Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Price List To Amend the Threshold Levels and Rebate Amounts Payable Under the Liquidity Provider Incentive Program, and To Amend the Rebate Amount Payable Under the Agency Order Incentive Program, 47230-47232 [2018-20195]
Download as PDF
<![CDATA[
47230
Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
has promulgated Regulation 14A to
regulate the solicitation of proxies or
consents. Regulation 14A (Exchange Act
Rules 14a–1 through 14a–21 and
Schedule 14A) (17 CFR 240.14a–1
through 240.14a–21 and 240.14a–101)
sets forth the requirements for the
dissemination, content and filing of
proxy or consent solicitation materials
in connection with annual or other
meetings of holders of a Section 12registered class of securities. We
estimate that Schedule 14A takes
approximately 130.4052 hours per
response and will be filed by
approximately 5,586 issuers annually.
In addition, we estimate that 75% of the
130.4052 hours per response (97.8035
hours) is prepared by the issuer for an
annual reporting burden of 546,333
hours (97.89 hours per response × 5,586
responses).
Written comments are invited on: (a)
Whether this collection of information
is necessary for the proper performance
of the functions of the agency, including
whether the information will have
practical utility; (b) the accuracy of the
agency’s estimate of the burden imposed
by the collection of information; (c)
ways to enhance the quality, utility, and
clarity of the information collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Please direct your written comments
to Pamela Dyson, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: September 12, 2018.
Eduardo A. Aleman,
Assistant Secretary.
daltland on DSKBBV9HB2PROD with NOTICES
[FR Doc. 2018–20280 Filed 9–17–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
of the most significant parts of such
statements.
[Release No. 34–84100; File No. SR–NYSE–
2018–39]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend Its
Price List To Amend the Threshold
Levels and Rebate Amounts Payable
Under the Liquidity Provider Incentive
Program, and To Amend the Rebate
Amount Payable Under the Agency
Order Incentive Program
September 12, 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 August
31, 2018, 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 amend the threshold levels
and rebate amounts payable under the
Liquidity Provider Incentive Program,
and amend the rebate amount payable
under the Agency Order Incentive
Program. The Exchange proposes to
implement the fee changes effective
September 1, 2018. 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.
2 15
VerDate Sep<11>2014
19:14 Sep 17, 2018
Jkt 244001
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
1. Purpose
The Exchange proposes to amend its
Price List to amend the threshold levels
and rebate amounts payable under the
Liquidity Provider Incentive Program,
and amend the rebate amount payable
under the Agency Order Incentive
Program. The Exchange proposes to
implement the fee changes effective
September 1, 2018.
Liquidity Provider Incentive Program
Pursuant to the Liquidity Provider
Incentive Program,4 a User 5 can qualify
for a daily rebate based on the number
of qualifying CUSIPs 6 on the NYSE
Bonds Book for which a Unique User 7
meets prescribed quoting requirements.
The Exchange proposes to amend the
threshold levels and rebate amounts
payable under the Liquidity Provider
Incentive Program to encourage
participants to meet the quoting
requirements in a greater number of
CUSIPs.
Currently, the daily rebate amount is
tiered based on the number of qualifying
CUSIPs that meet quoting requirements,
as follows:
Number of qualifying CUSIPs
400–599 ................................
Daily rebate
$500
4 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); 79210
(November 1, 2016), 81 FR 78213 (November 7,
2016) (SR–NYSE–2016–68); and 80934 (June 15,
2017), 82 FR 28173 (June 20, 2017) (SR–NYSE–
2017–27).
5 A User is any Member or Member Organization,
Sponsored Participant, or Authorized Trader that is
authorized to access NYSE Bonds. See Rule
86(b)(2)(M). For purposes of the Liquidity Provider
Incentive Program, a User is a Member or Member
Organization that is authorized to access NYSE
Bonds.
6 CUSIP stands for Committee on Uniform
Securities Identification Procedures. A CUSIP
number identifies most financial instruments,
including: stocks of all registered U.S. and
Canadian companies, commercial paper, and U.S.
government and municipal bonds. The CUSIP
system—owned by the American Bankers
Association and managed by Standard & Poor’s—
facilitates the clearance and settlement process of
securities. See https://www.sec.gov/answers/
cusip.htm.
7 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).
