Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List, 63431-63436 [2021-24897]

Download as PDF Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / Notices A proposed rule change filed under Rule 19b–4(f)(6) 14 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),15 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may take effect upon filing. The Exchange states that the proposed rule change raises no novel regulatory issues because the Funds will continue to comply with the requirements of BZX Rule 14.11(m). The Exchange also notes that a similar proposal to amend the listing rules of other shares that BZX also lists and trades pursuant to Rule 14.11(m) is currently in effect.16 For these reasons, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission waives the 30-day operative delay and designates the proposal operative upon filing.17 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 to determine whether the proposed rule 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– CboeBZX–2021–075 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–CboeBZX–2021–075. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CboeBZX–2021–075 and should be submitted on or before December 7, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–24896 Filed 11–15–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION lotter on DSK11XQN23PROD with NOTICES1 Sunshine Act Meetings 14 17 CFR 240.19b–4(f)(6). 15 17 CFR 240.19b–4(f)(6)(iii). 16 See Securities and Exchange Act No. 92946 (September 13, 2021) 86 FR 51941 (September 17, 2021) (SR–CboeBZX–2021–060). 17 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 17:03 Nov 15, 2021 Jkt 256001 Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold an TIME AND DATE: Open Meeting on Wednesday, November 17, 2021 at 11:00 a.m. The meeting will be webcast on the Commission’s website at www.sec.gov. PLACE: This meeting will begin at 11:00 a.m. (ET) and will be open to the public via webcast on the Commission’s website at www.sec.gov. STATUS: MATTERS TO BE CONSIDERED: 1. The Commission will consider whether to adopt amendments to the proxy rules relating to the use of universal proxy cards and related disclosures in director elections. 2. The Commission will consider whether to propose amendments to the proxy rules governing proxy voting advice. CONTACT PERSON FOR MORE INFORMATION: For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. Authority: 5 U.S.C. 552b. Dated: November 10, 2021. Vanessa A. Countryman, Secretary. [FR Doc. 2021–25030 Filed 11–12–21; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93545; File No. SR–NYSE– 2021–65] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List November 9, 2021. 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 November 1, 2021, 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, 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). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 18 17 PO 00000 CFR 200.30–3(a)(12). Frm 00103 Fmt 4703 Sfmt 4703 63431 E:\FR\FM\16NON1.SGM 16NON1 63432 Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to to[sic] amend its Price List to (1) eliminate the underutilized additional credits for member organizations that add liquidity in Tape B and C Securities when qualifying for certain non-tier and tiered credits by adding liquidity in Tape A Securities; (2) eliminate the underutilized Adding Tier for NonDisplayed Providers in Tape A Securities; and (3) revise the requirements to qualify for the Tier 5 Adding Credit in Tape A Securities. The Exchange proposes to implement the rule change on November 1, 2021. 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 lotter on DSK11XQN23PROD with NOTICES1 1. Purpose The Exchange proposes to amend its Price List to (1) eliminate the underutilized additional credits for member organizations that add liquidity in Tape B and C Securities when qualifying for certain non-tier and tiered credits by adding liquidity in Tape A Securities; (2) eliminate the underutilized Adding Tier for NonDisplayed Providers in Tape A Securities; and (3) revise the requirements to qualify for the Tier 5 Adding Credit in Tape A Securities. The proposed revision to the Tier 5 Adding Credit responds to the current competitive environment where order flow providers have a choice of where to direct liquidity-providing orders by offering further incentives for member organizations to send additional displayed liquidity to the Exchange. VerDate Sep<11>2014 17:03 Nov 15, 2021 Jkt 256001 The Exchange proposes to implement the rule change on November 1, 2021. Current Market and Competitive Environment The Exchange operates in a highly 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.’’ 4 As the Commission itself has recognized, the market for trading services in NMS stocks has become ‘‘more fragmented and competitive.’’ 5 Indeed, equity trading is currently dispersed across 16 exchanges,6 31 alternative trading systems,7 and numerous broker-dealer internalizers and wholesalers. Based on publiclyavailable information, no single exchange has more than 18% of the market.8 Therefore, no exchange possesses significant pricing power in the execution of equity order flow. More specifically, the Exchange’s share of executed volume of equity trades in Tapes A, B and C securities is less than 12%.9 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, in response to fee changes. With respect to non-marketable order flow that would provide displayed liquidity on an Exchange, member organizations can choose from any one 4 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (S7–10–04) (Final Rule) (‘‘Regulation NMS’’). 5 See Securities Exchange Act Release No. 51808[sic], 84FR 5202, 5253 (February 20, 2019) (File No. S7–05–18) (Transaction Fee Pilot for NMS Stocks Final Rule) (‘‘Transaction Fee Pilot’’). 6 See Cboe Global Markets, 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. 7 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. 8 See Cboe Global Markets U.S. Equities Market Volume Summary, available at https:// markets.cboe.com/us/equities/market_share/. 