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, 28676-28685 [2020-10219]
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28676
Federal Register / Vol. 85, No. 93 / Wednesday, May 13, 2020 / Notices
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
The title for the collection of
information is ‘‘Rule 203–2 (17 CFR
275.203–2) and Form ADV–W (17 CFR
279.2) under the Investment Advisers
Act of 1940 (15 U.S.C. 80b).’’ Rule 203–
2 under the Investment Advisers Act of
1940 establishes procedures for an
investment adviser to withdraw its
registration or pending registration with
the Commission. Rule 203–2 requires
every person withdrawing from
investment adviser registration with the
Commission to file Form ADV–W
electronically on the Investment
Adviser Registration Depository
(‘‘IARD’’). The purpose of the
information collection is to notify the
Commission and the public when an
investment adviser withdraws its
pending or approved SEC registration.
Typically, an investment adviser files a
Form ADV–W when it ceases doing
business or when it is ineligible to
remain registered with the Commission.
The respondents to the collection of
information are all investment advisers
that are registered with the Commission
or have applications pending for
registration. The Commission has
estimated that compliance with the
requirement to complete Form ADV–W
imposes a total burden of approximately
0.75 hours (45 minutes) for an adviser
filing for full withdrawal and
approximately 0.25 hours (15 minutes)
for an adviser filing for partial
withdrawal. Based on historical filings,
the Commission estimates that there are
approximately 802 respondents
annually filing for full withdrawal and
approximately 454 respondents
annually filing for partial withdrawal.
Based on these estimates, the total
estimated annual burden would be 715
hours ((802 respondents × .75 hours) +
(454 respondents × .25 hours)).
Rule 203–2 and Form ADV–W do not
require recordkeeping or records
retention. The collection of information
requirements under the rule and form
are mandatory. The information
collected pursuant to the rule and Form
ADV–W are filings with the
Commission. These filings are not kept
confidential. An agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
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information unless it displays a
currently valid control number.
Written comments are invited on: (a)
Whether the documentation of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
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quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
Please direct your written comments
to David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
Mailbox@sec.gov.
Dated: May 8, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–10239 Filed 5–12–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88833; File No. SR–
NYSEARCA–2020–39]
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
May 7, 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 May 1,
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).
U.S.C. 78a.
3 17 CFR 240.19b–4.
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The Exchange proposes to amend the
NYSE Arca Equities Fees and Charges
(‘‘Fee Schedule’’) to (1) adopt a new
pricing tier, Step Up Tier 5; (2) modify
the requirements associated with the
Step Up Tier 4 pricing tier; (3) increase
the per share credit applicable to Retail
Orders; (4) adopt an alternative
requirement to qualify for the Tape B
Tier 2 pricing tier; and (5) adopt an
incremental per share credit payable
under the Cross-Asset Tier 2 pricing
tier. 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
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to (1) adopt a new pricing
tier, Step Up Tier 5; (2) modify the
requirements associated with the Step
Up Tier 4 pricing tier; (3) increase the
per share credit applicable to Retail
Orders; (4) adopt an alternative
requirement to qualify for the Tape B
Tier 2 pricing tier; and (5) adopt an
incremental per share credit payable
under the Cross-Asset Tier 2 pricing
tier.
The proposed changes respond to the
current competitive environment where
order flow providers have a choice of
where to direct liquidity-providing
orders by offering further incentives for
ETP Holders 4 to send additional
displayed liquidity to the Exchange.
4 All references to ETP Holders in connection
with this proposed fee change include Market
Makers.
2 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
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The Exchange proposes to implement
the fee changes effective May 1, 2020.
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Background
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets. 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.’’ 5
As the Commission itself recognized,
the market for trading services in NMS
stocks has become ‘‘more fragmented
and competitive.’’ 6 Indeed, equity
trading is currently dispersed across 13
exchanges,7 numerous alternative
trading systems,8 and broker-dealer
internalizers and wholesalers, all
competing for order flow. Based on
publicly-available information, no
single exchange currently has more than
20% market share (whether including or
excluding auction volume).9 Therefore,
no exchange possesses significant
pricing power in the execution of equity
order flow. More specifically, the
Exchange currently has less than 12%
market share of executed volume of
equities trading.10
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can move order flow, or discontinue or
reduce use of certain categories of
products. While it is not possible to
know a firm’s reason for shifting order
flow, the Exchange believes that one
such reason is because of fee changes at
any of the registered exchanges or nonexchange venues to which a firm routes
order flow. With respect to nonmarketable order flow that would
provide displayed liquidity on an
5 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
6 See Securities Exchange Act Release No. 51808,
84 FR 5202, 5253 (February 20, 2019) (File No. S7–
05–18) (Final Rule).
7 See Cboe U.S Equities Market Volume
Summary, available at https://markets.cboe.com/us/
equities/market_share. See generally https://
www.sec.gov/fast-answers/divisionsmarket
regmrexchangesshtml.html.
8 See FINRA ATS Transparency Data, available at
https://otctransparency.finra.org/otctransparency/
AtsIssueData. A list of alternative trading systems
registered with the Commission is available at
https://www.sec.gov/foia/docs/atslist.htm.
9 See Cboe Global Markets U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
10 See id.
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Exchange against which market makers
can quote, ETP Holders can choose from
any one of the 13 currently operating
registered exchanges to route such order
flow. Accordingly, competitive forces
constrain exchange transaction fees that
relate to orders that would provide
displayed liquidity on an exchange.
Proposed Rule Change
Step Up Tier 5
The proposed rule change is designed
to be available to all ETP Holders on the
Exchange and is intended to provide
ETP Holders an opportunity to receive
an enhanced rebate by executing more
of their orders on the Exchange. The
Exchange currently provides credits to
ETP Holders who submit orders that
provide displayed liquidity on the
Exchange. The Exchange currently has
multiple levels of credits for orders that
provide displayed liquidity that are
based on the amount of volume of such
orders that ETP Holders send to the
Exchange.
In this competitive environment, the
Exchange has already established Step
Up Tiers 1–4, which are designed to
encourage ETP Holders that provide
displayed liquidity on the Exchange to
increase that order flow, which would
benefit all ETP Holders by providing
greater execution opportunities on the
Exchange. In order to provide an
incentive for ETP Holders to direct
providing displayed order flow to the
Exchange, the credits increase in the
various tiers based on increased levels
of volume directed to the Exchange.
Currently, the following credits are
available to ETP Holders that provide
increased levels of displayed liquidity
on the Exchange:
Tier
Step Up Tier ..
Step Up Tier 2
Step Up Tier 3
Step Up Tier 4
Credit for providing displayed
liquidity
$0.0030 (Tape A).
0.0023 (Tape B).
0.0031 (Tape C).
0.0028 (Tape A and C).
0.0022 (Tape B).
0.0025 (Tape A and C).
0.0022 (Tape B).
0.0033 (Tape A and C).
0.0034 (Tape B).
The Exchange proposes to amend the
Fee Schedule to introduce a new pricing
tier—Step Up Tier 5—for securities with
a per share price of $1.00 or above.
As proposed, ETP Holders would
qualify for the new Step Up Tier 5 if
they directly execute providing ADV per
month that is at least 0.20% of US
CADV 11 and execute providing ADV
11 US CADV means the United States
Consolidated Average Daily Volume for
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28677
per month as a percentage of US CADV
that is at least two times more than that
ETP Holder’s providing ADV in April
2020 as a percentage of US CADV. ETP
Holders that qualify for Step Up Tier 5
would receive a credit of $0.0032 per
share for orders that provide displayed
liquidity to the Book in Tape A, Tape
B and Tape C securities.
For all other fees and credits, tiered or
basic rates apply based on a firm’s
qualifying levels.
For example, assume an ETP Holder
has an adding ADV of 0.10% of US
CADV in all securities in the baseline
month of April 2020. Assume further
that the same ETP Holder has an adding
ADV of 0.20% of US CADV in all
securities in the billing month. The ETP
Holder in the above example would
qualify for the proposed Step Up Tier 5
with an adding ADV step up of 0.10%
of US CADV (i.e., 0.20% US CADV) and
an adding ADV that is at least two times
the ETP Holder’s April 2020 Baseline of
0.10%. If instead, the ETP holder had an
adding ADV of 0.12% of US CADV in
the baseline month of April 2020, that
ETP Holder would then need an adding
ADV of at least 0.24%, which is two
times the 0.12% adding ADV in the
baseline month. ETP Holders with less
than 0.10% in the baseline month
would need to add 0.20% of US CADV,
as that is more than two times any
adding ADV baseline under 0.10%.
The goal of the proposed Step Up Tier
5 pricing tier is to incentivize ETP
Holders to increase the orders sent
directly to the Exchange and therefore
provide liquidity that supports the
quality of price discovery and promotes
market transparency.
While the proposed pricing tier would
pay a credit that is lower than that
available to ETP Holders under Step Up
Tier 4, the proposed pricing tier also
adopts lower volume thresholds than
that required to qualify for Step Up Tier
4. The proposed pricing tier, however,
pays a credit that is higher than the Step
Up Tier, Step Up Tier 2 and Step Up
Tier 3. While the Adding ADV of 0.20%
requirement in proposed Step Up Tier 5
is less than the adding ADV requirement
in Step Up Tier (0.50% of US CADV and
an adding ADV step up of 0.10% US
CADV) and Step Up Tier 2 (0.22% of US
CADV and an adding ADV step up of
0.06%), proposed Step Up Tier 5 has the
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. See Fee Schedule,
footnote 3.
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additional higher requirement for ETP
Holders to double their adding ADV as
a percent of US CADV. An ETP Holder
that has 0.40% US CADV can increase
their adding ADV by 0.10% to reach the
0.50% CADV requirement to qualify for
Step Up Tier, which is only an increase
of 25% over the ETP Holder’s 0.40%
baseline.
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Step Up Tier 4
As described in greater detail below,
the Exchange proposes to modify the
volume requirements applicable to ETP
Holders to qualify for the Step Up Tier
4 pricing tier by lowering the percentage
threshold that an ETP Holder must
meet.12
Under Step Up Tier 4, if an ETP
Holder increases its providing liquidity
on the Exchange by a specified
percentage over the level that such ETP
Holder provided liquidity in September
2019, it is eligible to earn higher credits
for providing displayed liquidity.
Specifically, to qualify for the credits
under the Step Up Tier 4 pricing tier, an
ETP Holder must directly execute
providing average daily volume (ADV)
per month that is an increase of no less
than 0.55% of US CADV for that month
over the ETP Holder’s providing ADV in
September 2019, taken as a percentage
of US CADV. Currently, if an ETP
Holder meets these Step Up Tier 4
qualifications, such ETP Holder is
eligible to earn a credit of:
• $0.0033 per share for orders that
provide displayed liquidity to the Book
in Tape A and Tape C Securities, and
• $0.0034 per share for orders that
provide displayed liquidity to the Book
in Tape B Securities.13
With this proposed rule change, the
Exchange proposes to modify the
volume requirements applicable to ETP
Holders to qualify for the Step Up Tier
4 by lowering the percentage threshold
that an ETP Holder must meet, from a
minimum of 0.55% of US CADV for the
billing month to a minimum of 0.40%
of US CADV for the billing month.
The purpose of the proposed rule
change is to increase the incentive for
order flow providers to send liquidityproviding orders to the Exchange. As
described above, ETP Holders with
liquidity-providing orders have a choice
of where to send those orders. The
Exchange believes that, if it reduces the
requirement to qualify for a tiered
12 See Securities Exchange Act Release Nos.
85311 (March 14, 2019), 84 FR 10348 (March 20,
2019) (SR–NYSEArca–2019–10); and 87292
(October 11, 2019), 84 FR 55603 (October 17, 2019)
(SR–NYSEArca–2019–70).
13 See Securities Exchange Act Release No. 86122
(June 17, 2019), 84 FR 29258 (June 21, 2019) (SR–
NYSEArca–2019–43).
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credit, more ETP Holders will choose to
route their liquidity-providing orders to
the Exchange to qualify for the credit.
The Exchange does not know how
much order flow ETP Holders choose to
route to other exchanges or to offexchange venues. While the Step Up
Tier 4 pricing tier is available to all ETP
Holders, to date, two ETP Holder have
qualified for it.14 Without having a view
of ETP Holders’ activity on other
markets and off-exchange venues, the
Exchange has no way of knowing
whether this proposed rule change
would result in any more ETP Holders
qualifying for the Step Up Tier 4 credit.
The Exchange cannot predict with
certainty how many ETP Holders would
avail themselves of this opportunity but
additional liquidity-providing orders
would benefit all market participants
because it would provide greater
execution opportunities on the
Exchange.
The Exchange is not proposing to
amend any of the credits payable under
the Step Up Tier 4.
Additionally, in a recent filing related
to the Step Up Tier 4 pricing tier, the
Exchange adopted a cap applicable to
the Step Up Tier 4 credit in Tape B
securities and noted in such filing that
ETP Holders that qualify for Step Up
Tier 4 would not receive any additional
incremental Tape B Tier credits for
providing displayed liquidity, including
any incremental credits associated with
Less Active ETP Securities.15 The Fee
Schedule currently states that ‘‘ETP
Holders and Market Makers that qualify
for Step Up Tier 4 shall not receive any
additional incremental Tape B Tier
credits for providing displayed
liquidity.’’ The Exchange proposes to
clarify the applicability of the cap by
adding ‘‘including any incremental
credits associated with Less Active ETP
Securities’’ at the end of the sentence.
