Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Transaction, Routing, and Port Fees In Connection With the Re-Launch of Trading on the Exchange, 28671-28675 [2018-13165]

Download as PDF Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: June 20, 2018. FOR FURTHER INFORMATION CONTACT: Elizabeth Reed, 202–268–3179. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on June 14, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail & First-Class Package Service Contract 82 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018–175, CP2018–247. SUPPLEMENTARY INFORMATION: Elizabeth Reed, Attorney, Corporate and Postal Business Law. [FR Doc. 2018–13181 Filed 6–19–18; 8:45 am] BILLING CODE 7710–12–P POSTAL SERVICE Product Change—Priority Mail Express, Priority Mail, & First-Class Package Service Negotiated Service Agreement AGENCY: ACTION: Notice. The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. SUMMARY: DATES: Date of required notice: June 20, 2018. FOR FURTHER INFORMATION CONTACT: Elizabeth Reed, 202–268–3179. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on June 14, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express, Priority Mail, & First-Class Package Service Contract 39 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018–180, CP2018–252. sradovich on DSK3GMQ082PROD with NOTICES SUPPLEMENTARY INFORMATION: Elizabeth Reed, Attorney, Corporate and Postal Business Law. [FR Doc. 2018–13186 Filed 6–19–18; 8:45 am] BILLING CODE 7710–12–P VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 SECURITIES AND EXCHANGE COMMISSION of the most significant parts of such statements. [Release No. 34–83439; File No. SR– NYSENAT–2018–12] A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Transaction, Routing, and Port Fees In Connection With the Re-Launch of Trading on the Exchange June 14, 2018. 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 6, 2018, NYSE National, Inc. (the ‘‘Exchange’’ or ‘‘NYSE National’’) 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 Postal ServiceTM. 28671 The Exchange proposes to adopt transaction, routing, and port fees in connection with the re-launch of trading on the Exchange. The Exchange proposes to implement the rule change on June 6, 2018.4 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, 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 4 The Exchange originally filed to amend the Fee Schedule on May 18, 2018 (SR–NYSENAT–2018– 08) and withdrew such filing on May 25, 2018. The Exchange re-filed to amend the Fee Schedule on May 25, 2018 (SR–NYSENAT–2018–10) and withdrew such filing on June 6, 2018. This filing replaces SR–NYSENAT–2018–10 in its entirety. 2 15 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 1. Purpose On February 1, 2017, the Exchange ceased trading operations.5 On May 17, 2018, the Commission approved rule changes to support re-launch of trading operations on Pillar, which is an integrated trading technology platform designed to use a single specification for connecting to the equities and options markets operated by the Exchange and its affiliates, NYSE Arca, Inc. (‘‘NYSE Arca’’), NYSE American LLC (‘‘NYSE American’’), and New York Stock Exchange LLC (‘‘NYSE’’).6 As described in the Re-Launch Filing, with Pillar, the Exchange will re-launch trading in all Tape A, Tape B, and Tape C securities on an unlisted trading privileges (‘‘UTP’’) basis on a fully automated price-time priority allocation model.7 The Exchange’s Pillar trading platform is based on the rules and trading model of the cash equities platforms of NYSE Arca, which operates as a fully automated price-time priority allocation exchange. However, unlike its affiliated exchanges, the Exchange is not a listing venue and therefore will not have any ‘‘lead’’ or ‘‘designated’’ market makers for listed securities and would not operate any auctions. In addition, the Exchange will not operate a retail liquidity program. In connection with its re-launch of operations, the Exchange proposes to amend its Schedule of Fees and Rebates to adopt a new pricing model for trading on the Pillar platform. The proposed changes would apply to transactions executed in all trading sessions in securities priced at or above and below $1.00. The Exchange proposes to implement these changes effective June 6, 2018. 5 See Securities Exchange Act Release No. 80018 (February 10, 2017), 82 FR 10947 (February 16, 2017) (SR–NSX–2017–04) (‘‘Termination Filing’’). On January 31, 2017, Intercontinental Exchange, Inc. (‘‘ICE’’), through its wholly-owned subsidiary NYSE Group, acquired all of the outstanding capital stock of the Exchange (the ‘‘Acquisition’’). See Securities Exchange Act Release No. 79902 (January 30, 2017), 82 FR 9258 (February 3, 2017) (SR–NSX– 2016–16). Prior to the Acquisition, the Exchange was named ‘‘National Stock Exchange, Inc.’’ 6 See Securities Exchange Act Release No. 83289 (May 17, 2018) (SR–NYSENat–2018–02) (Approval Order) (‘‘Re-Launch Filing’’); see generally www.nyse.com/pillar. 7 See generally Re-Launch Filing. E:\FR\FM\20JNN1.SGM 20JNN1 28672 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices Proposed Rule Change The Exchange proposes the following transaction fees for the re-launch of trading on its Pillar trading platform. General Information Applicable to the Fee Schedule The Exchange proposes to summarize general information applicable to the Fee Schedule in two bullets under the first heading in the Fee Schedule titled ‘‘Fees and Credits Applicable to Market Participants.’’ The first bullet would provide that rebates are indicated by parentheses. The second bullet would provide that, for purposes of determining transaction fees and credits based on requirements based on quoting levels, average daily volume (‘‘ADV’’), and consolidated ADV (‘‘CADV’’), the Exchange may exclude shares traded any day that (1) the Exchange is not open for the entire trading day and/or (2) a disruption affects an Exchange system that lasts for more than 60 minutes during regular trading hours. The second proposed bullet would reproduce the language that appears in both the NYSE American Equities and NYSE Arca Equities price lists.8 Transaction Fees The Exchange proposes the following fees and credits for all transactions under new heading I titled ‘‘Transaction Fees’’: sradovich on DSK3GMQ082PROD with NOTICES Liquidity Adding Fees 9 For securities priced at or above $1.00, the Exchange proposes the following charges for executions on the Exchange of displayed orders that add liquidity to the Exchange: • The Exchange proposes to charge $0.0023 per share for executions on the Exchange of displayed orders that add liquidity to the Exchange. • The Exchange proposes to charge $0.0021 per share for executions on the Exchange of orders that set a new BBO 10 and that add liquidity to the Exchange. 