Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List To Adopt a Fee Waiver and a Fee Cap Related to the Liquidity Provider Incentive Program on the NYSE BondsSM, 41636-41638 [2016-15072]
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41636
Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices
mstockstill on DSK3G9T082PROD with NOTICES
in the ACE Program) through increased
opportunities to trade at potentially
improved prices as well as enhancing
price discovery. Furthermore, the
Exchange notes that the ACE Initiating
Participant Rebate is equitable and not
unfairly discriminatory because it
would continue to incent ATP Holders
to transact Customer orders on the
Exchange and an increase in Customer
order flow would bring greater volume
and liquidity to the Exchange. Increased
volume to the Exchange benefits all
market participants by providing more
trading opportunities and tighter
spreads, even to those market
participants that do not participate in
the ACE Program.
Finally, the Exchange believes the
proposed changes are consistent with
the Act because to the extent the
modifications permit the Exchange to
continue to attract greater volume and
liquidity, the proposed change would
improve the Exchange’s overall
competitiveness and strengthen its
market quality for all market
participants.
For these reasons, the Exchange
believes that the proposal is consistent
with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,10 the Exchange does not believe
that the proposed rule change would
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange believes the proposed
amendments to the ACE Program are
pro-competitive as the proposed
increased rebates may encourage OFPs
to direct Customer order flow to the
Exchange and any resulting increase in
volume and liquidity to the Exchange
would benefit all Exchange participants
through increased opportunities to trade
as well as enhancing price discovery.
Further, the Exchange believes the
proposed amendments to CUBE Auction
pricing are pro-competitive as the fees
and credits are designed to incent
increases in the number of CUBE
Auctions brought to the Exchange,
which would benefit all Exchange
participants through increased
opportunities to trade as well as
enhancing price discovery.
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
10 15
U.S.C. 78f(b)(8).
VerDate Sep<11>2014
18:52 Jun 24, 2016
Jkt 238001
competitive with other exchanges. For
the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 11 of the Act and
subparagraph (f)(2) of Rule 19b–4 12
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) 13 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEMKT–2016–60 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–NYSEMKT–2016–60. 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 such
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–
NYSEMKT–2016–60, and should be
submitted on or before July 18, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Brent J. Fields,
Secretary.
[FR Doc. 2016–15066 Filed 6–24–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–78108; File No. SR–NYSE–
2016–42]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Its
Price List To Adopt a Fee Waiver and
a Fee Cap Related to the Liquidity
Provider Incentive Program on the
NYSE BondsSM System
June 21, 2016.
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 June 7,
14 17
11 15
U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(2).
13 15 U.S.C. 78s(b)(2)(B).
PO 00000
Frm 00129
Fmt 4703
Sfmt 4703
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\27JNN1.SGM
27JNN1
Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices
2016, 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
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 to adopt a fee waiver and a fee
cap related to the Liquidity Provider
Incentive Program on the NYSE
BondsSM system. 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.
mstockstill on DSK3G9T082PROD 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 adopt a fee waiver and a fee
cap related to the Liquidity Provider
Incentive Program on the NYSE Bonds
system recently implemented by the
Exchange.4 Pursuant to the Liquidity
Provider Incentive Program, a voluntary
rebate program, the Exchange pays
Users 5 of NYSE Bonds a monthly rebate
provided Users who opt into the rebate
program meet specified quoting
requirements. Under the program, the
rebate payable is based on the number
4 See Securities Exchange Act Release Nos. 77591
(April 12, 2016), 81 FR 22656 (April 18, 2016) (SR–
NYSE–2016–26); and 77812 (May 11, 2016), 81 FR
30594 (May 17, 2016) (Sr-NYSE–2016–34).
5 Rule 86(b)(2)(M) [sic] defines a User as any
Member or Member Organization, Sponsored
Participant, or Authorized Trader that is authorized
to access NYSE Bonds.
VerDate Sep<11>2014
18:52 Jun 24, 2016
Jkt 238001
of CUSIPs 6 a User quotes. The rebate
amount is tiered based on the number
of CUSIPs quoted by a User, as follows:
41637
further incentivize Users to provide
liquidity on the NYSE Bonds system,
the Exchange proposes to adopt a fee
waiver and a fee cap. As proposed, the
fee waiver would apply to Users that
LIQUIDITY PROVIDER INCENTIVE
provide liquidity in 800 or more
PROGRAM
qualifying CUSIPs quoted on the NYSE
Number of CUSIPs
Monthly rebate Bonds Book. Additionally, the Exchange
proposes to adopt a fee cap of $5,000
400–599 ................................
