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, 23418-23421 [2020-08809]
Download as PDF
<![CDATA[
23418
Federal Register / Vol. 85, No. 81 / Monday, April 27, 2020 / Notices
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 11 and Rule 19b–4(f)(6)(iii)
thereunder.12
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),14 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing.
The Exchange states that waiver of the
operative delay would allow the
Exchange to implement the proposed
rule change in anticipation of LTSE’s
launch, thereby providing clarity to
market participants with respect to the
specific network processor and
proprietary data feeds that the Exchange
utilizes for the handling, routing, and
execution of orders, and for performing
the regulatory compliance checks
related to each of those functions. For
this reason, the Commission believes
that waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest.
Accordingly, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.15
At any time within 60 days of the
filing of this 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 will institute proceedings
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
15 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
lotter on DSKBCFDHB2PROD with NOTICES
12 17
VerDate Sep<11>2014
17:32 Apr 24, 2020
Jkt 250001
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
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–08811 Filed 4–24–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88709; File No. SR–
NYSEARCA–2020–33]
• 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–
CboeBZX–2020–031 on the subject line.
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
Paper Comments
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 April 14,
2020, 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.
• 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–CboeBZX–2020–031. 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–CboeBZX–2020–031, and
should be submitted on or before May
18, 2020.
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
April 21, 2020.
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 (1) eliminate an
alternative method to qualify for Tier 2,
(2) eliminate the incremental credit
applicable under Tape B Tier 2, and (3)
eliminate the Cross-Asset Tier 1 and
Tape C Tier 3 pricing tiers. The
Exchange proposes to implement the fee
changes effective May 1, 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
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\27APN1.SGM
27APN1
Federal Register / Vol. 85, No. 81 / Monday, April 27, 2020 / Notices
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 the
Fee Schedule to (1) eliminate an
alternative method to qualify for Tier 2,
(2) eliminate the incremental credit
applicable under Tape B Tier 2, and (3)
eliminate the Cross-Asset Tier 1 and
Tape C Tier 3 pricing tiers. The
Exchange proposes to implement the fee
changes effective May 1, 2020.
ETP Holders 4 currently qualify for
Tier 2 fees and credits by providing
liquidity an average daily share volume
per month of 0.30% or more, but less
than 0.70% of US consolidated average
daily volume (‘‘US CADV’’).5 In June
2016, the Exchange adopted an
alternative way for ETP Holders to
qualify for Tier 2 fees and credits.
Pursuant to the alternative method, an
ETP Holder could also qualify for Tier
2 fees and credits if the ETP Holder
provides liquidity of 0.10% or more of
the US CADV per month, and is
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’’).6 The Exchange
proposes to eliminate the alternative
method for ETP Holders to qualify for
Tier 2 fees and credits and remove it
from the Fee Schedule. The Exchange
has observed that historically, few ETP
Holders have qualified under the
alternative method, with little
associated volume, and the alternative
lotter on DSKBCFDHB2PROD with NOTICES
4 All
references to ETP Holders in connection
with this proposed fee change include Market
Makers.
5 US CADV means United States Consolidated
Average Daily Volume for transactions reported to
the Consolidated Tape, excluding odd lots through
January 31, 2014 (except for purposes of Lead
Market Maker pricing), and excludes volume on
days when the market closes early and on the date
of the annual reconstitution of the Russell
Investments Indexes. Transactions that are not
reported to the Consolidated Tape are not included
in US CADV.
6 See Securities Exchange Act Release No. 78065
(June 14, 2016), 81 FR 39976 (June 20, 2016) (SR–
NYSEArca–2016–85).
VerDate Sep<11>2014
17:32 Apr 24, 2020
Jkt 250001
method has not served to meaningfully
increase activity on the Exchange or
improve the quality of the market. Since
July 2019, no ETP Holder affiliated with
an OTP Holder or OTP Firm has
qualified for Tier 2 fees and credits
under the alternative method.7 The
Exchange is not proposing any other
change to the fees and credits applicable
under Tier 2.
