Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Schedule of Fees and Rebates, 23818-23821 [2019-10751]
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23818
Federal Register / Vol. 84, No. 100 / Thursday, May 23, 2019 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–10753 Filed 5–22–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85887; File No. SR–
NYSENAT–2019–12]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Its Schedule of
Fees and Rebates
May 17, 2019.
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 May 8,
2019, NYSE National, Inc. (‘‘NYSE
National’’ 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.
khammond on DSKBBV9HB2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Schedule of Fees and Rebates to (1)
increase the current adding tier fees
(Adding Tier 1, Adding Tier 2, Adding
Tier 3, and Adding Tier 4) for adding
displayed liquidity in Tape A, Tape B
and Tape C securities and renumber the
tiers in order of favorability; and (2)
adopt a new Step Up Adding Tier 1 that
would set forth fees for displayed and
non-displayed orders that add liquidity
to the Exchange and renumber the
current Step Up Adding Tier. The
Exchange proposes to implement the
rule change on May 8, 2019. 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.
10 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.
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
Schedule of Fees and Rebates to (1)
increase the current adding tier fees
(Adding Tier 1, Adding Tier 2, Adding
Tier 3, and Adding Tier 4) for adding
displayed liquidity in Tape A, Tape B
and Tape C securities and renumber the
tiers in order of favorability; and (2)
adopt a new Step Up Adding Tier 1 that
would set forth fees for displayed and
non-displayed orders that add liquidity
to the Exchange and renumber the
current Step Up Adding Tier.
The Exchange proposes to implement
the rule change on May 8, 2019.4
Proposed Changes To Adding Tiers
Current Adding Tier 1 (Proposed
Adding Tier 4)
Under current Adding Tier 1, the
Exchange offers 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
average daily volume (‘‘ADV’’) as a
percent of US consolidated ADV
(‘‘CADV’’) 5:
• $0.0020 per share for displayed
orders in Tapes B and C securities and
$0.0022 per share for displayed orders
in Tape A securities;
• $0.0018 per share for orders that set
a new Exchange BBO in Tapes B and C
securities and $0.0020 per share in Tape
A securities;
• $0.0022 per share for non-displayed
orders in Tapes B and C securities and
4 The Exchange originally filed to amend the
Schedule of Fees and Rebates on April 30, 2019
(SR–NYSENAT–2019–11). SR–NYSENAT–2019–11
was subsequently withdrawn and replaced by this
filing.
5 The Adding Tier 1 volumes are currently
waived. See footnote * in the current Schedule of
Fees and Rebates.
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$0.0024 per share for non-displayed
orders in Tape A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
The Exchange proposes to amend the
Adding Tier 1 fees as follows:
• $0.0023 per share for displayed
orders in Tapes B and C securities and
$0.0025 per share for displayed orders
in Tape A securities;
• $0.0021 per share for orders that set
a new Exchange BBO in Tapes B and C
securities and $0.0023 per share in Tape
A securities;
• $0.0025 per share for non-displayed
orders in Tapes B and C securities and
$0.0027 per share for non-displayed
orders in Tape A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
Current Adding Tier 1 would be
renumbered and become Adding Tier 4.
As noted, the current Adding Tier 1
volumes are waived. Footnote * of the
Schedule of Fees and Rebates would be
amended to reflect the renumbering of
current Adding Tier 1.6
Adding Tier 2 (Proposed Adding Tier 1)
Under current Adding Tier 2, the
Exchange offers 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 quotes: (i) At least 5% of the
NBBO 7 in 1,000 or more symbols on an
average daily basis, calculated monthly,
and 0.20% or more Adding ADV as a
percentage of US CADV, or (ii) at least
5% of the NBBO in 2,500 or more
symbols on an average daily basis,
calculated monthly, and 0.10% or more
Adding ADV as a % of US CADV:
• $0.0005 per share for adding
displayed orders in Tape B and C
securities and $0.0008 per share in Tape
A securities;
• $0.0005 per share for orders that set
a new Exchange BBO in Tape B and C
securities and $0.0008 per share in Tape
A securities;
• $0.0007 per share for adding nondisplayed orders in Tape B and C
securities and $0.0010 per share in Tape
A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
The Exchange proposes to amend the
Adding Tier 2 fees as follows:
• $0.0008 per share for adding
displayed orders in Tape B and C
securities and $0.0011 per share in Tape
A securities;
• $0.0008 per share for orders that set
a new Exchange BBO in Tape B and C
6 See
note 4, supra.
footnote ** in the current Schedule of Fees
and Rebates.
