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, 57274-57276 [2020-20257]

Download as PDF 57274 Federal Register / Vol. 85, No. 179 / Tuesday, September 15, 2020 / Notices 2020, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the proposed rule change as originally filed.6 On April 13, 2020, the Exchange filed Amendment No. 2 to the proposed rule change, which replaced and superseded the proposed rule change, as modified by Amendment No. 1.7 On April 22, 2020, the Commission noticed Amendment No. 2 to the proposed rule change and instituted proceedings pursuant to Section 19(b)(2)(B) of the Act 8 to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 2.9 On July 13, 2020, the Commission designated a longer period within which to issue an order approving or disapproving the proposed rule change, as modified by Amendment No. 2.10 On July 31, 2020, the Exchange filed Amendment No. 3 to the proposed rule change, which replaced and superseded the proposed rule change, as modified by Amendment No. 2.11 On September 4, 2020, the Exchange withdrew the proposed rule change (SR–CboeBZX– 2020–003). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20255 Filed 9–14–20; 8:45 am] jbell on DSKJLSW7X2PROD with NOTICES BILLING CODE 8011–01–P designated April 22, 2020 as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. 6 Amendment No. 1 is available at: https:// www.sec.gov/comments/sr-cboebzx-2020-003/ srcboebzx2020003-6993242-214730.pdf. 7 Amendment No. 2 is available at: https:// www.sec.gov/comments/sr-cboebzx-2020-003/ srcboebzx2020003-7098109-215773.pdf. 8 15 U.S.C. 78s(b)(2)(B). 9 See Securities Exchange Act Release No. 88726, 85 FR 23581 (April 28, 2020). 10 See Securities Exchange Act Release No. 89304, 85 FR 43622 (July 17, 2020). The Commission designated September 19, 2020, as the date by which the Commission shall either approve or disapprove the proposed rule change. 11 Amendment No. 3 is available at: https:// www.sec.gov/comments/sr-cboebzx-2020-003/ srcboebzx2020003-7570097-222225.pdf. 12 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:57 Sep 14, 2020 Jkt 250001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89797; File No. SR– NYSEArca–2020–81] 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 September 9, 2020. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 1, 2020, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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 the NYSE Arca Equities Fees and Charges (‘‘Fee Schedule’’) to (1) eliminate an alternative method to qualify for the Tape B Tier 1 pricing tier, and (2) eliminate the Retail Order Step-Up Tier 1 pricing tier. The Exchange proposes to implement the fee changes effective September 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. 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00094 Fmt 4703 Sfmt 4703 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) eliminate an alternative method to qualify for the Tape B Tier 1 pricing tier, and (2) eliminate the Retail Order Step-Up Tier 1 pricing tier. The Exchange proposes to implement the fee changes effective September 1, 2020. ETP Holders 3 currently qualify for a Tape B Tier 1 credit of $0.0030 4 per share when, on a daily basis, measured monthly, they directly execute providing volume in Tape B securities that is equal to at least 1.50% of Tape B US consolidated average daily volume (‘‘US CADV’’) 5 for the billing month.6 In February 2020, the Exchange adopted an alternative method for ETP Holders to qualify for the Tape B Tier 1 credit.7 In March 2020, the Exchange amended the percentage CADV requirement applicable under the alternative method.8 Pursuant to the alternative method, an ETP Holder could qualify for the Tape B Tier 1 credit if the ETP Holder is affiliated with an OTP Holder or OTP Firm that provides an ADV of electronic posted executions for the account of a market maker in all issues on NYSE Arca Options (excluding mini options) of at least 0.55% of total Customer equity and ETF option ADV as reported by The Options Clearing Corporation (‘‘OCC’’) and the ETP Holder directly executes providing volume in Tape B securities during the billing month that is equal to • at least 1.00% of US Tape B CADV for the billing month of March, April and May 2020 3 All references to ETP Holders in connection with this proposed fee change include Market Makers. 4 Under the Basic Rate, ETP Holders receive a credit of $0.0020 per share for Tape B orders that provide liquidity to the Book. 5 US CADV means United States Consolidated Average Daily Volume for transactions reported to the Consolidated Tape, excluding odd lots through January 31, 2014 (except for purposes of Lead Market Maker pricing), and excludes volume on days when the market closes early and on the date of the annual reconstitution of the Russell Investments Indexes. Transactions that are not reported to the Consolidated Tape are not included in US CADV. See Fee Schedule, footnote 3. 