Additionally, in June 2018, the
Exchange adopted an incremental credit
under Tape B Tier 2 pricing tier
pursuant to which ETP Holders can
receive an incremental credit of $0.0001
per share for orders that provide
liquidity to the order book in Tape B
securities when such ETP Holder meets
the requirements of Tape B Tier 2 and
executes adding ADV in Tape B
securities during a billing month equal
to at least 0.40% of Tape B CADV over
the ETP Holder’s Q1 2018 Tape B
adding ADV taken as a percentage of
Tape B CADV.8 The Exchange proposes
to eliminate the incremental credit
applicable under Tape B Tier 2 and
remove it from the Fee Schedule. Since
July 2019, no ETP Holder has qualified
for the incremental credit under Tape B
Tier 2.9 The Exchange is not proposing
any other change to the fees and credits
applicable under Tape B Tier 2.
Finally, the Exchange proposes to
eliminate the Cross-Asset Tier 1 and the
Tape C Tier 3 pricing tiers.
Under Cross-Asset Tier 1, ETP
Holders can receive a per share credit of
$0.0030 per share in Tape A, Tape B
and Tape C securities when an ETP
Holder (1) provides liquidity of 0.30%
or more of the US CADV per month, (2)
is affiliated with an OTP Holder or OTP
Firm that provides an ADV of electronic
posted Customer executions in all issues
on NYSE Arca Options (excluding mini
options) of at least 0.80% of total
Customer equity and ETF option ADV
as reported by OCC, and (3) executes an
ADV of Retail Orders 10 that provide
7 There are currently 53 firms that are both ETP
Holders and OTP Holders.
8 See Securities Exchange Act Release No. 83418
(June 12, 2018), 83 FR 28282 (June 18, 2018) (SR–
NYSEArca–2018–41).
9 There are currently 5 ETP Holders that could
qualify for the incremental credit under Tape B Tier
2.
10 A Retail Order is an agency order that
originates from a natural person and is submitted
to the Exchange by an ETP Holder, provided that
no change is made to the terms of the order to price
or side of market and the order does not originate
from a trading algorithm or any other computerized
methodology. See Securities Exchange Act Release
No. 67540 (July 30, 2012), 77 FR 46539 (August 3,
2012) (SR–NYSEArca–2012–77).
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
23419
liquidity during the month that is 0.10%
or more of the US CADV.11
Under Tape C Tier 3, ETP Holders can
receive a credit of $0.0002 per share in
Tape C securities when an ETP Holder
(1) directly executes providing volume
in Tape C securities during the billing
month that is equal to at least 0.40% of
US Tape C CADV over the ETP Holder’s
fourth quarter 2016 Tape C Adding ADV
taken as a percentage of Tape C CADV,
and (2) executes providing volume in
Tape B securities during the billing
month that is equal to at least 3.5% of
Tape B CADV. Under the Tape C Tier
3 pricing tier, ETP Holders are also
charged a fee of $0.0029 per share for
orders that take liquidity from the Book
in Tape C securities.12
The Exchange proposes to eliminate
each of the Cross-Asset Tier 1 and Tape
C Tier 3 pricing tiers and remove it from
the Fee Schedule because each of the
pricing tiers have been underutilized by
ETP Holders. The Exchange has
observed that historically, few ETP
Holders have qualified for the fees and
credits under each of these pricing tiers.
These pricing tiers have not served to
meaningfully increase activity on the
Exchange or improve the quality of the
market. Since July 2019, not a single
ETP Holder has qualified under any of
the two pricing tiers that the Exchange
proposes to eliminate.13
With the proposed elimination of
Cross-Asset Tier 1, the Exchange
proposes to rename current Cross-Asset
Tier 2 as Cross-Asset Tier 1 and rename
current Cross-Asset Tier 3 as CrossAsset Tier 2.
The proposed changes are not
otherwise intended to address any 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,14 in general, and
furthers the objectives of Sections
6(b)(4) and(5) of the Act,15 in particular,
because it provides for the equitable
allocation of reasonable dues, fees, and
other charges among its members,
11 See Securities Exchange Act Release No. 76084
(October 6, 2015), 80 FR 61529 (October 13, 2015)
(SR–NYSEArca–2015–87).
12 See Securities Exchange Act Release No. 80665
(May 11, 2017), 82 FR 22687 (May 17, 2017) (SR–
NYSEArca–2017–51).
