Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Schedule of Fees and Charges To Remove the Ineligibility for Certain Discounts, 4752-4755 [2020-01237]
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Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices
covered security’s closing price as
determined by the listing market for that
covered security as of the end of regular
trading hours on the prior day, and (ii)
impose such short sale circuit breaker
restriction for the remainder of the day
and the following day. In addition, the
Exchange’s policies and procedures,
among other things, must be reasonably
designed to permit the execution or
display of a short sale order of a covered
security marked ‘‘short exempt’’ without
regard to whether the order is at a price
that is less than or equal to the current
national best bid.
In Amendment No. 2, the Exchange
recognized that since the Cboe Market
Close will match buy and sell MOC
orders at 3:35 p.m. without knowing the
later determined execution price
(namely, the official closing price as
determined by the primary listing
exchange), there is a possibility that a
short sale MOC order that is matched for
execution in the Cboe Market Close
could result in an execution price that
violates Rule 201 of Regulation SHO. To
prevent such a violation of Rule 201 of
Regulation SHO, the Exchange proposed
to reject all short sale MOC orders that
are designated for participation in the
Cboe Market Close. The Exchange
noted, however, that MOC orders
marked ‘‘short exempt’’ are not subject
to the short sale circuit breaker
restriction under Regulation SHO, and
would therefore be accepted for
participation in the Cboe Market Close.
One commenter addressed the
proposed Amendment No. 2.346 In
particular, Nasdaq acknowledged that
the proposed amendment could help
BZX avoid violations of Rule 201 of
Regulation SHO.347 The Commission
believes that the Exchange’s proposed
handling of short sale MOC orders and
‘‘short exempt’’ MOC orders in the
context of the Cboe Market Close, as
described in Amendment No. 2, will
help to ensure that the Exchange is in
compliance with its responsibilities
under Rule 201(b) of Regulation SHO
and is otherwise consistent with the
protection of investors and in the public
interest.
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–01253 Filed 1–24–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–10747; 34–88012; File No.
265–32]
SEC Small Business Capital Formation
Advisory Committee
Securities and Exchange
Commission.
ACTION: Notice of meeting.
AGENCY:
The Securities and Exchange
Commission Small Business Capital
Formation Advisory Committee,
established pursuant to Section 40 of
the Securities Exchange Act of 1934 as
added by the SEC Small Business
Advocate Act of 2016, is providing
notice that it will hold a public meeting.
The public is invited to submit written
statements to the Committee.
DATES: The meeting will be held on
Tuesday, February 4, 2020, from 9:30
a.m. to 3:30 p.m. (ET) and will be open
to the public. Seating will be on a firstcome, first-served basis. Written
statements should be received on or
before February 4, 2020.
ADDRESSES: The meeting will be held at
the Commission’s headquarters, 100 F
Street NE, Washington, DC. The meeting
will be webcast on the Commission’s
website at www.sec.gov. Written
statements may be submitted by any of
the following methods:
SUMMARY:
Electronic Statements
IV. Conclusion
khammond on DSKJM1Z7X2PROD with NOTICES
It is therefore ordered, pursuant to
Rule 431 of the Commission’s Rules of
Practice, that the earlier action taken by
delegated authority, Exchange Act
Release No. 82522 (January 17, 2018), 83
FR 3205 (January 23, 2018), is set aside
and, pursuant to Section 19(b)(2) of the
Exchange Act, the proposed rule change
(SR–BatsBZX–2017–34), as modified by
Amendment No. 1 and Amendment No.
2, hereby is approved.
• Use the Commission’s internet
submission form (https://www.sec.gov/
rules/other.shtml); or
• Send an email message to rulecomments@sec.gov. Please include File
Number 265–32 on the subject line; or
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to a national
securities exchange.
Paper Statements
346 See
Nasdaq Letter 4.
347 See id. (noting also Nasdaq’s belief that
Amendment No. 2 did not address any of the other
issues that had been raised in prior comment
letters).