$10,000 per month that would apply to all Users
600–799 ................................
20,000 that do not attain the fee waiver, i.e.,
800 or more ..........................
30,000
Users that provide liquidity in the 400–
599 qualifying CUSIP tier and in the
To qualify for a rebate, a User is
600–799 qualifying CUSIP tier. The
required to provide continuous twoExchange is not proposing any change
sided quotes for at least eighty percent
to the level of fees or rebates applicable
(80%) of the time during the Core Bond
to the Liquidity Provider Incentive
Trading Session for an entire calendar
Program. The proposed rule change is
month.7 The Exchange calculates each
intended to provide Users with a greater
participating User’s quoting
performance beginning each month on a incentive to provide liquidity on the
NYSE Bonds system.
daily basis, up to and including the last
trading day of a calendar month, to
2. Statutory Basis
determine at the end of each month
The Exchange believes that the
each User’s monthly average. Under the proposed rule change is consistent with
program, Users must provide a twoSection 6(b) of the Act,9 in general, and
sided quote for a minimum of hundred
furthers the objectives of Sections
(100) bonds per side of the market with
6(b)(4) and 6(b)(5) of the Act,10 in
an average spread of half-point ($0.50)
particular, because it provides for the
or less in CUSIPs whose average
equitable allocation of reasonable dues,
maturity is at least five (5) years as of
fees, and other charges among its
the date the User provides a quote. In
members, issuers and other persons
order for a CUSIP to qualify for
using its facilities and does not unfairly
inclusion in the rebate calculation, a
discriminate between customers,
User must provide continuous twoissuers, brokers or dealers.
sided quotes in a CUSIP, whether it’s for
The Exchange believes that the
eighty percent (80%) or fifty percent
proposed changes to the Liquidity
(50%) of the time, as applicable, for a
Provider Incentive Program are
minimum of hundred (100) bonds per
reasonable and equitable as they are
side of the market that has an average
intended to further incentivize Users to
spread of half-point ($0.50) or less and
provide liquidity to the NYSE Bonds
whose average maturity is at least five
system. The proposed fee waiver for
(5) years as of the date the User provides Users that provide liquidity in 800 or
the quote.
more qualifying CUSIPs and the
Users that opt in to the Liquidity
proposed fee cap for Users that provide
Provider Incentive Program are subject
liquidity in the 400–599 qualifying
to a transaction fee for orders that
CUSIP tier and in the 600–799
provide liquidity to the NYSE Bonds
qualifying CUSIP tier, are both
Book of $0.50 per bond.8 In order to
reasonable amendments to the
Exchange’s fee schedule and do not
6 CUSIP stands for Committee on Uniform
unfairly discriminate between
Securities Identification Procedures. A CUSIP
number identifies most financial instruments,
customers, issuers, and brokers or
including: stocks of all registered U.S. and
dealers because all member
Canadian companies, commercial paper, and U.S.
organizations that opt in to the Liquidity
government and municipal bonds. The CUSIP
Provider Incentive Program would
system—owned by the American Bankers
Association and managed by Standard & Poor’s—
benefit from the proposed fee changes.
facilitates the clearance and settlement process of
The Exchange believes that the
securities. See https://www.sec.gov/answers/
proposed fee changes are also
cusip.htm.
reasonable because they are designed to
7 For the first calendar month after a User opts in,
the User is required to provide continuous twoprovide an incentive for member
sided quotes for fifty percent (50%) of the time
organizations to increase displayed
during the Core Bond Trading Session.
liquidity at the Exchange, thereby
8 For orders that take liquidity from the NYSE
Bonds Book, the current tiered fees apply, i.e., $0.50 increasing traded volume.
The Exchange is proposing to adopt a
per bond for executions of one to 10 bonds, $0.20
per bond for executions of 11 to 25 bonds and $0.10 pricing model whereby Users providing
per bond for executions of 26 bonds or more, with
liquidity in a minimum number of
a maximum fee of $100 per execution. Users that
do not opt in to the Liquidity Provider Incentive
Program are subject to the Exchange’s standard fees
and rebates, as currently provided on the Price List.
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4), (5).
10 15
E:\FR\FM\27JNN1.SGM
27JNN1
41638
Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices
mstockstill on DSK3G9T082PROD with NOTICES
qualifying CUSIPs to the NYSE Bonds
system would not pay a fee, and Users
that do not qualify for the fee waiver
would benefit by the proposed fee cap.