6 See Securities Exchange Act Release No. 76084 (October 6, 2015), 80 FR 61529 (October 13, 2015) (SR–NYSEArca–2015–87). 7 See Securities Exchange Act Release No. 88194 (February 13, 2020), 85 FR 9820 (February 20, 2020) (SR–NYSEArca–2020–12). 8 See Securities Exchange Act Release No. 88436 (March 20, 2020), 85 FR 17112 (March 26, 2020) (SR–NYSEArca–2020–21). E:\FR\FM\15SEN1.SGM 15SEN1 Federal Register / Vol. 85, No. 179 / Tuesday, September 15, 2020 / Notices jbell on DSKJLSW7X2PROD with NOTICES • at least 1.15% of US Tape B CADV for the billing month of June, July and August 2020 • at least 1.25% of US Tape B CADV for the billing month of September 2020 and each billing month thereafter. The Exchange proposes to eliminate the alternative method for ETP Holders to qualify for the Tape B Tier 1 credit and remove it from the Fee Schedule. The Exchange has observed that just one ETP Holder has qualified under the alternative method since it was adopted. Further, since March 2020, no ETP Holder affiliated with an OTP Holder or OTP Firm has qualified for the Tape B Tier 1 credit under the alternative method.9 Given that the alternative method has not served to meaningfully increase activity on the Exchange or improve the quality of the market, the Exchange has determined to eliminate it from the Fee Schedule. The Exchange is not proposing any other change to Tape B Tier 1 pricing tier. Additionally, the Exchange proposes to eliminate the Retail Order Step-Up Tier 1 pricing tier. Currently, to qualify for the Retail Order Step-Up Tier 1 credit, an ETP Holder must execute an average daily volume (ADV) per month of Retail Orders 10 with a time-in-force of Day that add or remove liquidity that is an increase of 0.12% or more of the US CADV above its April 2018 ADV taken as a percentage of US CADV.11 If an ETP Holder meets the Retail Order Step-Up Tier 1 requirement, such ETP Holder is eligible to earn a credit of $0.0033 per share for Retail Orders that provide displayed liquidity to the Book in Tape A, Tape B and Tape C securities, and is not charged a fee for Retail Orders with a time-in-force of Day that remove liquidity. The Exchange proposes to eliminate the Retail Order Step-Up Tier 1 pricing tier and remove it from the Fee Schedule because the pricing tier has been underutilized by ETP Holders. The Exchange notes that another current pricing tier, Retail Order Step-Up Tier 3, has a lower requirement and provides a higher credit than Retail Order Step-Up 9 There are currently 53 firms that are both ETP Holders and OTP Holders. 10 A Retail Order is an agency order that originates from a natural person and is submitted to the Exchange by an ETP Holder, provided that no change is made to the terms of the order to price or side of market and the order does not originate from a trading algorithm or any other computerized methodology. See Securities Exchange Act Release No. 67540 (July 30, 2012), 77 FR 46539 (August 3, 2012) (SR–NYSEArca–2012–77). 11 See Securities Exchange Act Release No. 83268 (May 17, 2018), 83 FR 23983 (May 23, 2018) (SR– NYSEArca–2018–34). VerDate Sep<11>2014 16:57 Sep 14, 2020 Jkt 250001 57275 Tier 1.12 As a result, no ETP Holders have qualified for the credit under the Retail Order Step-Up Tier 1 pricing tier since the Exchange adopted the Retail Order Step-Up Tier 3. Therefore, the Exchange has determined to eliminate the Retail Order Step-Up Tier 1 from the Fee Schedule. With the proposed elimination of Retail Order Step-Up Tier 1, the Exchange proposes to rename current Retail Order Step-Up Tier 2 as Retail Order Step-Up Tier 1, rename current Retail Order Step-Up Tier 3 as Retail Order Step-Up Tier 2, and rename current Retail Order Step-Up Tier 4 as Retail Order Step-Up Tier 3. The proposed changes are not otherwise intended to address any other issues, and the Exchange is not aware of any significant problems that market participants would have in complying with the proposed changes. and credits, and even entire pricing tiers, when such incentives become underutilized. The Exchange believes eliminating underutilized incentive programs would also simplify the Fee Schedule. The Exchange further believes that removing reference to the pricing tiers that the Exchange proposes to eliminate from the Fee Schedule would also add clarity to the Fee Schedule. The Exchange believes that eliminating requirements and credits, and even entire pricing tiers, from the Fee Schedule when