Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend its Price List, 41633-41635 [2020-14869]

Download as PDF Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89220; File No. SR–NYSE– 2020–54] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend its Price List July 6, 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 June 23, 2020, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Price List to specify that the Exchange may exclude from its average daily volume and quoting calculations the date of the annual reconstitution of the Russell Investments Indexes. 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. jbell on DSKJLSW7X2PROD with NOTICES 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. 1 15 U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Sep<11>2014 18:28 Jul 09, 2020 Jkt 250001 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Price List to specify that the Exchange may exclude from its average daily volume and quoting calculations the date of the annual reconstitution of the Russell Investments Indexes (the ‘‘Russell Rebalance’’). Proposed Rule Change The Exchange’s Price List currently provides that, for purposes of determining transaction fees and credits based on quoting levels, average daily volume (‘‘ADV’’), and consolidated ADV (‘‘CADV’’), the Exchange may exclude shares traded any day that (1) the Exchange is not open for the entire trading day and/or (2) a disruption affects an Exchange system that lasts for more than 60 minutes during regular trading hours. The Exchange proposes to specify that the Exchange may also exclude from its quoting levels, ADV, and CADV calculations the date of the annual Russell Rebalance. The Russell Rebalance, which typically occurs in June, is characterized by high trading volumes, much of which derive from market participants who are not generally as active entering the market to rebalance their holdings inline with the Russell Rebalance.4 The Exchange believes that the high trading volumes during the Russell Rebalance can significantly impact ADV, CADV and quoting calculations. The Exchange believes that excluding the date of the Russell Rebalance will mitigate the uncertainty faced by member organizations as to their quoting, ADV, and CADV levels and the corresponding rebate amounts during the month of the Russell Rebalance, thereby providing member organizations with an increased certainty as to that month’s cost for trades executed on the Exchange. The Exchange further believes that removing this uncertainty will encourage member organizations to participate in trading on the Exchange during the remaining trading days in the month of the Russell Rebalance in a manner intended to be incented by the Exchange’s Price List. To effectuate this change, the Exchange proposes to add a clause to current footnote * following 4 See, e.g., Securities Exchange Act Release No. 69793 (July 18, 2013), 78 FR 37865, 37866 (July 24, 2013) (SR–BATS–2013–034) (excluding the Russell Reconstitution Day from the definition of ADV); Securities Exchange Act Release No. 72002 (April 23, 2014), 79 FR 24028, 24029 (April 29, 2014) (SR– EDGX–2014–10) (same). PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 41633 ‘‘Transaction Fees.’’ As proposed, the new clause would provide that the Exchange may exclude shares traded any day that ‘‘is the date of the annual reconstitution of the Russell Investments Indexes.’’ The proposed change is similar to, and consistent with, the rules of the Exchange’s affiliates and other self-regulatory organizations.5 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,6 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,7 in particular, because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. The Exchange notes that it operates in a highly fragmented and competitive market in which competitive forces constrain the Exchange’s transaction fees, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. The Proposed Change Is Reasonable The Exchange believes that it is reasonable to permit the Exchange to eliminate from the calculation of quoting levels, ADV, and CADV the date of the annual Russell Rebalance because it will provide member organizations with a greater level of certainty as to their level of rebates and fees for trading in the month of the Russell Rebalance. By eliminating a trading day that would almost certainly lower a member organization’s ADV as a percentage of CADV, the Exchange believes that the proposal will make the majority of member organizations more likely to meet the minimum thresholds of higher 5 See, e.g., NYSE Arca Equities Fees and Charges, available at https://www.nyse.com/publicdocs/nyse/ markets/nyse-arca/NYSE_Arca_Marketplace_ Fees.pdf (‘‘the date of the annual reconstitution of the Russell Investments Indexes does not count toward volume tiers’’); NYSE National, Inc. Schedule of Fees and Rebates, available at https:// www.nyse.com/publicdocs/nyse/regulation/nyse/ NYSE_National_Schedule_of_Fees.pdf (‘‘the Exchange may exclude shares traded any day that . . . is the date of the annual reconstitution of the Russell Investments Indexes’’ for purposes of determining transaction fees and credits based on quoting levels, ADV, and CADV); Cboe BZX U.S. Equities Exchange Fee Schedule, available at https://markets.cboe.com/us/equities/membership/ fee_schedule/bzx/(‘‘The Exchange excludes from its calculation of ADAV and ADV shares added or removed on . . . the last Friday in June (the ‘Russell Reconstitution Day’)’’). