Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List, 1395-1396 [2016-31945]

Download as PDF Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79710; File No. SR–NYSE– 2016–89] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List December 29, 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 December 16, 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, effective January 3, 2017, to (i) waive new firm application fees for applicants seeking only to obtain a bond trading license (‘‘BTL’’) for 2017; and (ii) waive the BTL fee for 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. mstockstill on DSK3G9T082PROD 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 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. 1 15 U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Sep<11>2014 21:06 Jan 04, 2017 Jkt 241001 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, effective January 3, 2017, to (i) waive new firm application fees for applicants seeking only to obtain a BTL for 2017; and (iii) waive the BTL fee for 2017. The Exchange proposes to implement the fee changes effective January 3, 2017. The Exchange proposes to waive the New Firm Fee for 2017 for new member organization applicants that are seeking only to obtain a BTL and not trade equities at the Exchange. The Exchange currently charges a New Firm Fee ranging from $2,500 to $20,000, depending on the type of firm, that is charged per application for any brokerdealer that applies to be approved as an Exchange member organization. The proposed waiver of the New Firm Fee would be available only to applicants seeking approval as a new member organization, including carrying firms, introducing firms, or non-public organizations, that would be seeking to obtain a BTL at the Exchange and not trade equities. Further, if a new firm that is approved as a member organization and has had the New Firm Fee waived converts a BTL to a full trading license within one year of approval, the New Firm Fee would be charged retroactively. The Exchange believes that charging the New Firm Fee retroactively within a year of approval is appropriate because it would discourage applicants to claim that they are applying for a BTL solely to avoid New Firm Fees. Additionally, the Exchange currently charges a BTL fee of $1,000 per year. The Exchange proposes to amend the Price List to waive the BTL fee for 2017. The Exchange believes that the proposed fee changes would provide increased incentives for bond trading firms that are not currently Exchange member organizations to apply for Exchange membership and a BTL. The Exchange believes that having more member organizations trading on the Exchange’s bond platform would benefit investors through the additional display of liquidity and increased execution opportunities in Exchange-traded bonds at the Exchange. The proposed change is not otherwise intended to address any other issues, and the Exchange is not aware of any problems that members and member organizations would have in complying with the proposed change. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 1395 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,5 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 it is reasonable to waive the New Firm Fee and the annual BTL fee for 2017 to provide an incentive for bond trading firms to apply for Exchange membership and a BTL. The Exchange believes that providing an incentive for bond trading firms that are not currently Exchange member organizations to apply for membership and a BTL would encourage market participants to become members of the Exchange and bring additional liquidity to the only transparent bond market. To the extent the existing New Firm Fees or the BTL fee serves as a disincentive for bond trading firms to become Exchange member organizations, the Exchange believes that the proposed fee change could expand the number of firms eligible to trade bonds on the Exchange. The Exchange believes creating incentives for