8 See NYSE American Equities Price List, available at https://www.nyse.com/publicdocs/nyse/ markets/nyse-american/NYSE_America_Equities_ Price_List.pdf; NYSE Arca Equities Price List, available at https://www.nyse.com/publicdocs/nyse/ markets/nyse-arca/NYSE_Arca_Marketplace_ Fees.pdf. 9 Currently, there are two other exchanges (Cboe BYX and Nasdaq BX) that have adopted a fee model that offers rebates to liquidity takers and charges fees to liquidity providers. See Cboe BYX U.S. Equities Exchange Fee Schedule, available at https://markets.cboe.com/us/equities/membership/ fee_schedule/byx/, and Nasdaq BX Fee Schedule, available at https://www.nasdaqtrader.com/ Trader.aspx?id=bx_pricing. 10 The term ‘‘BBO’’ is defined in Rule 1.1 to mean the best bid or offer that is a Protected Quotation VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 • The Exchange proposes to charge $0.0025 per share for executions on the Exchange of non-displayed orders that add liquidity to the Exchange. • Finally, the Exchange proposes to charge $0.0010 per share for executions on the Exchange of Mid-Point Liquidity (‘‘MPL’’) orders that add liquidity to the Exchange. For securities priced below $1.00, the Exchange does not propose to charge a fee for executions on the Exchange of displayed orders and non-displayed orders that add liquidity to the Exchange. Liquidity Removing Fees The Exchange does not propose to charge a fee for executions on the Exchange of orders that remove liquidity from the Exchange. The proposal would apply to securities priced at or above $1.00. The Exchange also does not propose to charge a fee for executions on the Exchange of MPL orders that remove liquidity from the Exchange. The proposal would apply to securities priced at or above $1.00. For securities priced below $1.00, the Exchange does not propose to charge a fee for orders that remove liquidity from the Exchange. Adding and Remove Tiers for Securities at or Above $1.00 The Exchange proposes tiered adding requirements for displayed and nondisplayed orders in securities priced at or above $1.00, as follows. Under the proposed Adding Tier, the Exchange would offer the following fees for transactions in stocks with a per share price of $1.00 or more when adding liquidity to the Exchange if the ETP Holder has at least 0.015% of Adding ADV as a percent of US CADV: • $0.0020 per share for displayed orders; • $0.0022 per share for non-displayed orders; • $0.0018 per share for orders that set a new Exchange BBO; and • $0.0005 per share for MPL orders. Under the proposed Taking Tier, the Exchange would offer the following credits for transactions in stocks with a per share price of $1.00 or more when removing liquidity from the Exchange if the ETP Holder has at least 50,000 shares of Adding ADV: • ($0.0020) per share for orders; • ($0.0002) per share for MPL orders. The Exchange also proposes to waive the Adding Tier and Taking Tier volume on the Exchange. The term ‘‘BB’’ means the best bid that is a Protected Quotation on the Exchange and the term ‘‘BO’’ means the best offer that is a Protected Quotation on the Exchange. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 requirements until June 1, 2018, which would be reflected in footnote *. Routing Fees Under a new heading II titled ‘‘Routing Fees,’’ the Exchange proposes the following fees for routing, which would be applicable to all orders by ETP Holders that are routed. For all executions in securities with a price at or above $1.00 that route to and execute in an away market,11 the Exchange proposes to charge a fee of $0.0030 per share for executions. For securities priced below $1.00 that route to and execute in an away market, the Exchange proposes to charge a fee of 0.30% of the total dollar value of the transaction. Port Fees Under proposed new heading III titled ‘‘Port Fees,’’ the Exchange proposes fees for the use of ports that: (1) Provide connectivity to the Exchange’s trading systems (i.e., ports for entry of orders and/or quotes (‘‘order/quote entry ports’’)), and (2) allow for the receipt of ‘‘drop copies’’ of order or transaction information (‘‘drop copy ports’’ and, together with order/quote entry ports, ‘‘ports’’).12 For order/quote entry ports, the Exchange proposes to charge $250 per port per month. The fee would apply to all market participants. The Exchange proposes not to charge for order/quote entry ports until June 1, 2018. Thereafter, the Exchange proposes to implement the $250 per port per month fee. Similarly, the Exchange proposes to charge $250 per drop copy port per month. The fee would apply to all market participants. Additionally, the Exchange proposes to specify that only one fee per drop copy port would apply, even if the port receives drop copies from multiple order/quote entry ports. The Exchange proposes not to charge for drop copy ports until June 1, 2018. Thereafter, the Exchange proposes to implement the $250 per port per month fee. 11 The term ‘‘Away Market’’ is defined in Rule 1.1 to mean any exchange, alternative trading system (‘‘ATS’’) or other broker-dealer (1) with which the Exchange maintains an electronic linkage and (2) that provides instantaneous responses to orders routed from the Exchange. 12 Firms receive confirmations of their orders and receive execution reports via the order/quote entry port that is used to enter the order or quote. A ‘‘drop copy’’ contains redundant information that a firm chooses to have ‘‘dropped’’ to another destination (e.g., to allow the firm’s back office and/or compliance department, or another firm—typically the firm’s clearing broker—to have immediate access to the information). Drop copies can only be sent via a drop copy port. Drop copy ports cannot be used to enter orders and/or quotes. E:\FR\FM\20JNN1.SGM 20JNN1 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices Equity Trading Permit (‘‘ETP’’) Fee The Exchange proposes a new heading IV titled ‘‘ETP Fee.’’ The Exchange does not propose to charge a fee to obtain an ETP.13 The proposed changes are not otherwise intended to address any other issues, and the Exchange is not aware of any problems that ETP Holders 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,14 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,15 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. Liquidity Removing Fees The Exchange believes that not charging a fee for removing liquidity in securities priced at or above $1.00 and securities priced below $1.00 is reasonable, equitable and not unfairly discriminatory because it would provide a financial incentive to bring additional removing flow to a public market. sradovich on DSK3GMQ082PROD with NOTICES Liquidity Adding Fees The Exchange believes that charging a fee of $0.0023 per share for liquidity adding displayed orders in securities priced at or above $1.00 is reasonable, equitable and not unfairly discriminatory because the Exchange must balance the cost of credits for orders that remove liquidity and the fees to provide displayed liquidity. The Exchange believes that the proposed change is both equitable and not unfairly discriminatory because the fee would apply uniformly to all similarlysituated market participants. The Exchange believes that charging a fee of $0.0021 per share for liquidity adding orders that set a new Exchange BBO in securities priced at or above $1.00 is reasonable, equitable and not unfairly discriminatory because the lower fee, compared with the fee of $0.0023 per share for liquidity adding displayed orders that do not set a new Exchange BBO, will provide an incentive for ETP Holders to improve 13 ETP refers to an Equity Trading Permit issued by the Exchange for effecting approved securities transactions on the Exchange. See Rule 1.1 (definition of ETP). 