E:\FR\FM\18SEN1.SGM
18SEN1
Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
Number of qualifying CUSIPs
600–799 ................................
800 or more ..........................
Daily rebate
1,000
1,500
daltland on DSKBBV9HB2PROD with NOTICES
The Exchange now proposes to amend
the current tiers by: (1) Adjusting the
third tier (800 or more CUSIPs) so that
it becomes 800–999 CUSIPs; and (2)
adopting a new tier for 1000 or more
CUSIPs with a corresponding daily
rebate of $2,000. With the proposed
changes to the tiers, the Exchange is
attempting to strike the right balance
between the number of qualifying
CUSIPs and its corresponding rebate to
ensure that the incentive program
achieves its intended purpose of
attracting liquidity in a greater number
of CUSIPs to NYSE Bonds.
With the proposed amended tiers, the
CUSIP threshold and corresponding
rebate would be as follows:
The Exchange is not proposing any
change to the Agency Order Incentive
Program other than to change the
amount of the rebate for a period of four
months, from September 2018 to
December 2018.
The proposed rule change is intended
to provide Users with a greater incentive
to transact on NYSE Bonds.
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 its proposed
rebates pursuant to a tiered pricing
Number of qualifying CUSIPs
Daily rebate
structure is reasonable, equitable and
400–599 ................................
$500 non-discriminatory. The Exchange’s
600–799 ................................
1,000 proposal to add a new tier is reasonable
800–999 ................................
1,500 as it is designed to encourage
1,000 or more .......................
2,000 participants to provide liquidity in a
greater number of CUSIPs on NYSE
Bonds in order to benefit by receiving a
The Exchange is not proposing any
larger daily rebate that was previously
change to the Liquidity Provider
not available. The Exchange believes
Incentive Program other than to add an
that with the proposed amended tiers,
additional tier and a corresponding
which provides for additional volume
rebate for the new tier.
thresholds, Users that meet prescribed
Agency Order Incentive Program
quoting requirements in a varying
number of CUSIPs would qualify for
Pursuant to the Agency Order
rebates. The purpose of the Liquidity
Incentive Program,8 the Exchange
Provider Incentive Program is to
currently provides a monthly rebate of
$4,000 to a User that submits an average incentivize Users to provide liquidity to
the Exchange. In order to achieve that
of 400 resting limit orders of any size
objective, the Exchange believes it is
per trading day during the month and
that are submitted as Agency Orders 9 by reasonable to amend the tiers and
rebates payable under each tier to allow
the User. In order to further incentivize
Users of varying levels of participation
Users to provide displayed liquidity on
to qualify for the rebates payable under
NYSE Bonds, the Exchange proposes to
the incentive program. Volume-based
provide an increased monthly rebate of
rebates such as those maintained by the
$10,000 to Users that meet the
Exchange for NYSE Bonds are equitable
requirements of the incentive program.
The proposed increased rebate would be because they are open to all Users on an
equal basis and provide additional
applicable for a limited period of time,
from September 2018 to December 2018. benefits that are reasonably related to
In the absence of a proposed rule change the value of an exchange’s market
quality. The proposed modification to
filed by the Exchange, the monthly
the tiers and the proposed addition of a
rebate payable under the Agency Order
new tier is each intended to incentivize
Incentive Program would revert back to
Users to provide liquidity in a greater
$4,000 per month beginning January
number of CUSIPs on NYSE Bonds in an
2019.
effort to qualify for the enhanced rebate
made available by the tiers.
8 See Securities Exchange Act Release No. 82343
The Exchange believes that by
(December 18, 2017), 82 FR 60782 (December 22,
2017) (SR–NYSE–2017–68).
providing Users with the ability to earn
9 For purposes of the Agency Order Incentive
increased rebates, the Exchange is
Program, an Agency Order is any order submitted
rewarding aggressive liquidity providers
by a User that it represents as agent on NYSE
Bonds. See Securities Exchange Act Release No.
82343 (December 18, 2017), 82 FR 60782 (December
22, 2017).
VerDate Sep<11>2014
19:14 Sep 17, 2018
Jkt 244001
10 15
11 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(4), (5).
Frm 00108
Fmt 4703
Sfmt 4703
47231
in the market, and by doing so, the
Exchange will encourage the additional
utilization of, and interaction with, the
NYSE Bonds platform and provide
customers with the premier venue for
price discovery, liquidity, and
competitive quotes.