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• Send paper statements to Vanessa
A. Countryman, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
PO 00000
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All submissions should refer to File No.
265–32. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method. The Commission
will post all statements on the SEC’s
website at www.sec.gov.
Statements also 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. (ET).
All statements received will be posted
without change; we do not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
FOR FURTHER INFORMATION CONTACT: Julie
Z. Davis, Senior Special Counsel, Office
of the Advocate for Small Business
Capital Formation, at (202) 551–5407,
Securities and Exchange Commission,
100 F Street NE, Washington, DC
20549–3628.
SUPPLEMENTARY INFORMATION: The
meeting will be open to the public.
Persons needing special
accommodations because of a disability
should notify the contact person listed
in the section above entitled FOR
FURTHER INFORMATION CONTACT. The
agenda for the meeting includes matters
relating to rules and regulations
affecting small and emerging companies
under the federal securities laws.
Dated: January 22, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020–01313 Filed 1–24–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88009; File No. SR–
NYSEArca–2020–06]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the Schedule
of Fees and Charges To Remove the
Ineligibility for Certain Discounts
January 21, 2020.
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 January
10, 2020, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or the ‘‘Exchange’’) filed with the
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
E:\FR\FM\27JAN1.SGM
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Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices
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.
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 Charges to remove
the ineligibility for certain discounts
when an issuer transfers an Exchange
Traded Product or Structured Product
off the Exchange (except to an Exchange
affiliate) in a trailing 12-month period.
The Exchange proposes to implement
the fee changes effective January 10,
2020. 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
khammond on DSKJM1Z7X2PROD with NOTICES
1. Purpose
The Exchange proposes to amend its
Schedule of Fees and Charges to remove
the ineligibility for certain discounts
when an issuer transfers an Exchange
Traded Product (‘‘ETP’’) or Structured
Product off the Exchange (except for
transfers to an Exchange affiliate) in a
trailing 12-month period.
The proposed change responds to the
current extremely competitive
environment for ETP listings in which
issuers can readily favor competing
venues or transfer their listings if they
deem fee levels at a particular venue to
be excessive, or discount opportunities
available at other venues to be more
favorable. The Exchange’s current
annual fees for ETPs are based on the
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number of shares outstanding per issuer
and provide incentives for issuers to list
multiple series of certain securities on
the Exchange. In response to the
competitive environment for listings,
the Exchange adopted a competitive
pricing structure that combines higher
minimum annual fees for certain
securities with discounts for issuers that
list multiple ETPs and Structured
Products.4 The proposed change is
designed to encourage more issuers to
qualify for the discounts and enhance
competition among issuers and listing
venues by removing ineligibility for
certain discounts when an issuer
transfers a Product off the Exchange
(except for transfers to an Exchange
affiliate) in a trailing 12-month period.
The Exchange proposes to implement
the fee changes effective January 10,
2020.
Proposed Rule Change
Currently, the Exchange offers nonmutually exclusive ‘‘Fund Family’’ and
‘‘High Volume Products’’ discounts for
ETPs and Structured Products that are
set forth in Section 9 of the Schedule of
Fees and Charges. Eligibility for the
discounts is subject to the limitation
that an issuer that transfers a Product off
the Exchange (except for transfers to an
Exchange affiliate) in a trailing 12month period beginning January 1, 2020
is ineligible for either or both discounts
for the following calendar year. The
Exchange proposes to remove this
limitation from the Schedule of Fees
and Charges.
The purpose of the proposed change
is to encourage more issuers to qualify
for the discounts by removing the
restriction on achieving or retaining
them. Although the limitation is a
reasonable attempt to incentivize issuers
to maintain listings on the Exchange
and discourage transfers to and from the
Exchange solely for the purpose of
securing one or more discounts, the
Exchange believes that removing the
limitation outweighs those
considerations because it would result
in more issuers qualifying for and
retaining discounts while enhancing
competition among issuers and listing
venues, to the benefit of all market
participants. The proposed change
described above is not otherwise
intended to address other issues, and
the Exchange is not aware of any
significant problems that market
participants would have in complying
with the proposed changes.