14 15 U.S.C. 78f(b). 15 15 U.S.C. 78f(b)(4) & (5). VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 displayed quotes on the Exchange, which would benefit all market participants. The Exchange believes that charging a fee of $0.0025 per share for liquidity adding non-displayed orders in securities priced at or above $1.00 is reasonable and not unfairly discriminatory because the proposed rate would be lower than the fee charged by other exchanges.16 The Exchange further believes that the proposed fee is equitable and not unfairly discriminatory because it would apply to all non-displayed orders that add liquidity to the Exchange. The Exchange believes that charging a lower fee of $0.0010 per share for liquidity adding MPL orders in securities priced at or above $1.00 is reasonable, equitable and not unfairly discriminatory because the lower fee would provide an incentive for participation and provide price improvement, which would benefit all market participants. The Exchange believes that not charging a fee for orders that remove liquidity in securities priced below $1.00 is reasonable, equitable and not unfairly discriminatory. The Exchange believes that not charging a fee for orders that remove liquidity would encourage price discovery and enhance market quality by encouraging more competitive quoting of displayed orders that add liquidity. The Exchange further believes that not charging a fee for orders that remove liquidity is equitable and not unfairly discriminatory because it is designed to facilitate execution of, and enhance trading opportunities for, displayed orders that add liquidity and that would execute against those orders that remove liquidity, thereby further incentivizing entry of displayed adding orders on the Exchange. The Exchange believes that not charging a fee for orders that remove liquidity would also reduce costs for market participants and investors. Adding and Remove Tiers for Securities at or Above $1.00 The Exchange believes that the proposed tiered adding requirements for displayed and non-displayed orders in securities priced at or above $1.00 are reasonable, equitable and not unfairly discriminatory, as follows. The proposed Adding Tier fees for adding liquidity ($0.0020 per share for displayed orders, $0.0022 per share for 16 Nasdaq BX, for instance, charges a fee of $0.0030 per share for providing non-displayed liquidity for securities priced at or above $1.00 for all other firms. See Nasdaq BX Exchange Fee Schedule 2018, available at https:// www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 28673 non-displayed orders, $0.0018 per share for orders that set a new Exchange BBO, and $0.0005 per share for MPL orders) for ETP Holders with at least 0.015% of Adding CADV in securities with a per share price of $1.00 or more when adding liquidity are reasonable because it would further contribute to incent ETP Holders to provide increased liquidity on the Exchange, benefiting all ETP Holders. In addition, the Exchange believes that the proposed Adding Tier credits are equitable and not unfairly discriminatory as all similarly situated market participants will be subject to the same credits on an equal and nondiscriminatory basis. Similarly, the proposed Taking Tier credits (($0.0020) per share for orders that remove liquidity and ($0.0002) per share for MPL orders) that remove liquidity for ETP Holders with an Adding ADV of at least 50,000 shares in securities with a per share price of $1.00 or more when removing liquidity from the Exchange is reasonable, equitable and not unfairly discriminatory because the proposed fees are in line with the fees for removing liquidity on other exchanges.17 Finally, the Exchange believes it is reasonable to waive the Adding Tier and Taking Tier volume requirements until June 1, 2018, because the waiver for a limited period of time will enable the Exchange to improve its overall competitiveness and strengthen its market quality for all market participants. The proposed waiver is not unfairly discriminatory because it will apply equally to all similarly situated ETP Holders. Routing Fees The Exchange believes that its proposed routing fees are reasonable and not an unfairly discriminatory allocation of fees because the fee would be applicable to all ETP Holders in an equivalent manner. Moreover, the proposed fees for routing shares are also reasonable and not unfairly discriminatory because they are consistent with fees charged on other exchanges. In particular, the Exchange’s proposal to charge a fee of $0.0030 per share for all executions that route to and execute on away markets in securities priced at or above $1.00 is reasonable and not unfairly discriminatory because it is consistent with fees charged on other exchanges.18 17 See CBOE BYX Exchange Fee Schedule at https://markets.cboe.com/us/equities/membership/ fee_schedule/byx/. 18 See Nasdaq Exchange Fee Schedule at https:// nasdaqtrader.com/Trader.aspx?id=PriceList Trading2. E:\FR\FM\20JNN1.SGM 20JNN1 28674 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices Finally, the proposal to charge a fee for all executions of 0.30% of total dollar value for transactions in securities with a price under $1.00 that route to and execute on away markets is reasonable and not unfairly discriminatory because it is consistent with fees charged on other exchanges.19 sradovich on DSK3GMQ082PROD with NOTICES Port Fees The Exchange believes that the proposed rates for order/quote entry ports and drop copy ports are reasonable because the fees charged for both types of ports are expected to permit the Exchange to offset, in part, its connectivity costs associated with making such ports available, including costs based on software and hardware enhancements and resources dedicated to gateway development, quality assurance, and support. The proposed port fees are also reasonable because the proposed fees are comparable to the rates charged by other venues, and in some cases are less expensive than many of the Exchange’s competitors.20 The Exchange believes that the proposed fee for order/quote entry ports is equitable and not unfairly discriminatory because charges for order/entry ports will be based on the number of ports utilized. This aspect of the proposed rule change is also equitable and not unfairly discriminatory because it will apply on an equal basis for all ports on the Exchange. The Exchange also believes that these fees are equitable and not unfairly discriminatory because they would apply to all users of order/quote entry ports on the Exchange. The Exchange believes that the proposed fee for drop copy ports is reasonable because it will result in a fee being charged for the use of technology and infrastructure provided by the Exchange. In this regard, the Exchange believes that the rate is reasonable because it is comparable to the rate 19 NASDAQ, for example, charges a fee of 0.30% (i.e., 30 basis points) of total dollar volume to remove liquidity for shares executed below $1.00. See NASDAQ Fee Schedule at https:// www.nasdaqtrader.com/Trader.aspx?id=PriceList Trading2. 