The proposed rule change will therefore
benefit all Users that provide liquidity
to the NYSE Bonds system.
The Exchange further believes that the
proposed rule change is equitable and
not unfairly discriminatory in that it
will apply uniformly to all Users
accessing the NYSE Bonds system. Each
User will have the ability to determine
the extent to which the Exchange’s
proposed structure will provide it with
an economic incentive to use the NYSE
Bonds system, and model its business
accordingly.
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. Debt
securities typically trade in a
decentralized OTC dealer market that is
less liquid and transparent than the
equities markets. The Exchange believes
that the proposed change would
increase competition with these OTC
venues by creating additional incentives
to engage in bonds transactions on the
Exchange and rewarding market
participants for actively quoting and
providing liquidity in the only
transparent bond market, which the
Exchange believes will enhance market
quality.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues that are not
transparent. In such an environment,
the Exchange must continually review,
and consider adjusting its fees and
rebates to remain competitive with other
exchanges as well as with alternative
trading systems and other venues that
are not required to comply 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 change 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
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:
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 such
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–
2016–42, and should be submitted on or
before July 18, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–15072 Filed 6–24–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–78111; File No. SR–
BatsBZX–2016–24]
• 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–2016–42 on the subject line.
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Related to Fees
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–2016–42. 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
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 8,
2016, Bats BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) 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 Exchange has
designated the proposed rule change as
U.S.C. 78f(b)(8).
VerDate Sep<11>2014
18:52 Jun 24, 2016
Jkt 238001
12 15
15 17
13 17
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
14 15 U.S.C. 78s(b)(2)(B).
June 21, 2016.
1 15
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
E:\FR\FM\27JNN1.SGM
27JNN1
]]>Agencies
[Federal Register Volume 81, Number 123 (Monday, June 27, 2016)]
[Notices]
[Pages 41636-41638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15072]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-78108; File No. SR-NYSE-2016-42]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List To Adopt a Fee Waiver and a Fee Cap Related to the
Liquidity Provider Incentive Program on the NYSE Bonds\SM\ System
June 21, 2016.
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 June 7,
[[Page 41637]]
2016, 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 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 its Price List to adopt a fee waiver
and a fee cap related to the Liquidity Provider Incentive Program on
the NYSE Bonds\SM\ system. 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 adopt a fee waiver
and a fee cap related to the Liquidity Provider Incentive Program on
the NYSE Bonds system recently implemented by the Exchange.\4\ Pursuant
to the Liquidity Provider Incentive Program, a voluntary rebate
program, the Exchange pays Users \5\ of NYSE Bonds a monthly rebate
provided Users who opt into the rebate program meet specified quoting
requirements. Under the program, the rebate payable is based on the
number of CUSIPs \6\ a User quotes. The rebate amount is tiered based
on the number of CUSIPs quoted by a User, as follows:
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release Nos. 77591 (April 12,
2016), 81 FR 22656 (April 18, 2016) (SR-NYSE-2016-26); and 77812
(May 11, 2016), 81 FR 30594 (May 17, 2016) (Sr-NYSE-2016-34).
\5\ Rule 86(b)(2)(M) [sic] defines a User as any Member or
Member Organization, Sponsored Participant, or Authorized Trader
that is authorized to access NYSE Bonds.
\6\ CUSIP stands for Committee on Uniform Securities
Identification Procedures. A CUSIP number identifies most financial
instruments, including: stocks of all registered U.S. and Canadian
companies, commercial paper, and U.S. government and municipal
bonds. The CUSIP system--owned by the American Bankers Association
and managed by Standard & Poor's--facilitates the clearance and
settlement process of securities. See https://www.sec.gov/answers/cusip.htm.
Liquidity Provider Incentive Program
------------------------------------------------------------------------
Number of CUSIPs Monthly rebate
------------------------------------------------------------------------
400-599................................................. $10,000
600-799................................................. 20,000
800 or more............................................. 30,000
------------------------------------------------------------------------
To qualify for a rebate, a User is required to provide continuous
two-sided quotes for at least eighty percent (80%) of the time during
the Core Bond Trading Session for an entire calendar month.\7\ The
Exchange calculates each participating User's quoting performance
beginning each month on a daily basis, up to and including the last
trading day of a calendar month, to determine at the end of each month
each User's monthly average. Under the program, Users must provide a
two-sided quote for a minimum of hundred (100) bonds per side of the
market with an average spread of half-point ($0.50) or less in CUSIPs
whose average maturity is at least five (5) years as of the date the
User provides a quote. In order for a CUSIP to qualify for inclusion in
the rebate calculation, a User must provide continuous two-sided quotes
in a CUSIP, whether it's for eighty percent (80%) or fifty percent
(50%) of the time, as applicable, for a minimum of hundred (100) bonds
per side of the market that has an average spread of half-point ($0.50)
or less and whose average maturity is at least five (5) years as of the
date the User provides the quote.