such incentives become ineffective is equitable and not unfairly discriminatory because the requirements, and credits, and even entire pricing tiers, would be eliminated in their entirety and would no longer be available to any ETP Holder. For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act. 2. Statutory Basis B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,15 the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Intramarket Competition. The Exchange’s proposal to eliminate certain requirements and credits, and pricing tiers in their entirety, will not place any undue burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act given that not a single ETP Holder has qualified for any of the fees and credits under any of the pricing tiers that are the subject of this proposed rule change for a number of months. To the extent the proposed rule change places a burden on competition, any such burden would be outweighed by the fact that none of the pricing tiers proposed for deletion have served their intended purpose of incentivizing ETP Holders to more broadly participate on the Exchange. Moreover, ETP Holders can choose to trade on other venues to the extent they believe that the credits provided are too low or the qualification criteria are not attractive. Intermarket Competition. The Exchange believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive market in which market participants can readily choose to send their orders to other exchanges and offexchange venues if they deem fee levels The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,13 in general, and furthers the objectives of Sections 6(b)(4) and(5) of the Act,14 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 believes that the proposed rule change to eliminate the alternative method to qualify for the Tape B Tier 1 pricing tier, and eliminate the Retail Order Step-Up Tier 1 pricing tier is reasonable because each of the pricing tiers that are the subject of this proposed rule change have been underutilized and have generally not incentivized ETP Holders to bring liquidity and increase trading on the Exchange. Since March 2020, no ETP Holder has availed itself of the alternative method to qualify for the Tape B Tier 1 pricing tier. Similarly, no ETP Holder has qualified for Retail Order Step-Up Tier 1 since the Exchange adopted the Retail Order StepUp Tier 3 in January 2020, which provides a higher credit and has a lesser requirement to qualify. The Exchange does not anticipate any ETP Holder in the near future to qualify for any of the tiers that are the subject of this proposed rule change. The Exchange believes it is reasonable to eliminate requirements 12 See Securities Exchange Act Release No. 87994 (January 16, 2020), 85 FR 3955 (January 23, 2020) (SR–NYSEArca–2020–05). 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(4) and (5). PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 15 15 E:\FR\FM\15SEN1.SGM U.S.C. 78f(b)(8). 15SEN1 57276 Federal Register / Vol. 85, No. 179 / Tuesday, September 15, 2020 / Notices at those other venues to be more favorable. Market share statistics provide ample evidence that price competition between exchanges is fierce, with liquidity and market share moving freely from one execution venue to another in reaction to pricing changes. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and with offexchange venues. Because competitors are free to modify their own fees and credits in response, and because market participants may readily adjust their order routing practices, the Exchange does not believe this proposed fee change would impose any burden on intermarket competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 16 of the Act and subparagraph (f)(2) of Rule 19b–4 17 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) 18 of the Act to determine whether the proposed rule change should be approved or disapproved. jbell on DSKJLSW7X2PROD with NOTICES 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–2020–81 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–2020–81. 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 offices 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–2020–81, and should be submitted on or before October 6, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20257 Filed 9–14–20; 8:45 am] BILLING CODE 8011–01–P 16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f)(2). 