The Exchange further believes that the
rebate currently in place is reasonable
because it is designed to give Users who
meet quoting requirements in a
minimum of 400 CUSIPs a benefit by
way of a daily rebate. The Exchange also
believes that the Liquidity Provider
Incentive Program is equitable and not
unfairly discriminatory because it
would uniformly apply to all Users that
trade bonds on NYSE Bonds.
The Exchange believes it is reasonable
and equitable to adopt an increased
rebate payable to Users under the
Agency Order Incentive Program in
order to incentivize Users to submit
Agency Orders to the Exchange. This in
turn would provide NYSE Bonds with
potential new order flow and liquidity
providers as it continues to grow its
marketplace. The Exchange believes it is
reasonable and equitable to adopt an
increased rebate for a limited period of
time as an incentive for Users to submit
an increased number of Agency Orders
to qualify for the increased rebate, and
at the same time to encourage Users that
do not participate in the Agency Order
Incentive Program to begin to do so
during the period of time during which
the Exchange would pay the additional
$6,000 per month. The Agency Order
Incentive Program targets a particular
segment in which the Exchange seeks to
attract greater order flow and the
Exchange believes the proposed
increase to the monthly rebate for the
remainder of this year should
incentivize Users sufficiently to try to
qualify for the rebate.
The Exchange believes the proposed
rule change would provide an incentive
for Users to provide additional liquidity
to the market and add competition to
the existing group of liquidity providers.
The Exchange does not expect the
revenues it forgoes as a result of the
proposal to negatively affect its ability
to conduct its regulatory program.
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 increased rebate,
and each User would have the ability to
determine the extent to which the
Exchange’s proposed rebate will provide
it with an economic incentive to use
NYSE Bonds, and model its business
accordingly.
E:\FR\FM\18SEN1.SGM
18SEN1
47232
Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
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 additional incentives
to engage in bonds transactions on the
Exchange and rewarding market
participants for actively quoting and
providing liquidity in the only
transparent bond market, which the
Exchange believes will enhance market
quality.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues that are not
transparent. In such an environment,
the Exchange must continually review,
and consider adjusting its fees and
rebates to remain competitive with other
exchanges as well as with alternative
trading systems and other venues that
are not required to comply with the
statutory standards applicable to
exchanges. Because competitors are free
to modify their own fees and credits in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited. As a result of all of these
considerations, the Exchange does not
believe that the proposed change will
impair the ability of member
organizations or competing order
execution venues to maintain their
competitive standing in the financial
markets.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
daltland on DSKBBV9HB2PROD with NOTICES
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 No. SR–
NYSE–2018–39 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File No.
SR–NYSE–2018–39. 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.
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 No.
SR–NYSE–2018–39, and should be
submitted on or before October 9, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–20195 Filed 9–17–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84099; File No. SR–
NYSEARCA–2018–64]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify the NYSE Arca
Options Fee Schedule
September 12, 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 August
29, 2018, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 modify the
NYSE Arca Options Fee Schedule (‘‘Fee
Schedule’’). The Exchange proposes to
implement the fee change effective
September 1, 2018. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
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
12 15
13 15
U.S.C. 78f(b)(8).
U.S.C. 78s(b)(3)(A).
VerDate Sep<11>2014
19:14 Sep 17, 2018
14 17
15 15
Jkt 244001
PO 00000
CFR 240.19b–4(f)(2).
U.S.C. 78s(b)(2)(B).
Frm 00109
Fmt 4703
Sfmt 4703
E:\FR\FM\18SEN1.SGM
18SEN1
]]>Agencies
[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Notices]
[Pages 47230-47232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20195]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84100; File No. SR-NYSE-2018-39]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend Its Price List To Amend the Threshold Levels and Rebate
Amounts Payable Under the Liquidity Provider Incentive Program, and To
Amend the Rebate Amount Payable Under the Agency Order Incentive
Program
September 12, 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 August 31, 2018, 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 amend the
threshold levels and rebate amounts payable under the Liquidity
Provider Incentive Program, and amend the rebate amount payable under
the Agency Order Incentive Program. The Exchange proposes to implement
the fee changes effective September 1, 2018. 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 amend the
threshold levels and rebate amounts payable under the Liquidity
Provider Incentive Program, and amend the rebate amount payable under
the Agency Order Incentive Program. The Exchange proposes to implement
the fee changes effective September 1, 2018.