4 ‘‘Exchange Traded Products’’ are defined in
footnote 3 of the current Schedule of Fees and
Charges. ‘‘Structured Products’’ are defined in
footnote 4 of the current Schedule of Fees and
Charges.
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,5 in general, and
furthers the objectives of Sections
6(b)(4) and (5) of the Act,6 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 Proposed Change Is Reasonable
As discussed above, the Exchange
operates in a highly competitive market
for the listing of ETPs. Specifically, ETP
issuers can readily favor competing
venues or transfer listings if they deem
fee levels at a particular venue to be
excessive, or discount opportunities
available at other venues to be more
favorable. The Exchange’s current
annual fees for ETPs are based on the
number of shares outstanding per issuer
and provide incentives for issuers to list
multiple series of certain securities on
the Exchange. The Commission has
repeatedly expressed its preference for
competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. Specifically, in Regulation
NMS, the Commission highlighted the
importance of market forces in
determining prices and SRO revenues
and, also, recognized that current
regulation of the market system ‘‘has
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 7
The Exchange believes that the
ongoing competition among the
exchanges with respect to new listings
and the transfer of existing listings
among competitor exchanges
demonstrates that issuers can choose
different listing markets in response to
fee changes. Accordingly, competitive
forces constrain exchange listing fees.
Stated otherwise, changes to exchange
listing fees can have a direct effect on
the ability of an exchange to compete for
new listings and retain existing listings.
Given this competitive environment,
the Exchange believes that the proposed
change is a reasonable attempt to
encourage more issuers to qualify for
discounts that the Exchange offers by
removing restrictions on achieving or
retaining them, thereby enhancing
competition among issuers and listing
venues.
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) & (5).
7 See Regulation NMS, 70 FR at 37499.
6 15
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Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices
The Proposal Is an Equitable Allocation
of Fees
The Exchange believes the proposal
equitably allocates its fees among its
market participants. In the prevailing
competitive environment, issuers can
readily favor competing venues or
transfer listings if they deem fee levels
at a particular venue to be excessive, or
discount opportunities available at other
venues to be more favorable. The
proposed removal of the limitation on
discounts for ETPs and Structured
Products is equitable because it would
apply uniformly to all issuers and to all
ETPs and Structured Products listed on
the Exchange either generically or
pursuant to a rule filing with the
Commission. For the same reasons, the
proposal neither targets nor will it have
a disparate impact on any particular
category of market participant.
khammond on DSKJM1Z7X2PROD with NOTICES
The Proposal Is Not Unfairly
Discriminatory
The Exchange believes that the
proposal is not unfairly discriminatory.
In the prevailing competitive
environment, issuers are free to list
elsewhere if they believe that alternative
venues offer them better value. The
Exchange believes it is not unfairly
discriminatory to remove an eligibility
restriction on issuers transferring
Products off the Exchange because
removal of the restriction would apply
to and potentially benefit all issuers
equally.
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,8 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Instead, as
discussed above, the Exchange believes
that the proposed change would
encourage competition by removing an
incentive for issuers not to transfer
Products off of the Exchange (except to
an Exchange affiliate) in a trailing 12month period, which the Exchange
believes will enhance competition
among issuers and listing venues, to the
benefit of investors. As noted, the
market for listing services is extremely
competitive. Issuers have the option to
list their securities on these alternative
venues based on the fees charged and
the value provided by each listing
exchange. Because issuers have a choice
to list their securities on a different
national securities exchange, the
Exchange does not believe that the
proposed change impose a burden on
competition.
Intramarket Competition. The
proposed change is designed to remove
a restriction in order to encourage more
issuers to qualify for and retain
discounts that the Exchange offers.
Removal of the restriction would be
apply [sic] to and potentially benefit all
issuers equally, and, as such, the
proposed change would not impose a
disparate burden on competition among
market participants on the Exchange.