bond trading firms to trade bonds on the Exchange protects investors and the public interest by increasing the competition and liquidity on the only transparent market for bond trading. The proposed waiver of the New Firm Fee and BTL fee is equitable and not unfairly discriminatory because it would be offered to all market participants that wish to trade at the Exchange the narrower class of debt securities only. Finally, recognizing the statements of Commissioners who have expressed concern about the state of the U.S. corporate and municipal bond markets as well as recommendations outlined in the Commission’s release of its Report on the Municipal Securities Market (Report), the Exchange believes that expanding the number of member organizations eligible to trade bonds at the Exchange would be an important element in the democratization of the fixed income market.6 As highlighted in 4 15 U.S.C. 78f(b). U.S.C. 78f(b)(4), (5). 6 See SEC Report on the Municipal Securities Market, July 2012. https://www.sec.gov/news/ studies/2012/munireport073112.pdf; ‘‘SEC’s Gallagher Says Retail Bond Investors Fighting ‘Headwinds’ ’’, Jesse Hamilton, Bloomberg News. Sep 20, 2012. See https://www.bloomberg.com/news/ 5 15 E:\FR\FM\05JAN1.SGM Continued 05JAN1 1396 Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices mstockstill on DSK3G9T082PROD with NOTICES SEC Chair White’s statement during the SEC’s 2013 Roundtable on Fixed Income Markets, the Report makes recommendations that include (1) improving pre- and post-trade transparency; (2) promoting the use of transparent and open trading venues, and (3) requiring dealers to seek ‘‘best execution’’ for customers and to provide customers with relevant pricing information in connection with their transactions.7 Achieving these recommendations and applying them to both the municipal and corporate bond markets would, in the Exchange’s view, assist in lowering the systemic risk that is anticipated to increase as interest rates rise and the closed network of bond trading comes under pressure as retirement and pension managers seek to adjust their positions. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,8 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 over-the-counter (‘‘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 reducing the cost of being approved as and operating as an Exchange member organization that solely trades bonds at the Exchange, which the Exchange believes will enhance market quality through the additional display of liquidity and increased execution opportunities in Exchange-traded bonds at the Exchange. 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 2012-09-19/sec-s-gallagher-says-retail-bondinvestors-fighting-headwinds-.html. 7 See Opening remarks of Chairman Mary Jo White at SEC Roundtable on Fixed Income Markets. https://www.sec.gov/News/Speech/Detail/Speech/ 1365171515300. 8 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 21:06 Jan 04, 2017 Jkt 241001 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) 9 of the Act and subparagraph (f)(2) of Rule 19b–4 10 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) 11 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– NYSE–2016–89 on the subject line. 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 11 15 U.S.C. 78s(b)(2)(B). 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–2016–89. 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–2016–89, and should be submitted on or before January 26, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2016–31945 Filed 1–4–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting; Additional Item FEDERAL REGISTER CITATION OF PREVIOUS ANNOUNCEMENT: To Be Published. PREVIOUSLY ANNOUNCED TIME AND DATE OF THE MEETING: Friday, January 6, 2017. The following matters will also be considered during the 2:30 p.m. Closed Meeting scheduled CHANGES IN THE MEETING: 10 17 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 12 17 E:\FR\FM\05JAN1.SGM CFR 200.30–3(a)(12). 05JAN1