20 For example, NASDAQ charges $575 for order entry ports and $550 for DROP ports. See NASDAQ Fee Schedule at https://www.nasdaqtrader.com/ Trader.aspx?id=PriceListTrading2#connectivity. Also, Cboe BZX charges $550 per month per pair for logical ports. See Cboe BZX U.S. Equities Exchange Fee Schedule at https:// markets.cboe.com/us/equities/membership/fee_ schedule/bzx/. Additionally, Cboe EDGA and Cboe EDGX each charge $550 per port per month. See Cboe EDGA U.S. Equities Exchange Fee Schedule at https://markets.cboe.com/us/equities/ membership/fee_schedule/edga/ and Cboe EDGX U.S. Equities Exchange Fee Schedule at https:// markets.cboe.com/us/equities/membership/fee_ schedule/edgx/. VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 charged by other exchanges for drop copy ports.21 The Exchange also believes that it is reasonable that only one fee per drop copy port would apply, even if the port receives drop copies from multiple order/quote entry ports, because the purpose of drop copies is such that a trading unit’s or a firm’s entire order and execution activity is captured. The Exchange believes that the proposed new fee for drop copy ports is equitable and not unfairly discriminatory because it will apply on an equal basis to all users of drop copy ports and to all drop copy ports on the Exchange. In this regard, all firms will be able to request drop copy ports, as would be the case with order/quote entry ports. ETP Fee The Exchange believes that not charging a fee to obtain an ETP on the Exchange is reasonable because it may incentivize broker-dealers to become Exchange permit holders and to direct order flow to the Exchange, which benefits all market participants through increased liquidity and enhanced price discovery. Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange’s statement regarding the burden on competition. For the foregoing 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,22 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. Instead, the Exchange believes that the proposed changes would encourage the submission of additional liquidity to a public exchange, thereby promoting price discovery and transparency and enhancing order execution opportunities for ETP Holders. The Exchange believes that this could promote competition between the Exchange and other execution venues, including those that currently offer similar order types and comparable transaction pricing, by encouraging additional orders to be sent to the Exchange for execution. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance 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 changes will impair the ability of ETP Holders 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) 23 of the Act and subparagraph (f)(2) of Rule 19b–4 24 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) 25 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 23 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 25 15 U.S.C. 78s(b)(2)(B). 21 See note 20, supra. 22 15 U.S.C. 78f(b)(8). PO 00000 Frm 00068 Fmt 4703 24 17 Sfmt 4703 E:\FR\FM\20JNN1.SGM 20JNN1 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Eduardo A. Aleman, Assistant Secretary. • 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– NYSENAT–2018–12 on the subject line. [FR Doc. 2018–13165 Filed 6–19–18; 8:45 am] Paper Comments [Release No. 34–83442; File No. SR– CboeBZX–2018–037] sradovich on DSK3GMQ082PROD with NOTICES • 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–NYSENAT–2018–12. 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 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 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. 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–NYSENAT–2018–12 and should be submitted on or before July 11, 2018. VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Physical Port Fees for BZX June 14, 2018. 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 1, 2018, Cboe 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 one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend its fees and rebates applicable to Members 5 and non-Members of the Exchange pursuant to BZX Rule 15.1(a) and (c) to modify its fees for physical ports. The text of the proposed rule change is available at the Exchange’s website at www.markets.cboe.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 26 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange.’’ See Exchange Rule 1.5(n). 1 15 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 28675 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 Exchange 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 these 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 implement proposed changes to its fee schedule relating to physical connectivity fees, effective June 1, 2018. By way of background, a physical port is utilized by a Member or non-Member to connect to the Exchange at the data centers where the Exchange’s servers are located. The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange’s business is primarily conducted on a daily basis, and (ii) a secondary data center, which is predominantly maintained for business continuity purposes. The Exchange currently assesses the following physical connectivity fees for Members and non-Members on a monthly basis: $2,000 per physical port for a 1 gigabyte circuit and $7,000 per physical port for a 10 gigabyte circuit. The Exchange proposes to increase the fees per physical ports from (i) $2,000 to $2,500 per month, per port for a 1 gigabyte circuit and (ii) $7,000 to $7,500 per month, per port for a 10 gigabyte circuit. The Exchange notes the proposed fees enable it to continue to maintain and improve its market technology and services and also notes that the proposed fee changes are in line with the amounts assessed by other exchanges for similar connections.6 The Exchange also proposes to adopt separate physical port fees for connection to its secondary data center, which is predominantly maintained for business continuity purposes (‘‘Disaster Recovery Systems’’). Particularly, the Disaster Recovery Systems can be 6 See e.g., NYSE Arca Equities Fees and Charges, NYSE Arca Marketplace: Other Fees and Charges, Connectivity Fees. See also, Nasdaq Phlx LLC Pricing Schedule, Section XI, Direct Connectivity to Phlx. E:\FR\FM\20JNN1.SGM 20JNN1