7 See
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securities and $0.0011 per share in Tape
A securities;
• $0.0010 per share for adding nondisplayed orders in Tape B and C
securities and $0.0013 per share in Tape
A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
Current Adding Tier 2 would also be
renumbered and become Adding Tier 1.
khammond on DSKBBV9HB2PROD with NOTICES
Adding Tier 3 (Proposed Adding Tier 2)
Under current Adding Tier 3, the
Exchange offers 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 quotes at least 5% of the NBBO
in 2000 or more symbols on an average
daily basis, calculated monthly, and
executes 0.10% or more Adding ADV as
a percentage of US CADV:
• $0.0009 per share for adding
displayed orders in Tape B and C
securities and $0.0012 per share in Tape
A securities;
• $0.0009 per share for orders that set
a new Exchange BBO in Tape B and C
securities and $0.0012 per share in Tape
A securities;
• $0.0011 per share for adding nondisplayed orders in Tape B and C
securities and $0.0014 per share in Tape
A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
The Exchange proposes to amend the
Adding Tier 3 fees as follows:
• $0.0012 per share for adding
displayed orders in Tape B and C
securities and $0.0015 per share in Tape
A securities;
• $0.0012 per share for orders that set
a new Exchange BBO in Tape B and C
securities and $0.0015 per share in Tape
A securities;
• $0.0014 per share for adding nondisplayed orders in Tape B and C
securities and $0.0017 per share in Tape
A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
Current Adding Tier 3 would be
renumbered and become Adding Tier 2.
Adding Tier 4 (Proposed Adding Tier 3)
Under current Adding Tier 4, the
Exchange offers 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 quotes at least 5% of the NBBO
in 600 or more symbols on an average
daily basis, calculated monthly:
• $0.0012 per share for adding
displayed orders in Tape B and C
securities and $0.0014 per share in Tape
A securities;
• $0.0012 per share for orders that set
a new Exchange BBO in Tape B and C
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securities and $0.0014 per share in Tape
A securities;
• $0.0014 per share for adding nondisplayed orders in Tape B and C
securities and $0.0016 per share in Tape
A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
The Exchange proposes to amend the
Adding Tier 4 fees as follows:
• $0.0015 per share for adding
displayed orders in Tape B and C
securities and $0.0017 per share in Tape
A securities;
• $0.0015 per share for orders that set
a new Exchange BBO in Tape B and C
securities and $0.0017 per share in Tape
A securities;
• $0.0017 per share for adding nondisplayed orders in Tape B and C
securities and $0.0019 per share in Tape
A securities; and
• $0.0005 per share for MPL orders,
which would remain unchanged.
Current Adding Tier 4 would be
renumbered and become Adding Tier 3.
Proposed Step Up Adding Tier 1
The Exchange proposes a new Step
Up Adding Tier 1 for displayed and
non-displayed orders in securities
priced at or above $1.00.
Under the proposed Step Up Adding
Tier 1, 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 0.07% or more of
Adding ADV as a percentage of US
CADV over the ETP Holder’s Adding
ADV as a % of US CADV in November
2018:
• $0.0012 per share for adding
displayed orders in Tapes B and C
securities and $0.0015 per share in Tape
A securities;
• $0.0012 per share for orders that set
a new Exchange BBO 8 in Tapes B and
C securities and $0.0015 per share in
Tape A securities;
• $0.0014 per share for adding nondisplayed orders in Tapes B and C
securities and $0.0017 per share in Tape
A securities; and
• $0.0005 per share for MPL orders.