The Exchange believes codifying the cap
language into the Fee Schedule will
provide clarity to the Fee Schedule and
avoid investor confusion.
to exchange versus off-exchange venues.
For example, the Exchange examined
Rule 606 disclosures from two
prominent retail brokerages: E-Trade
and TD Ameritrade. For securities listed
on the New York Stock Exchange LLC
in the fourth quarter of 2019, TD
Ameritrade routed 95% of its limit
orders to off-exchange venues.17
Similarly, E-Trade Financial routed
more than 73% of its limit orders to offexchange venues.18
The Exchange thus needs to compete
in the first instance with non-exchange
venues for Retail Order flow, and with
the 13 other exchange venues for that
Retail Order flow that is not directed
off-exchange. This competition is
particularly acute for non-marketable
Retail Orders, i.e., Retail Orders that
provide liquidity, and even more
fiercely for non-marketable Retail
Orders that provide displayed liquidity
on an exchange. Accordingly,
competitive forces compel the Exchange
to use exchange transaction fees and
credits, particularly as they relate to
competing for Retail Order flow,
because market participants can readily
trade on competing venues if they deem
pricing levels at those other venues to
be more favorable.
In response to this competitive
environment, the Exchange currently
provides credits to ETP Holders who
enter Retail Orders 19 on the Exchange.
The Exchange has multiple levels of
such credits that are based on an ETP
Holder’s trading volume of Retail Orders
on the Exchange.20 ETP Holders that do
not qualify for tiered pricing currently
receive, under the Basic Rates section of
the Fee Schedule, a credit of $0.0030
per share for Retail Orders in Tape A,
Tape B and Tape C securities that
provide liquidity to the Book. With this
proposed rule change, the Exchange
proposes to increase the base credit
from $0.0030 per share to $0.0032 per
share.
The proposed change would reduce
the difference in credits available to
Retail Orders that provide displayed
Retail Orders
As noted above, the market for trading
services in NMS stocks has become
‘‘more fragmented and competitive.’’ 16
The competition for Retail Order flow is
even more stark, particularly as it relates
14 As of April 27, 2020, there is one ETP Holder
on the Exchange that qualifies for the Exchange’s
Step Up Tier 4 pricing tier.
15 See Securities Exchange Act Release No. 88436
(March 20, 2020), 85 FR 17112 (March 26, 2020)
(SR–NYSEArca–2020–21).
16 See Securities Exchange Act Release No. 51808,
84 FR 5202, 5253 (February 20, 2019) (File No. S7–
05–18) (Transaction Fee Pilot for NMS Stocks Final
Rule) (‘‘Transaction Fee Pilot’’).
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17 See https://www.tdameritrade.com/retail-en_
us/resources/pdf/AMTD2054.pdf.
18 See https://content.etrade.com/etrade/
powerpage/pdf/OrderRouting11AC6.pdf.
19 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).
20 See Retail Order Tier, Retail Order Step-Up
Tier 1 and Retail Order Step-Up Tier 2 on the Fee
Schedule at https://www.nyse.com/publicdocs/
nyse/markets/nyse-arca/NYSE_Arca_Marketplace_
Fees.pdf.
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liquidity on the Exchange from ETP
Holders qualifying for the base credit
versus the tiered credits available to
Retail Orders that provide displayed
liquidity on the Exchange. The
Exchange believes that by increasing the
base credit, it would be more closely
align with the credits available for other
Retail Orders that provide liquidity on
the Exchange.
Tape B Tier 2
Currently, under the Tape B Tier 2
pricing tier, an ETP Holder could
qualify for a credit of $0.0028 per
share 21 if such ETP Holders, on a daily
basis, measured monthly, directly
executes providing volume in Tape B
Securities during the billing month
(‘‘Tape B Adding ADV’’) that is either
(1) equal to at least 1.0% of the US Tape
B CADV or (2) equal to at least 0.20%
of the US Tape B CADV for the billing
month over the ETP Holder’s Q2 2015
Tape B Adding ADV taken as a
percentage of Tape B CADV. The
Exchange proposes to introduce a third
method of qualifying for Tape B Tier 2
credits.
As proposed, ETP Holders could
qualify for the Tape B Tier 2 credit of
$0.0028 per share for providing
liquidity to the Book in Tape B
Securities if such ETP Holder, on a daily
basis, measured monthly, directly
executes Tape B Adding ADV that is
equal to at least 0.25% of the US Tape
B CADV for the billing month over the
ETP Holder’s April 2020 Tape B Adding
ADV taken as a percentage of Tape B
CADV.
The Exchange believes that, by
providing for an additional method of
qualifying for Tape B Tier 2, this
proposed change will provide a greater
incentive to attract additional liquidity
from additional ETP Holders in Tape B
Securities so as to qualify for the Tape
B Tier 2 credit.
The Exchange is not proposing any
change to the level of Tape B Tier 2
credits.
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Cross-Asset Tier 2
The Exchange proposes to adopt an
incremental credit under a current
pricing tier, Cross-Asset Tier 2, that
would provide an additional incentive
for all ETP Holders to provide liquidity
in Tapes A, B and C Securities.
The purpose of this proposed rule
change is to introduce a new
incremental credit of $0.0001 per share
under Cross-Asset Tier 2 if an ETP
Holder meets both the existing Cross21 Under the Basic Rate, ETP Holders receive a
credit of $0.0020 per share for Tape B orders that
provide liquidity to the Book.
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Asset Tier 2 requirements 22 and
executes a designated percentage of
volume of its US CADV, as described
below.
The Exchange currently offers tiered
pricing that provides ETP Holders
opportunities to qualify for higher
rebates or reduced fees where certain
volume criteria and thresholds are met.
Tiered pricing provides an incremental
incentive for ETP Holders to strive for
higher tier levels, which provides
increasingly higher discounts for
satisfying more stringent criteria. More
specifically, the Exchange currently has
multiple levels of credits designed to
incentivize ETP Holders to achieve
certain levels of participation on both
the Exchange’s equities and options
platform (‘‘NYSE Arca Options’’). Under
Cross-Asset Tier 1, ETP Holders can
currently receive the following credits
for orders that provide liquidity, i.e.,
resting limit orders available for
execution on the Exchange, in Tapes A,
B and C Securities: $0.0031 per share in
Tape A Securities; $0.0030 per share in
Tape B Securities; and $0.0032 per
share in Tape C Securities.23
Additionally, under Cross-Asset Tier 2,
ETP Holders can currently receive a
credit of $0.0030 per share for orders
that provide liquidity.
The Exchange proposes to provide an
increased incentive for ETP Holders that
otherwise qualify for the current CrossAsset Tier 2 to send liquidity-providing
orders to the Exchange in Tapes A, B
and C Securities. As proposed, if an ETP
Holder meets the requirements of CrossAsset Tier 2 and increases adding and
removing liquidity in Tape A, Tape B
and Tape C Securities combined during
the billing month equal to at least 0.40%
of US CADV above its adding and
removing liquidity in Tape A, Tape B
and Tape C Securities combined of US
CADV in Q1 2020 would be eligible for
an incremental credit of $0.0001 per
share for orders that provide liquidity to
the Book in Tape A, Tape B, and Tape
C Securities.
For example, if an ETP Holder that
qualifies for Cross-Asset Tier 2 has an
adding ADV of 18 million shares and a
22 To qualify for credits under Cross-Asset Tier 2,
ETP Holders are required to (a) provide liquidity of
0.30% or more of the US CADV per month, and (b)
have an affiliation 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 0.80% of total Customer equity and ETF
option ADV as reported by OCC, of which at least
0.20% of total Customer equity and ETF option
ADV as reported by OCC is from Customer and
Professional Customer executions in non-Penny
Pilot issues on NYSE Arca Options. See Fee
Schedule, Cross-Asset Tier 2.
23 See Fee Schedule, Cross-Asset Tier 1.
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28679
removing ADV of 12 million shares, or
30 million shares combined ADV in Q1
2020. If US CADV for Q1 2020 was 6
billion shares, the ETP Holder would
have an adding and removing ADV of
0.50% of US CADV in the baseline
period. If the same ETP Holder had an
adding and removing ADV of 54 million
shares combined in a month where US
CADV was also 6 billion shares, for an
adding and removing ADV of 0.90% of
US CADV, that ETP Holder would meet
the additional requirement because the
ETP Holder would have a step up of
0.40% of adding and removing ADV
over its baseline month. The ETP Holder
would then qualify for an incremental
credit of $0.0001 per share for providing
liquidity, for a combined credit of
$0.0031 per share.
The proposed rule change is designed
to be available to all ETP Holders on the
Exchange and is intended to provide
ETP Holders an additional opportunity
to receive an enhanced rebate by
executing more of their orders on the
Exchange.
The Exchange proposes to increase
the credits available under the CrossAsset Tier 2 pricing tier to provide an
incentive for ETP Holders to send
increased order flow. If an ETP Holder
qualifies for Cross-Asset Tier 2 and
meets the additional proposed
requirement, that ETP Holder would be
eligible for an incremental credit as
compared to the current credit for
qualifying for Cross-Asset Tier 2, which
is $0.0030 per share credit for orders
that provide liquidity in Tapes A, B and
C Securities.
The Exchange does not know how
much order flow ETP Holders choose to
route to other exchanges or to offexchange venues. No ETP Holder
currently qualifies for the credit under
the current Cross-Asset Tier 1 pricing
tier and one ETP Holder currently
qualifies for the credits under the
current Cross-Asset Tier 2 pricing tier.24
However, without having a view of ETP
Holders’ activity on other markets and
off-exchange venues, the Exchange has
no way of knowing whether this
proposed rule change would result in
any ETP Holders qualifying for the
incremental credit. The Exchange
believes the proposed increased credit
for Cross-Asset Tier 2 would provide an
incentive for ETP Holders to submit
additional liquidity-providing orders to
the Exchange to qualify for the
incremental credit.
The proposed changes are not
otherwise intended to address any other
issues, and the Exchange is not aware of
24 As of April 14, 2020, there are 53 firms that are
both ETP Holders and OTP Holders.
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earlier, the Exchange currently has less
than 12% market share of executed
volume of equities trading.32
The Exchange believes that the ever2. Statutory Basis
shifting market share among the
The Exchange believes that the
exchanges from month to month
proposed rule change is consistent with demonstrates that market participants
Section 6(b) of the Act,25 in general, and can shift order flow, or discontinue to
furthers the objectives of Sections
reduce use of certain categories of
6(b)(4) and (5) of the Act,26 in particular, products, in response to fee changes.
because it provides for the equitable
With respect to non-marketable order
allocation of reasonable dues, fees, and
which provide liquidity on an
other charges among its members,
Exchange, ETP Holders can choose from
issuers and other persons using its
any one of the 13 currently operating
facilities and does not unfairly
registered exchanges to route such order
discriminate between customers,
flow. Accordingly, competitive forces
issuers, brokers or dealers.
reasonably constrain exchange
The Proposed Fee Change Is Reasonable transaction fees that relate to orders that
would provide displayed liquidity on an
As discussed above, the Exchange
exchange. Stated otherwise, changes to
operates in a highly fragmented and
exchange transaction fees can have a
competitive market. The Commission
direct effect on the ability of an
has repeatedly expressed its preference
exchange to compete for order flow.
for competition over regulatory
Given this competitive environment,
intervention in determining prices,
the proposal represents a reasonable
products, and services in the securities
attempt to attract additional order flow
markets. Specifically, in Regulation
to the Exchange.
NMS, the Commission highlighted the
Step Up Tier 5
importance of market forces in
determining prices and SRO revenues
The Exchange believes the proposal to
and, also, recognized that current
adopt the Step Up Tier 5 pricing tier is
regulation of the market system ‘‘has
reasonable as it would serve as an
been remarkably successful in
incentive to market participants to
promoting market competition in its
increase the orders sent directly to
broader forms that are most important to NYSE Arca and therefore provide
investors and listed companies.’’ 27
liquidity that supports the quality of
As the Commission itself recognized,
price discovery and promotes market
the market for trading services in NMS
transparency. The Exchange believes the
stocks has become ‘‘more fragmented
proposed pricing tier, which adopts a
and competitive.’’ 28 Indeed, equity
lower threshold, is reasonable and
trading is currently dispersed across 13
equitable because it would allow ETP
exchanges,29 31 alternative trading
Holders to receive increased credits
systems,30 and numerous broker-dealer
from those currently available under
internalizers and wholesalers, all
Step Up Tiers 1, 2 and 3. Moreover, the
competing for order flow. Based on
addition of the Step Up Tier 5 pricing
publicly-available information, no
tier would benefit market participants
single exchange currently has more than whose increased order flow provides
20% market share (whether including or meaningful added levels of liquidity
excluding auction volume).31 Therefore, thereby contributing to the depth and
no exchange possesses significant
market quality on the Exchange.
pricing power in the execution of equity Further, the Exchange believes the
order flow. More specifically, as noted
proposed pricing tier is reasonable as it
requires ETP Holders to double their
25 15 U.S.C. 78f(b).
adding ADV as a percent of US CADV
26 15 U.S.C. 78f(b)(4) and (5).
in addition to meeting the 0.20% adding
27 See Securities Exchange Act Release No. 51808
ADV requirement to qualify for the
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
proposed credit. A firm with an adding
28 See Securities Exchange Act Release No. 51808,
ADV of 0.25% of US CADV would need
84 FR 5202, 5253 (February 20, 2019) (File No. S7–
05–18) (Final rule).
to increase it to 0.50% to qualify.
jbell on DSKJLSW7X2PROD with NOTICES
any significant problems that market
participants would have in complying
with the proposed changes.