13 As noted above, there are currently 53 firms
that are both ETP Holders and OTP Holders that
could qualify for the Cross-Asset Tier 1 pricing tier
and 2 ETP Holders that could qualify for the Tape
C Tier 3 pricing tier.
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(4) and (5).
E:\FR\FM\27APN1.SGM
27APN1
23420
Federal Register / Vol. 85, No. 81 / Monday, April 27, 2020 / Notices
lotter on DSKBCFDHB2PROD with NOTICES
issuers and other persons using its
facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Exchange believes that the
proposed rule change to eliminate the
alternative method to qualify for Tier 2,
eliminate the incremental credit under
Tape B Tier 2, and eliminate the CrossAsset Tier 1 and Tape C Tier 3 pricing
tiers is reasonable because each of the
pricing tiers that are the subject of this
proposed rule change have been
underutilized and have generally not
incentivized ETP Holders to bring
liquidity and increase trading on the
Exchange. Since July 2019, no ETP
Holder has availed itself of any of the
pricing tiers that the Exchange is
proposing to eliminate. The Exchange
does not anticipate any ETP Holder in
the near future to qualify for any of the
tiers that are the subject of this proposed
rule change. The Exchange believes it is
reasonable to eliminate requirements
and credits, and even entire pricing tiers
when such incentives become
underutilized. The Exchange believes
eliminating underutilized incentive
programs would also simplify the Fee
Schedule. The Exchange further
believes that removing reference to the
pricing tiers that the Exchange proposes
to eliminate from the Fee Schedule
would also add clarity to the Fee
Schedule. The Exchange believes that
eliminating requirements and credits,
and even entire pricing tiers from the
Fee Schedule when such incentives
become ineffective is equitable and not
unfairly discriminatory because the
requirements, and credits, and even
entire pricing tiers would be eliminated
in their entirety and would no longer be
available to any ETP Holder.
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,16 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.
Intramarket Competition. The
Exchange’s proposal to eliminate certain
requirements and credits, and pricing
tiers in their entirety, will not place any
undue burden on intramarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act given that, since
July 2019, not a single ETP Holder has
qualified for any of the fees and credits
under any of the pricing tiers that are
the subject of this proposed rule change.
To the extent the proposed rule change
places a burden on competition, any
such burden would be outweighed by
the fact that none of the pricing tiers
proposed for deletion have served their
intended purpose of incentivizing ETP
Holders to more broadly participate on
the Exchange. Moreover, ETP Holders
can choose to trade on other venues to
the extent they believe that the credits
provided are too low or the qualification
criteria are not attractive.
Intermarket Competition. The
Exchange believes the proposed rule
change does not impose any burden on
intermarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange operates in a highly
competitive market in which market
participants can readily choose to send
their orders to other exchanges and offexchange venues if they deem fee levels
at those other venues to be more
favorable. Market share statistics
provide ample evidence that price
competition between exchanges is
fierce, with liquidity and market share
moving freely from one execution venue
to another in reaction to pricing
changes. In such an environment, the
Exchange must continually adjust its
fees and rebates to remain competitive
with other exchanges and with offexchange venues. 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
does not believe this proposed fee
change would 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) 17 of the Act and
subparagraph (f)(2) of Rule 19b–4 18
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
17 15
16 15
U.S.C. 78f(b)(8).
VerDate Sep<11>2014
17:32 Apr 24, 2020
18 17
Jkt 250001
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
Frm 00096
Fmt 4703
Sfmt 4703
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) 19 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–2020–33 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–2020–33. 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.
19 15
E:\FR\FM\27APN1.SGM
U.S.C. 78s(b)(2)(B).
27APN1
Federal Register / Vol. 85, No. 81 / Monday, April 27, 2020 / Notices
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–2020–33 and
should be submitted on or before May
18, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–08809 Filed 4–24–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release 33844;
File No. 812–15061]
Invesco Advisers, Inc., et al.
April 21, 2020.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
lotter on DSKBCFDHB2PROD with NOTICES
AGENCY:
Notice of application for an order
under sections 17(d) and 57(i) of the
Investment Company Act of 1940 (the
‘‘Act’’) and rule 17d–1 under the Act to
permit certain joint transactions
otherwise prohibited by sections 17(d)
and 57(a)(4) of the Act and rule 17d–1
under the Act.