For example, in a given month of 20
trading days, assume that an ETP Holder
adds liquidity of an ADV of 3.8 million
shares in a month where CADV is 7.6
billion shares, or 0.05% of US CADV in
November 2018 (the ‘‘Baseline’’).
Further assume that the ETP Holder
adds liquidity of an ADV of 9.5 million
8 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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23819
shares in the relevant billing month
with the same US CADV of 7.6 billion
shares, or 0.125% of US CADV. That
ETP Holder would qualify for the
proposed Step Up Adding Tier 1 based
on their 0.075% step up as a percent of
US CADV over the ETP Holder’s
Baseline.
Finally, the existing Step Up Adding
Tier would be renumbered Step Up
Adding Tier 2.
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,9 in general, and
furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,10 in
particular, because it provides for the
equitable allocation of reasonable dues,
fees, and other charges among its
members, issuers and other persons
using its facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
Proposed Changes To Adding Tiers
The Exchange believes that the
proposed changes to the tiered adding
requirements for displayed and nondisplayed orders in Tape A, Tape B and
Tape C securities priced at or above
$1.00 are reasonable, equitable and not
unfairly discriminatory, as follows.
The proposed changes to the Adding
Tier 1, Adding Tier 2, Adding Tier 3,
and Adding Tier 4 fees for adding
liquidity in Tapes A, B and C securities
for ETP Holders meeting the current
requirements for each tier, which the
Exchange does not propose to change,
are reasonable because the proposed fee
will incentivize submission of
additional liquidity to a public
exchange, thereby benefiting all ETP
Holders by achieving higher tiers.
Specifically, the Exchange believes that
higher charges would incentivize ETP
Holders to send additional liquidity to
the Exchange in order to avoid the
proposed fee by meeting the Adding
Tier liquidity requirements.
The proposed fees are also equitable
and not unfairly discriminatory because
those fees would be consistent with or
lower than the applicable rate on other
marketplaces that charge for adding
liquidity. For example, Cboe BYX
charges a standard fee of $0.0019 per
share, and their lowest fee for adding is
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) & (5).
10 15
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$0.0012, while Cboe EDGA charges a
standard fee of $0.0030 per share, and
their lowest fee for adding is $0.0022. In
addition, the Exchange believes that the
proposed Adding Tier fees are equitable
and not unfairly discriminatory as all
similarly situated market participants
will be subject to the same fees on an
equal and non-discriminatory basis.
khammond on DSKBBV9HB2PROD with NOTICES
Proposed Step Up Adding Tier 1
The Exchange believes that the
proposed Step Up Adding Tier 1 fees for
ETP Holders with 0.07% or more
Adding average daily volume as a
percentage of US CADV in addition to
the ETP Holder’s Adding ADV as a
percentage of US CADV in November
2018 is reasonable because the proposed
tier would further contribute to
incentivizing ETP Holders to bring
additional order flow to a public market.
In particular, the Exchange believes that
the proposed new tiered rates will
provide an incentive for more active
ETP Holders, including those that meet
the current Step Up Adding Tier 2 as
well as those that do not, to add
displayed liquidity to the Exchange in
excess of the current Step Up Adding
Tier 2 level, to the benefit of the
investing public and all market
participants. In addition, the Exchange
believes that the proposed Step Up
Adding Tier 1 fees are equitable and not
unfairly discriminatory because all
similarly situated market participants
who would submit additional liquidity
to the Exchange in order to qualify for
the fees would be subject to the same
fees on an equal and non-discriminatory
basis.
The Exchange also believes that the
proposed non-substantive renumbering
changes would not be inconsistent with
the public interest and the protection of
investors because investors will not be
harmed and in fact would benefit from
increased clarity and transparency,
thereby reducing potential confusion.
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,11 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. 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) 12 of the Act and
subparagraph (f)(2) of Rule 19b–4 13
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
12 15
11 15
U.S.C. 78f(b)(8).