Agencies

[Federal Register Volume 83, Number 119 (Wednesday, June 20, 2018)]
[Notices]
[Pages 28671-28675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13165]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83439; File No. SR-NYSENAT-2018-12]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt 
Transaction, Routing, and Port Fees In Connection With the Re-Launch of 
Trading on the Exchange

June 14, 2018.
    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 6, 2018, NYSE National, Inc. (the ``Exchange'' or 
``NYSE National'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt transaction, routing, and port fees 
in connection with the re-launch of trading on the Exchange. The 
Exchange proposes to implement the rule change on June 6, 2018.\4\ 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.
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    \4\ The Exchange originally filed to amend the Fee Schedule on 
May 18, 2018 (SR-NYSENAT-2018-08) and withdrew such filing on May 
25, 2018. The Exchange re-filed to amend the Fee Schedule on May 25, 
2018 (SR-NYSENAT-2018-10) and withdrew such filing on June 6, 2018. 
This filing replaces SR-NYSENAT-2018-10 in its entirety.
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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
    On February 1, 2017, the Exchange ceased trading operations.\5\ On 
May 17, 2018, the Commission approved rule changes to support re-launch 
of trading operations on Pillar, which is an integrated trading 
technology platform designed to use a single specification for 
connecting to the equities and options markets operated by the Exchange 
and its affiliates, NYSE Arca, Inc. (``NYSE Arca''), NYSE American LLC 
(``NYSE American''), and New York Stock Exchange LLC (``NYSE'').\6\
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    \5\ See Securities Exchange Act Release No. 80018 (February 10, 
2017), 82 FR 10947 (February 16, 2017) (SR-NSX-2017-04) 
(``Termination Filing''). On January 31, 2017, Intercontinental 
Exchange, Inc. (``ICE''), through its wholly-owned subsidiary NYSE 
Group, acquired all of the outstanding capital stock of the Exchange 
(the ``Acquisition''). See Securities Exchange Act Release No. 79902 
(January 30, 2017), 82 FR 9258 (February 3, 2017) (SR-NSX-2016-16). 
Prior to the Acquisition, the Exchange was named ``National Stock 
Exchange, Inc.''
    \6\ See Securities Exchange Act Release No. 83289 (May 17, 2018) 
(SR-NYSENat-2018-02) (Approval Order) (``Re-Launch Filing''); see 
generally www.nyse.com/pillar.
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    As described in the Re-Launch Filing, with Pillar, the Exchange 
will re-launch trading in all Tape A, Tape B, and Tape C securities on 
an unlisted trading privileges (``UTP'') basis on a fully automated 
price-time priority allocation model.\7\ The Exchange's Pillar trading 
platform is based on the rules and trading model of the cash equities 
platforms of NYSE Arca, which operates as a fully automated price-time 
priority allocation exchange. However, unlike its affiliated exchanges, 
the Exchange is not a listing venue and therefore will not have any 
``lead'' or ``designated'' market makers for listed securities and 
would not operate any auctions. In addition, the Exchange will not 
operate a retail liquidity program.
---------------------------------------------------------------------------

    \7\ See generally Re-Launch Filing.
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    In connection with its re-launch of operations, the Exchange 
proposes to amend its Schedule of Fees and Rebates to adopt a new 
pricing model for trading on the Pillar platform.
    The proposed changes would apply to transactions executed in all 
trading sessions in securities priced at or above and below $1.00.
    The Exchange proposes to implement these changes effective June 6, 
2018.