29 See Cboe Global Markets, U.S Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
30 See FINRA ATS Transparency Data, available
at https://otctransparency.finra.org/
otctransparency/AtsIssueData. A list of alternative
trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/
atslist.htm.
31 See Cboe Global Markets U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
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Step Up Tier 4
The Exchange believes the proposed
change to lower the volume
requirements under the Step Up Tier 4
pricing tier is reasonable because it
would allow ETP Holders an additional
opportunity to meet the requirement of
32 See
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Frm 00082
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the pricing tier to receive per share
credits payable under the Step Up Tier
4, thereby encouraging the submission
of additional liquidity to a national
securities exchange. Submission of
additional liquidity to the Exchange
would promote price discovery and
transparency and enhance order
execution opportunities for ETP Holders
from the substantial amounts of
liquidity present on the Exchange. All
ETP Holders would benefit from the
greater amounts of liquidity that will be
present on the Exchange, which would
provide greater execution opportunities.
Because only two ETP Holders to date
have qualified for the Step Up Tier 4,
the Exchange believes the proposed
lower volume requirements are
reasonable as they would provide an
additional incentive for more ETP
Holders to qualify for this established
tier and direct their order flow to the
Exchange and provide meaningful
added levels of displayed liquidity,
thereby contributing to the depth and
market quality on the Exchange.
The Exchange notes that volumebased incentives and discounts have
been widely adopted by exchanges,33
including the Exchange,34 and are
reasonable, equitable and nondiscriminatory because they are open to
all ETP Holders on an equal basis and
provide additional credits that are
reasonably related to the value to an
exchange’s market quality and
associated higher levels of market
activity.
The Exchange believes its proposal to
amend the Fee Schedule to codify the
fee cap applicable to the Step Up Tier
4 pricing tier is reasonable as it would
add clarity and result in a more
transparent Fee Schedule. The Exchange
believes the proposed change would
allow ETP Holders to more easily
validate the bills that they receive from
the Exchange, thus alleviating potential
confusion.
Retail Orders
The Exchange believes that the
proposed change is reasonable because
the increased credit for Retail Orders
would continue to encourage ETP
33 See e.g., Cboe BZX U.S. Equities Exchange
(‘‘BZX’’) Fee Schedule, Footnote 1, Add Volume
Tiers which provide enhanced rebates between
$0.0025 and $0.0033 per share for displayed orders
where BZX members meet certain volume
thresholds.
34 See e.g., Fee Schedule, Step Up Tier, Step Up
Tier 2, Step Up Tier 3 and Step Up Tier 4, which
provide enhanced rebates between $0.0025 and
$0.0033 per share in Tape A Securities, between
$0.0022 and $0.0034 per share in Tape B Securities,
and between $0.0025 and $0.0033 per share in Tape
C Securities for orders that provide displayed
liquidity where ETP Holders meet certain volume
thresholds.
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Holders to send Retail Orders to the
Exchange. As noted above, the Exchange
operates in a highly competitive
environment, particularly for attracting
Retail Order flow that provides
displayed liquidity on an exchange. The
Exchange believes it is reasonable to
continue to provide an increased credit
for Retail Orders that provide displayed
liquidity. The Exchange believes the
proposed change is also reasonable
because it is designed to attract higher
volumes of Retail Orders transacted on
the Exchange by ETP Holders which
would benefit all market participants by
offering greater price discovery,
increased transparency, and an
increased opportunity to trade on the
Exchange.
jbell on DSKJLSW7X2PROD with NOTICES
Tape B Tier 2
The Exchange believes the proposed
change to the Tape B Tier 2 pricing tier
is reasonable because it would apply to
ETP Holders that provide liquidity to
the Exchange and is designed to
incentivize ETP Holders to increase the
orders sent directly to the Exchange and
therefore provide liquidity that supports
the quality of price discovery and
promotes market transparency.
The Exchange believes that the
proposed new threshold for qualifying
for Tape B Tier 2 is reasonable because
it is designed to encourage increased
trading activity on the NYSE Arca
equity market. The Exchange believes it
is reasonable to require ETP Holders to
meet the applicable volume threshold to
qualify for the Tape B Tier 2 credit.
Further, the proposed change is
reasonable as it would allow ETP
Holders an additional method to qualify
for the credit payable under the pricing
tier if ETP Holders are unable to meet
either of the two existing requirements.
Additionally, ETP Holders that cannot
meet the higher threshold for the Tape
B Tier 1 credits would be able to qualify
for the Tape B Tier 2 credit, which
while providing for a lower credit, also
has lower requirements to qualify for
such credit.
Cross-Asset Tier 2
The Exchange believes the proposed
increased credit is reasonable as it
would provide an additional incentive
for ETP Holders to qualify for the new
incremental credit and direct their order
flow to the Exchange and provide
meaningful added levels of liquidity,
thereby contributing to the depth and
market quality on the Exchange. As
noted above, the Exchange operates in a
highly competitive environment,
particularly for attracting order flow that
provides liquidity on an exchange. The
Exchange believes it is reasonable to
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continue to provide a higher credit for
orders that provide liquidity if an ETP
Holder meets the heightened volume
requirements to qualify for the new
incremental credit.
Because the proposed amendment to
the Cross-Asset Tier 2 pricing tier would
be new with a requirement to increase
liquidity providing orders, no ETP
Holder currently qualifies for the
proposed new incremental credit.
As noted above, volume-based
incentives and discounts have been
widely adopted by exchanges, and are
reasonable, equitable and nondiscriminatory because they are open to
all ETP Holders on an equal basis and
provide additional credits that are
reasonably related to the value to an
exchange’s market quality and
associated higher levels of market
activity.
As noted previously, there are a small
number of firms that currently qualify or
could qualify for the credits under the
current Cross-Asset Tier 1 and CrossAsset Tier 2 pricing tiers and if these
firms were to submit more of their
liquidity-providing orders to the
Exchange, each could qualify for the
proposed new incremental credit.
However, without having a view of ETP
Holders’ activity on other markets and
off-exchange venues, the Exchange has
no way of knowing whether this
proposed rule change would result in
any ETP Holders qualifying for the new
incremental credit. The Exchange
believes the proposed incremental
credit would provide an incentive for
ETP Holders to submit additional
adding and removing liquidity to
qualify for the additional credit.
The Exchange believes that the
proposed new credit for liquidity
providing orders in Tapes A, B and C
Securities under the current Cross-Asset
Tier 2 pricing tier is reasonable because
it provides an incentive for ETP Holders
to route additional liquidity-providing
and removing order flow to the
Exchange, which would promote price
discovery and increase execution
opportunities for all ETP Holders. The
proposed pricing is structured similarly
to the incremental credit the Exchange
currently provides under current CrossAsset Tier 2, which likewise provides
ETP Holders an incremental credit of
$0.0004 per share (above the tiered rate
of $0.0030 per share) if the ETP Holder
meets the qualifying requirements.35
The Exchange believes that the
proposed change to the Cross-Asset Tier
35 See
Fee Schedule, Cross-Asset Tier 2. See also
Securities and Exchange Act Release No. 80920
(June 14, 2017), 82 FR 28106 (June 20, 2017) (SR–
NYSEArca–2017–64).
PO 00000
Frm 00083
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28681
2 pricing tier is reasonable because an
ETP Holder that otherwise qualifies for
the tier would still be eligible for the
current per share credit of $0.0030 per
share for orders that provide liquidity.
The proposed additional credit is
designed to provide an incentive for
such ETP Holder to route additional
providing and removing liquidity to the
Exchange, which would be eligible for
the higher credit.
On the backdrop of the competitive
environment in which the Exchange
currently operates, the proposed rule
change is a reasonable attempt to
increase liquidity on the Exchange and
improve the Exchange’s market share
relative to its competitors.
The Proposed Fee Change Is an
Equitable Allocation of Fees and Credits
The Exchange believes its proposal
equitably allocates its fees among its
market participants.
Step Up Tier 5
The Exchange believes the proposed
pricing tier is equitable because it
would allow ETP Holders to receive
increased credits from those currently
available under Step Up Tiers 1, 2 and
3. Moreover, the addition of the Step Up
Tier 5 pricing tier would benefit market
participants whose increased order flow
provides meaningful added levels of
liquidity thereby contributing to the
depth and market quality on the
Exchange. Given that Step Up Tier 5
would be a new pricing tier, no ETP
Holder currently qualifies for the
proposed credit. And without having a
view of ETP Holders’ activity on other
markets and off-exchange venues, the
Exchange has no way of knowing
whether this proposed rule change
would result in any ETP Holders
qualifying for this tier. However, the
Exchange believes the proposed lower
volume requirements would provide an
incentive for ETP Holders to continue to
submit liquidity-providing order flow,
which would promote price discovery
and increase execution opportunities for
all ETP Holders. The proposed change
would thereby encourage the
submission of additional liquidity to a
national securities exchange, thus
promoting price discovery and
transparency and enhancing order
execution opportunities for ETP Holders
from the substantial amounts of
liquidity present on the Exchange,
which would benefit all market
participants on the Exchange.
Step Up Tier 4
First, the Exchange is not proposing to
adjust the amount of the Step Up Tier
4 credits, which will remain at the
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current level for all ETP Holders.
Rather, the proposal would continue to
encourage ETP Holders to send orders
that add liquidity to the Exchange,
thereby contributing to robust levels of
liquidity, which benefits all market
participants. The Exchange believes
that, for the reasons discussed above,
lowering the requirements would make
it easier for liquidity providers to
qualify for the Step Up Tier 4 credit,
thereby encouraging submission of
additional liquidity by more ETP
Holders to the Exchange. The proposed
change will thereby encourage the
submission of additional liquidity to a
national securities exchange, thus
promoting price discovery and
transparency and enhancing order
execution opportunities for ETP Holders
from the substantial amounts of
liquidity present on the Exchange. All
ETP Holders would benefit from the
greater amounts of liquidity that will be
present on the Exchange, which would
provide greater execution opportunities.
As noted above, only one ETP Holder
currently qualifies for the Step Up Tier
4 pricing tier. Without having a view of
ETP Holders’ activity on other markets
and off-exchange venues, the Exchange
has no way of knowing whether this
proposed rule change would result in
any additional ETP Holders qualifying
for this tier. However, the Exchange
believes the proposed lower volume
requirements would provide an
incentive for ETP Holders to continue to
submit liquidity-providing order flow,
which would promote price discovery
and increase execution opportunities for
all ETP Holders. The proposed change
will thereby encourage the submission
of additional liquidity to a national
securities exchange, thus promoting
price discovery and transparency and
enhancing order execution
opportunities for ETP Holders from the
substantial amounts of liquidity present
on the Exchange, which would benefit
all market participants on the Exchange.
The Exchange believes the proposed
rule change would improve market
quality for all market participants on the
Exchange and, as a consequence, attract
more liquidity to the Exchange thereby
improving market-wide quality. ETP
Holders that currently qualify for credits
associated with Step Up pricing tiers on
the Exchange will continue to receive
credits when they provide liquidity to
the Exchange. The Exchange believes
that recalibrating the requirements for
providing liquidity will continue to
attract order flow and liquidity to the
Exchange for the benefit of investors
generally.
Since only one ETP Holder presently
qualifies for the credits associated with
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19:53 May 12, 2020
Jkt 250001
Step Up Tier 4, the proposal will not
adversely impact such ETP Holder’s
existing pricing or its ability to qualify
for other credits provided by the
Exchange.
Finally, the Exchange believes its
proposal to amend the Fee Schedule to
codify the fee cap applicable to the Step
Up Tier 4 pricing tier is equitable as it
would add clarity and result in a more
transparent Fee Schedule. The Exchange
believes the proposed change would
allow ETP Holders to more easily
validate the bills that they receive from
the Exchange, thus alleviating potential
confusion.
Retail Orders
The Exchange believes it is an
equitable allocation of reasonable fees to
increase the credit that would be
available for Retail Orders because it
would reduce the difference in credits
available for Retail Orders that provide
liquidity, while still providing increased
credits under the Retail Order Tiers to
provide an incentive for ETP Holders to
route displayed liquidity to the
Exchange.
Further, given the competitive market
for attracting Retail Order flow, the
Exchange notes that with this proposed
rule change, the Exchange’s pricing for
Retail Orders would be comparable to
credits currently in place on other
exchanges that the Exchange competes
with for order flow. For example, the
Nasdaq Stock Market LLC (‘‘Nasdaq’’)
provides its members with a non-tier
credit of $0.00325 per share for Retail
Orders that provide liquidity on that
market,36 while BZX provides its
members with a credit of $0.0032 per
share for retail orders that add liquidity
to that market.37
The Exchange further believes that the
proposed change is equitable because it
is reasonably related to the value to the
Exchange’s market quality associated
with higher volume in Retail Orders.
The Exchange notes that currently only
11 firms submit Retail Orders that add
liquidity on the Exchange and of those
11 firms, 9 qualify for the base Retail
Order credit, while the other 2 qualify
for higher tiered Retail Order credits.
More firms could receive the base Retail
Order credit of $0.0032 if those firms
directed their Retail Orders to the
Exchange.