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
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temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 14 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSENAT–2019–12 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
Number SR–NYSENAT–2019–12. 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.
Persons submitting comments are
14 15
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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–2019–12 and
should be submitted on or before June
13, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–10751 Filed 5–22–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE Arca
Equities Fees and Charges To Adopt a
Higher Credit for the Tier 2 Pricing Tier
May 17, 2019.
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 May 10,
2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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.
khammond on DSKBBV9HB2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE Arca Equities Fees and Charges
(‘‘Fee Schedule’’) to adopt a higher
credit for the Tier 2 pricing tier. The
Exchange proposes to implement the fee
changes effective May 10, 2019.4 The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 The Exchange originally filed to amend the Fee
Schedule on April 30, 2019 (SR–NYSEArca–2019–
31) and withdrew such filing on May 10, 2019.
1 15
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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
[Release No. 34–85888; File No. SR–
NYSEARCA–2019–37]
15 17
at the Commission’s Public Reference
Room.
1. Purpose
The Exchange proposes to amend the
Fee Schedule to adopt a higher credit
for Tier 2. The Exchange proposes to
implement the fee changes effective
May 10, 2019.
The Exchange proposes to adopt a
higher credit for a current pricing tier—
Tier 2—for securities with a per share
price $1.00 or above.
Currently, a Tier 2 credit of $0.0029
per share for orders in Tape A and Tape
C Securities that provide liquidity to the
Book, and a credit of $0.0022 per share
for orders in Tape B Securities 5 that
provide liquidity to the Book, applies to
ETP Holders and Market Makers that
either (1) provide liquidity an average
daily share volume per month of 0.30%
or more, but less than 0.70% of the US
CADV or (2) provide liquidity of 0.10%
of more of the US CADV per month, and
are affiliated with an OTP Holder or
OTP Firm that provides an ADV of
electronic posted Customer and
Professional Customer executions in all
issues on NYSE Arca Options
(excluding mini options) of at least
1.50% of total Customer equity and ETF
option ADV as reported by The Options
Clearing Corporation (‘‘OCC’’).
The Exchange proposes to adopt a
higher credit of $0.0031 per share for
orders that provide liquidity in Tape A
and Tape C Securities, and $0.0024 per
share for orders that provide liquidity in
Tape B Securities. The proposed higher
credit would be applicable for orders
5 An additional credit applies to ETP Holders and
Market Makers affiliated with LMMs that provide
displayed liquidity to the Book based on the
number of Less Active ETP Securities in which the
LMM is registered as the LMM. See LMM
Transaction Fees and Credits on the Fee Schedule
for the applicable tiered credits.
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23821
that provide displayed liquidity to the
Book for ETP Holders and Market
Makers that meet the requirements of
Tier 2 described above and, for the
billing month, (1) execute providing
volume equal to at least 0.30% of US
CADV, (2) execute removing volume
equal to at least 0.285% of US CADV,
and (3) execute Market-On-Close and
Limit-On-Close Orders executed in a
Closing Auction of at least 0.075% of
US CADV.
For example, assume an ETP Holder
posts an order for 1,000 shares that
provides liquidity to the Book. Assume
further that 600 shares, from the 1,000
shares that are posted and therefore are
adding liquidity, trade against an
incoming order which would be
removing liquidity. The 600 share
execution would be a product of two
orders interacting, one that provided
liquidity and the contra order that
removed liquidity. The remaining 400
shares of that ETP Holder’s adding order
would remain posted on the Book. The
600 shares of the adding order that
executed and added liquidity would
count towards the executed adding
volume requirement of 0.30% of US
CADV, the first prong of the
requirement. The 400 shares of that
adding order that remain unexecuted
would not count towards the
requirement.