18 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 16:57 Sep 14, 2020 19 17 Jkt 250001 PO 00000 CFR 200.30–3(a)(12). Frm 00096 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89792; File No. SR–OCC– 2020–805] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of No Objection To Advance Notice Concerning Proposed Changes To Enhance OCC’s Stock Loan Close-Out Process September 9, 2020. I. Introduction On July 14, 2020, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) advance notice SR–OCC–2020–805 (‘‘Advance Notice’’) pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled Payment, Clearing and Settlement Supervision Act of 2010 (‘‘Clearing Supervision Act’’) 1 and Rule 19b–4(n)(1)(i) 2 under the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 3 to require Clearing Members that OCC instructs to buy-in or sell-out securities to execute such transactions and provide OCC notice of such action by the settlement time on the business day after OCC gives the instruction.4 The Advance Notice was published for public comment in the Federal Register on August 14, 2020,5 and the Commission has received no comments regarding the changes proposed in the Advance Notice.6 The Commission is hereby providing notice of no objection to the Advance Notice. 1 12 U.S.C. 5465(e)(1). CFR 240.19b–4(n)(1)(i). 3 15 U.S.C. 78a et seq. 4 See Notice of Filing infra note 5, at 85 FR 49697. 5 Securities Exchange Act Release No. 89515 (Aug. 10, 2020), 85 FR 49697 (Aug. 14, 2020) (File No. SR–OCC–2020–805) (‘‘Notice of Filing’’). On July 14, 2020, OCC also filed a related proposed rule change (SR–OCC–2020–008) with the Commission pursuant to Section 19(b)(1) of the Exchange Act and Rule 19b–4 thereunder (‘‘Proposed Rule Change’’). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b–4, respectively. In the Proposed Rule Change, which was published in the Federal Register on July 30, 2020, OCC seeks approval of proposed changes to its rules necessary to implement the Advance Notice. Securities Exchange Act Release No. 89393 (Jul. 24, 2020), 85 FR 45943 (Jul. 30, 2020) (File No. SR–OCC–2020– 008). The comment period for the related Proposed Rule Change filing closed on August 20, 2020. 6 Since the proposal contained in the Advance Notice was also filed as a proposed rule change, all public comments received on the proposal are considered regardless of whether the comments are submitted on the Proposed Rule Change or the Advance Notice. 2 17 E:\FR\FM\15SEN1.SGM 15SEN1

Agencies

[Federal Register Volume 85, Number 179 (Tuesday, September 15, 2020)]
[Notices]
[Pages 57274-57276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20257]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89797; File No. SR-NYSEArca-2020-81]


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

September 9, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 1, 2020, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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\ 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 the NYSE Arca Equities Fees and 
Charges (``Fee Schedule'') to (1) eliminate an alternative method to 
qualify for the Tape B Tier 1 pricing tier, and (2) eliminate the 
Retail Order Step-Up Tier 1 pricing tier. The Exchange proposes to 
implement the fee changes effective September 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) eliminate an 
alternative method to qualify for the Tape B Tier 1 pricing tier, and 
(2) eliminate the Retail Order Step-Up Tier 1 pricing tier. The 
Exchange proposes to implement the fee changes effective September 1, 
2020.
    ETP Holders \3\ currently qualify for a Tape B Tier 1 credit of 
$0.0030 \4\ per share when, on a daily basis, measured monthly, they 
directly execute providing volume in Tape B securities that is equal to 
at least 1.50% of Tape B US consolidated average daily volume (``US 
CADV'') \5\ for the billing month.\6\ In February 2020, the Exchange 
adopted an alternative method for ETP Holders to qualify for the Tape B 
Tier 1 credit.\7\ In March 2020, the Exchange amended the percentage 
CADV requirement applicable under the alternative method.\8\ Pursuant 
to the alternative method, an ETP Holder could qualify for the Tape B 
Tier 1 credit if the ETP Holder is affiliated with an OTP Holder or OTP 
Firm that provides an ADV of electronic posted executions for the 
account of a market maker in all issues on NYSE Arca Options (excluding 
mini options) of at least 0.55% of total Customer equity and ETF option 
ADV as reported by The Options Clearing Corporation (``OCC'') and the 
ETP Holder directly executes providing volume in Tape B securities 
during the billing month that is equal to
---------------------------------------------------------------------------

    \3\ All references to ETP Holders in connection with this 
proposed fee change include Market Makers.
    \4\ Under the Basic Rate, ETP Holders receive a credit of 
$0.0020 per share for Tape B orders that provide liquidity to the 
Book.