Further, the Exchange notes that, with
this proposed rule change, the
36 See Nasdaq Price List, Rebate to Add Displayed
Designated Retail Liquidity, at https://
nasdaqtrader.com/
Trader.aspx?id=PriceListTrading2.
37 See BZX Fee Schedule, Fee Codes and
Associated Fees, at https://markets.cboe.com/us/
equities/membership/fee_schedule/bzx/.
PO 00000
Frm 00084
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difference between the highest credit
provided for Retail Orders, $0.0035 per
share, and the credit for Retail Orders
that do not qualify for any of the Retail
Order pricing tiers, $0.0032 per share,
would be $0.0003, or 9%, which the
Exchange believes is small given the
requirements that ETP Holders are
required to meet to qualify for the
higher credit. Therefore, the Exchange
believes the proposed change to the base
credit for Retail Orders is equitable, as
it would provide discounts that are
reasonably related to the value to the
Exchange’s market quality associated
with higher volumes associated with the
submission of Retail Orders to the
Exchange.
The Exchange believes that
recalibrating the credits for providing
liquidity will continue to attract order
flow and liquidity to the Exchange,
thereby contributing to price discovery
on the Exchange and benefiting
investors generally.
The Exchange believes that the
proposed rule change is equitable
because maintaining or increasing the
proportion of Retail Orders in exchangelisted securities that are executed on a
registered national securities exchange
(rather than relying on certain available
off-exchange execution methods) would
contribute to investors’ confidence in
the fairness of their transactions and
would benefit all investors by
deepening the Exchange’s liquidity
pool, supporting the quality of price
discovery, promoting market
transparency and improving investor
protection.
Tape B Tier 2
The Exchange believes the proposed
change to the Tape B Tier 2 pricing tier
is equitably allocated because it would
apply to ETP Holders that provide
liquidity to the Exchange and is
designed to incentivize these market
participants to increase the orders sent
directly to the Exchange and therefore,
provide liquidity that supports the
quality of price discovery and promotes
market transparency.
The Exchange believes the Tape B
Tier 2 pricing tier is equitable because
it is open to all similarly situated ETP
Holders on an equal basis and provide
a per share credit that is reasonably
related to the value of an exchange’s
market quality associated with higher
volumes. The Exchange believes it is
equitable to require ETP Holders to meet
the applicable volume thresholds to
qualify for the Tape B Tier 2 credit.
Further, the proposed change is
equitable as it would allow ETP Holders
an additional method to qualify for the
credit payable under the pricing tier if
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ETP Holders are unable to meet either
of the two existing requirements.
The Exchange believes the Tape B
Tier 2 pricing tier is equitable because
it is open to all similarly situated ETP
Holders on an equal basis and provides
a credit that is reasonably related to the
value of an exchange’s market quality
associated with higher volumes.
Cross-Asset Tier 2
The Exchange believes that the
proposed increased credit under the
Cross-Asset Tier 2 pricing tier is
equitable because the magnitude of the
additional credit is not unreasonably
high in comparison to the credit paid
with respect to other pricing tiers on the
Exchange, and in comparison to the
credits paid by other exchanges for
orders that provide liquidity. For
example, ETP Holders currently receive
credits in Tape A, Tape B and Tape C
Securities that range between $0.0022
per share and $0.0034 per share under
Step Up Tier, Step Up Tier 2, Step Up
Tier 3, Step Up Tier 4, and proposed
Step Up Tier 5.
With respect to credits paid by the
Exchange’s competitors, BZX provides a
credit of $0.0031 per share in Tape B
Securities under that market’s CrossAsset pricing tier.38
The Exchange believes that the
proposed new incremental credit for
liquidity providing orders in Tapes A, B
and C Securities under current CrossAsset Tier 2 is also equitable because
the proposal would continue to
encourage ETP Holders to route
liquidity-providing orders to the
Exchange in Tapes A, B and C
Securities, thereby contributing to
robust levels of liquidity, which benefits
all market participants.
As noted above, there are a small
number of firms that currently qualify or
could qualify for the credits under the
current Cross-Asset Tier 1 and CrossAsset Tier 2 pricing tiers and if these
firms were to submit more of their
liquidity-providing orders to the
Exchange, each could qualify for the
proposed new incremental credit.
However, without having a view of an
ETP Holder’s activity on other markets
and off-exchange venues, the Exchange
believes the proposed new incremental
credit would provide an incentive for
market participants to increase liquidity
in order to qualify for the proposed new
incremental credit, thereby encouraging
submission of additional liquidity to the
Exchange. The proposed change will
thereby encourage the submission of
38 See BZX Fee Schedule, Cross-Asset Tape B
Tier, at https://markets.cboe.com/us/equities/
membership/fee_schedule/bzx/.
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additional liquidity to a national
securities exchange, thus promoting
price discovery and transparency and
enhancing order execution
opportunities for ETP Holders from the
substantial amounts of liquidity present
on the Exchange. All ETP Holders
would benefit from the greater amounts
of liquidity that will be present on the
Exchange, which would provide greater
execution opportunities.
The Exchange believes the proposed
rule change would improve market
quality for all market participants on the
Exchange and, as a consequence, attract
more liquidity to the Exchange thereby
improving market-wide quality. ETP
Holders that currently qualify for credits
associated with Cross-Asset pricing tiers
on the Exchange will continue to
receive credits when they provide
liquidity to the Exchange. The Exchange
believes that recalibrating the credits for
providing liquidity will continue to
attract order flow and liquidity to the
Exchange for the benefit of investors
generally. As to those market
participants that do not presently
qualify for the credits associated with
Cross-Asset Tier 2, the proposal will not
adversely impact their existing pricing
or their ability to qualify for other
credits provided by the Exchange.
The Proposed Fee Change Is Not
Unfairly Discriminatory
The Exchange believes that the
proposal is not unfairly discriminatory.
In the prevailing competitive
environment, ETP Holders are free to
disfavor the Exchange’s pricing if they
believe that alternatives offer them
better value.
Step Up Tier 5
The Exchange believes that the
proposed new Step Up Tier 5 pricing
tier is not unfairly discriminatory
because it is open to all ETP Holders, on
an equal basis, that meet the
requirements to qualify for the tier. The
proposed pricing tier would also serve
as an incentive to ETP Holders and
Market Makers that do not currently
meet the requirement of other pricing
tiers on the Exchange to increase the
level of orders sent directly to NYSE
Arca in order to qualify for, and receive
the higher credits associated with
proposed Step Up Tier 5. The proposed
pricing tier would apply equally to all
ETP Holders as each would be required
to execute providing ADV per month
that is at least 0.20% of US CADV and
execute providing ADV per month as a
percentage of US CADV that is at least
two times more than that ETP Holders
and Market Makers providing ADV in
April 2020 as a percentage of US CADV,
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28683
regardless of whether an ETP Holder
currently meets the requirement of
another pricing tier.
Step Up Tier 4
The proposal to lower the volume
requirement under Step Up Tier 4
neither targets or will it have a disparate
impact on any particular category of
market participant. The proposal does
not permit unfair discrimination
because the lower threshold would be
applied to all similarly situated ETP
Holders, who would all be eligible for
the same credit on an equal basis.
Accordingly, no ETP Holder already
operating on the Exchange would be
disadvantaged by this allocation of fees.
The Exchange believes it is not
unfairly discriminatory to adopt lower
volume requirements for ETP Holders to
qualify for the Step Up Tier 4 pricing
tier and adopt clarifying language with
respect to the cap currently applicable
for ETP Holders that qualify for the Step
Up Tier 4 pricing tier as the proposed
change would apply on an equal basis
to all ETP Holders. Further, the
Exchange believes the proposed lower
volume requirements would incentivize
ETP Holders to execute more of their
liquidity-providers orders on the
Exchange to qualify for the increased
credits payable under Step Up Tier 4.
The Exchange also believes that the
proposed change is not unfairly
discriminatory because it is reasonably
related to the value of the Exchange’s
market quality associated with higher
volume. The proposed lower volume
requirements would apply equally to all
ETP Holders as each would be required
to execute providing volume in Tapes
A, B and C Securities during the billing
month that is at least 0.40% of US
CADV over its providing ADV in
September 2019, taken as a percentage
of US CADV, regardless of whether an
ETP Holder currently meets the
requirement of another pricing tier.
Retail Orders
The Exchange believes that the
proposed change is not unfairly
discriminatory because it would apply
to all ETP Holders on an equal and nondiscriminatory basis. The Exchange
further believes that the proposed
change is not unfairly discriminatory
because it is reasonably related to the
value to the Exchange’s market quality
associated with higher volume in Retail
Orders. Further, the Exchange notes
that, with this proposed rule change, the
difference between the highest credit
provided for Retail Orders, $0.0035 per
share, and the credit for Retail Orders
that do not qualify for any of the Retail
Order pricing tiers, $0.0032 per share,
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jbell on DSKJLSW7X2PROD with NOTICES
would be $0.0003, or 9%, which the
Exchange believes is small given the
requirements that ETP Holders are
required to meet to qualify for the
higher credit. Therefore, the Exchange
believes the proposed change to the base
credit for Retail Orders is not unfairly
discriminatory, as it would continue to
provide discounts that are reasonably
related to the value to the Exchange’s
market quality associated with higher
volumes under the current Retail Order
tiers.
The Exchange believes that
recalibrating the credits for providing
liquidity will continue to attract order
flow and liquidity to the Exchange,
thereby contributing to price discovery
on the Exchange and benefiting
investors generally.
The Exchange believes that the
proposed rule change is not unfairly
discriminatory because maintaining or
increasing the proportion of Retail
Orders in exchange-listed securities that
are executed on a registered national
securities exchange (rather than relying
on certain available off-exchange
execution methods) would contribute to
investors’ confidence in the fairness of
their transactions and would benefit all
investors by deepening the Exchange’s
liquidity pool, supporting the quality of
price discovery, promoting market
transparency and improving investor
protection. This aspect of the proposed
rule change also is consistent with the
Act because all similarly situated ETP
Holders would be eligible to qualify for
the credit. Furthermore, the submission
of Retail Orders is optional for ETP
Holders in that they could choose
whether to submit Retail Orders and, if
they do, the extent of its activity in this
regard.
Tape B Tier 2
The Exchange believes that the
proposed new method of qualifying for
the Tape B Tier 2 credit is not unfairly
discriminatory because it would be
available to all ETP Holders on an equal
and non-discriminatory basis. In this
regard, the Exchange notes that ETP
Holders that do not meet the proposed
alternative method would continue to
have the opportunity to qualify for the
Tape B Tier 2 credit by satisfying either
of the two existing requirements, which
would not change as a result of this
proposal.
Further, the Exchange believes the
proposed additional method to qualify
for the Tape B Tier 2 credit would
incentivize ETP Holders that do not
meet the current requirements to
execute more of their liquidityproviders orders on the Exchange to
qualify under the proposed method. The
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19:53 May 12, 2020
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Exchange also believes that the
proposed change is not unfairly
discriminatory because it is reasonably
related to the value of the Exchange’s
market quality associated with higher
volume. The proposed additional
method to qualify for the Tape B Tier 2
credit would apply equally to all ETP
Holders as each would be required to
meet the new criteria regardless of
whether an ETP Holder currently meets
the requirement of another pricing tier.
Cross-Asset Tier 2
The Exchange believes it is not
unfairly discriminatory to provide an
incremental per share credit as the
proposed increased credit would be
provided on an equal basis to all ETP
Holders that add liquidity by meeting
the increased volume requirements
under the Cross-Asset Tier 2 pricing
tier. Further, the Exchange believes the
proposed incremental per share credit
would incentivize ETP Holders that
meet the current Cross-Asset Tier 2
pricing tier requirements to execute
more of their liquidity-providers orders
on the Exchange to qualify for the
proposed incremental credit. The
Exchange also believes that the
proposed change is not unfairly
discriminatory because it is reasonably
related to the value of the Exchange’s
market quality associated with higher
volume. The proposed incremental per
share credit would apply equally to all
ETP Holders as each would be required
to meet the additional criteria regardless
of whether an ETP Holder currently
meets the requirement of another
pricing tier.
Similarly, the Exchange believes it is
not unfairly discriminatory to provide
an incremental credit for liquidity
providing orders in Tapes A, B and C
Securities under the current Cross-Asset
Tier 2 pricing tier because the proposed
credit would be provided on an equal
basis to all ETP Holders that add
liquidity by meeting the proposed new
volume requirements.
Finally, the submission of orders to
the Exchange is optional for ETP
Holders in that they could choose
whether to submit orders to the
Exchange and, if they do, the extent of
its activity in this regard. 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.
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,39 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 changes would
encourage the submission of additional
liquidity to a public exchange, thereby
promoting market depth, price
discovery and transparency and
enhancing order execution
opportunities for ETP Holders. As a
result, the Exchange believes that the
proposed change furthers the
Commission’s goal in adopting
Regulation NMS of fostering integrated
competition among orders, which
promotes ‘‘more efficient pricing of
individual stocks for all types of orders,
large and small.’’ 40
Intramarket Competition. The
Exchange believes its proposed
amendments to its Fee Schedule would
not impose any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange does not believe that the
proposed change represents a significant
departure from previous pricing offered
by the Exchange or its competitors. The
proposed changes are designed to attract
additional order flow to the Exchange.