Further, assume the same ETP Holder
sends an Immediate or Cancel (‘‘IOC’’)
order of 1,000 shares to the Exchange,
of which 600 shares execute against an
order that was already resting on the
Book. The 600 share execution would be
a product of two orders interacting, one
that provided liquidity and the contra
order that took liquidity. The 400 shares
remaining of that IOC order that did not
immediately execute would cancel back
to the ETP Holder that submitted the
1,000 share order. The 600 shares of the
IOC order that executed and removed
liquidity would count towards the
executed removing volume requirement
of 0.285% of US CADV, the second
prong of the requirement. The 400
shares of that IOC order that did not
execute and was canceled would not
count towards the requirement.
Additionally, assume an ETP Holder
sends a Market-On-Close (‘‘MOC’’) order
of 2,000 shares to the Exchange for
execution in the Closing Auction.
Further assume that 1,200 shares of that
MOC order executed in the Closing
Auction, and the remaining 800 shares
did not execute and were canceled after
the Closing Auction. The 1,200 shares of
that MOC order that executed and
traded in the Closing Auction would
count towards the Market-On-Close and
Limit-On-Close Orders executed in a
E:\FR\FM\23MYN1.SGM
23MYN1
]]>Agencies
[Federal Register Volume 84, Number 100 (Thursday, May 23, 2019)]
[Notices]
[Pages 23818-23821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10751]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85887; File No. SR-NYSENAT-2019-12]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its
Schedule of Fees and Rebates
May 17, 2019.
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 May 8, 2019, NYSE National, Inc. (``NYSE National'' 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.
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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 amend its Schedule of Fees and Rebates to
(1) increase the current adding tier fees (Adding Tier 1, Adding Tier
2, Adding Tier 3, and Adding Tier 4) for adding displayed liquidity in
Tape A, Tape B and Tape C securities and renumber the tiers in order of
favorability; and (2) adopt a new Step Up Adding Tier 1 that would set
forth fees for displayed and non-displayed orders that add liquidity to
the Exchange and renumber the current Step Up Adding Tier. The Exchange
proposes to implement the rule change on May 8, 2019. 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 Schedule of Fees and Rebates to
(1) increase the current adding tier fees (Adding Tier 1, Adding Tier
2, Adding Tier 3, and Adding Tier 4) for adding displayed liquidity in
Tape A, Tape B and Tape C securities and renumber the tiers in order of
favorability; and (2) adopt a new Step Up Adding Tier 1 that would set
forth fees for displayed and non-displayed orders that add liquidity to
the Exchange and renumber the current Step Up Adding Tier.
The Exchange proposes to implement the rule change on May 8,
2019.\4\
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\4\ The Exchange originally filed to amend the Schedule of Fees
and Rebates on April 30, 2019 (SR-NYSENAT-2019-11). SR-NYSENAT-2019-
11 was subsequently withdrawn and replaced by this filing.
---------------------------------------------------------------------------
Proposed Changes To Adding Tiers
Current Adding Tier 1 (Proposed Adding Tier 4)
Under current Adding Tier 1, the Exchange offers 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 average daily volume (``ADV'') as a percent of US
consolidated ADV (``CADV'') \5\:
---------------------------------------------------------------------------
\5\ The Adding Tier 1 volumes are currently waived. See footnote
* in the current Schedule of Fees and Rebates.
---------------------------------------------------------------------------
$0.0020 per share for displayed orders in Tapes B and C
securities and $0.0022 per share for displayed orders in Tape A
securities;
$0.0018 per share for orders that set a new Exchange BBO
in Tapes B and C securities and $0.0020 per share in Tape A securities;
$0.0022 per share for non-displayed orders in Tapes B and
C securities and $0.0024 per share for non-displayed orders in Tape A
securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 1 fees as follows:
$0.0023 per share for displayed orders in Tapes B and C
securities and $0.0025 per share for displayed orders in Tape A
securities;
$0.0021 per share for orders that set a new Exchange BBO
in Tapes B and C securities and $0.0023 per share in Tape A securities;
$0.0025 per share for non-displayed orders in Tapes B and
C securities and $0.0027 per share for non-displayed orders in Tape A
securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 1 would be renumbered and become Adding Tier 4.
As noted, the current Adding Tier 1 volumes are waived. Footnote * of
the Schedule of Fees and Rebates would be amended to reflect the
renumbering of current Adding Tier 1.\6\
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\6\ See note 4, supra.
