reasonable 
because it is consistent with a rate that is currently available to 
SLPs. The Exchange also believes that the proposed rate is reasonable 
because it is directly related to an SLP's activity during the month in 
assigned securities (i.e., the applicable 10% and 10 million share 
thresholds). In this regard, the proposed change is intended to 
incentivize SLPs to provide liquidity on the Exchange in order to 
satisfy the applicable percentage and volume thresholds and would 
result in a credit that is reasonably related to an exchange's market 
quality that is associated with higher volumes.
    The Exchange believes that the proposed rule change is equitable 
and not unfairly discriminatory because it will apply to all SLPs on an 
equal and non-discriminatory basis. All similarly situated members on 
the Exchange are subject to the same fee structure, and access to the 
Exchange is offered on terms that are not unfairly discriminatory. In 
this regard, the Exchange notes that the standard credit is available 
to all SLPs. Likewise, all SLPs are eligible to qualify for the 
increased credit, which, as discussed above, is based on whether an SLP 
satisfies the applicable percentage and volume thresholds.
    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) \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 NYSE.
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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.

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-NYSE-2012-33 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-NYSE-2012-33. 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-NYSE-2012-33 and should be 
submitted on or before August 29, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19364 Filed 8-7-12; 8:45 am]
BILLING CODE 8011-01-P