Summary of Application: Applicants
request an order to permit certain
closed-end management investment
companies and business development
companies (‘‘BDCs’’) to co-invest in
portfolio companies with each other and
with certain affiliated investment funds
and accounts.
Applicants: Invesco Dynamic Credit
Opportunities Fund (‘‘Fund’’), Invesco
Senior Income Trust (‘‘Trust’’), Invesco
Advisers, Inc. (‘‘IAI’’), Invesco Senior
Secured Management, Inc. (‘‘ISSM,’’ and
together with IAI, the ‘‘Existing
Advisers’’).
Filing Dates: Applicants filed the
application on August 23, 2019, and
amended it on December 20, 2019 and
February 28, 2020.
Hearing or Notification of Hearing: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by emailing the
Commission’s Secretary at SecretarysOffice@sec.gov and serving applicants
with a copy of the request by email.
Hearing requests should be received by
20 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:32 Apr 24, 2020
Jkt 250001
the Commission by 5:30 p.m. on May
18, 2020, and should be accompanied
by proof of service on the applicants, in
the form of an affidavit, or, for lawyers,
a certificate of service. Pursuant to rule
0–5 under the Act, hearing requests
should state the nature of the writer’s
interest, any facts bearing upon the
desirability of a hearing on the matter,
the reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by emailing the
Commission’s Secretary at SecretarysOffice@sec.gov.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
The Fund, the Trust, and IAI:
Joseph.Benedetti@Invesco.com.
FOR FURTHER INFORMATION CONTACT:
Benjamin Kalish, Senior Counsel, at
(202) 551–7361 or David Nicolardi,
Branch Chief at (202) 551–6825
(Division of Investment Management,
Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
website by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Introduction
1. The applicants request an order of
the Commission under sections 17(d)
and 57(i) and rule 17d–1 thereunder
(the ‘‘Order’’) to permit, subject to the
terms and conditions set forth in the
application (the ‘‘Conditions’’), a
Regulated Fund 1 and one or more other
Regulated Funds and/or one or more
Affiliated Funds 2 to enter into Co1 ‘‘Regulated Funds’’ means the Fund, the Trust,
and any Future Regulated Funds. ‘‘Future Regulated
Fund’’ means a closed-end management investment
company (a) that is registered under the Act or has
elected to be regulated as a BDC, (b) whose
investment adviser (and sub-adviser(s), if any) is an
Adviser, and (c) that intends to participate in the
Co-Investment Program.
‘‘Adviser’’ means each Existing Adviser together
with any future investment adviser that (i) controls,
is controlled by or is under common control with
an Existing Adviser, (ii) is registered as an
investment adviser under the Advisers Act and (iii)
is not a Regulated Fund (defined below) or a
subsidiary of a Regulated Fund.
2 ‘‘Affiliated Fund’’ means any existing or any
Future Affiliated Fund. ‘‘Future Affiliated Fund’’
means any entity (i) whose investment adviser (and
sub-adviser(s), if any) are Advisers, (ii) that either
(a) would be an investment company but for
Section 3(c)(1), 3(c)(5)(C) or 3(c)(7) of the Act, (b)
relies on Rule 3a-7 under the Act, or (c) does not
meet the definition of investment company under
the Act and qualifies as a real estate investment
trust (‘‘REIT’’) within the meaning of Section 856
of Sub-Chapter M of the Internal Revenue Code of
1986, as amended (the ‘‘Code’’), because
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
23421
Investment Transactions with each
other. ‘‘Co-Investment Transaction’’
means any transaction in which a
Regulated Fund (or its Wholly-Owned
Investment Sub (as defined below))
participated together with one or more
Affiliated Funds and/or one or more
other Regulated Funds in reliance on
the Order. ‘‘Potential Co-Investment
Transaction’’ means any investment
opportunity in which a Regulated Fund
(or its Wholly-Owned Investment Sub)
could not participate together with one
or more Affiliated Funds and/or one or
more other Regulated Funds without
obtaining and relying on the Order.3
Applicants
2. The Fund and the Trust are each a
diversified closed-end management
investment company incorporated in
Delaware and registered as an
investment company under the Act.