---------------------------------------------------------------------------
Adding Tier 2 (Proposed Adding Tier 1)
Under current Adding Tier 2, the Exchange offers 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 quotes: (i) At least
5% of the NBBO \7\ in 1,000 or more symbols on an average daily basis,
calculated monthly, and 0.20% or more Adding ADV as a percentage of US
CADV, or (ii) at least 5% of the NBBO in 2,500 or more symbols on an
average daily basis, calculated monthly, and 0.10% or more Adding ADV
as a % of US CADV:
---------------------------------------------------------------------------
\7\ See footnote ** in the current Schedule of Fees and Rebates.
---------------------------------------------------------------------------
$0.0005 per share for adding displayed orders in Tape B
and C securities and $0.0008 per share in Tape A securities;
$0.0005 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0008 per share in Tape A securities;
$0.0007 per share for adding non-displayed orders in Tape
B and C securities and $0.0010 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 2 fees as follows:
$0.0008 per share for adding displayed orders in Tape B
and C securities and $0.0011 per share in Tape A securities;
$0.0008 per share for orders that set a new Exchange BBO
in Tape B and C
[[Page 23819]]
securities and $0.0011 per share in Tape A securities;
$0.0010 per share for adding non-displayed orders in Tape
B and C securities and $0.0013 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 2 would also be renumbered and become Adding
Tier 1.
Adding Tier 3 (Proposed Adding Tier 2)
Under current Adding Tier 3, the Exchange offers 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 quotes at least 5%
of the NBBO in 2000 or more symbols on an average daily basis,
calculated monthly, and executes 0.10% or more Adding ADV as a
percentage of US CADV:
$0.0009 per share for adding displayed orders in Tape B
and C securities and $0.0012 per share in Tape A securities;
$0.0009 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0012 per share in Tape A securities;
$0.0011 per share for adding non-displayed orders in Tape
B and C securities and $0.0014 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 3 fees as follows:
$0.0012 per share for adding displayed orders in Tape B
and C securities and $0.0015 per share in Tape A securities;
$0.0012 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0015 per share in Tape A securities;
$0.0014 per share for adding non-displayed orders in Tape
B and C securities and $0.0017 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 3 would be renumbered and become Adding Tier 2.
Adding Tier 4 (Proposed Adding Tier 3)
Under current Adding Tier 4, the Exchange offers 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 quotes at least 5%
of the NBBO in 600 or more symbols on an average daily basis,
calculated monthly:
$0.0012 per share for adding displayed orders in Tape B
and C securities and $0.0014 per share in Tape A securities;
$0.0012 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0014 per share in Tape A securities;
$0.0014 per share for adding non-displayed orders in Tape
B and C securities and $0.0016 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
The Exchange proposes to amend the Adding Tier 4 fees as follows:
$0.0015 per share for adding displayed orders in Tape B
and C securities and $0.0017 per share in Tape A securities;
$0.0015 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0017 per share in Tape A securities;
$0.0017 per share for adding non-displayed orders in Tape
B and C securities and $0.0019 per share in Tape A securities; and
$0.0005 per share for MPL orders, which would remain
unchanged.
Current Adding Tier 4 would be renumbered and become Adding Tier 3.
Proposed Step Up Adding Tier 1
The Exchange proposes a new Step Up Adding Tier 1 for displayed and
non-displayed orders in securities priced at or above $1.00.
Under the proposed Step Up Adding Tier 1, 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 0.07% or more of Adding ADV as a percentage of US CADV over the ETP
Holder's Adding ADV as a % of US CADV in November 2018:
$0.0012 per share for adding displayed orders in Tapes B
and C securities and $0.0015 per share in Tape A securities;
$0.0012 per share for orders that set a new Exchange BBO
\8\ in Tapes B and C securities and $0.0015 per share in Tape A
securities;
---------------------------------------------------------------------------
\8\ 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.