Liquidity Provider Incentive Program
Pursuant to the Liquidity Provider Incentive Program,\4\ a User \5\
can qualify for a daily rebate based on the number of qualifying CUSIPs
\6\ on the NYSE Bonds Book for which a Unique User \7\ meets prescribed
quoting requirements. The Exchange proposes to amend the threshold
levels and rebate amounts payable under the Liquidity Provider
Incentive Program to encourage participants to meet the quoting
requirements in a greater number of CUSIPs.
---------------------------------------------------------------------------
\4\ 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); 79210 (November
1, 2016), 81 FR 78213 (November 7, 2016) (SR-NYSE-2016-68); and
80934 (June 15, 2017), 82 FR 28173 (June 20, 2017) (SR-NYSE-2017-
27).
\5\ A User is any Member or Member Organization, Sponsored
Participant, or Authorized Trader that is authorized to access NYSE
Bonds. See Rule 86(b)(2)(M). For purposes of the Liquidity Provider
Incentive Program, a User is a Member or Member Organization that is
authorized to access NYSE Bonds.
\6\ CUSIP stands for Committee on Uniform Securities
Identification Procedures. A CUSIP number identifies most financial
instruments, including: stocks of all registered U.S. and Canadian
companies, commercial paper, and U.S. government and municipal
bonds. The CUSIP system--owned by the American Bankers Association
and managed by Standard & Poor's--facilitates the clearance and
settlement process of securities. See https://www.sec.gov/answers/cusip.htm.
\7\ 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).
---------------------------------------------------------------------------
Currently, the daily rebate amount is tiered based on the number of
qualifying CUSIPs that meet quoting requirements, as follows:
------------------------------------------------------------------------
Number of qualifying CUSIPs Daily rebate
------------------------------------------------------------------------
400-599................................................. $500
[[Page 47231]]
600-799................................................. 1,000
800 or more............................................. 1,500
------------------------------------------------------------------------
The Exchange now proposes to amend the current tiers by: (1)
Adjusting the third tier (800 or more CUSIPs) so that it becomes 800-
999 CUSIPs; and (2) adopting a new tier for 1000 or more CUSIPs with a
corresponding daily rebate of $2,000. With the proposed changes to the
tiers, the Exchange is attempting to strike the right balance between
the number of qualifying CUSIPs and its corresponding rebate to ensure
that the incentive program achieves its intended purpose of attracting
liquidity in a greater number of CUSIPs to NYSE Bonds.
With the proposed amended tiers, the CUSIP threshold and
corresponding rebate would be as follows:
------------------------------------------------------------------------
Number of qualifying CUSIPs Daily rebate
------------------------------------------------------------------------
400-599................................................. $500
600-799................................................. 1,000
800-999................................................. 1,500
1,000 or more........................................... 2,000
------------------------------------------------------------------------
The Exchange is not proposing any change to the Liquidity Provider
Incentive Program other than to add an additional tier and a
corresponding rebate for the new tier.
Agency Order Incentive Program
Pursuant to the Agency Order Incentive Program,\8\ the Exchange
currently provides a monthly rebate of $4,000 to a User that submits an
average of 400 resting limit orders of any size per trading day during
the month and that are submitted as Agency Orders \9\ by the User. In
order to further incentivize Users to provide displayed liquidity on
NYSE Bonds, the Exchange proposes to provide an increased monthly
rebate of $10,000 to Users that meet the requirements of the incentive
program. The proposed increased rebate would be applicable for a
limited period of time, from September 2018 to December 2018. In the
absence of a proposed rule change filed by the Exchange, the monthly
rebate payable under the Agency Order Incentive Program would revert
back to $4,000 per month beginning January 2019.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 82343 (December 18,
2017), 82 FR 60782 (December 22, 2017) (SR-NYSE-2017-68).
\9\ For purposes of the Agency Order Incentive Program, an
Agency Order is any order submitted by a User that it represents as
agent on NYSE Bonds. See Securities Exchange Act Release No. 82343
(December 18, 2017), 82 FR 60782 (December 22, 2017).
---------------------------------------------------------------------------
The Exchange is not proposing any change to the Agency Order
Incentive Program other than to change the amount of the rebate for a
period of four months, from September 2018 to December 2018.