3. IAI is a Delaware corporation and
a wholly-owned subsidiary of Invesco
Ltd. IAI is registered with the
Commission as an investment adviser
under the Advisers Act. ISSM is a
Delaware corporation and a whollyowned subsidiary of IAI. ISSM is
registered with the Commission as an
investment adviser under the Advisers
Act.
4. Applicants state that a Regulated
Fund may, from time to time, form one
or more Wholly-Owned Investment
Subs.4 Such a subsidiary may be
prohibited from investing in a CoInvestment Transaction with a
Regulated Fund (other than its parent)
substantially all of its assets would consist of real
properties, and (iii) that intends to participate in the
Co-Investment Program.
3 All existing entities that currently intend to rely
on the Order have been named as applicants and
any existing or future entities that may rely on the
Order in the future will comply with its terms and
Conditions set forth in the application.
4 ‘‘Wholly-Owned Investment Sub’’ means an
entity (i) that is wholly-owned by a Regulated Fund
(with such Regulated Fund at all times holding,
beneficially and of record, 100% of the voting and
economic interests); (ii) whose sole business
purpose is to hold one or more investments on
behalf of such Regulated Fund (and, in the case of
an SBIC Subsidiary (defined below), maintains a
license under the SBA Act (defined below) and
issues debentures guaranteed by the SBA (defined
below)); (iii) with respect to which such Regulated
Fund’s Board has the sole authority to make all
determinations with respect to the entity’s
participation under the Conditions to this
application; and (iv) that (a) would be an
investment company but for Section 3(c)(1),
3(c)(5)(C), or 3(c)(7) of the Act, (b) relies on Rule
3a–7 under the Act, or (c) qualifies as a REIT within
the meaning of Section 856 of the Code because
substantially all of its assets would consist of real
properties. The term ‘‘SBIC Subsidiary’’ means a
Wholly-Owned Investment Sub that is licensed by
the Small Business Administration (the ‘‘SBA’’) to
operate under the Small Business Investment Act of
1958, as amended, (the ‘‘SBA Act’’) as a small
business investment company.
E:\FR\FM\27APN1.SGM
27APN1
]]>Agencies
[Federal Register Volume 85, Number 81 (Monday, April 27, 2020)]
[Notices]
[Pages 23418-23421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08809]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88709; File No. SR-NYSEARCA-2020-33]
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
April 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 April 14, 2020, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE Arca Equities Fees and
Charges (``Fee Schedule'') to (1) eliminate an alternative method to
qualify for Tier 2, (2) eliminate the incremental credit applicable
under Tape B Tier 2, and (3) eliminate the Cross-Asset Tier 1 and Tape
C Tier 3 pricing tiers. The Exchange proposes to implement the fee
changes effective May 1, 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
[[Page 23419]]
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 the Fee Schedule to (1) eliminate an
alternative method to qualify for Tier 2, (2) eliminate the incremental
credit applicable under Tape B Tier 2, and (3) eliminate the Cross-
Asset Tier 1 and Tape C Tier 3 pricing tiers. The Exchange proposes to
implement the fee changes effective May 1, 2020.
ETP Holders \4\ currently qualify for Tier 2 fees and credits by
providing liquidity an average daily share volume per month of 0.30% or
more, but less than 0.70% of US consolidated average daily volume (``US
CADV'').\5\ In June 2016, the Exchange adopted an alternative way for
ETP Holders to qualify for Tier 2 fees and credits. Pursuant to the
alternative method, an ETP Holder could also qualify for Tier 2 fees
and credits if the ETP Holder provides liquidity of 0.10% or more of
the US CADV per month, and is 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'').\6\ The
Exchange proposes to eliminate the alternative method for ETP Holders
to qualify for Tier 2 fees and credits and remove it from the Fee
Schedule. The Exchange has observed that historically, few ETP Holders
have qualified under the alternative method, with little associated
volume, and the alternative method has not served to meaningfully
increase activity on the Exchange or improve the quality of the market.