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4) & (5). E:\FR\FM\10JYN1.SGM 10JYN1 41634 Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / Notices tiers, which will provide additional incentive for member organizations to increase their participation on the Exchange and earn more favorable rates. As noted above, other self-regulatory organizations have adopted rules that are substantially similar to the change being proposed by the Exchange.8 The Proposal Is an Equitable Allocation of Fees The Exchange believes its proposal equitably allocates its fees among its market participants. Specifically, the Exchange believes that the proposal constitutes an equitable allocation of fees because the exclusion would apply equally to all member organizations and market participants and to all volume tiers. Further, the Exchange believes that removing a single known day of atypical trading behavior would allow all member organizations to more predictably calculate the costs associated with their trading activity on the Exchange on the Russell Rebalance day, thereby enabling such participants to operate their business without concern of unpredictable and potentially significant changes in revenues and expenses. jbell on DSKJLSW7X2PROD with NOTICES The Proposal Is Not Unfairly Discriminatory The Exchange believes that the proposal is not unfairly discriminatory because the exclusion would apply equally to all member organizations, to all market participants and to all volume tiers. Moreover, the proposal neither targets nor will it have a disparate impact on any particular category of market participant. Rather, as discussed above, the Exchange believes that removing a single known day of atypical trading behavior would allow all member organizations to more predictably calculate the credits and fees associated with their trading activity on the Russell Rebalance day, thereby enabling such participants to operate their business without concern of unpredictable and potentially significant changes in expenses. Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange’s statement regarding the burden on competition. For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,9 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. Rather, as noted above, by eliminating a trading day that would almost certainly result in lowering a member organization’s ADV as a percentage of CADV, the Exchange believes that the proposal will benefit the majority of member organizations by making it more likely for them to meet the minimum thresholds of higher tiers, which will provide additional incentive for member organizations to increase their participation on the Exchange and earn more favorable rates. The Exchange believes that the proposal thus fosters competition by providing an additional incentive to member organizations to submit orders to the Exchange. The proposed exclusion would be available to all similarly-situated market participants, and, as such, the proposed change would not impose a disparate burden on competition among market participants on the Exchange. Intramarket Competition. The proposed change is designed to eliminate a trading day that would almost certainly result in lowering a member organization’s ADV as a percentage of CADV. The Exchange believes that the proposal would provide additional incentive for member organizations to increase their participation on the Exchange. Greater liquidity benefits all market participants on the Exchange by providing more trading opportunities and encourages member organizations to send orders, thereby contributing to robust levels of liquidity, which benefits all market participants. The proposed exclusion would be available to all similarlysituated market participants, and, as such, the proposed change would not impose a disparate burden on competition among market participants on the Exchange. Intermarket Competition. The Exchange operates in a highly competitive 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. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and with offexchange venues. By providing member organizations with a greater level of certainty as to their level of rebates and costs for trading in the month of the Russell Rebalance, the Exchange believes that the proposed change could promote competition between the Exchange and other execution venues by encouraging member organizations to their participation on the Exchange in order to earn more favorable rates. 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) 10 of the Act and subparagraph (f)(2) of Rule 19b–4 11 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) 12 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2020–54 on the subject line. Paper Comments • Send paper comments in triplicate to: Secretary, Securities and Exchange 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 12 15 U.S.C. 78s(b)(2)(B). 11 17 8 See notes 4–5, supra. VerDate Sep<11>2014 18:28 Jul 09, 2020 9 15 Jkt 250001 PO 00000 U.S.C. 78f(b)(8). Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\10JYN1.SGM 10JYN1 Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / Notices Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2020–54. 