The proposed rule change is intended to provide Users with a
greater incentive to transact on NYSE Bonds.
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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------
The Exchange believes its proposed rebates pursuant to a tiered
pricing structure is reasonable, equitable and non-discriminatory. The
Exchange's proposal to add a new tier is reasonable as it is designed
to encourage participants to provide liquidity in a greater number of
CUSIPs on NYSE Bonds in order to benefit by receiving a larger daily
rebate that was previously not available. The Exchange believes that
with the proposed amended tiers, which provides for additional volume
thresholds, Users that meet prescribed quoting requirements in a
varying number of CUSIPs would qualify for rebates. The purpose of the
Liquidity Provider Incentive Program is to incentivize Users to provide
liquidity to the Exchange. In order to achieve that objective, the
Exchange believes it is reasonable to amend the tiers and rebates
payable under each tier to allow Users of varying levels of
participation to qualify for the rebates payable under the incentive
program. Volume-based rebates such as those maintained by the Exchange
for NYSE Bonds are equitable because they are open to all Users on an
equal basis and provide additional benefits that are reasonably related
to the value of an exchange's market quality. The proposed modification
to the tiers and the proposed addition of a new tier is each intended
to incentivize Users to provide liquidity in a greater number of CUSIPs
on NYSE Bonds in an effort to qualify for the enhanced rebate made
available by the tiers.
The Exchange believes that by providing Users with the ability to
earn increased rebates, the Exchange is rewarding aggressive liquidity
providers in the market, and by doing so, the Exchange will encourage
the additional utilization of, and interaction with, the NYSE Bonds
platform and provide customers with the premier venue for price
discovery, liquidity, and competitive quotes.
The Exchange further believes that the rebate currently in place is
reasonable because it is designed to give Users who meet quoting
requirements in a minimum of 400 CUSIPs a benefit by way of a daily
rebate. The Exchange also believes that the Liquidity Provider
Incentive Program is equitable and not unfairly discriminatory because
it would uniformly apply to all Users that trade bonds on NYSE Bonds.
The Exchange believes it is reasonable and equitable to adopt an
increased rebate payable to Users under the Agency Order Incentive
Program in order to incentivize Users to submit Agency Orders to the
Exchange. This in turn would provide NYSE Bonds with potential new
order flow and liquidity providers as it continues to grow its
marketplace. The Exchange believes it is reasonable and equitable to
adopt an increased rebate for a limited period of time as an incentive
for Users to submit an increased number of Agency Orders to qualify for
the increased rebate, and at the same time to encourage Users that do
not participate in the Agency Order Incentive Program to begin to do so
during the period of time during which the Exchange would pay the
additional $6,000 per month. The Agency Order Incentive Program targets
a particular segment in which the Exchange seeks to attract greater
order flow and the Exchange believes the proposed increase to the
monthly rebate for the remainder of this year should incentivize Users
sufficiently to try to qualify for the rebate.
The Exchange believes the proposed rule change would provide an
incentive for Users to provide additional liquidity to the market and
add competition to the existing group of liquidity providers. The
Exchange does not expect the revenues it forgoes as a result of the
proposal to negatively affect its ability to conduct its regulatory
program.
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 increased rebate, and each User would have the ability to determine
the extent to which the Exchange's proposed rebate will provide it with
an economic incentive to use NYSE Bonds, and model its business
accordingly.
[[Page 47232]]
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 additional incentives to
engage in bonds transactions on the Exchange and rewarding market
participants for actively quoting and providing liquidity in the only
transparent bond market, which the Exchange believes will enhance
market quality.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues that
are not transparent. In such an environment, the Exchange must
continually review, and consider adjusting its fees and rebates to
remain competitive with other exchanges as well as with alternative
trading systems and other venues that are not required to comply with
the statutory standards applicable to exchanges. Because competitors
are free to modify their own fees and credits in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited. As a
result of all of these considerations, the Exchange does not believe
that the proposed change will impair the ability of member
organizations or competing order execution venues to maintain their
competitive standing in the financial markets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \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.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File No. SR-NYSE-2018-39 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File No. SR-NYSE-2018-39. 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. 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 No. SR-NYSE-2018-39, and should be submitted on or
before October 9, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20195 Filed 9-17-18; 8:45 am]
BILLING CODE 8011-01-P
