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 Rebate for the NYSE BondsSM, 60782-60784 [2017-27561]
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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
17Ad–22(b)(2) requires, in relevant part,
a registered clearing agency that
performs central counterparty services
to establish, implement, maintain and
enforce written policies and procedures
that are reasonably designed to use
margin requirements to limit its credit
exposures to participants under normal
market conditions and use risk-based
models and parameters to set margin
requirements.11 Rules 17Ad–22(e)(6)(i)
and (v) require a covered clearing
agency that provides central
counterparty services to cover its credit
exposures to its participants by
establishing a risk-based margin system
that, among other things, considers and
produces margin levels commensurate
with, the risks and particular attributes
of each relevant product, portfolio, and
market, and uses an appropriate method
for measuring credit exposure that
accounts for relevant product risk
factors and portfolio effects across
products.12
The Commission finds that the
proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act and the
relevant provisions of Rule 17Ad–22
thereunder. Specifically, the
Commission believes that the proposed
rule change will enhance LCH SA’s
assessment of the risks associated with
clearing products that may exhibit
WWR, and thereby collect an
appropriate level of resources, which in
turn will improve LCH SA’s ability to
withstand the default of a Clearing
Member. As a result, the Commission
believes that the proposed rule change
will augment LCH SA’s ability to
safeguard the securities and funds
which are in its custody and control.
Therefore, the Commission finds that
the proposed rule change is consistent
with the requirements of Section
17A(b)(3)(F) of the Act.
Moreover, the Commission believes
that WWR is a relevant factor when
considering the risks associated with
clearing securities products, including
CDS products, and when developing
margin models to cover credit exposures
associated with providing clearance and
settlement services for such products.
By ensuring that it will take into
consideration both WWR and RWR as
proposed, LCH SA will have margin that
more accurately measures the level of
risk, and should therefore produce
margin requirements that are
commensurate with such risks, as well
as the attributes of the products it clears.
Accordingly, the Commission finds that
the proposed rule change is consistent
with the requirements of Rule 17Ad–
11 17
12 17
CFR 240.17Ad–22(b)(2).
CFR 240.17Ad–22(e)(6)(i) and (v).
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22(b)(2) and Rule 17Ad–22(e)(6)(i) and
(v).
IV. Conclusion
It Is Therefore Ordered pursuant to
Section 19(b)(2) of the Act that the
proposed rule change (SR–LCH SA–
2017–009) be, and hereby is,
approved.13
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.14
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–27563 Filed 12–21–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82343; File No. SR–NYSE–
2017–68]
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 Rebate for the
NYSE BondsSM System
December 18, 2017.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
14, 2017, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
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 rebate for the NYSE
BondsSM system. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
13 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
14 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
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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 provide a rebate for the
NYSE Bonds system.4
The Exchange currently does not
charge any execution fee for orders in
bonds that take liquidity from the NYSE
Bonds Book. For orders in bonds that
provide liquidity, the Exchange
currently provides a rebate of $0.05 per
bond, with a maximum rebate of $50 per
execution, for bond liquidity providers
that meet the requirements of Rule 88.5
The Exchange also currently provides
rebates under the Liquidity Provider
Incentive Program 6 pursuant to which
the Exchange pays a daily rebate to a
User 7 that is a Member or Member
Organization based on the number of
Qualifying CUSIPs on the NYSE Bonds
Book for which a Unique User 8 meets
prescribed quoting requirements. The
Exchange is not proposing any change
to the bond liquidity provider rebate
4 The Exchange originally filed to amend the Fee
Schedule on December 1, 2017 (SR–NYSE–2017–
65) and withdrew such filing on December 14,
2017.
5 There are currently no bond liquidity providers
who meet the requirements of Rule 88 and therefore
no rebates are currently provided under the
program.
6 See Securities Exchange Act Release Nos 77591
(April 12, 2016), 81 FR 22656 (April 18, 2016) (SR–
NYSE–2016–26); 77812 (May 11, 2016), 81 FR
30594 (May 17, 2016) (SR–NYSE–2016–34); and
79210 (November 1, 2016), 81 FR 78213 (November
7, 2016) (SR–NYSE–2016–68).
7 Rule 86(b)(2)(M) defines a User as any Member
or Member Organization, Sponsored Participant, or
Authorized Trader that is authorized to access
NYSE Bonds.