    \5\ US CADV means United States Consolidated Average Daily 
Volume for transactions reported to the Consolidated Tape, excluding 
odd lots through January 31, 2014 (except for purposes of Lead 
Market Maker pricing), and excludes volume on days when the market 
closes early and on the date of the annual reconstitution of the 
Russell Investments Indexes. Transactions that are not reported to 
the Consolidated Tape are not included in US CADV. See Fee Schedule, 
footnote 3.
    \6\ See Securities Exchange Act Release No. 76084 (October 6, 
2015), 80 FR 61529 (October 13, 2015) (SR-NYSEArca-2015-87).
    \7\ See Securities Exchange Act Release No. 88194 (February 13, 
2020), 85 FR 9820 (February 20, 2020) (SR-NYSEArca-2020-12).
    \8\ See Securities Exchange Act Release No. 88436 (March 20, 
2020), 85 FR 17112 (March 26, 2020) (SR-NYSEArca-2020-21).
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     at least 1.00% of US Tape B CADV for the billing month of 
March, April and May 2020

[[Page 57275]]

     at least 1.15% of US Tape B CADV for the billing month of 
June, July and August 2020
     at least 1.25% of US Tape B CADV for the billing month of 
September 2020 and each billing month thereafter.
    The Exchange proposes to eliminate the alternative method for ETP 
Holders to qualify for the Tape B Tier 1 credit and remove it from the 
Fee Schedule. The Exchange has observed that just one ETP Holder has 
qualified under the alternative method since it was adopted. Further, 
since March 2020, no ETP Holder affiliated with an OTP Holder or OTP 
Firm has qualified for the Tape B Tier 1 credit under the alternative 
method.\9\ Given that the alternative method has not served to 
meaningfully increase activity on the Exchange or improve the quality 
of the market, the Exchange has determined to eliminate it from the Fee 
Schedule. The Exchange is not proposing any other change to Tape B Tier 
1 pricing tier.
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    \9\ There are currently 53 firms that are both ETP Holders and 
OTP Holders.
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    Additionally, the Exchange proposes to eliminate the Retail Order 
Step-Up Tier 1 pricing tier.
    Currently, to qualify for the Retail Order Step-Up Tier 1 credit, 
an ETP Holder must execute an average daily volume (ADV) per month of 
Retail Orders \10\ with a time-in-force of Day that add or remove 
liquidity that is an increase of 0.12% or more of the US CADV above its 
April 2018 ADV taken as a percentage of US CADV.\11\ If an ETP Holder 
meets the Retail Order Step-Up Tier 1 requirement, such ETP Holder is 
eligible to earn a credit of $0.0033 per share for Retail Orders that 
provide displayed liquidity to the Book in Tape A, Tape B and Tape C 
securities, and is not charged a fee for Retail Orders with a time-in-
force of Day that remove liquidity.
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    \10\ A Retail Order is an agency order that originates from a 
natural person and is submitted to the Exchange by an ETP Holder, 
provided that no change is made to the terms of the order to price 
or side of market and the order does not originate from a trading 
algorithm or any other computerized methodology. See Securities 
Exchange Act Release No. 67540 (July 30, 2012), 77 FR 46539 (August 
3, 2012) (SR-NYSEArca-2012-77).
    \11\ See Securities Exchange Act Release No. 83268 (May 17, 
2018), 83 FR 23983 (May 23, 2018) (SR-NYSEArca-2018-34).
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    The Exchange proposes to eliminate the Retail Order Step-Up Tier 1 
pricing tier and remove it from the Fee Schedule because the pricing 
tier has been underutilized by ETP Holders. The Exchange notes that 
another current pricing tier, Retail Order Step-Up Tier 3, has a lower 
requirement and provides a higher credit than Retail Order Step-Up Tier 
1.\12\ As a result, no ETP Holders have qualified for the credit under 
the Retail Order Step-Up Tier 1 pricing tier since the Exchange adopted 
the Retail Order Step-Up Tier 3. Therefore, the Exchange has determined 
to eliminate the Retail Order Step-Up Tier 1 from the Fee Schedule.