Intermarket Competition. The
Exchange operates in a highly
competitive listings market in which
issuers can readily choose alternative
listing venues. In such an environment,
the Exchange must adjust its fees and
discounts to remain competitive with
other exchanges competing for the same
listings. Because competitors are free to
modify their own fees and discounts in
response, and because issuers may
readily adjust their listing decisions and
practices, the Exchange does not believe
its proposed change can impose any
burden on intermarket competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 9 of the Act and
subparagraph (f)(2) of Rule 19b–4 10
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
9 15
8 15
U.S.C. 78f(b)(8).
VerDate Sep<11>2014
16:54 Jan 24, 2020
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
10 17
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under Section 19(b)(2)(B) 11 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2020–06 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–NYSEArca–2020–06. 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
Number SR–NYSEArca–2020–06 and
11 15
E:\FR\FM\27JAN1.SGM
U.S.C. 78s(b)(2)(B).
27JAN1
Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices
should be submitted on or before
February 18, 2020.
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
Dated: January 22, 2020.
Vanessa A. Countryman,
Secretary.
Sunshine Act Meetings
AGENCY:
BILLING CODE 8011–01–P
ACTION:
SELECTIVE SERVICE SYSTEM
The following forms have been
submitted to the Office of Management
and Budget (OMB) for extension of
clearance in compliance with the
Paperwork Reduction Act (44 U.S.C.
Chapter 35):
AGENCY:
2:00 p.m. on
Wednesday, January 29, 2020.
PLACE: The meeting will be held at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matters of the closed
meeting will consist of the following
topics:
Institution and settlement of injunctive
actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
khammond on DSKJM1Z7X2PROD with NOTICES
TIME AND DATE:
ACTION:
Selective Service System.
Notice.
The following forms have been
submitted to the Office of Management
and Budget (OMB) for extension of
clearance in compliance with the
Paperwork Reduction Act (44 U.S.C.
Chapter 35):
SSS FORM—404
Title: Potential Board Member
Information.
Purpose: Is used to identify
individuals willing to serve as members
of local, appeal or review boards in the
Selective Service System.
Respondents: Potential Board
Members.
Burden: A burden of 15 minutes or
less on the individual respondent.
Copies of the above identified form
can be obtained upon written request to
the Selective Service System, Reports
Clearance Officer, 1515 Wilson
Boulevard, Arlington, Virginia 22209–
2425.
Written comments and
recommendations for the proposed
extension of clearance of the form
should be sent within 30 days of the
publication of this notice to the
Selective Service System, Reports
Clearance Officer, 1515 Wilson
Boulevard, Arlington, Virginia 22209–
2425.
A copy of the comments should be
sent to the Office of Information and
Regulatory Affairs, Attention: Desk
Officer, Selective Service System, Office
of Management and Budget, New
Executive Office Building, Room 3235,
Washington, DC 20503.
Dated: January 14, 2020.
Donald M. Benton,
Director.
[FR Doc. 2020–01330 Filed 1–24–20; 8:45 am]
12 17
CFR 200.30–3(a)(12).
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16:54 Jan 24, 2020
BILLING CODE 8015–01–P
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Selective Service System.
Notice.
[FR Doc. 2020–01366 Filed 1–23–20; 11:15 am]
Forms Submitted to the Office of
Management and Budget for Extension
of Clearance
SECURITIES AND EXCHANGE
COMMISSION
SELECTIVE SERVICE SYSTEM
Forms Submitted to the Office of
Management and Budget for Extension
of Clearance
[FR Doc. 2020–01237 Filed 1–24–20; 8:45 am]
BILLING CODE 8011–01–P
4755
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SSS FORM—402
Title: Uncompensated Registrar
Appointment Form.
Purpose: Is used to verify the official
status of applicants for the position of
Uncompensated Registrars and to
establish authority for those appointed
to perform as Selective Service System
Registrars.
Respondents: United States citizens
over the age of 18.
Frequency: One time.
Burden: The reporting burden is three
minutes or less per respondent.