8 For purposes of the Liquidity Provider Incentive
Program, the term ‘Unique User’ means a User, a
trading desk of a User, or a customer of a User, on
whose behalf a Member or Member Organization
enters quotes or orders under a Unique User ID that
such User requests from and is provided by the
Exchange. See Securities Exchange Act Release No.
80934 (June 15, 2017), 82 FR 28173 (June 20, 2017)
(SR–NYSE–2017–27).
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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
program or the Liquidity Provider
Incentive Program.
The Exchange proposes to adopt the
Agency Order Incentive Program. As
proposed, a monthly rebate of $4,000
would be payable to a User that submits
an average of 400 resting limit orders of
any size per trading day 9 during the
month and that are submitted as Agency
Orders by the User. For purposes of the
proposed Agency Order Incentive
Program, an Agency Order is any order
submitted by a User that it represents as
agent on NYSE Bonds. For example,
assume a User submits 10,000 orders
during January 2018, which has 21
trading days. Of the 10,000 orders, if
8,500 orders are resting limit orders that
are represented as agent by the User, the
average for the purposes of the proposed
rebate would be 405 orders per trading
day (8,500 orders/21 trading days). In
this instance the User will have met the
average orders per day requirement to
qualify for the proposed rebate. The
Exchange believes that the proposed
rebate program would encourage
additional displayed liquidity in bonds
on the Exchange.
sradovich on DSK3GMQ082PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,10 in general, and
furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,11 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
and equitable to adopt the Agency Order
Incentive Program for the bonds trading
platform, which would provide rebates
for member organizations that provide
liquidity to bonds traded on the
Exchange. This proposed rule change
targets a particular segment in which
the Exchange seeks to attract greater
order flow. The proposed rebate
program would provide an incentive for
additional liquidity at the Exchange.
The Exchange further believes Agency
Orders are becoming an increasingly
important segment of bonds trading and
the proposed rebate seeks to incentivize
9 A trading day is any day that NYSE Bonds is
available for trading, as determined by Securities
Industry and Financial Market Association
(‘‘SIFMA’’), which annually provides
recommendations for early and full market closes
that the bond market, including NYSE Bonds,
follows. The current SIFMA holiday schedule is
available at https://www.sifma.org/services/holidayschedule/#us2016.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4), (5).
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market participants to direct a greater
number of such orders to the Exchange.
The Exchange believes the proposed
fee change would provide an incentive
for Users to provide additional liquidity
to the market and add competition to
the existing group of liquidity providers.
Finally, the Exchange believes that the
proposed rule change is not unfairly
discriminatory in that it would apply
uniformly to all Users accessing NYSE
Bonds. All similarly situated Users
would be subject to the same rebate
structure, and each User would have the
ability to determine the extent to which
the Exchange’s proposed rebate
structure will provide it with an
economic incentive to use NYSE Bonds,
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,12 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 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) 13 of the Act and
subparagraph (f)(2) of Rule 19b–4 14
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) 15 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–2017–68 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2017–68. 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
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
15 15 U.S.C. 78s(b)(2)(B).
14 17
12 15
PO 00000
U.S.C. 78f(b)(8).
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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
only one method. The Commission will
post all comments on the Commission’s
internet website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSE–2017–68, and
should be submitted on or before
January 12, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–27561 Filed 12–21–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82344; File No. SR–
NYSEARCA–2017–142]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Adopt a
Decommission Extension Fee for
Receipt of the NYSE Arca Integrated
Feed Market Data Product
sradovich on DSK3GMQ082PROD with NOTICES
December 18, 2017.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
12, 2017, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
16 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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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 adopt a
Decommission Extension Fee for receipt
of the NYSE Arca Integrated Feed
market data product. The proposed rule
change is available on the Exchange’s
website 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 adopt a
Decommission Extension Fee for receipt
of the NYSE Arca Integrated Feed
market data product,4 as set forth on the
NYSE Arca Equities Proprietary Market
Data Fee Schedule (‘‘Fee Schedule’’).5
4 See Securities Exchange Act Release No. 65669
(November 2, 2011), 76 FR 69311 (November 8,
2011) (SR–NYSEArca–2011–78) (notice of filing and
immediate effectiveness of proposed rule change
offering the NYSE Arca Integrated Feed). See also
Securities Exchange Act Release Nos. 66128
(January 10, 2012), 77 FR 2331 (January 17, 2012)
(SR–NYSEArca–2011–96) (establishing fees for
NYSE Arca Integrated Feed); 69315 (April 5, 2013),
78 FR 21668 (April 11, 2013) (SR–NYSEArca–2013–
37) (establishing non-display usage fees); 73011
(September 5, 2014), 79 FR 54315 (September 11,
2014) (SR–NYSEArca–2014–93) (amending nondisplay usage fees); 76914 (January 14, 2016), 81 FR
3484 (January 21, 2016) (SR–NYSEArca–2016–03)
(amending fees for NYSE Arca Integrated Feed); and
82100 (November 16, 2017), 82 FR 55660
(November 22, 2017) (SR–NYSEArca–2017–130)
(amending fees for NYSE Arca Integrated Feed).