[[Page 28672]]

Proposed Rule Change
    The Exchange proposes the following transaction fees for the re-
launch of trading on its Pillar trading platform.
General Information Applicable to the Fee Schedule
    The Exchange proposes to summarize general information applicable 
to the Fee Schedule in two bullets under the first heading in the Fee 
Schedule titled ``Fees and Credits Applicable to Market Participants.''
    The first bullet would provide that rebates are indicated by 
parentheses.
    The second bullet would provide that, for purposes of determining 
transaction fees and credits based on requirements based on quoting 
levels, average daily volume (``ADV''), and consolidated ADV 
(``CADV''), the Exchange may exclude shares traded any day that (1) the 
Exchange is not open for the entire trading day and/or (2) a disruption 
affects an Exchange system that lasts for more than 60 minutes during 
regular trading hours. The second proposed bullet would reproduce the 
language that appears in both the NYSE American Equities and NYSE Arca 
Equities price lists.\8\
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    \8\ See NYSE American Equities Price List, available at https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf; NYSE Arca Equities Price List, 
available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf.
---------------------------------------------------------------------------

Transaction Fees
    The Exchange proposes the following fees and credits for all 
transactions under new heading I titled ``Transaction Fees'':
Liquidity Adding Fees \9\
---------------------------------------------------------------------------

    \9\ Currently, there are two other exchanges (Cboe BYX and 
Nasdaq BX) that have adopted a fee model that offers rebates to 
liquidity takers and charges fees to liquidity providers. See Cboe 
BYX U.S. Equities Exchange Fee Schedule, available at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/, and 
Nasdaq BX Fee Schedule, available at https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing.
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    For securities priced at or above $1.00, the Exchange proposes the 
following charges for executions on the Exchange of displayed orders 
that add liquidity to the Exchange:
     The Exchange proposes to charge $0.0023 per share for 
executions on the Exchange of displayed orders that add liquidity to 
the Exchange.
     The Exchange proposes to charge $0.0021 per share for 
executions on the Exchange of orders that set a new BBO \10\ and that 
add liquidity to the Exchange.
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    \10\ The term ``BBO'' is defined in Rule 1.1 to mean the best 
bid or offer that is a Protected Quotation on the Exchange. The term 
``BB'' means the best bid that is a Protected Quotation on the 
Exchange and the term ``BO'' means the best offer that is a 
Protected Quotation on the Exchange.
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     The Exchange proposes to charge $0.0025 per share for 
executions on the Exchange of non-displayed orders that add liquidity 
to the Exchange.
     Finally, the Exchange proposes to charge $0.0010 per share 
for executions on the Exchange of Mid-Point Liquidity (``MPL'') orders 
that add liquidity to the Exchange.
    For securities priced below $1.00, the Exchange does not propose to 
charge a fee for executions on the Exchange of displayed orders and 
non-displayed orders that add liquidity to the Exchange.
Liquidity Removing Fees
    The Exchange does not propose to charge a fee for executions on the 
Exchange of orders that remove liquidity from the Exchange. The 
proposal would apply to securities priced at or above $1.00.
    The Exchange also does not propose to charge a fee for executions 
on the Exchange of MPL orders that remove liquidity from the Exchange. 
The proposal would apply to securities priced at or above $1.00.
    For securities priced below $1.00, the Exchange does not propose to 
charge a fee for orders that remove liquidity from the Exchange.
Adding and Remove Tiers for Securities at or Above $1.00
    The Exchange proposes tiered adding requirements for displayed and 
non-displayed orders in securities priced at or above $1.00, as 
follows.
    Under the proposed Adding Tier, the Exchange would offer the 
following fees for transactions in stocks with a per share price of 
$1.00 or more when adding liquidity to the Exchange if the ETP Holder 
has at least 0.015% of Adding ADV as a percent of US CADV:
     $0.0020 per share for displayed orders;
     $0.0022 per share for non-displayed orders;
     $0.0018 per share for orders that set a new Exchange BBO; 
and
     $0.0005 per share for MPL orders.
    Under the proposed Taking Tier, the Exchange would offer the 
following credits for transactions in stocks with a per share price of 
$1.00 or more when removing liquidity from the Exchange if the ETP 
Holder has at least 50,000 shares of Adding ADV:
     ($0.0020) per share for orders;
     ($0.0002) per share for MPL orders.
    The Exchange also proposes to waive the Adding Tier and Taking Tier 
volume requirements until June 1, 2018, which would be reflected in 
footnote *.
Routing Fees
    Under a new heading II titled ``Routing Fees,'' the Exchange 
proposes the following fees for routing, which would be applicable to 
all orders by ETP Holders that are routed.
    For all executions in securities with a price at or above $1.00 
that route to and execute in an away market,\11\ the Exchange proposes 
to charge a fee of $0.0030 per share for executions.
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    \11\ The term ``Away Market'' is defined in Rule 1.1 to mean any 
exchange, alternative trading system (``ATS'') or other broker-
dealer (1) with which the Exchange maintains an electronic linkage 
and (2) that provides instantaneous responses to orders routed from 
the Exchange.
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    For securities priced below $1.00 that route to and execute in an 
away market, the Exchange proposes to charge a fee of 0.30% of the 
total dollar value of the transaction.
Port Fees
    Under proposed new heading III titled ``Port Fees,'' the Exchange 
proposes fees for the use of ports that:
    (1) Provide connectivity to the Exchange's trading systems (i.e., 
ports for entry of orders and/or quotes (``order/quote entry ports'')), 
and
    (2) allow for the receipt of ``drop copies'' of order or 
transaction information (``drop copy ports'' and, together with order/
quote entry ports, ``ports'').\12\
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    \12\ Firms receive confirmations of their orders and receive 
execution reports via the order/quote entry port that is used to 
enter the order or quote. A ``drop copy'' contains redundant 
information that a firm chooses to have ``dropped'' to another 
destination (e.g., to allow the firm's back office and/or compliance 
department, or another firm--typically the firm's clearing broker--
to have immediate access to the information). Drop copies can only 
be sent via a drop copy port. Drop copy ports cannot be used to 
enter orders and/or quotes.
---------------------------------------------------------------------------

    For order/quote entry ports, the Exchange proposes to charge $250 
per port per month. The fee would apply to all market participants.
    The Exchange proposes not to charge for order/quote entry ports 
until June 1, 2018. Thereafter, the Exchange proposes to implement the 
$250 per port per month fee.
    Similarly, the Exchange proposes to charge $250 per drop copy port 
per month. The fee would apply to all market participants. 
Additionally, the Exchange proposes to specify that only one fee per 
drop copy port would apply, even if the port receives drop copies from 
multiple order/quote entry ports.
    The Exchange proposes not to charge for drop copy ports until June 
1, 2018. Thereafter, the Exchange proposes to implement the $250 per 
port per month fee.