Since July 2019, no ETP Holder affiliated with an OTP Holder or OTP
Firm has qualified for Tier 2 fees and credits under the alternative
method.\7\ The Exchange is not proposing any other change to the fees
and credits applicable under Tier 2.
---------------------------------------------------------------------------
\4\ All references to ETP Holders in connection with this
proposed fee change include Market Makers.
\5\ US CADV means United States Consolidated Average Daily
Volume for transactions reported to the Consolidated Tape, excluding
odd lots through January 31, 2014 (except for purposes of Lead
Market Maker pricing), and excludes volume on days when the market
closes early and on the date of the annual reconstitution of the
Russell Investments Indexes. Transactions that are not reported to
the Consolidated Tape are not included in US CADV.
\6\ See Securities Exchange Act Release No. 78065 (June 14,
2016), 81 FR 39976 (June 20, 2016) (SR-NYSEArca-2016-85).
\7\ There are currently 53 firms that are both ETP Holders and
OTP Holders.
---------------------------------------------------------------------------
Additionally, in June 2018, the Exchange adopted an incremental
credit under Tape B Tier 2 pricing tier pursuant to which ETP Holders
can receive an incremental credit of $0.0001 per share for orders that
provide liquidity to the order book in Tape B securities when such ETP
Holder meets the requirements of Tape B Tier 2 and executes adding ADV
in Tape B securities during a billing month equal to at least 0.40% of
Tape B CADV over the ETP Holder's Q1 2018 Tape B adding ADV taken as a
percentage of Tape B CADV.\8\ The Exchange proposes to eliminate the
incremental credit applicable under Tape B Tier 2 and remove it from
the Fee Schedule. Since July 2019, no ETP Holder has qualified for the
incremental credit under Tape B Tier 2.\9\ The Exchange is not
proposing any other change to the fees and credits applicable under
Tape B Tier 2.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 83418 (June 12,
2018), 83 FR 28282 (June 18, 2018) (SR-NYSEArca-2018-41).
\9\ There are currently 5 ETP Holders that could qualify for the
incremental credit under Tape B Tier 2.
---------------------------------------------------------------------------
Finally, the Exchange proposes to eliminate the Cross-Asset Tier 1
and the Tape C Tier 3 pricing tiers.
Under Cross-Asset Tier 1, ETP Holders can receive a per share
credit of $0.0030 per share in Tape A, Tape B and Tape C securities
when an ETP Holder (1) provides liquidity of 0.30% or more of the US
CADV per month, (2) is affiliated with an OTP Holder or OTP Firm that
provides an ADV of electronic posted Customer executions in all issues
on NYSE Arca Options (excluding mini options) of at least 0.80% of
total Customer equity and ETF option ADV as reported by OCC, and (3)
executes an ADV of Retail Orders \10\ that provide liquidity during the
month that is 0.10% or more of the US CADV.\11\
---------------------------------------------------------------------------
\10\ A Retail Order is an agency order that originates from a
natural person and is submitted to the Exchange by an ETP Holder,
provided that no change is made to the terms of the order to price
or side of market and the order does not originate from a trading
algorithm or any other computerized methodology. See Securities
Exchange Act Release No. 67540 (July 30, 2012), 77 FR 46539 (August
3, 2012) (SR-NYSEArca-2012-77).
\11\ See Securities Exchange Act Release No. 76084 (October 6,
2015), 80 FR 61529 (October 13, 2015) (SR-NYSEArca-2015-87).
---------------------------------------------------------------------------
Under Tape C Tier 3, ETP Holders can receive a credit of $0.0002
per share in Tape C securities when an ETP Holder (1) directly executes
providing volume in Tape C securities during the billing month that is
equal to at least 0.40% of US Tape C CADV[thinsp]over the ETP Holder's
fourth quarter 2016 Tape C Adding ADV taken as a percentage of Tape C
CADV, and (2) executes providing volume in Tape B securities during the
billing month that is equal to at least 3.5% of Tape B CADV. Under the
Tape C Tier 3 pricing tier, ETP Holders are also charged a fee of
$0.0029 per share for orders that take liquidity from the Book in Tape
C securities.\12\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 80665 (May 11,
2017), 82 FR 22687 (May 17, 2017) (SR-NYSEArca-2017-51).