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–NYSE–2020–54 and should be submitted on or before July 31, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–14869 Filed 7–9–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION jbell on DSKJLSW7X2PROD with NOTICES Submission for OMB Review; 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: Rule 206(4)–6, SEC File No. 270– 513, OMB Control No. 3235–0571 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 13 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:28 Jul 09, 2020 Jkt 250001 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for extension of the previously approved collection of information discussed below. The title for the collection of information is ‘‘Rule 206(4)–6’’ under the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) (‘‘Advisers Act’’) and the collection has been approved under OMB Control No. 3235–0571. The Commission adopted rule 206(4)–6 (17 CFR 275.206(4)–6), the proxy voting rule, to address an investment adviser’s fiduciary obligation to clients who have given the adviser authority to vote their securities. Under the rule, an investment adviser that exercises voting authority over client securities is required to: (i) Adopt and implement policies and procedures that are reasonably designed to ensure that the adviser votes securities in the best interest of clients, including procedures to address any material conflict that may arise between the interest of the adviser and the client; (ii) disclose to clients how they may obtain information on how the adviser has voted with respect to their securities; and (iii) describe to clients the adviser’s proxy voting policies and procedures and, on request, furnish a copy of the policies and procedures to the requesting client. The rule is designed to assure that advisers that vote proxies for their clients vote those proxies in their clients’ best interest and provide clients with information about how their proxies were voted. Rule 206(4)–6 contains ‘‘collection of information’’ requirements within the meaning of the Paperwork Reduction Act. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The collection is mandatory and responses to the disclosure requirement are not kept confidential. The respondents are investment advisers registered with the Commission that vote proxies with respect to clients’ securities. Advisory clients of these investment advisers use the information required by the rule to assess investment advisers’ proxy voting policies and procedures and to monitor the advisers’ performance of their proxy voting activities. The information required by Advisers Act rule 204–2, a recordkeeping rule, also is used by the Commission staff in its examination and oversight program. Without the information collected under the rules, advisory clients would not have PO 00000 Frm 00121 Fmt 4703 Sfmt 9990 41635 information they need to assess the adviser’s services and monitor the adviser’s handling of their accounts, and the Commission would be less efficient and effective in its programs. The estimated number of investment advisers subject to the collection of information requirements under the rule is 12,265. It is estimated that each of these advisers is required to spend on average 10 hours annually documenting its proxy voting procedures under the requirements of the rule, for a total burden of 122,650 hours. We further estimate that on average, approximately 279 clients of each adviser would request copies of the underlying policies and procedures. We estimate that it would take these advisers 0.1 hours per client to deliver copies of the policies and procedures, for a total burden of 342,194 hours. Accordingly, we estimate that rule 206(4)-6 results in an annual aggregate burden of collection for SEC-registered investment advisers of a total of 464,844 hours. Records related to an adviser’s proxy voting policies and procedures and proxy voting history are separately required under the Advisers Act recordkeeping rule 204–2 (17 CFR 275.204–2). The standard retention period required for books and records under rule 204–2 is five years, in an easily accessible place, the first two years in an appropriate office of the investment adviser. OMB has previously approved the collection with this retention period. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to (i) www.reginfo.gov/ public/do/PRAMain and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@ sec.gov. Dated: July 2, 2020. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–14753 Filed 7–9–20; 8:45 am] BILLING CODE 8011–01–P E:\FR\FM\10JYN1.SGM 10JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 85, Number 133 (Friday, July 10, 2020)]
[Notices]
[Pages 41633-41635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14869]



[[Page 41633]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89220; File No. SR-NYSE-2020-54]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend its Price List

July 6, 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 June 23, 2020, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Price List to specify that the 
Exchange may exclude from its average daily volume and quoting 
calculations the date of the annual reconstitution of the Russell 
Investments Indexes. The proposed rule change is available on the 
Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to specify that the 
Exchange may exclude from its average daily volume and quoting 
calculations the date of the annual reconstitution of the Russell 
Investments Indexes (the ``Russell Rebalance'').