Copies of the above identified form
can be obtained upon written request to
the Selective Service System, Reports
Clearance Officer, 1515 Wilson
Boulevard, Arlington, Virginia 22209–
2425.
Written comments and
recommendations for the proposed
extension of clearance of the form
should be sent within 30 days of the
publication of this notice to the
Selective Service System, Reports
Clearance Officer, 1515 Wilson
Boulevard, Arlington, Virginia 22209–
2425.
A copy of the comments should be
sent to the Office of Information and
Regulatory Affairs, Attention: Desk
Officer, Selective Service System, Office
of Management and Budget, New
Executive Office Building, Room 3235,
Washington, DC 20503.
Dated: January 14, 2020.
Donald M. Benton,
Director.
[FR Doc. 2020–01331 Filed 1–24–20; 8:45 am]
BILLING CODE 8015–01–P
SMALL BUSINESS ADMINISTRATION
Military Reservist Economic Injury
Disaster Loans Interest Rate for
Second Quarter FY 2020
The Small Business Administration
publishes an interest rate for Military
Reservist Economic Injury Disaster
Loans (13 CFR 123.512) on a quarterly
E:\FR\FM\27JAN1.SGM
27JAN1
]]>Agencies
[Federal Register Volume 85, Number 17 (Monday, January 27, 2020)]
[Notices]
[Pages 4752-4755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01237]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88009; File No. SR-NYSEArca-2020-06]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the
Schedule of Fees and Charges To Remove the Ineligibility for Certain
Discounts
January 21, 2020.
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 January 10, 2020, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the
[[Page 4753]]
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.
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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 Charges to
remove the ineligibility for certain discounts when an issuer transfers
an Exchange Traded Product or Structured Product off the Exchange
(except to an Exchange affiliate) in a trailing 12-month period. The
Exchange proposes to implement the fee changes effective January 10,
2020. 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 Charges to
remove the ineligibility for certain discounts when an issuer transfers
an Exchange Traded Product (``ETP'') or Structured Product off the
Exchange (except for transfers to an Exchange affiliate) in a trailing
12-month period.
The proposed change responds to the current extremely competitive
environment for ETP listings in which issuers can readily favor
competing venues or transfer their listings if they deem fee levels at
a particular venue to be excessive, or discount opportunities available
at other venues to be more favorable. The Exchange's current annual
fees for ETPs are based on the number of shares outstanding per issuer
and provide incentives for issuers to list multiple series of certain
securities on the Exchange. In response to the competitive environment
for listings, the Exchange adopted a competitive pricing structure that
combines higher minimum annual fees for certain securities with
discounts for issuers that list multiple ETPs and Structured
Products.\4\ The proposed change is designed to encourage more issuers
to qualify for the discounts and enhance competition among issuers and
listing venues by removing ineligibility for certain discounts when an
issuer transfers a Product off the Exchange (except for transfers to an
Exchange affiliate) in a trailing 12-month period.
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\4\ ``Exchange Traded Products'' are defined in footnote 3 of
the current Schedule of Fees and Charges. ``Structured Products''
are defined in footnote 4 of the current Schedule of Fees and
Charges.
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The Exchange proposes to implement the fee changes effective
January 10, 2020.
Proposed Rule Change
Currently, the Exchange offers non-mutually exclusive ``Fund
Family'' and ``High Volume Products'' discounts for ETPs and Structured
Products that are set forth in Section 9 of the Schedule of Fees and
Charges. Eligibility for the discounts is subject to the limitation
that an issuer that transfers a Product off the Exchange (except for
transfers to an Exchange affiliate) in a trailing 12-month period
beginning January 1, 2020 is ineligible for either or both discounts
for the following calendar year. The Exchange proposes to remove this
limitation from the Schedule of Fees and Charges.