[[Page 28673]]

Equity Trading Permit (``ETP'') Fee
    The Exchange proposes a new heading IV titled ``ETP Fee.'' The 
Exchange does not propose to charge a fee to obtain an ETP.\13\
---------------------------------------------------------------------------

    \13\ ETP refers to an Equity Trading Permit issued by the 
Exchange for effecting approved securities transactions on the 
Exchange. See Rule 1.1 (definition of ETP).
---------------------------------------------------------------------------

    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems that ETP 
Holders 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,\14\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\15\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4) & (5).
---------------------------------------------------------------------------

Liquidity Removing Fees
    The Exchange believes that not charging a fee for removing 
liquidity in securities priced at or above $1.00 and securities priced 
below $1.00 is reasonable, equitable and not unfairly discriminatory 
because it would provide a financial incentive to bring additional 
removing flow to a public market.
Liquidity Adding Fees
    The Exchange believes that charging a fee of $0.0023 per share for 
liquidity adding displayed orders in securities priced at or above 
$1.00 is reasonable, equitable and not unfairly discriminatory because 
the Exchange must balance the cost of credits for orders that remove 
liquidity and the fees to provide displayed liquidity. The Exchange 
believes that the proposed change is both equitable and not unfairly 
discriminatory because the fee would apply uniformly to all similarly-
situated market participants.
    The Exchange believes that charging a fee of $0.0021 per share for 
liquidity adding orders that set a new Exchange BBO in securities 
priced at or above $1.00 is reasonable, equitable and not unfairly 
discriminatory because the lower fee, compared with the fee of $0.0023 
per share for liquidity adding displayed orders that do not set a new 
Exchange BBO, will provide an incentive for ETP Holders to improve 
displayed quotes on the Exchange, which would benefit all market 
participants.
    The Exchange believes that charging a fee of $0.0025 per share for 
liquidity adding non-displayed orders in securities priced at or above 
$1.00 is reasonable and not unfairly discriminatory because the 
proposed rate would be lower than the fee charged by other 
exchanges.\16\ The Exchange further believes that the proposed fee is 
equitable and not unfairly discriminatory because it would apply to all 
non-displayed orders that add liquidity to the Exchange.
---------------------------------------------------------------------------

    \16\ Nasdaq BX, for instance, charges a fee of $0.0030 per share 
for providing non-displayed liquidity for securities priced at or 
above $1.00 for all other firms. See Nasdaq BX Exchange Fee Schedule 
2018, available at https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing.
---------------------------------------------------------------------------

    The Exchange believes that charging a lower fee of $0.0010 per 
share for liquidity adding MPL orders in securities priced at or above 
$1.00 is reasonable, equitable and not unfairly discriminatory because 
the lower fee would provide an incentive for participation and provide 
price improvement, which would benefit all market participants.
    The Exchange believes that not charging a fee for orders that 
remove liquidity in securities priced below $1.00 is reasonable, 
equitable and not unfairly discriminatory. The Exchange believes that 
not charging a fee for orders that remove liquidity would encourage 
price discovery and enhance market quality by encouraging more 
competitive quoting of displayed orders that add liquidity. The 
Exchange further believes that not charging a fee for orders that 
remove liquidity is equitable and not unfairly discriminatory because 
it is designed to facilitate execution of, and enhance trading 
opportunities for, displayed orders that add liquidity and that would 
execute against those orders that remove liquidity, thereby further 
incentivizing entry of displayed adding orders on the Exchange. The 
Exchange believes that not charging a fee for orders that remove 
liquidity would also reduce costs for market participants and 
investors.
Adding and Remove Tiers for Securities at or Above $1.00
    The Exchange believes that the proposed tiered adding requirements 
for displayed and non-displayed orders in securities priced at or above 
$1.00 are reasonable, equitable and not unfairly discriminatory, as 
follows.
    The proposed Adding Tier fees for adding liquidity ($0.0020 per 
share for displayed orders, $0.0022 per share for non-displayed orders, 
$0.0018 per share for orders that set a new Exchange BBO, and $0.0005 
per share for MPL orders) for ETP Holders with at least 0.015% of 
Adding CADV in securities with a per share price of $1.00 or more when 
adding liquidity are reasonable because it would further contribute to 
incent ETP Holders to provide increased liquidity on the Exchange, 
benefiting all ETP Holders. In addition, the Exchange believes that the 
proposed Adding Tier credits are equitable and not unfairly 
discriminatory as all similarly situated market participants will be 
subject to the same credits on an equal and non-discriminatory basis.
    Similarly, the proposed Taking Tier credits (($0.0020) per share 
for orders that remove liquidity and ($0.0002) per share for MPL 
orders) that remove liquidity for ETP Holders with an Adding ADV of at 
least 50,000 shares in securities with a per share price of $1.00 or 
more when removing liquidity from the Exchange is reasonable, equitable 
and not unfairly discriminatory because the proposed fees are in line 
with the fees for removing liquidity on other exchanges.\17\
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    \17\ See CBOE BYX Exchange Fee Schedule at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/.
---------------------------------------------------------------------------