Agencies

[Federal Register Volume 82, Number 3 (Thursday, January 5, 2017)]
[Notices]
[Pages 1395-1396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31945]



[[Page 1395]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79710; File No. SR-NYSE-2016-89]


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

December 29, 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 December 16, 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, effective January 3, 
2017, to (i) waive new firm application fees for applicants seeking 
only to obtain a bond trading license (``BTL'') for 2017; and (ii) 
waive the BTL fee for 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, effective January 3, 
2017, to (i) waive new firm application fees for applicants seeking 
only to obtain a BTL for 2017; and (iii) waive the BTL fee for 2017. 
The Exchange proposes to implement the fee changes effective January 3, 
2017.
    The Exchange proposes to waive the New Firm Fee for 2017 for new 
member organization applicants that are seeking only to obtain a BTL 
and not trade equities at the Exchange. The Exchange currently charges 
a New Firm Fee ranging from $2,500 to $20,000, depending on the type of 
firm, that is charged per application for any broker-dealer that 
applies to be approved as an Exchange member organization. The proposed 
waiver of the New Firm Fee would be available only to applicants 
seeking approval as a new member organization, including carrying 
firms, introducing firms, or non-public organizations, that would be 
seeking to obtain a BTL at the Exchange and not trade equities. 
Further, if a new firm that is approved as a member organization and 
has had the New Firm Fee waived converts a BTL to a full trading 
license within one year of approval, the New Firm Fee would be charged 
retroactively. The Exchange believes that charging the New Firm Fee 
retroactively within a year of approval is appropriate because it would 
discourage applicants to claim that they are applying for a BTL solely 
to avoid New Firm Fees.
    Additionally, the Exchange currently charges a BTL fee of $1,000 
per year. The Exchange proposes to amend the Price List to waive the 
BTL fee for 2017.
    The Exchange believes that the proposed fee changes would provide 
increased incentives for bond trading firms that are not currently 
Exchange member organizations to apply for Exchange membership and a 
BTL. The Exchange believes that having more member organizations 
trading on the Exchange's bond platform would benefit investors through 
the additional display of liquidity and increased execution 
opportunities in Exchange-traded bonds at the Exchange.
    The proposed change is not otherwise intended to address any other 
issues, and the Exchange is not aware of any problems that members and 
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,\4\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to waive the New Firm 
Fee and the annual BTL fee for 2017 to provide an incentive for bond 
trading firms to apply for Exchange membership and a BTL. The Exchange 
believes that providing an incentive for bond trading firms that are 
not currently Exchange member organizations to apply for membership and 
a BTL would encourage market participants to become members of the 
Exchange and bring additional liquidity to the only transparent bond 
market. To the extent the existing New Firm Fees or the BTL fee serves 
as a disincentive for bond trading firms to become Exchange member 
organizations, the Exchange believes that the proposed fee change could 
expand the number of firms eligible to trade bonds on the Exchange. The 
Exchange believes creating incentives for bond trading firms to trade 
bonds on the Exchange protects investors and the public interest by 
increasing the competition and liquidity on the only transparent market 
for bond trading. The proposed waiver of the New Firm Fee and BTL fee 
is equitable and not unfairly discriminatory because it would be 
offered to all market participants that wish to trade at the Exchange 
the narrower class of debt securities only.
    Finally, recognizing the statements of Commissioners who have 
expressed concern about the state of the U.S. corporate and municipal 
bond markets as well as recommendations outlined in the Commission's 
release of its Report on the Municipal Securities Market (Report), the 
Exchange believes that expanding the number of member organizations 
eligible to trade bonds at the Exchange would be an important element 
in the democratization of the fixed income market.\6\ As highlighted in

[[Page 1396]]

SEC Chair White's statement during the SEC's 2013 Roundtable on Fixed 
Income Markets, the Report makes recommendations that include (1) 
improving pre- and post-trade transparency; (2) promoting the use of 
transparent and open trading venues, and (3) requiring dealers to seek 
``best execution'' for customers and to provide customers with relevant 
pricing information in connection with their transactions.\7\ Achieving 
these recommendations and applying them to both the municipal and 
corporate bond markets would, in the Exchange's view, assist in 
lowering the systemic risk that is anticipated to increase as interest 
rates rise and the closed network of bond trading comes under pressure 
as retirement and pension managers seek to adjust their positions.
---------------------------------------------------------------------------

    \6\ See SEC Report on the Municipal Securities Market, July 
2012. https://www.sec.gov/news/studies/2012/munireport073112.pdf; 
``SEC's Gallagher Says Retail Bond Investors Fighting `Headwinds' 
'', Jesse Hamilton, Bloomberg News. Sep 20, 2012. See https://www.bloomberg.com/news/2012-09-19/sec-s-gallagher-says-retail-bond-investors-fighting-headwinds-.html.
    \7\ See Opening remarks of Chairman Mary Jo White at SEC 
Roundtable on Fixed Income Markets. https://www.sec.gov/News/Speech/Detail/Speech/1365171515300.
---------------------------------------------------------------------------

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

    In accordance with Section 6(b)(8) of the Act,\8\ 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 
over-the-counter (``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 
reducing the cost of being approved as and operating as an Exchange 
member organization that solely trades bonds at the Exchange, which the 
Exchange believes will enhance market quality through the additional 
display of liquidity and increased execution opportunities in Exchange-
traded bonds at the Exchange.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2016-89 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-2016-89. 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-2016-89, and 
should be submitted on or before January 26, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-31945 Filed 1-4-17; 8:45 am]
BILLING CODE 8011-01-P