---------------------------------------------------------------------------
\7\ For the first calendar month after a User opts in, the User
is required to provide continuous two-sided quotes for fifty percent
(50%) of the time during the Core Bond Trading Session.
---------------------------------------------------------------------------
Users that opt in to the Liquidity Provider Incentive Program are
subject to a transaction fee for orders that provide liquidity to the
NYSE Bonds Book of $0.50 per bond.\8\ In order to further incentivize
Users to provide liquidity on the NYSE Bonds system, the Exchange
proposes to adopt a fee waiver and a fee cap. As proposed, the fee
waiver would apply to Users that provide liquidity in 800 or more
qualifying CUSIPs quoted on the NYSE Bonds Book. Additionally, the
Exchange proposes to adopt a fee cap of $5,000 per month that would
apply to all Users that do not attain the fee waiver, i.e., Users that
provide liquidity in the 400-599 qualifying CUSIP tier and in the 600-
799 qualifying CUSIP tier. The Exchange is not proposing any change to
the level of fees or rebates applicable to the Liquidity Provider
Incentive Program. The proposed rule change is intended to provide
Users with a greater incentive to provide liquidity on the NYSE Bonds
system.
---------------------------------------------------------------------------
\8\ For orders that take liquidity from the NYSE Bonds Book, the
current tiered fees apply, i.e., $0.50 per bond for executions of
one to 10 bonds, $0.20 per bond for executions of 11 to 25 bonds and
$0.10 per bond for executions of 26 bonds or more, with a maximum
fee of $100 per execution. Users that do not opt in to the Liquidity
Provider Incentive Program are subject to the Exchange's standard
fees and rebates, as currently provided on the Price List.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\10\ in
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4), (5).
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The Exchange believes that the proposed changes to the Liquidity
Provider Incentive Program are reasonable and equitable as they are
intended to further incentivize Users to provide liquidity to the NYSE
Bonds system. The proposed fee waiver for Users that provide liquidity
in 800 or more qualifying CUSIPs and the proposed fee cap for Users
that provide liquidity in the 400-599 qualifying CUSIP tier and in the
600-799 qualifying CUSIP tier, are both reasonable amendments to the
Exchange's fee schedule and do not unfairly discriminate between
customers, issuers, and brokers or dealers because all member
organizations that opt in to the Liquidity Provider Incentive Program
would benefit from the proposed fee changes. The Exchange believes that
the proposed fee changes are also reasonable because they are designed
to provide an incentive for member organizations to increase displayed
liquidity at the Exchange, thereby increasing traded volume.
The Exchange is proposing to adopt a pricing model whereby Users
providing liquidity in a minimum number of
[[Page 41638]]
qualifying CUSIPs to the NYSE Bonds system would not pay a fee, and
Users that do not qualify for the fee waiver would benefit by the
proposed fee cap. The proposed rule change will therefore benefit all
Users that provide liquidity to the NYSE Bonds system.
The Exchange further believes that the proposed rule change is
equitable and not unfairly discriminatory in that it will apply
uniformly to all Users accessing the NYSE Bonds system. Each User will
have the ability to determine the extent to which the Exchange's
proposed structure will provide it with an economic incentive to use
the NYSE Bonds system, and model its business accordingly.
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. Debt securities typically trade in a decentralized
OTC dealer market that is less liquid and transparent than the equities
markets. The Exchange believes that the proposed change would increase
competition with these OTC venues by creating additional incentives to
engage in bonds transactions on the Exchange and rewarding market
participants for actively quoting and providing liquidity in the only
transparent bond market, which the Exchange believes will enhance
market quality.
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\11\ 15 U.S.C. 78f(b)(8).
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The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues that
are not transparent. In such an environment, the Exchange must
continually review, and consider adjusting its fees and rebates to
remain competitive with other exchanges as well as with alternative
trading systems and other venues that are not required to comply 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 change 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2016-42 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-2016-42. 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 such 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-2016-42, and should be
submitted on or before July 18, 2016.
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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-15072 Filed 6-24-16; 8:45 am]
BILLING CODE 8011-01-P