The purpose of the proposed change is to encourage more issuers to
qualify for the discounts by removing the restriction on achieving or
retaining them. Although the limitation is a reasonable attempt to
incentivize issuers to maintain listings on the Exchange and discourage
transfers to and from the Exchange solely for the purpose of securing
one or more discounts, the Exchange believes that removing the
limitation outweighs those considerations because it would result in
more issuers qualifying for and retaining discounts while enhancing
competition among issuers and listing venues, to the benefit of all
market participants. The proposed change described above is not
otherwise intended to address other issues, and the Exchange is not
aware of any significant problems that market participants would have
in complying with the proposed changes.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\6\ 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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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) & (5).
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The Proposed Change Is Reasonable
As discussed above, the Exchange operates in a highly competitive
market for the listing of ETPs. Specifically, ETP issuers can readily
favor competing venues or transfer listings if they deem fee levels at
a particular venue to be excessive, or discount opportunities available
at other venues to be more favorable. The Exchange's current annual
fees for ETPs are based on the number of shares outstanding per issuer
and provide incentives for issuers to list multiple series of certain
securities on the Exchange. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \7\
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\7\ See Regulation NMS, 70 FR at 37499.
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The Exchange believes that the ongoing competition among the
exchanges with respect to new listings and the transfer of existing
listings among competitor exchanges demonstrates that issuers can
choose different listing markets in response to fee changes.
Accordingly, competitive forces constrain exchange listing fees. Stated
otherwise, changes to exchange listing fees can have a direct effect on
the ability of an exchange to compete for new listings and retain
existing listings.
Given this competitive environment, the Exchange believes that the
proposed change is a reasonable attempt to encourage more issuers to
qualify for discounts that the Exchange offers by removing restrictions
on achieving or retaining them, thereby enhancing competition among
issuers and listing venues.
[[Page 4754]]
The Proposal Is an Equitable Allocation of Fees
The Exchange believes the proposal equitably allocates its fees
among its market participants. In the prevailing competitive
environment, issuers can readily favor competing venues or transfer
listings if they deem fee levels at a particular venue to be excessive,
or discount opportunities available at other venues to be more
favorable. The proposed removal of the limitation on discounts for ETPs
and Structured Products is equitable because it would apply uniformly
to all issuers and to all ETPs and Structured Products listed on the
Exchange either generically or pursuant to a rule filing with the
Commission. For the same reasons, the proposal neither targets nor will
it have a disparate impact on any particular category of market
participant.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. In the prevailing competitive environment, issuers are
free to list elsewhere if they believe that alternative venues offer
them better value. The Exchange believes it is not unfairly
discriminatory to remove an eligibility restriction on issuers
transferring Products off the Exchange because removal of the
restriction would apply to and potentially benefit all issuers equally.
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,\8\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed change would encourage competition by removing an
incentive for issuers not to transfer Products off of the Exchange
(except to an Exchange affiliate) in a trailing 12-month period, which
the Exchange believes will enhance competition among issuers and
listing venues, to the benefit of investors. As noted, the market for
listing services is extremely competitive. Issuers have the option to
list their securities on these alternative venues based on the fees
charged and the value provided by each listing exchange. Because
issuers have a choice to list their securities on a different national
securities exchange, the Exchange does not believe that the proposed
change impose a burden on competition.
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\8\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition. The proposed change is designed to remove
a restriction in order to encourage more issuers to qualify for and
retain discounts that the Exchange offers. Removal of the restriction
would be apply [sic] to and potentially benefit all issuers equally,
and, as such, the proposed change would not impose a disparate burden
on competition among market participants on the Exchange.
Intermarket Competition. The Exchange operates in a highly
competitive listings market in which issuers can readily choose
alternative listing venues. In such an environment, the Exchange must
adjust its fees and discounts to remain competitive with other
exchanges competing for the same listings. Because competitors are free
to modify their own fees and discounts in response, and because issuers
may readily adjust their listing decisions and practices, the Exchange
does not believe its proposed change can impose any burden on
intermarket competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\11\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEArca-2020-06 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-NYSEArca-2020-06. 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 Number SR-NYSEArca-2020-06 and
[[Page 4755]]
should be submitted on or before February 18, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
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\12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2020-01237 Filed 1-24-20; 8:45 am]
BILLING CODE 8011-01-P