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    \12\ See Securities Exchange Act Release No. 87994 (January 16, 
2020), 85 FR 3955 (January 23, 2020) (SR-NYSEArca-2020-05).
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    With the proposed elimination of Retail Order Step-Up Tier 1, the 
Exchange proposes to rename current Retail Order Step-Up Tier 2 as 
Retail Order Step-Up Tier 1, rename current Retail Order Step-Up Tier 3 
as Retail Order Step-Up Tier 2, and rename current Retail Order Step-Up 
Tier 4 as Retail Order Step-Up Tier 3.
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any significant problems 
that market participants would have in complying with the proposed 
changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\13\ in general, and furthers the 
objectives of Sections 6(b)(4) and(5) of the Act,\14\ 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change to eliminate 
the alternative method to qualify for the Tape B Tier 1 pricing tier, 
and eliminate the Retail Order Step-Up Tier 1 pricing tier is 
reasonable because each of the pricing tiers that are the subject of 
this proposed rule change have been underutilized and have generally 
not incentivized ETP Holders to bring liquidity and increase trading on 
the Exchange. Since March 2020, no ETP Holder has availed itself of the 
alternative method to qualify for the Tape B Tier 1 pricing tier. 
Similarly, no ETP Holder has qualified for Retail Order Step-Up Tier 1 
since the Exchange adopted the Retail Order Step-Up Tier 3 in January 
2020, which provides a higher credit and has a lesser requirement to 
qualify. The Exchange does not anticipate any ETP Holder in the near 
future to qualify for any of the tiers that are the subject of this 
proposed rule change. The Exchange believes it is reasonable to 
eliminate requirements and credits, and even entire pricing tiers, when 
such incentives become underutilized. The Exchange believes eliminating 
underutilized incentive programs would also simplify the Fee Schedule. 
The Exchange further believes that removing reference to the pricing 
tiers that the Exchange proposes to eliminate from the Fee Schedule 
would also add clarity to the Fee Schedule. The Exchange believes that 
eliminating requirements and credits, and even entire pricing tiers, 
from the Fee Schedule when such incentives become ineffective is 
equitable and not unfairly discriminatory because the requirements, and 
credits, and even entire pricing tiers, would be eliminated in their 
entirety and would no longer be available to any ETP Holder.
    For the foregoing reasons, the Exchange believes that the proposal 
is consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\15\ 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.
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    \15\ 15 U.S.C. 78f(b)(8).
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    Intramarket Competition. The Exchange's proposal to eliminate 
certain requirements and credits, and pricing tiers in their entirety, 
will not place any undue burden on intramarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
given that not a single ETP Holder has qualified for any of the fees 
and credits under any of the pricing tiers that are the subject of this 
proposed rule change for a number of months. To the extent the proposed 
rule change places a burden on competition, any such burden would be 
outweighed by the fact that none of the pricing tiers proposed for 
deletion have served their intended purpose of incentivizing ETP 
Holders to more broadly participate on the Exchange. Moreover, ETP 
Holders can choose to trade on other venues to the extent they believe 
that the credits provided are too low or the qualification criteria are 
not attractive.
    Intermarket Competition. The Exchange believes the proposed rule 
change does not impose any burden on intermarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The Exchange operates in a highly competitive market in which market 
participants can readily choose to send their orders to other exchanges 
and off-exchange venues if they deem fee levels

[[Page 57276]]

at those other venues to be more favorable. Market share statistics 
provide ample evidence that price competition between exchanges is 
fierce, with liquidity and market share moving freely from one 
execution venue to another in reaction to pricing changes. In such an 
environment, the Exchange must continually adjust its fees and rebates 
to remain competitive with other exchanges and with off-exchange 
venues. Because competitors are free to modify their own fees and 
credits in response, and because market participants may readily adjust 
their order routing practices, the Exchange does not believe this 
proposed fee change would impose any burden on intermarket competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \16\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \17\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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) \18\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \18\ 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-2020-81 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-2020-81. 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 offices 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-2020-81, and should be 
submitted on or before October 6, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-20257 Filed 9-14-20; 8:45 am]
BILLING CODE 8011-01-P
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