Proposed Rule Change
    The Exchange's Price List currently provides that, for purposes of 
determining transaction fees and credits based on quoting levels, 
average daily volume (``ADV''), and consolidated ADV (``CADV''), the 
Exchange may exclude shares traded any day that (1) the Exchange is not 
open for the entire trading day and/or (2) a disruption affects an 
Exchange system that lasts for more than 60 minutes during regular 
trading hours. The Exchange proposes to specify that the Exchange may 
also exclude from its quoting levels, ADV, and CADV calculations the 
date of the annual Russell Rebalance.
    The Russell Rebalance, which typically occurs in June, is 
characterized by high trading volumes, much of which derive from market 
participants who are not generally as active entering the market to 
rebalance their holdings in-line with the Russell Rebalance.\4\ The 
Exchange believes that the high trading volumes during the Russell 
Rebalance can significantly impact ADV, CADV and quoting calculations. 
The Exchange believes that excluding the date of the Russell Rebalance 
will mitigate the uncertainty faced by member organizations as to their 
quoting, ADV, and CADV levels and the corresponding rebate amounts 
during the month of the Russell Rebalance, thereby providing member 
organizations with an increased certainty as to that month's cost for 
trades executed on the Exchange. The Exchange further believes that 
removing this uncertainty will encourage member organizations to 
participate in trading on the Exchange during the remaining trading 
days in the month of the Russell Rebalance in a manner intended to be 
incented by the Exchange's Price List.
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    \4\ See, e.g., Securities Exchange Act Release No. 69793 (July 
18, 2013), 78 FR 37865, 37866 (July 24, 2013) (SR-BATS-2013-034) 
(excluding the Russell Reconstitution Day from the definition of 
ADV); Securities Exchange Act Release No. 72002 (April 23, 2014), 79 
FR 24028, 24029 (April 29, 2014) (SR-EDGX-2014-10) (same).
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    To effectuate this change, the Exchange proposes to add a clause to 
current footnote * following ``Transaction Fees.'' As proposed, the new 
clause would provide that the Exchange may exclude shares traded any 
day that ``is the date of the annual reconstitution of the Russell 
Investments Indexes.'' The proposed change is similar to, and 
consistent with, the rules of the Exchange's affiliates and other self-
regulatory organizations.\5\
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    \5\ See, e.g., NYSE Arca Equities Fees and Charges, available at 
https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (``the date of the annual 
reconstitution of the Russell Investments Indexes does not count 
toward volume tiers''); NYSE National, Inc. Schedule of Fees and 
Rebates, available at https://www.nyse.com/publicdocs/nyse/regulation/nyse/NYSE_National_Schedule_of_Fees.pdf (``the Exchange 
may exclude shares traded any day that . . . is the date of the 
annual reconstitution of the Russell Investments Indexes'' for 
purposes of determining transaction fees and credits based on 
quoting levels, ADV, and CADV); Cboe BZX U.S. Equities Exchange Fee 
Schedule, available at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/(``The Exchange excludes from its 
calculation of ADAV and ADV shares added or removed on . . . the 
last Friday in June (the `Russell Reconstitution Day')'').
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\7\ in 
particular, because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities and does not unfairly discriminate 
between customers, issuers, brokers or dealers. The Exchange notes that 
it operates in a highly fragmented and competitive market in which 
competitive forces constrain the Exchange's transaction fees, and 
market participants can readily trade on competing venues if they deem 
pricing levels at those other venues to be more favorable.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) & (5).