5 The Exchange originally filed to amend the Fee
Schedule on November 29, 2017 (SR–NYSEArca–
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Recipients of NYSE Arca Integrated
Feed would continue to be subject to the
already existing subscription fees
currently set forth in the Fee Schedule.
The proposed Decommission Extension
Fee would apply only to subscribers
who choose to continue to receive the
NYSE Arca Integrated Feed in its legacy
format for up to two months after the
previously-announced date for the end
of distribution in the legacy format, after
which the feed will be distributed
exclusively in the new format as
notified to customers previously and
further explained below. The Exchange
has provided customers with adequate
notice that it intends to discontinue
dissemination of the data feed in the
legacy format, having first announced
this to customers in June 2017.6
As part of the Exchange’s efforts to
regularly upgrade systems to support
more modern data distribution formats
and protocols as technology evolves,
beginning August 21, 2017, NYSE Arca
Integrated Feed began transmitting in a
new format, Exchange Data Protocol
(XDP). Since August 21, 2017, the
Exchange has been transmitting NYSE
Arca Integrated Feed in both the legacy
format and in XDP format without any
additional fee being charged for
providing this data feed in both formats.
The dual dissemination remained in
place until November 30, 2017, the
planned decommission date of the
legacy format.
The purpose of the proposed
Decommission Extension Fee is to
provide customers an incentive to fully
transition to the XDP format so the
Exchange does not have to continue to
support both the legacy format and the
XDP format and incur, for example, the
costs involved in maintaining additional
servers and monitoring multiple
distribution channels and testing
environments not needed by the XDP
format. Therefore, beginning December
1, 2017, recipients of NYSE Arca
Integrated Feed who wish to continue to
receive NYSE Arca Integrated Feed in
the legacy format will be subject to the
proposed Decommission Extension Fee
of $5,000 per month.7 During the
2017–136) and withdrew such filing on December
12, 2017.
6 See Trader Update at https://www.nyse.com/
trader-update/history#110000065786. See also
https://www.nyse.com/trader-update/history
#110000078705.
7 The concept of a Decommission Extension Fee
is not novel. The Exchange’s affiliates, NYSE and
NYSE American, have both previously adopted a
Decommission Extension Fee for receipt of multiple
market data products when those products migrated
to the XDP format. See Securities Exchange Act
Release Nos. 79286 (November 10, 2016), 81 FR
81186 (November 17, 2016) (SR–NYSE–2016–73);
79287 (November 10, 2016), 81 FR 81216
E:\FR\FM\22DEN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 245 (Friday, December 22, 2017)]
[Notices]
[Pages 60782-60784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27561]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82343; File No. SR-NYSE-2017-68]
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 Rebate for the NYSE Bonds\SM\ System
December 18, 2017.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on December 14, 2017, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
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 rebate for
the NYSE Bonds\SM\ system. The proposed rule change is available on the
Exchange's website 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 provide a rebate
for the NYSE Bonds system.\4\
---------------------------------------------------------------------------
\4\ The Exchange originally filed to amend the Fee Schedule on
December 1, 2017 (SR-NYSE-2017-65) and withdrew such filing on
December 14, 2017.