    Finally, the Exchange believes it is reasonable to waive the Adding 
Tier and Taking Tier volume requirements until June 1, 2018, because 
the waiver for a limited period of time will enable the Exchange to 
improve its overall competitiveness and strengthen its market quality 
for all market participants. The proposed waiver is not unfairly 
discriminatory because it will apply equally to all similarly situated 
ETP Holders.
Routing Fees
    The Exchange believes that its proposed routing fees are reasonable 
and not an unfairly discriminatory allocation of fees because the fee 
would be applicable to all ETP Holders in an equivalent manner. 
Moreover, the proposed fees for routing shares are also reasonable and 
not unfairly discriminatory because they are consistent with fees 
charged on other exchanges. In particular, the Exchange's proposal to 
charge a fee of $0.0030 per share for all executions that route to and 
execute on away markets in securities priced at or above $1.00 is 
reasonable and not unfairly discriminatory because it is consistent 
with fees charged on other exchanges.\18\
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    \18\ See Nasdaq Exchange Fee Schedule at https://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.

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[[Page 28674]]

    Finally, the proposal to charge a fee for all executions of 0.30% 
of total dollar value for transactions in securities with a price under 
$1.00 that route to and execute on away markets is reasonable and not 
unfairly discriminatory because it is consistent with fees charged on 
other exchanges.\19\
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    \19\ NASDAQ, for example, charges a fee of 0.30% (i.e., 30 basis 
points) of total dollar volume to remove liquidity for shares 
executed below $1.00. See NASDAQ Fee Schedule at https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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Port Fees
    The Exchange believes that the proposed rates for order/quote entry 
ports and drop copy ports are reasonable because the fees charged for 
both types of ports are expected to permit the Exchange to offset, in 
part, its connectivity costs associated with making such ports 
available, including costs based on software and hardware enhancements 
and resources dedicated to gateway development, quality assurance, and 
support. The proposed port fees are also reasonable because the 
proposed fees are comparable to the rates charged by other venues, and 
in some cases are less expensive than many of the Exchange's 
competitors.\20\
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    \20\ For example, NASDAQ charges $575 for order entry ports and 
$550 for DROP ports. See NASDAQ Fee Schedule at https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2#connectivity. 
Also, Cboe BZX charges $550 per month per pair for logical ports. 
See Cboe BZX U.S. Equities Exchange Fee Schedule at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/. 
Additionally, Cboe EDGA and Cboe EDGX each charge $550 per port per 
month. See Cboe EDGA U.S. Equities Exchange Fee Schedule at https://markets.cboe.com/us/equities/membership/fee_schedule/edga/ and Cboe 
EDGX U.S. Equities Exchange Fee Schedule at https://markets.cboe.com/us/equities/membership/fee_schedule/edgx/.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee for order/quote entry 
ports is equitable and not unfairly discriminatory because charges for 
order/entry ports will be based on the number of ports utilized. This 
aspect of the proposed rule change is also equitable and not unfairly 
discriminatory because it will apply on an equal basis for all ports on 
the Exchange. The Exchange also believes that these fees are equitable 
and not unfairly discriminatory because they would apply to all users 
of order/quote entry ports on the Exchange.
    The Exchange believes that the proposed fee for drop copy ports is 
reasonable because it will result in a fee being charged for the use of 
technology and infrastructure provided by the Exchange. In this regard, 
the Exchange believes that the rate is reasonable because it is 
comparable to the rate charged by other exchanges for drop copy 
ports.\21\
---------------------------------------------------------------------------

    \21\ See note 20, supra.
---------------------------------------------------------------------------

    The Exchange also believes that it is reasonable that only one fee 
per drop copy port would apply, even if the port receives drop copies 
from multiple order/quote entry ports, because the purpose of drop 
copies is such that a trading unit's or a firm's entire order and 
execution activity is captured. The Exchange believes that the proposed 
new fee for drop copy ports is equitable and not unfairly 
discriminatory because it will apply on an equal basis to all users of 
drop copy ports and to all drop copy ports on the Exchange. In this 
regard, all firms will be able to request drop copy ports, as would be 
the case with order/quote entry ports.
ETP Fee
    The Exchange believes that not charging a fee to obtain an ETP on 
the Exchange is reasonable because it may incentivize broker-dealers to 
become Exchange permit holders and to direct order flow to the 
Exchange, which benefits all market participants through increased 
liquidity and enhanced price discovery.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For the foregoing 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,\22\ 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. Instead, the Exchange believes that the proposed 
changes would encourage the submission of additional liquidity to a 
public exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for ETP Holders. The Exchange 
believes that this could promote competition between the Exchange and 
other execution venues, including those that currently offer similar 
order types and comparable transaction pricing, by encouraging 
additional orders to be sent to the Exchange for execution.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive or rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees and rebates to remain competitive with other exchanges and 
with alternative trading systems that have been exempted from 
compliance 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 changes will impair the 
ability of ETP Holders 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) \23\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \24\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 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) \25\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \25\ 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

[[Page 28675]]

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-NYSENAT-2018-12 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-NYSENAT-2018-12. 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 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 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. 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-NYSENAT-2018-12 and should 
be submitted on or before July 11, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-13165 Filed 6-19-18; 8:45 am]
 BILLING CODE 8011-01-P
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