---------------------------------------------------------------------------
$0.0014 per share for adding non-displayed orders in Tapes
B and C securities and $0.0017 per share in Tape A securities; and
$0.0005 per share for MPL orders.
For example, in a given month of 20 trading days, assume that an
ETP Holder adds liquidity of an ADV of 3.8 million shares in a month
where CADV is 7.6 billion shares, or 0.05% of US CADV in November 2018
(the ``Baseline''). Further assume that the ETP Holder adds liquidity
of an ADV of 9.5 million shares in the relevant billing month with the
same US CADV of 7.6 billion shares, or 0.125% of US CADV. That ETP
Holder would qualify for the proposed Step Up Adding Tier 1 based on
their 0.075% step up as a percent of US CADV over the ETP Holder's
Baseline.
Finally, the existing Step Up Adding Tier would be renumbered Step
Up Adding Tier 2.
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,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\10\ in
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) & (5).
---------------------------------------------------------------------------
Proposed Changes To Adding Tiers
The Exchange believes that the proposed changes to the tiered
adding requirements for displayed and non-displayed orders in Tape A,
Tape B and Tape C securities priced at or above $1.00 are reasonable,
equitable and not unfairly discriminatory, as follows.
The proposed changes to the Adding Tier 1, Adding Tier 2, Adding
Tier 3, and Adding Tier 4 fees for adding liquidity in Tapes A, B and C
securities for ETP Holders meeting the current requirements for each
tier, which the Exchange does not propose to change, are reasonable
because the proposed fee will incentivize submission of additional
liquidity to a public exchange, thereby benefiting all ETP Holders by
achieving higher tiers. Specifically, the Exchange believes that higher
charges would incentivize ETP Holders to send additional liquidity to
the Exchange in order to avoid the proposed fee by meeting the Adding
Tier liquidity requirements.
The proposed fees are also equitable and not unfairly
discriminatory because those fees would be consistent with or lower
than the applicable rate on other marketplaces that charge for adding
liquidity. For example, Cboe BYX charges a standard fee of $0.0019 per
share, and their lowest fee for adding is
[[Page 23820]]
$0.0012, while Cboe EDGA charges a standard fee of $0.0030 per share,
and their lowest fee for adding is $0.0022. In addition, the Exchange
believes that the proposed Adding Tier fees are equitable and not
unfairly discriminatory as all similarly situated market participants
will be subject to the same fees on an equal and non-discriminatory
basis.
Proposed Step Up Adding Tier 1
The Exchange believes that the proposed Step Up Adding Tier 1 fees
for ETP Holders with 0.07% or more Adding average daily volume as a
percentage of US CADV in addition to the ETP Holder's Adding ADV as a
percentage of US CADV in November 2018 is reasonable because the
proposed tier would further contribute to incentivizing ETP Holders to
bring additional order flow to a public market. In particular, the
Exchange believes that the proposed new tiered rates will provide an
incentive for more active ETP Holders, including those that meet the
current Step Up Adding Tier 2 as well as those that do not, to add
displayed liquidity to the Exchange in excess of the current Step Up
Adding Tier 2 level, to the benefit of the investing public and all
market participants. In addition, the Exchange believes that the
proposed Step Up Adding Tier 1 fees are equitable and not unfairly
discriminatory because all similarly situated market participants who
would submit additional liquidity to the Exchange in order to qualify
for the fees would be subject to the same fees on an equal and non-
discriminatory basis.
The Exchange also believes that the proposed non-substantive
renumbering changes would not be inconsistent with the public interest
and the protection of investors because investors will not be harmed
and in fact would benefit from increased clarity and transparency,
thereby reducing potential confusion.
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,\11\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. 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.
---------------------------------------------------------------------------
\11\ 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) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\14\ 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 Number SR-NYSENAT-2019-12 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 Number SR-NYSENAT-2019-12. 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. Persons submitting comments are
[[Page 23821]]
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-2019-12 and should be submitted
on or before June 13, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10751 Filed 5-22-19; 8:45 am]
BILLING CODE 8011-01-P