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The Proposed Change Is Reasonable
    The Exchange believes that it is reasonable to permit the Exchange 
to eliminate from the calculation of quoting levels, ADV, and CADV the 
date of the annual Russell Rebalance because it will provide member 
organizations with a greater level of certainty as to their level of 
rebates and fees for trading in the month of the Russell Rebalance. By 
eliminating a trading day that would almost certainly lower a member 
organization's ADV as a percentage of CADV, the Exchange believes that 
the proposal will make the majority of member organizations more likely 
to meet the minimum thresholds of higher

[[Page 41634]]

tiers, which will provide additional incentive for member organizations 
to increase their participation on the Exchange and earn more favorable 
rates. As noted above, other self-regulatory organizations have adopted 
rules that are substantially similar to the change being proposed by 
the Exchange.\8\
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    \8\ See notes 4-5, supra.
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The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal equitably allocates its fees 
among its market participants. Specifically, the Exchange believes that 
the proposal constitutes an equitable allocation of fees because the 
exclusion would apply equally to all member organizations and market 
participants and to all volume tiers. Further, the Exchange believes 
that removing a single known day of atypical trading behavior would 
allow all member organizations to more predictably calculate the costs 
associated with their trading activity on the Exchange on the Russell 
Rebalance day, thereby enabling such participants to operate their 
business without concern of unpredictable and potentially significant 
changes in revenues and expenses.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory because the exclusion would apply equally to all member 
organizations, to all market participants and to all volume tiers. 
Moreover, the proposal neither targets nor will it have a disparate 
impact on any particular category of market participant. Rather, as 
discussed above, the Exchange believes that removing a single known day 
of atypical trading behavior would allow all member organizations to 
more predictably calculate the credits and fees associated with their 
trading activity on the Russell Rebalance day, thereby enabling such 
participants to operate their business without concern of unpredictable 
and potentially significant changes in expenses.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For the foregoing reasons, the Exchange believes that the proposal 
is consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\9\ 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. Rather, as noted above, by eliminating a trading 
day that would almost certainly result in lowering a member 
organization's ADV as a percentage of CADV, the Exchange believes that 
the proposal will benefit the majority of member organizations by 
making it more likely for them to meet the minimum thresholds of higher 
tiers, which will provide additional incentive for member organizations 
to increase their participation on the Exchange and earn more favorable 
rates. The Exchange believes that the proposal thus fosters competition 
by providing an additional incentive to member organizations to submit 
orders to the Exchange. The proposed exclusion would be available to 
all similarly-situated market participants, and, as such, the proposed 
change would not impose a disparate burden on competition among market 
participants on the Exchange.
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    \9\ 15 U.S.C. 78f(b)(8).
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    Intramarket Competition. The proposed change is designed to 
eliminate a trading day that would almost certainly result in lowering 
a member organization's ADV as a percentage of CADV. The Exchange 
believes that the proposal would provide additional incentive for 
member organizations to increase their participation on the Exchange. 
Greater liquidity benefits all market participants on the Exchange by 
providing more trading opportunities and encourages member 
organizations to send orders, thereby contributing to robust levels of 
liquidity, which benefits all market participants. The proposed 
exclusion would be available to all similarly-situated market 
participants, and, as such, the proposed change would not impose a 
disparate burden on competition among market participants on the 
Exchange.
    Intermarket Competition. The Exchange operates in a highly 
competitive 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. In such an 
environment, the Exchange must continually adjust its fees and rebates 
to remain competitive with other exchanges and with off-exchange 
venues. By providing member organizations with a greater level of 
certainty as to their level of rebates and costs for trading in the 
month of the Russell Rebalance, the Exchange believes that the proposed 
change could promote competition between the Exchange and other 
execution venues by encouraging member organizations to their 
participation on the Exchange in order to earn more favorable rates.

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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 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-NYSE-2020-54 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary, 
Securities and Exchange

[[Page 41635]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2020-54. 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-NYSE-2020-54 and should be submitted on 
or before July 31, 2020.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14869 Filed 7-9-20; 8:45 am]
BILLING CODE 8011-01-P

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