The Exchange believes that the
proposed lower volume requirements
and alternative criteria to qualify for
existing pricing tiers would continue to
incentivize market participants to direct
providing displayed order flow to the
Exchange. The Exchange’s proposal to
adopt an increased credit for Retail
Orders would also continue to
incentivize ETP Holders to direct more
of their Retail Orders to the Exchange.
Greater liquidity benefits all market
participants on the Exchange by
providing more trading opportunities
and encourages ETP Holders, to send
orders, thereby contributing to robust
levels of liquidity, which benefits all
market participants. Moreover, the
proposal to modify the Fee Schedule to
make clear the applicability of the cap
under the Step Up Tier 4 pricing tier
would not pose an undue burden on
competition but would instead add
clarity and transparency to the Fee
Schedule regarding the amount of credit
payable under the Step Up Tier 4
pricing tier.
39 15
U.S.C. 78f(b)(8).
Securities Exchange Act Release No. 51808,
70 FR 37495, 37498–99 (June 29, 2005) (S7–10–04)
(Final Rule).
40 See
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Intermarket Competition. The
Exchange operates in a highly
competitive market in which market
participants can readily choose to send
their orders to other exchange and offexchange venues if they deem fee levels
at those other venues to be more
favorable. As noted above, the
Exchange’s market share of intraday
trading (i.e., excluding auctions) is
currently less than 12%. 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 its proposed fee change
can impose any burden on intermarket
competition.
The Exchange believes that the
proposed change could promote
competition between the Exchange and
other execution venues, including those
that currently offer similar order types
and comparable transaction pricing, by
encouraging additional orders to be sent
to the Exchange for execution.
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.
jbell on DSKJLSW7X2PROD with NOTICES
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) 41 of the Act and
subparagraph (f)(2) of Rule 19b–4 42
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 43 of the Act to
determine whether the proposed rule
41 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
43 15 U.S.C. 78s(b)(2)(B).
42 17
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19:53 May 12, 2020
Jkt 250001
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–2020–39 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEARCA–2020–39. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEARCA–2020–39, and
should be submitted on or before June
3, 2020.
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
28685
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.44
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–10219 Filed 5–12–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0049, SEC File No.
270–39]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Form ADV
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
The title for the collection of
information is ‘‘Form ADV under the
Investment Advisers Act of 1940.’’ Form
ADV is a three-part investment adviser
registration form. Part 1 of Form ADV
contains information used primarily by
the Securities and Exchange
Commission (the ‘‘Commission’’) staff
and Part 2 is the client brochure. Part 3
requires registered investment advisers
that offer services to retail investors to
prepare and file with the Commission,
post to the adviser’s website (if it has
one), and deliver to retail investors a
relationship summary. The Commission
uses the information on Form ADV to
determine eligibility for registration
with us and to manage our regulatory
and examination programs. Clients use
the information required in Form ADV
to determine whether to hire or retain
an investment adviser, as well as what
types of accounts and services are
appropriate for their needs.
This collection of information is
found at 17 CFR 279.1, 17 CFR 275.203–
1, 17 CFR 275.204–1 and 17 CFR
275.204–4 and is mandatory. The
Commission’s examination staff use the
information to determine eligibility for
registration with us and to manage our
44 17
E:\FR\FM\13MYN1.SGM
CFR 200.30–3(a)(12).
13MYN1
]]>Agencies
[Federal Register Volume 85, Number 93 (Wednesday, May 13, 2020)]
[Notices]
[Pages 28676-28685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10219]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88833; File No. SR-NYSEARCA-2020-39]
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
May 7, 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 May 1, 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) adopt a new pricing tier, Step Up
Tier 5; (2) modify the requirements associated with the Step Up Tier 4
pricing tier; (3) increase the per share credit applicable to Retail
Orders; (4) adopt an alternative requirement to qualify for the Tape B
Tier 2 pricing tier; and (5) adopt an incremental per share credit
payable under the Cross-Asset Tier 2 pricing tier. 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 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule to (1) adopt a new
pricing tier, Step Up Tier 5; (2) modify the requirements associated
with the Step Up Tier 4 pricing tier; (3) increase the per share credit
applicable to Retail Orders; (4) adopt an alternative requirement to
qualify for the Tape B Tier 2 pricing tier; and (5) adopt an
incremental per share credit payable under the Cross-Asset Tier 2
pricing tier.
The proposed changes respond to the current competitive environment
where order flow providers have a choice of where to direct liquidity-
providing orders by offering further incentives for ETP Holders \4\ to
send additional displayed liquidity to the Exchange.
---------------------------------------------------------------------------
\4\ All references to ETP Holders in connection with this
proposed fee change include Market Makers.
---------------------------------------------------------------------------
[[Page 28677]]
The Exchange proposes to implement the fee changes effective May 1,
2020.
Background
The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. 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.'' \5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
As the Commission itself recognized, the market for trading
services in NMS stocks has become ``more fragmented and competitive.''
\6\ Indeed, equity trading is currently dispersed across 13
exchanges,\7\ numerous alternative trading systems,\8\ and broker-
dealer internalizers and wholesalers, all competing for order flow.
Based on publicly-available information, no single exchange currently
has more than 20% market share (whether including or excluding auction
volume).\9\ Therefore, no exchange possesses significant pricing power
in the execution of equity order flow. More specifically, the Exchange
currently has less than 12% market share of executed volume of equities
trading.\10\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 51808, 84 FR 5202,
5253 (February 20, 2019) (File No. S7-05-18) (Final Rule).
\7\ See Cboe U.S Equities Market Volume Summary, available at
https://markets.cboe.com/us/equities/market_share. See generally
https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
\8\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of
alternative trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/atslist.htm.
\9\ See Cboe Global Markets U.S. Equities Market Volume Summary,
available at https://markets.cboe.com/us/equities/market_share/.
\10\ See id.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
move order flow, or discontinue or reduce use of certain categories of
products. While it is not possible to know a firm's reason for shifting
order flow, the Exchange believes that one such reason is because of
fee changes at any of the registered exchanges or non-exchange venues
to which a firm routes order flow. With respect to non-marketable order
flow that would provide displayed liquidity on an Exchange against
which market makers can quote, ETP Holders can choose from any one of
the 13 currently operating registered exchanges to route such order
flow. Accordingly, competitive forces constrain exchange transaction
fees that relate to orders that would provide displayed liquidity on an
exchange.
Proposed Rule Change
Step Up Tier 5
The proposed rule change is designed to be available to all ETP
Holders on the Exchange and is intended to provide ETP Holders an
opportunity to receive an enhanced rebate by executing more of their
orders on the Exchange. The Exchange currently provides credits to ETP
Holders who submit orders that provide displayed liquidity on the
Exchange. The Exchange currently has multiple levels of credits for
orders that provide displayed liquidity that are based on the amount of
volume of such orders that ETP Holders send to the Exchange.
In this competitive environment, the Exchange has already
established Step Up Tiers 1-4, which are designed to encourage ETP
Holders that provide displayed liquidity on the Exchange to increase
that order flow, which would benefit all ETP Holders by providing
greater execution opportunities on the Exchange. In order to provide an
incentive for ETP Holders to direct providing displayed order flow to
the Exchange, the credits increase in the various tiers based on
increased levels of volume directed to the Exchange.
Currently, the following credits are available to ETP Holders that
provide increased levels of displayed liquidity on the Exchange:
------------------------------------------------------------------------
Credit for providing
Tier displayed liquidity
------------------------------------------------------------------------
Step Up Tier.............................. $0.0030 (Tape A).
0.0023 (Tape B).
0.0031 (Tape C).
Step Up Tier 2............................ 0.0028 (Tape A and C).
0.0022 (Tape B).
Step Up Tier 3............................ 0.0025 (Tape A and C).
0.0022 (Tape B).
Step Up Tier 4............................ 0.0033 (Tape A and C).
0.0034 (Tape B).
------------------------------------------------------------------------
The Exchange proposes to amend the Fee Schedule to introduce a new
pricing tier--Step Up Tier 5--for securities with a per share price of
$1.00 or above.
As proposed, ETP Holders would qualify for the new Step Up Tier 5
if they directly execute providing ADV per month that is at least 0.20%
of US CADV \11\ and execute providing ADV per month as a percentage of
US CADV that is at least two times more than that ETP Holder's
providing ADV in April 2020 as a percentage of US CADV. ETP Holders
that qualify for Step Up Tier 5 would receive a credit of $0.0032 per
share for orders that provide displayed liquidity to the Book in Tape
A, Tape B and Tape C securities.
---------------------------------------------------------------------------
\11\ US CADV means the 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. See Fee Schedule,
footnote 3.
---------------------------------------------------------------------------
For all other fees and credits, tiered or basic rates apply based
on a firm's qualifying levels.
For example, assume an ETP Holder has an adding ADV of 0.10% of US
CADV in all securities in the baseline month of April 2020. Assume
further that the same ETP Holder has an adding ADV of 0.20% of US CADV
in all securities in the billing month. The ETP Holder in the above
example would qualify for the proposed Step Up Tier 5 with an adding
ADV step up of 0.10% of US CADV (i.e., 0.20% US CADV) and an adding ADV
that is at least two times the ETP Holder's April 2020 Baseline of
0.10%. If instead, the ETP holder had an adding ADV of 0.12% of US CADV
in the baseline month of April 2020, that ETP Holder would then need an
adding ADV of at least 0.24%, which is two times the 0.12% adding ADV
in the baseline month. ETP Holders with less than 0.10% in the baseline
month would need to add 0.20% of US CADV, as that is more than two
times any adding ADV baseline under 0.10%.
The goal of the proposed Step Up Tier 5 pricing tier is to
incentivize ETP Holders to increase the orders sent directly to the
Exchange and therefore provide liquidity that supports the quality of
price discovery and promotes market transparency.
While the proposed pricing tier would pay a credit that is lower
than that available to ETP Holders under Step Up Tier 4, the proposed
pricing tier also adopts lower volume thresholds than that required to
qualify for Step Up Tier 4. The proposed pricing tier, however, pays a
credit that is higher than the Step Up Tier, Step Up Tier 2 and Step Up
Tier 3. While the Adding ADV of 0.20% requirement in proposed Step Up
Tier 5 is less than the adding ADV requirement in Step Up Tier (0.50%
of US CADV and an adding ADV step up of 0.10% US CADV) and Step Up Tier
2 (0.22% of US CADV and an adding ADV step up of 0.06%), proposed Step
Up Tier 5 has the
[[Page 28678]]
additional higher requirement for ETP Holders to double their adding
ADV as a percent of US CADV. An ETP Holder that has 0.40% US CADV can
increase their adding ADV by 0.10% to reach the 0.50% CADV requirement
to qualify for Step Up Tier, which is only an increase of 25% over the
ETP Holder's 0.40% baseline.
Step Up Tier 4
As described in greater detail below, the Exchange proposes to
modify the volume requirements applicable to ETP Holders to qualify for
the Step Up Tier 4 pricing tier by lowering the percentage threshold
that an ETP Holder must meet.\12\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release Nos. 85311 (March 14,
2019), 84 FR 10348 (March 20, 2019) (SR-NYSEArca-2019-10); and 87292
(October 11, 2019), 84 FR 55603 (October 17, 2019) (SR-NYSEArca-
2019-70).
---------------------------------------------------------------------------
Under Step Up Tier 4, if an ETP Holder increases its providing
liquidity on the Exchange by a specified percentage over the level that
such ETP Holder provided liquidity in September 2019, it is eligible to
earn higher credits for providing displayed liquidity. Specifically, to
qualify for the credits under the Step Up Tier 4 pricing tier, an ETP
Holder must directly execute providing average daily volume (ADV) per
month that is an increase of no less than 0.55% of US CADV for that
month over the ETP Holder's providing ADV in September 2019, taken as a
percentage of US CADV. Currently, if an ETP Holder meets these Step Up
Tier 4 qualifications, such ETP Holder is eligible to earn a credit of:
$0.0033 per share for orders that provide displayed
liquidity to the Book in Tape A and Tape C Securities, and
$0.0034 per share for orders that provide displayed
liquidity to the Book in Tape B Securities.\13\
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 86122 (June 17,
2019), 84 FR 29258 (June 21, 2019) (SR-NYSEArca-2019-43).
---------------------------------------------------------------------------
With this proposed rule change, the Exchange proposes to modify the
volume requirements applicable to ETP Holders to qualify for the Step
Up Tier 4 by lowering the percentage threshold that an ETP Holder must
meet, from a minimum of 0.55% of US CADV for the billing month to a
minimum of 0.40% of US CADV for the billing month.
The purpose of the proposed rule change is to increase the
incentive for order flow providers to send liquidity-providing orders
to the Exchange. As described above, ETP Holders with liquidity-
providing orders have a choice of where to send those orders. The
Exchange believes that, if it reduces the requirement to qualify for a
tiered credit, more ETP Holders will choose to route their liquidity-
providing orders to the Exchange to qualify for the credit.
The Exchange does not know how much order flow ETP Holders choose
to route to other exchanges or to off-exchange venues. While the Step
Up Tier 4 pricing tier is available to all ETP Holders, to date, two
ETP Holder have qualified for it.\14\ Without having a view of ETP
Holders' activity on other markets and off-exchange venues, the
Exchange has no way of knowing whether this proposed rule change would
result in any more ETP Holders qualifying for the Step Up Tier 4
credit. The Exchange cannot predict with certainty how many ETP Holders
would avail themselves of this opportunity but additional liquidity-
providing orders would benefit all market participants because it would
provide greater execution opportunities on the Exchange.