---------------------------------------------------------------------------
The Exchange proposes to eliminate each of the Cross-Asset Tier 1
and Tape C Tier 3 pricing tiers and remove it from the Fee Schedule
because each of the pricing tiers have been underutilized by ETP
Holders. The Exchange has observed that historically, few ETP Holders
have qualified for the fees and credits under each of these pricing
tiers. These pricing tiers have not served to meaningfully increase
activity on the Exchange or improve the quality of the market. Since
July 2019, not a single ETP Holder has qualified under any of the two
pricing tiers that the Exchange proposes to eliminate.\13\
---------------------------------------------------------------------------
\13\ As noted above, there are currently 53 firms that are both
ETP Holders and OTP Holders that could qualify for the Cross-Asset
Tier 1 pricing tier and 2 ETP Holders that could qualify for the
Tape C Tier 3 pricing tier.
---------------------------------------------------------------------------
With the proposed elimination of Cross-Asset Tier 1, the Exchange
proposes to rename current Cross-Asset Tier 2 as Cross-Asset Tier 1 and
rename current Cross-Asset Tier 3 as Cross-Asset Tier 2.
The proposed changes are not otherwise intended to address any
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,\14\ in general, and furthers the
objectives of Sections 6(b)(4) and(5) of the Act,\15\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members,
[[Page 23420]]
issuers and other persons using its facilities and does not unfairly
discriminate between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change to eliminate
the alternative method to qualify for Tier 2, eliminate the incremental
credit under Tape B Tier 2, and eliminate the Cross-Asset Tier 1 and
Tape C Tier 3 pricing tiers is reasonable because each of the pricing
tiers that are the subject of this proposed rule change have been
underutilized and have generally not incentivized ETP Holders to bring
liquidity and increase trading on the Exchange. Since July 2019, no ETP
Holder has availed itself of any of the pricing tiers that the Exchange
is proposing to eliminate. The Exchange does not anticipate any ETP
Holder in the near future to qualify for any of the tiers that are the
subject of this proposed rule change. The Exchange believes it is
reasonable to eliminate requirements and credits, and even entire
pricing tiers when such incentives become underutilized. The Exchange
believes eliminating underutilized incentive programs would also
simplify the Fee Schedule. The Exchange further believes that removing
reference to the pricing tiers that the Exchange proposes to eliminate
from the Fee Schedule would also add clarity to the Fee Schedule. The
Exchange believes that eliminating requirements and credits, and even
entire pricing tiers from the Fee Schedule when such incentives become
ineffective is equitable and not unfairly discriminatory because the
requirements, and credits, and even entire pricing tiers would be
eliminated in their entirety and would no longer be available to any
ETP Holder.
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,\16\ 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.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
Intramarket Competition. The Exchange's proposal to eliminate
certain requirements and credits, and pricing tiers in their entirety,
will not place any undue burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
given that, since July 2019, not a single ETP Holder has qualified for
any of the fees and credits under any of the pricing tiers that are the
subject of this proposed rule change. To the extent the proposed rule
change places a burden on competition, any such burden would be
outweighed by the fact that none of the pricing tiers proposed for
deletion have served their intended purpose of incentivizing ETP
Holders to more broadly participate on the Exchange. Moreover, ETP
Holders can choose to trade on other venues to the extent they believe
that the credits provided are too low or the qualification criteria are
not attractive.
Intermarket Competition. The Exchange believes the proposed rule
change does not impose any burden on intermarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange operates in a highly competitive market in which market
participants can readily choose to send their orders to other exchanges
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Market share statistics provide ample evidence
that price competition between exchanges is fierce, with liquidity and
market share moving freely from one execution venue to another in
reaction to pricing changes. In such an environment, the Exchange must
continually adjust its fees and rebates to remain competitive with
other exchanges and with off-exchange venues. 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 does not believe this proposed fee change would 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) \17\ of the Act and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\19\ 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-NYSEARCA-2020-33 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-2020-33. 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.
[[Page 23421]]
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-2020-33 and should
be submitted on or before May 18, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-08809 Filed 4-24-20; 8:45 am]
BILLING CODE 8011-01-P