---------------------------------------------------------------------------
The Exchange currently does not charge any execution fee for orders
in bonds that take liquidity from the NYSE Bonds Book. For orders in
bonds that provide liquidity, the Exchange currently provides a rebate
of $0.05 per bond, with a maximum rebate of $50 per execution, for bond
liquidity providers that meet the requirements of Rule 88.\5\ The
Exchange also currently provides rebates under the Liquidity Provider
Incentive Program \6\ pursuant to which the Exchange pays a daily
rebate to a User \7\ that is a Member or Member Organization based on
the number of Qualifying CUSIPs on the NYSE Bonds Book for which a
Unique User \8\ meets prescribed quoting requirements. The Exchange is
not proposing any change to the bond liquidity provider rebate
[[Page 60783]]
program or the Liquidity Provider Incentive Program.
---------------------------------------------------------------------------
\5\ There are currently no bond liquidity providers who meet the
requirements of Rule 88 and therefore no rebates are currently
provided under the program.
\6\ See Securities Exchange Act Release Nos 77591 (April 12,
2016), 81 FR 22656 (April 18, 2016) (SR-NYSE-2016-26); 77812 (May
11, 2016), 81 FR 30594 (May 17, 2016) (SR-NYSE-2016-34); and 79210
(November 1, 2016), 81 FR 78213 (November 7, 2016) (SR-NYSE-2016-
68).
\7\ Rule 86(b)(2)(M) defines a User as any Member or Member
Organization, Sponsored Participant, or Authorized Trader that is
authorized to access NYSE Bonds.
\8\ For purposes of the Liquidity Provider Incentive Program,
the term `Unique User' means a User, a trading desk of a User, or a
customer of a User, on whose behalf a Member or Member Organization
enters quotes or orders under a Unique User ID that such User
requests from and is provided by the Exchange. See Securities
Exchange Act Release No. 80934 (June 15, 2017), 82 FR 28173 (June
20, 2017) (SR-NYSE-2017-27).
---------------------------------------------------------------------------
The Exchange proposes to adopt the Agency Order Incentive Program.
As proposed, a monthly rebate of $4,000 would be payable to a User that
submits an average of 400 resting limit orders of any size per trading
day \9\ during the month and that are submitted as Agency Orders by the
User. For purposes of the proposed Agency Order Incentive Program, an
Agency Order is any order submitted by a User that it represents as
agent on NYSE Bonds. For example, assume a User submits 10,000 orders
during January 2018, which has 21 trading days. Of the 10,000 orders,
if 8,500 orders are resting limit orders that are represented as agent
by the User, the average for the purposes of the proposed rebate would
be 405 orders per trading day (8,500 orders/21 trading days). In this
instance the User will have met the average orders per day requirement
to qualify for the proposed rebate. The Exchange believes that the
proposed rebate program would encourage additional displayed liquidity
in bonds on the Exchange.
---------------------------------------------------------------------------
\9\ A trading day is any day that NYSE Bonds is available for
trading, as determined by Securities Industry and Financial Market
Association (``SIFMA''), which annually provides recommendations for
early and full market closes that the bond market, including NYSE
Bonds, follows. The current SIFMA holiday schedule is available at
https://www.sifma.org/services/holiday-schedule/#us2016.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\11\ 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 and equitable to adopt the Agency Order Incentive
Program for the bonds trading platform, which would provide rebates for
member organizations that provide liquidity to bonds traded on the
Exchange. This proposed rule change targets a particular segment in
which the Exchange seeks to attract greater order flow. The proposed
rebate program would provide an incentive for additional liquidity at
the Exchange. The Exchange further believes Agency Orders are becoming
an increasingly important segment of bonds trading and the proposed
rebate seeks to incentivize market participants to direct a greater
number of such orders to the Exchange.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4), (5).
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The Exchange believes the proposed fee change would provide an
incentive for Users to provide additional liquidity to the market and
add competition to the existing group of liquidity providers. Finally,
the Exchange believes that the proposed rule change is not unfairly
discriminatory in that it would apply uniformly to all Users accessing
NYSE Bonds. All similarly situated Users would be subject to the same
rebate structure, and each User would have the ability to determine the
extent to which the Exchange's proposed rebate structure will provide
it with an economic incentive to use NYSE Bonds, 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,\12\ 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 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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\12\ 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) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 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 [email protected]. Please include
File Number SR-NYSE-2017-68 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2017-68. 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
[[Page 60784]]
only one method. The Commission will post all comments on the
Commission's internet website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2017-68, and should be submitted on
or before January 12, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-27561 Filed 12-21-17; 8:45 am]
BILLING CODE 8011-01-P