---------------------------------------------------------------------------
\14\ As of April 27, 2020, there is one ETP Holder on the
Exchange that qualifies for the Exchange's Step Up Tier 4 pricing
tier.
---------------------------------------------------------------------------
The Exchange is not proposing to amend any of the credits payable
under the Step Up Tier 4.
Additionally, in a recent filing related to the Step Up Tier 4
pricing tier, the Exchange adopted a cap applicable to the Step Up Tier
4 credit in Tape B securities and noted in such filing that ETP Holders
that qualify for Step Up Tier 4 would not receive any additional
incremental Tape B Tier credits for providing displayed liquidity,
including any incremental credits associated with Less Active ETP
Securities.\15\ The Fee Schedule currently states that ``ETP Holders
and Market Makers that qualify for Step Up Tier 4 shall not receive any
additional incremental Tape B Tier credits for providing displayed
liquidity.'' The Exchange proposes to clarify the applicability of the
cap by adding ``including any incremental credits associated with Less
Active ETP Securities'' at the end of the sentence. The Exchange
believes codifying the cap language into the Fee Schedule will provide
clarity to the Fee Schedule and avoid investor confusion.
---------------------------------------------------------------------------
\15\ See Securities Exchange Act Release No. 88436 (March 20,
2020), 85 FR 17112 (March 26, 2020) (SR-NYSEArca-2020-21).
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Retail Orders
As noted above, the market for trading services in NMS stocks has
become ``more fragmented and competitive.'' \16\ The competition for
Retail Order flow is even more stark, particularly as it relates to
exchange versus off-exchange venues. For example, the Exchange examined
Rule 606 disclosures from two prominent retail brokerages: E-Trade and
TD Ameritrade. For securities listed on the New York Stock Exchange LLC
in the fourth quarter of 2019, TD Ameritrade routed 95% of its limit
orders to off-exchange venues.\17\ Similarly, E-Trade Financial routed
more than 73% of its limit orders to off-exchange venues.\18\
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\16\ See Securities Exchange Act Release No. 51808, 84 FR 5202,
5253 (February 20, 2019) (File No. S7-05-18) (Transaction Fee Pilot
for NMS Stocks Final Rule) (``Transaction Fee Pilot'').
\17\ See https://www.tdameritrade.com/retail-en_us/resources/pdf/AMTD2054.pdf.
\18\ See https://content.etrade.com/etrade/powerpage/pdf/OrderRouting11AC6.pdf.
---------------------------------------------------------------------------
The Exchange thus needs to compete in the first instance with non-
exchange venues for Retail Order flow, and with the 13 other exchange
venues for that Retail Order flow that is not directed off-exchange.
This competition is particularly acute for non-marketable Retail
Orders, i.e., Retail Orders that provide liquidity, and even more
fiercely for non-marketable Retail Orders that provide displayed
liquidity on an exchange. Accordingly, competitive forces compel the
Exchange to use exchange transaction fees and credits, particularly as
they relate to competing for Retail Order flow, because market
participants can readily trade on competing venues if they deem pricing
levels at those other venues to be more favorable.
In response to this competitive environment, the Exchange currently
provides credits to ETP Holders who enter Retail Orders \19\ on the
Exchange. The Exchange has multiple levels of such credits that are
based on an ETP Holder's trading volume of Retail Orders on the
Exchange.\20\ ETP Holders that do not qualify for tiered pricing
currently receive, under the Basic Rates section of the Fee Schedule, a
credit of $0.0030 per share for Retail Orders in Tape A, Tape B and
Tape C securities that provide liquidity to the Book. With this
proposed rule change, the Exchange proposes to increase the base credit
from $0.0030 per share to $0.0032 per share.
---------------------------------------------------------------------------
\19\ 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).
\20\ See Retail Order Tier, Retail Order Step-Up Tier 1 and
Retail Order Step-Up Tier 2 on the Fee Schedule at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf.
---------------------------------------------------------------------------
The proposed change would reduce the difference in credits
available to Retail Orders that provide displayed
[[Page 28679]]
liquidity on the Exchange from ETP Holders qualifying for the base
credit versus the tiered credits available to Retail Orders that
provide displayed liquidity on the Exchange. The Exchange believes that
by increasing the base credit, it would be more closely align with the
credits available for other Retail Orders that provide liquidity on the
Exchange.
Tape B Tier 2
Currently, under the Tape B Tier 2 pricing tier, an ETP Holder
could qualify for a credit of $0.0028 per share \21\ if such ETP
Holders, on a daily basis, measured monthly, directly executes
providing volume in Tape B Securities during the billing month (``Tape
B Adding ADV'') that is either (1) equal to at least 1.0% of the US
Tape B CADV or (2) equal to at least 0.20% of the US Tape B CADV for
the billing month over the ETP Holder's Q2 2015 Tape B Adding ADV taken
as a percentage of Tape B CADV. The Exchange proposes to introduce a
third method of qualifying for Tape B Tier 2 credits.
---------------------------------------------------------------------------
\21\ Under the Basic Rate, ETP Holders receive a credit of
$0.0020 per share for Tape B orders that provide liquidity to the
Book.
---------------------------------------------------------------------------
As proposed, ETP Holders could qualify for the Tape B Tier 2 credit
of $0.0028 per share for providing liquidity to the Book in Tape B
Securities if such ETP Holder, on a daily basis, measured monthly,
directly executes Tape B Adding ADV that is equal to at least 0.25% of
the US Tape B CADV for the billing month over the ETP Holder's April
2020 Tape B Adding ADV taken as a percentage of Tape B CADV.
The Exchange believes that, by providing for an additional method
of qualifying for Tape B Tier 2, this proposed change will provide a
greater incentive to attract additional liquidity from additional ETP
Holders in Tape B Securities so as to qualify for the Tape B Tier 2
credit.
The Exchange is not proposing any change to the level of Tape B
Tier 2 credits.
Cross-Asset Tier 2
The Exchange proposes to adopt an incremental credit under a
current pricing tier, Cross-Asset Tier 2, that would provide an
additional incentive for all ETP Holders to provide liquidity in Tapes
A, B and C Securities.
The purpose of this proposed rule change is to introduce a new
incremental credit of $0.0001 per share under Cross-Asset Tier 2 if an
ETP Holder meets both the existing Cross-Asset Tier 2 requirements \22\
and executes a designated percentage of volume of its US CADV, as
described below.
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\22\ To qualify for credits under Cross-Asset Tier 2, ETP
Holders are required to (a) provide liquidity of 0.30% or more of
the US CADV per month, and (b) have an affiliation 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 0.80% of total
Customer equity and ETF option ADV as reported by OCC, of which at
least 0.20% of total Customer equity and ETF option ADV as reported
by OCC is from Customer and Professional Customer executions in non-
Penny Pilot issues on NYSE Arca Options. See Fee Schedule, Cross-
Asset Tier 2.
---------------------------------------------------------------------------
The Exchange currently offers tiered pricing that provides ETP
Holders opportunities to qualify for higher rebates or reduced fees
where certain volume criteria and thresholds are met. Tiered pricing
provides an incremental incentive for ETP Holders to strive for higher
tier levels, which provides increasingly higher discounts for
satisfying more stringent criteria. More specifically, the Exchange
currently has multiple levels of credits designed to incentivize ETP
Holders to achieve certain levels of participation on both the
Exchange's equities and options platform (``NYSE Arca Options''). Under
Cross-Asset Tier 1, ETP Holders can currently receive the following
credits for orders that provide liquidity, i.e., resting limit orders
available for execution on the Exchange, in Tapes A, B and C
Securities: $0.0031 per share in Tape A Securities; $0.0030 per share
in Tape B Securities; and $0.0032 per share in Tape C Securities.\23\
Additionally, under Cross-Asset Tier 2, ETP Holders can currently
receive a credit of $0.0030 per share for orders that provide
liquidity.
---------------------------------------------------------------------------
\23\ See Fee Schedule, Cross-Asset Tier 1.
---------------------------------------------------------------------------
The Exchange proposes to provide an increased incentive for ETP
Holders that otherwise qualify for the current Cross-Asset Tier 2 to
send liquidity-providing orders to the Exchange in Tapes A, B and C
Securities. As proposed, if an ETP Holder meets the requirements of
Cross-Asset Tier 2 and increases adding and removing liquidity in Tape
A, Tape B and Tape C Securities combined during the billing month equal
to at least 0.40% of US CADV above its adding and removing liquidity in
Tape A, Tape B and Tape C Securities combined of US CADV in Q1 2020
would be eligible for an incremental credit of $0.0001 per share for
orders that provide liquidity to the Book in Tape A, Tape B, and Tape C
Securities.
For example, if an ETP Holder that qualifies for Cross-Asset Tier 2
has an adding ADV of 18 million shares and a removing ADV of 12 million
shares, or 30 million shares combined ADV in Q1 2020. If US CADV for Q1
2020 was 6 billion shares, the ETP Holder would have an adding and
removing ADV of 0.50% of US CADV in the baseline period. If the same
ETP Holder had an adding and removing ADV of 54 million shares combined
in a month where US CADV was also 6 billion shares, for an adding and
removing ADV of 0.90% of US CADV, that ETP Holder would meet the
additional requirement because the ETP Holder would have a step up of
0.40% of adding and removing ADV over its baseline month. The ETP
Holder would then qualify for an incremental credit of $0.0001 per
share for providing liquidity, for a combined credit of $0.0031 per
share.
The proposed rule change is designed to be available to all ETP
Holders on the Exchange and is intended to provide ETP Holders an
additional opportunity to receive an enhanced rebate by executing more
of their orders on the Exchange.
The Exchange proposes to increase the credits available under the
Cross-Asset Tier 2 pricing tier to provide an incentive for ETP Holders
to send increased order flow. If an ETP Holder qualifies for Cross-
Asset Tier 2 and meets the additional proposed requirement, that ETP
Holder would be eligible for an incremental credit as compared to the
current credit for qualifying for Cross-Asset Tier 2, which is $0.0030
per share credit for orders that provide liquidity in Tapes A, B and C
Securities.
The Exchange does not know how much order flow ETP Holders choose
to route to other exchanges or to off-exchange venues. No ETP Holder
currently qualifies for the credit under the current Cross-Asset Tier 1
pricing tier and one ETP Holder currently qualifies for the credits
under the current Cross-Asset Tier 2 pricing tier.\24\ However, without
having a view of ETP Holders' activity on other markets and off-
exchange venues, the Exchange has no way of knowing whether this
proposed rule change would result in any ETP Holders qualifying for the
incremental credit. The Exchange believes the proposed increased credit
for Cross-Asset Tier 2 would provide an incentive for ETP Holders to
submit additional liquidity-providing orders to the Exchange to qualify
for the incremental credit.
---------------------------------------------------------------------------
\24\ As of April 14, 2020, there are 53 firms that are both ETP
Holders and OTP Holders.
---------------------------------------------------------------------------
The proposed changes are not otherwise intended to address any
other issues, and the Exchange is not aware of
[[Page 28680]]
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,\25\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\26\ 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.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Proposed Fee Change Is Reasonable
As discussed above, the Exchange operates in a highly fragmented
and competitive market. 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.'' \27\
---------------------------------------------------------------------------
\27\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
As the Commission itself recognized, the market for trading
services in NMS stocks has become ``more fragmented and competitive.''
\28\ Indeed, equity trading is currently dispersed across 13
exchanges,\29\ 31 alternative trading systems,\30\ and numerous broker-
dealer internalizers and wholesalers, all competing for order flow.
Based on publicly-available information, no single exchange currently
has more than 20% market share (whether including or excluding auction
volume).\31\ Therefore, no exchange possesses significant pricing power
in the execution of equity order flow. More specifically, as noted
earlier, the Exchange currently has less than 12% market share of
executed volume of equities trading.\32\
---------------------------------------------------------------------------
\28\ See Securities Exchange Act Release No. 51808, 84 FR 5202,
5253 (February 20, 2019) (File No. S7-05-18) (Final rule).
\29\ See Cboe Global Markets, U.S Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
\30\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of
alternative trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/atslist.htm.
\31\ See Cboe Global Markets U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
\32\ See id.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue to reduce use of certain categories of
products, in response to fee changes. With respect to non-marketable
order which provide liquidity on an Exchange, ETP Holders can choose
from any one of the 13 currently operating registered exchanges to
route such order flow. Accordingly, competitive forces reasonably
constrain exchange transaction fees that relate to orders that would
provide displayed liquidity on an exchange. Stated otherwise, changes
to exchange transaction fees can have a direct effect on the ability of
an exchange to compete for order flow.
Given this competitive environment, the proposal represents a
reasonable attempt to attract additional order flow to the Exchange.
Step Up Tier 5
The Exchange believes the proposal to adopt the Step Up Tier 5
pricing tier is reasonable as it would serve as an incentive to market
participants to increase the orders sent directly to NYSE Arca and
therefore provide liquidity that supports the quality of price
discovery and promotes market transparency. The Exchange believes the
proposed pricing tier, which adopts a lower threshold, is reasonable
and equitable because it would allow ETP Holders to receive increased
credits from those currently available under Step Up Tiers 1, 2 and 3.
Moreover, the addition of the Step Up Tier 5 pricing tier would benefit
market participants whose increased order flow provides meaningful
added levels of liquidity thereby contributing to the depth and market
quality on the Exchange. Further, the Exchange believes the proposed
pricing tier is reasonable as it requires ETP Holders to double their
adding ADV as a percent of US CADV in addition to meeting the 0.20%
adding ADV requirement to qualify for the proposed credit. A firm with
an adding ADV of 0.25% of US CADV would need to increase it to 0.50% to
qualify.
Step Up Tier 4
The Exchange believes the proposed change to lower the volume
requirements under the Step Up Tier 4 pricing tier is reasonable
because it would allow ETP Holders an additional opportunity to meet
the requirement of the pricing tier to receive per share credits
payable under the Step Up Tier 4, thereby encouraging the submission of
additional liquidity to a national securities exchange. Submission of
additional liquidity to the Exchange would promote price discovery and
transparency and enhance order execution opportunities for ETP Holders
from the substantial amounts of liquidity present on the Exchange. All
ETP Holders would benefit from the greater amounts of liquidity that
will be present on the Exchange, which would provide greater execution
opportunities.
Because only two ETP Holders to date have qualified for the Step Up
Tier 4, the Exchange believes the proposed lower volume requirements
are reasonable as they would provide an additional incentive for more
ETP Holders to qualify for this established tier and direct their order
flow to the Exchange and provide meaningful added levels of displayed
liquidity, thereby contributing to the depth and market quality on the
Exchange.
The Exchange notes that volume-based incentives and discounts have
been widely adopted by exchanges,\33\ including the Exchange,\34\ and
are reasonable, equitable and non-discriminatory because they are open
to all ETP Holders on an equal basis and provide additional credits
that are reasonably related to the value to an exchange's market
quality and associated higher levels of market activity.
---------------------------------------------------------------------------
\33\ See e.g., Cboe BZX U.S. Equities Exchange (``BZX'') Fee
Schedule, Footnote 1, Add Volume Tiers which provide enhanced
rebates between $0.0025 and $0.0033 per share for displayed orders
where BZX members meet certain volume thresholds.
\34\ See e.g., Fee Schedule, Step Up Tier, Step Up Tier 2, Step
Up Tier 3 and Step Up Tier 4, which provide enhanced rebates between
$0.0025 and $0.0033 per share in Tape A Securities, between $0.0022
and $0.0034 per share in Tape B Securities, and between $0.0025 and
$0.0033 per share in Tape C Securities for orders that provide
displayed liquidity where ETP Holders meet certain volume
thresholds.
---------------------------------------------------------------------------
The Exchange believes its proposal to amend the Fee Schedule to
codify the fee cap applicable to the Step Up Tier 4 pricing tier is
reasonable as it would add clarity and result in a more transparent Fee
Schedule. The Exchange believes the proposed change would allow ETP
Holders to more easily validate the bills that they receive from the
Exchange, thus alleviating potential confusion.
Retail Orders
The Exchange believes that the proposed change is reasonable
because the increased credit for Retail Orders would continue to
encourage ETP
[[Page 28681]]
Holders to send Retail Orders to the Exchange. As noted above, the
Exchange operates in a highly competitive environment, particularly for
attracting Retail Order flow that provides displayed liquidity on an
exchange. The Exchange believes it is reasonable to continue to provide
an increased credit for Retail Orders that provide displayed liquidity.
The Exchange believes the proposed change is also reasonable because it
is designed to attract higher volumes of Retail Orders transacted on
the Exchange by ETP Holders which would benefit all market participants
by offering greater price discovery, increased transparency, and an
increased opportunity to trade on the Exchange.
Tape B Tier 2
The Exchange believes the proposed change to the Tape B Tier 2
pricing tier is reasonable because it would apply to ETP Holders that
provide liquidity to the Exchange and is designed to incentivize ETP
Holders to increase the orders sent directly to the Exchange and
therefore provide liquidity that supports the quality of price
discovery and promotes market transparency.
The Exchange believes that the proposed new threshold for
qualifying for Tape B Tier 2 is reasonable because it is designed to
encourage increased trading activity on the NYSE Arca equity market.
The Exchange believes it is reasonable to require ETP Holders to meet
the applicable volume threshold to qualify for the Tape B Tier 2
credit. Further, the proposed change is reasonable as it would allow
ETP Holders an additional method to qualify for the credit payable
under the pricing tier if ETP Holders are unable to meet either of the
two existing requirements. Additionally, ETP Holders that cannot meet
the higher threshold for the Tape B Tier 1 credits would be able to
qualify for the Tape B Tier 2 credit, which while providing for a lower
credit, also has lower requirements to qualify for such credit.
Cross-Asset Tier 2
The Exchange believes the proposed increased credit is reasonable
as it would provide an additional incentive for ETP Holders to qualify
for the new incremental credit and direct their order flow to the
Exchange and provide meaningful added levels of liquidity, thereby
contributing to the depth and market quality on the Exchange. As noted
above, the Exchange operates in a highly competitive environment,
particularly for attracting order flow that provides liquidity on an
exchange. The Exchange believes it is reasonable to continue to provide
a higher credit for orders that provide liquidity if an ETP Holder
meets the heightened volume requirements to qualify for the new
incremental credit.
Because the proposed amendment to the Cross-Asset Tier 2 pricing
tier would be new with a requirement to increase liquidity providing
orders, no ETP Holder currently qualifies for the proposed new
incremental credit.
As noted above, volume-based incentives and discounts have been
widely adopted by exchanges, and are reasonable, equitable and non-
discriminatory because they are open to all ETP Holders on an equal
basis and provide additional credits that are reasonably related to the
value to an exchange's market quality and associated higher levels of
market activity.
As noted previously, there are a small number of firms that
currently qualify or could qualify for the credits under the current
Cross-Asset Tier 1 and Cross-Asset Tier 2 pricing tiers and if these
firms were to submit more of their liquidity-providing orders to the
Exchange, each could qualify for the proposed new incremental credit.
However, without having a view of ETP Holders' activity on other
markets and off-exchange venues, the Exchange has no way of knowing
whether this proposed rule change would result in any ETP Holders
qualifying for the new incremental credit. The Exchange believes the
proposed incremental credit would provide an incentive for ETP Holders
to submit additional adding and removing liquidity to qualify for the
additional credit.
The Exchange believes that the proposed new credit for liquidity
providing orders in Tapes A, B and C Securities under the current
Cross-Asset Tier 2 pricing tier is reasonable because it provides an
incentive for ETP Holders to route additional liquidity-providing and
removing order flow to the Exchange, which would promote price
discovery and increase execution opportunities for all ETP Holders. The
proposed pricing is structured similarly to the incremental credit the
Exchange currently provides under current Cross-Asset Tier 2, which
likewise provides ETP Holders an incremental credit of $0.0004 per
share (above the tiered rate of $0.0030 per share) if the ETP Holder
meets the qualifying requirements.\35\ The Exchange believes that the
proposed change to the Cross-Asset Tier 2 pricing tier is reasonable
because an ETP Holder that otherwise qualifies for the tier would still
be eligible for the current per share credit of $0.0030 per share for
orders that provide liquidity. The proposed additional credit is
designed to provide an incentive for such ETP Holder to route
additional providing and removing liquidity to the Exchange, which
would be eligible for the higher credit.
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\35\ See Fee Schedule, Cross-Asset Tier 2. See also Securities
and Exchange Act Release No. 80920 (June 14, 2017), 82 FR 28106
(June 20, 2017) (SR-NYSEArca-2017-64).
---------------------------------------------------------------------------
On the backdrop of the competitive environment in which the
Exchange currently operates, the proposed rule change is a reasonable
attempt to increase liquidity on the Exchange and improve the
Exchange's market share relative to its competitors.
The Proposed Fee Change Is an Equitable Allocation of Fees and Credits
The Exchange believes its proposal equitably allocates its fees
among its market participants.
Step Up Tier 5
The Exchange believes the proposed pricing tier is equitable
because it would allow ETP Holders to receive increased credits from
those currently available under Step Up Tiers 1, 2 and 3. Moreover, the
addition of the Step Up Tier 5 pricing tier would benefit market
participants whose increased order flow provides meaningful added
levels of liquidity thereby contributing to the depth and market
quality on the Exchange. Given that Step Up Tier 5 would be a new
pricing tier, no ETP Holder currently qualifies for the proposed
credit. And without having a view of ETP Holders' activity on other
markets and off-exchange venues, the Exchange has no way of knowing
whether this proposed rule change would result in any ETP Holders
qualifying for this tier. However, the Exchange believes the proposed
lower volume requirements would provide an incentive for ETP Holders to
continue to submit liquidity-providing order flow, which would promote
price discovery and increase execution opportunities for all ETP
Holders. The proposed change would thereby encourage the submission of
additional liquidity to a national securities exchange, thus promoting
price discovery and transparency and enhancing order execution
opportunities for ETP Holders from the substantial amounts of liquidity
present on the Exchange, which would benefit all market participants on
the Exchange.
Step Up Tier 4
First, the Exchange is not proposing to adjust the amount of the
Step Up Tier 4 credits, which will remain at the
[[Page 28682]]
current level for all ETP Holders. Rather, the proposal would continue
to encourage ETP Holders to send orders that add liquidity to the
Exchange, thereby contributing to robust levels of liquidity, which
benefits all market participants. The Exchange believes that, for the
reasons discussed above, lowering the requirements would make it easier
for liquidity providers to qualify for the Step Up Tier 4 credit,
thereby encouraging submission of additional liquidity by more ETP
Holders to the Exchange. The proposed change will thereby encourage the
submission of additional liquidity to a national securities exchange,
thus promoting price discovery and transparency and enhancing order
execution opportunities for ETP Holders from the substantial amounts of
liquidity present on the Exchange. All ETP Holders would benefit from
the greater amounts of liquidity that will be present on the Exchange,
which would provide greater execution opportunities.
As noted above, only one ETP Holder currently qualifies for the
Step Up Tier 4 pricing tier. Without having a view of ETP Holders'
activity on other markets and off-exchange venues, the Exchange has no
way of knowing whether this proposed rule change would result in any
additional ETP Holders qualifying for this tier. However, the Exchange
believes the proposed lower volume requirements would provide an
incentive for ETP Holders to continue to submit liquidity-providing
order flow, which would promote price discovery and increase execution
opportunities for all ETP Holders. The proposed change will thereby
encourage the submission of additional liquidity to a national
securities exchange, thus promoting price discovery and transparency
and enhancing order execution opportunities for ETP Holders from the
substantial amounts of liquidity present on the Exchange, which would
benefit all market participants on the Exchange.
The Exchange believes the proposed rule change would improve market
quality for all market participants on the Exchange and, as a
consequence, attract more liquidity to the Exchange thereby improving
market-wide quality. ETP Holders that currently qualify for credits
associated with Step Up pricing tiers on the Exchange will continue to
receive credits when they provide liquidity to the Exchange. The
Exchange believes that recalibrating the requirements for providing
liquidity will continue to attract order flow and liquidity to the
Exchange for the benefit of investors generally.
Since only one ETP Holder presently qualifies for the credits
associated with Step Up Tier 4, the proposal will not adversely impact
such ETP Holder's existing pricing or its ability to qualify for other
credits provided by the Exchange.
Finally, the Exchange believes its proposal to amend the Fee
Schedule to codify the fee cap applicable to the Step Up Tier 4 pricing
tier is equitable as it would add clarity and result in a more
transparent Fee Schedule. The Exchange believes the proposed change
would allow ETP Holders to more easily validate the bills that they
receive from the Exchange, thus alleviating potential confusion.
Retail Orders
The Exchange believes it is an equitable allocation of reasonable
fees to increase the credit that would be available for Retail Orders
because it would reduce the difference in credits available for Retail
Orders that provide liquidity, while still providing increased credits
under the Retail Order Tiers to provide an incentive for ETP Holders to
route displayed liquidity to the Exchange.
Further, given the competitive market for attracting Retail Order
flow, the Exchange notes that with this proposed rule change, the
Exchange's pricing for Retail Orders would be comparable to credits
currently in place on other exchanges that the Exchange competes with
for order flow. For example, the Nasdaq Stock Market LLC (``Nasdaq'')
provides its members with a non-tier credit of $0.00325 per share for
Retail Orders that provide liquidity on that market,\36\ while BZX
provides its members with a credit of $0.0032 per share for retail
orders that add liquidity to that market.\37\
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\36\ See Nasdaq Price List, Rebate to Add Displayed Designated
Retail Liquidity, at https://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
\37\ See BZX Fee Schedule, Fee Codes and Associated Fees, at
https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/.
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The Exchange further believes that the proposed change is equitable
because it is reasonably related to the value to the Exchange's market
quality associated with higher volume in Retail Orders. The Exchange
notes that currently only 11 firms submit Retail Orders that add
liquidity on the Exchange and of those 11 firms, 9 qualify for the base
Retail Order credit, while the other 2 qualify for higher tiered Retail
Order credits. More firms could receive the base Retail Order credit of
$0.0032 if those firms directed their Retail Orders to the Exchange.
Further, the Exchange notes that, with this proposed rule change,
the difference between the highest credit provided for Retail Orders,
$0.0035 per share, and the credit for Retail Orders that do not qualify
for any of the Retail Order pricing tiers, $0.0032 per share, would be
$0.0003, or 9%, which the Exchange believes is small given the
requirements that ETP Holders are required to meet to qualify for the
higher credit. Therefore, the Exchange believes the proposed change to
the base credit for Retail Orders is equitable, as it would provide
discounts that are reasonably related to the value to the Exchange's
market quality associated with higher volumes associated with the
submission of Retail Orders to the Exchange.
The Exchange believes that recalibrating the credits for providing
liquidity will continue to attract order flow and liquidity to the
Exchange, thereby contributing to price discovery on the Exchange and
benefiting investors generally.
The Exchange believes that the proposed rule change is equitable
because maintaining or increasing the proportion of Retail Orders in
exchange-listed securities that are executed on a registered national
securities exchange (rather than relying on certain available off-
exchange execution methods) would contribute to investors' confidence
in the fairness of their transactions and would benefit all investors
by deepening the Exchange's liquidity pool, supporting the quality of
price discovery, promoting market transparency and improving investor
protection.
Tape B Tier 2
The Exchange believes the proposed change to the Tape B Tier 2
pricing tier is equitably allocated because it would apply to ETP
Holders that provide liquidity to the Exchange and is designed to
incentivize these market participants to increase the orders sent
directly to the Exchange and therefore, provide liquidity that supports
the quality of price discovery and promotes market transparency.
The Exchange believes the Tape B Tier 2 pricing tier is equitable
because it is open to all similarly situated ETP Holders on an equal
basis and provide a per share credit that is reasonably related to the
value of an exchange's market quality associated with higher volumes.
The Exchange believes it is equitable to require ETP Holders to meet
the applicable volume thresholds to qualify for the Tape B Tier 2
credit. Further, the proposed change is equitable as it would allow ETP
Holders an additional method to qualify for the credit payable under
the pricing tier if
[[Page 28683]]
ETP Holders are unable to meet either of the two existing requirements.
The Exchange believes the Tape B Tier 2 pricing tier is equitable
because it is open to all similarly situated ETP Holders on an equal
basis and provides a credit that is reasonably related to the value of
an exchange's market quality associated with higher volumes.
Cross-Asset Tier 2
The Exchange believes that the proposed increased credit under the
Cross-Asset Tier 2 pricing tier is equitable because the magnitude of
the additional credit is not unreasonably high in comparison to the
credit paid with respect to other pricing tiers on the Exchange, and in
comparison to the credits paid by other exchanges for orders that
provide liquidity. For example, ETP Holders currently receive credits
in Tape A, Tape B and Tape C Securities that range between $0.0022 per
share and $0.0034 per share under Step Up Tier, Step Up Tier 2, Step Up
Tier 3, Step Up Tier 4, and proposed Step Up Tier 5.
With respect to credits paid by the Exchange's competitors, BZX
provides a credit of $0.0031 per share in Tape B Securities under that
market's Cross-Asset pricing tier.\38\
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\38\ See BZX Fee Schedule, Cross-Asset Tape B Tier, at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/.
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The Exchange believes that the proposed new incremental credit for
liquidity providing orders in Tapes A, B and C Securities under current
Cross-Asset Tier 2 is also equitable because the proposal would
continue to encourage ETP Holders to route liquidity-providing orders
to the Exchange in Tapes A, B and C Securities, thereby contributing to
robust levels of liquidity, which benefits all market participants.
As noted above, there are a small number of firms that currently
qualify or could qualify for the credits under the current Cross-Asset
Tier 1 and Cross-Asset Tier 2 pricing tiers and if these firms were to
submit more of their liquidity-providing orders to the Exchange, each
could qualify for the proposed new incremental credit. However, without
having a view of an ETP Holder's activity on other markets and off-
exchange venues, the Exchange believes the proposed new incremental
credit would provide an incentive for market participants to increase
liquidity in order to qualify for the proposed new incremental credit,
thereby encouraging submission of additional liquidity to the Exchange.
The proposed change will thereby encourage the submission of additional
liquidity to a national securities exchange, thus promoting price
discovery and transparency and enhancing order execution opportunities
for ETP Holders from the substantial amounts of liquidity present on
the Exchange. All ETP Holders would benefit from the greater amounts of
liquidity that will be present on the Exchange, which would provide
greater execution opportunities.
The Exchange believes the proposed rule change would improve market
quality for all market participants on the Exchange and, as a
consequence, attract more liquidity to the Exchange thereby improving
market-wide quality. ETP Holders that currently qualify for credits
associated with Cross-Asset pricing tiers on the Exchange will continue
to receive credits when they provide liquidity to the Exchange. The
Exchange believes that recalibrating the credits for providing
liquidity will continue to attract order flow and liquidity to the
Exchange for the benefit of investors generally. As to those market
participants that do not presently qualify for the credits associated
with Cross-Asset Tier 2, the proposal will not adversely impact their
existing pricing or their ability to qualify for other credits provided
by the Exchange.
The Proposed Fee Change Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. In the prevailing competitive environment, ETP Holders
are free to disfavor the Exchange's pricing if they believe that
alternatives offer them better value.
Step Up Tier 5
The Exchange believes that the proposed new Step Up Tier 5 pricing
tier is not unfairly discriminatory because it is open to all ETP
Holders, on an equal basis, that meet the requirements to qualify for
the tier. The proposed pricing tier would also serve as an incentive to
ETP Holders and Market Makers that do not currently meet the
requirement of other pricing tiers on the Exchange to increase the
level of orders sent directly to NYSE Arca in order to qualify for, and
receive the higher credits associated with proposed Step Up Tier 5. The
proposed pricing tier would apply equally to all ETP Holders as each
would be required to execute providing ADV per month that is at least
0.20% of US CADV and execute providing ADV per month as a percentage of
US CADV that is at least two times more than that ETP Holders and
Market Makers providing ADV in April 2020 as a percentage of US CADV,
regardless of whether an ETP Holder currently meets the requirement of
another pricing tier.
Step Up Tier 4
The proposal to lower the volume requirement under Step Up Tier 4
neither targets or will it have a disparate impact on any particular
category of market participant. The proposal does not permit unfair
discrimination because the lower threshold would be applied to all
similarly situated ETP Holders, who would all be eligible for the same
credit on an equal basis. Accordingly, no ETP Holder already operating
on the Exchange would be disadvantaged by this allocation of fees.
The Exchange believes it is not unfairly discriminatory to adopt
lower volume requirements for ETP Holders to qualify for the Step Up
Tier 4 pricing tier and adopt clarifying language with respect to the
cap currently applicable for ETP Holders that qualify for the Step Up
Tier 4 pricing tier as the proposed change would apply on an equal
basis to all ETP Holders. Further, the Exchange believes the proposed
lower volume requirements would incentivize ETP Holders to execute more
of their liquidity-providers orders on the Exchange to qualify for the
increased credits payable under Step Up Tier 4. The Exchange also
believes that the proposed change is not unfairly discriminatory
because it is reasonably related to the value of the Exchange's market
quality associated with higher volume. The proposed lower volume
requirements would apply equally to all ETP Holders as each would be
required to execute providing volume in Tapes A, B and C Securities
during the billing month that is at least 0.40% of US CADV over its
providing ADV in September 2019, taken as a percentage of US CADV,
regardless of whether an ETP Holder currently meets the requirement of
another pricing tier.
Retail Orders
The Exchange believes that the proposed change is not unfairly
discriminatory because it would apply to all ETP Holders on an equal
and non-discriminatory basis. The Exchange further believes that the
proposed change is not unfairly discriminatory because it is reasonably
related to the value to the Exchange's market quality associated with
higher volume in Retail Orders. Further, the Exchange notes that, with
this proposed rule change, the difference between the highest credit
provided for Retail Orders, $0.0035 per share, and the credit for
Retail Orders that do not qualify for any of the Retail Order pricing
tiers, $0.0032 per share,
[[Page 28684]]
would be $0.0003, or 9%, which the Exchange believes is small given the
requirements that ETP Holders are required to meet to qualify for the
higher credit. Therefore, the Exchange believes the proposed change to
the base credit for Retail Orders is not unfairly discriminatory, as it
would continue to provide discounts that are reasonably related to the
value to the Exchange's market quality associated with higher volumes
under the current Retail Order tiers.
The Exchange believes that recalibrating the credits for providing
liquidity will continue to attract order flow and liquidity to the
Exchange, thereby contributing to price discovery on the Exchange and
benefiting investors generally.
The Exchange believes that the proposed rule change is not unfairly
discriminatory because maintaining or increasing the proportion of
Retail Orders in exchange-listed securities that are executed on a
registered national securities exchange (rather than relying on certain
available off-exchange execution methods) would contribute to
investors' confidence in the fairness of their transactions and would
benefit all investors by deepening the Exchange's liquidity pool,
supporting the quality of price discovery, promoting market
transparency and improving investor protection. This aspect of the
proposed rule change also is consistent with the Act because all
similarly situated ETP Holders would be eligible to qualify for the
credit. Furthermore, the submission of Retail Orders is optional for
ETP Holders in that they could choose whether to submit Retail Orders
and, if they do, the extent of its activity in this regard.
Tape B Tier 2
The Exchange believes that the proposed new method of qualifying
for the Tape B Tier 2 credit is not unfairly discriminatory because it
would be available to all ETP Holders on an equal and non-
discriminatory basis. In this regard, the Exchange notes that ETP
Holders that do not meet the proposed alternative method would continue
to have the opportunity to qualify for the Tape B Tier 2 credit by
satisfying either of the two existing requirements, which would not
change as a result of this proposal.
Further, the Exchange believes the proposed additional method to
qualify for the Tape B Tier 2 credit would incentivize ETP Holders that
do not meet the current requirements to execute more of their
liquidity-providers orders on the Exchange to qualify under the
proposed method. The Exchange also believes that the proposed change is
not unfairly discriminatory because it is reasonably related to the
value of the Exchange's market quality associated with higher volume.
The proposed additional method to qualify for the Tape B Tier 2 credit
would apply equally to all ETP Holders as each would be required to
meet the new criteria regardless of whether an ETP Holder currently
meets the requirement of another pricing tier.
Cross-Asset Tier 2
The Exchange believes it is not unfairly discriminatory to provide
an incremental per share credit as the proposed increased credit would
be provided on an equal basis to all ETP Holders that add liquidity by
meeting the increased volume requirements under the Cross-Asset Tier 2
pricing tier. Further, the Exchange believes the proposed incremental
per share credit would incentivize ETP Holders that meet the current
Cross-Asset Tier 2 pricing tier requirements to execute more of their
liquidity-providers orders on the Exchange to qualify for the proposed
incremental credit. The Exchange also believes that the proposed change
is not unfairly discriminatory because it is reasonably related to the
value of the Exchange's market quality associated with higher volume.
The proposed incremental per share credit would apply equally to all
ETP Holders as each would be required to meet the additional criteria
regardless of whether an ETP Holder currently meets the requirement of
another pricing tier.
Similarly, the Exchange believes it is not unfairly discriminatory
to provide an incremental credit for liquidity providing orders in
Tapes A, B and C Securities under the current Cross-Asset Tier 2
pricing tier because the proposed credit would be provided on an equal
basis to all ETP Holders that add liquidity by meeting the proposed new
volume requirements.
Finally, the submission of orders to the Exchange is optional for
ETP Holders in that they could choose whether to submit orders to the
Exchange and, if they do, the extent of its activity in this regard.
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,\39\ 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 changes would encourage the submission of additional
liquidity to a public exchange, thereby promoting market depth, price
discovery and transparency and enhancing order execution opportunities
for ETP Holders. As a result, the Exchange believes that the proposed
change furthers the Commission's goal in adopting Regulation NMS of
fostering integrated competition among orders, which promotes ``more
efficient pricing of individual stocks for all types of orders, large
and small.'' \40\
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\39\ 15 U.S.C. 78f(b)(8).
\40\ See Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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Intramarket Competition. The Exchange believes its proposed
amendments to its Fee Schedule would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange does not believe that the proposed
change represents a significant departure from previous pricing offered
by the Exchange or its competitors. The proposed changes are designed
to attract additional order flow to the Exchange. The Exchange believes
that the proposed lower volume requirements and alternative criteria to
qualify for existing pricing tiers would continue to incentivize market
participants to direct providing displayed order flow to the Exchange.
The Exchange's proposal to adopt an increased credit for Retail Orders
would also continue to incentivize ETP Holders to direct more of their
Retail Orders to the Exchange. Greater liquidity benefits all market
participants on the Exchange by providing more trading opportunities
and encourages ETP Holders, to send orders, thereby contributing to
robust levels of liquidity, which benefits all market participants.
Moreover, the proposal to modify the Fee Schedule to make clear the
applicability of the cap under the Step Up Tier 4 pricing tier would
not pose an undue burden on competition but would instead add clarity
and transparency to the Fee Schedule regarding the amount of credit
payable under the Step Up Tier 4 pricing tier.
[[Page 28685]]
Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily choose to
send their orders to other exchange and off-exchange venues if they
deem fee levels at those other venues to be more favorable. As noted
above, the Exchange's market share of intraday trading (i.e., excluding
auctions) is currently less than 12%. 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 its proposed fee change can
impose any burden on intermarket competition.
The Exchange believes that the proposed change could promote
competition between the Exchange and other execution venues, including
those that currently offer similar order types and comparable
transaction pricing, by encouraging additional orders to be sent to the
Exchange for execution.
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) \41\ of the Act and subparagraph (f)(2) of Rule
19b-4 \42\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\41\ 15 U.S.C. 78s(b)(3)(A).
\42\ 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) \43\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\43\ 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-2020-39 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEARCA-2020-39. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEARCA-2020-39, and should be
submitted on or before June 3, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\44\
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\44\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-10219 Filed 5-12-20; 8:45 am]
BILLING CODE 8011-01-P