9 See id. PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 of the numerous currently operating registered exchanges to route such order flow. Accordingly, competitive forces constrain exchange transaction fees that relate to orders that would provide liquidity on an exchange. Proposed Rule Change The Exchange proposes to eliminate certain underutilized additional credits for adding liquidity in Tape B and C Securities and the underutilized Adding Tier for Non-Displayed Providers in Tape A Securities, as follows. Underutilized Additional Credits Member organizations adding liquidity in Tape A Securities and meeting all of the requirements of the Non-Tier Adding Credit, the Tier 1 Adding Credit, the Tier 2 Adding Credit, the Tier 3 Adding Credit, the Tier 4 Adding Credit, the Tier 5 Adding Credit, the Tier 6 Adding Credit, the Step Up Tier 1 Adding Credit, the Step Up Tier 2 Adding Credit and the Step Up Tier 4 Adding Credit are currently eligible for an additional credit of $0.0001 per share (under the Non-Tier Adding Credit, Tier 3 Adding Credit, Tier 4 Adding Credit, Tier 5 Adding Credit, Tier 6 Adding Credit, and Step Up Tier 4 Adding Credit) or $0.0005 per share (under the Tier 1 Adding Credit, Tier 2 Adding Credit, Step Up Tier 1 Adding Credit, and Step Up Tier 2 Adding Credit) if the member organization also adds a specified amount of liquidity, excluding liquidity added as an Supplemental Liquidity Provider (‘‘SLP’’), in Tapes B and C Securities. The Exchange proposes to eliminate and remove these additional credits from the Non-Tier Adding Credit, Tier 1 Adding Credit, Tier 2 Adding Credit, Tier 3 Adding Credit, Tier 4 Adding Credit, Tier 5 Adding Credit, Tier 6 Adding Credit, Step Up Tier 1 Adding Credit, Step Up Tier 2 Adding Credit and Step Up Tier 4 Adding Credit sections of the Price List. The additional credit has been underutilized by member organizations insofar as no member organization qualified for an additional credit year to date in any of the non-tier or tiers in which it is offered. As such, Exchange does not anticipate that any member organization in the near future would qualify for the additional credits that are the subject of this proposed rule change. Underutilized Adding Tier for NonDisplayed Providers in Tape A Securities Under the current Adding Tier for Non-Displayed Providers, the Exchange provides credits in Tape A securities for all orders, other than MPL Orders, from E:\FR\FM\16NON1.SGM 16NON1 Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / Notices lotter on DSK11XQN23PROD with NOTICES1 qualifying member organizations that have at least • an average daily trading volume (‘‘ADV’’) that adds liquidity to the Exchange during the billing month (‘‘Adding ADV’’) of 0.35% of Tape A consolidated ADV (‘‘Tape A CADV’’), excluding any liquidity added by a Designated Market Maker (‘‘DMM’’); 10 and • Adding ADV of Non-Displayed Limit Orders of at least 4 million shares; and • 35% of the Member Organization’s Total Adding ADV is comprised of NonDisplayed Limit Orders. A member organization that meets the above requirements receives a credit of $0.0023 per share ($0.0006 per share for Non-Displayed Limit Orders) if the member organization has an Adding ADV of at least 0.35% of Tape A CADV or a credit of $0.0026 per share ($0.0007 per share for Non-Displayed Limit Orders) if the member organization has Adding ADV of at least 0.45% of Tape A CADV. In addition, Member Organizations meeting the above requirements and adding liquidity, excluding liquidity added as an SLP, in Tapes B and C Securities of at least 0.20% of Tape B and Tape C CADV combined will receive an additional $0.00005 per share. The Exchange proposes to eliminate the Adding Tier for Non-Displayed Providers in its entirety and remove it from the Price List. The tier, including the additional $0.00005 per share credit, has been underutilized by member organizations insofar as no member organization has qualified for the tier since its introduction in April 2021. As such, Exchange does not anticipate any member organization in the near future would qualify for the credit that is the subject of this proposed rule change. Alternative Qualification for Tier 5 Adding Credit In response to the competitive environment described above, the Exchange has established incentives for its member organizations who submit orders that provide liquidity on the Exchange. The proposed fee change is also designed to attract additional order flow to the Exchange by incentivizing member organizations to submit additional displayed liquidity to the Exchange. Under the current Tier 5 Adding Credit, the Exchange provides a $0.0017 10 Footnote 2 to the Price List defines ADV as ‘‘average daily volume’’ and ‘‘Adding ADV’’ as ADV that adds liquidity to the Exchange during the billing month. CADV is defined in footnote * of the Price List. VerDate Sep<11>2014 17:03 Nov 15, 2021 Jkt 256001 credit in Tape A securities for orders, other than MPL and Non-Display Reserve orders, that add liquidity to the Exchange where a member organization’s Adding ADV, excluding liquidity added as an SLP and as a DMM, is at least 0.29% of NYSE CADV. Further, member organizations that meet the above requirements and add liquidity, excluding liquidity added as an SLP, in Tape B and C Securities of at least 0.20% of Tape B and Tape C CADV combined, would receive an additional $0.0001 per share. As discussed above, the Exchange proposes to delete this additional credit as underutilized. The Exchange further proposes to provide an alternative way for member organizations to qualify for the Tier 5 Adding Credit. As proposed, as an alternative to where a member organization’s Adding ADV, excluding liquidity added as an SLP and as a DMM, is at least 0.29% of NYSE CADV, member organizations that have an Adding ADV, excluding liquidity added as an SLP and as a DMM, of at least 0.125% of NYSE CADV and two times more than the Member Organization’s Adding ADV in Tape A Securities in Q1 2021 11 as a percentage of NYSE CADV would also qualify for the $0.0017 credit. The Exchange believes that the alternative way to qualify for the Tier 5 Adding Credit will incentivize greater participation from member organizations to increase liquidityproviding orders in the Tape A securities they send to the Exchange to qualify for the Tier 5 Adding Credit, which would support the quality of price discovery on the Exchange and provide additional liquidity for incoming orders. As noted above, the Exchange operates in a competitive environment, particularly as it relates to attracting non-marketable orders, which add liquidity to the Exchange. The Exchange does not know how much order flow member organizations choose to route to other exchanges or to offexchange venues. Based on the profile of liquidity-adding firms generally, the Exchange believes that additional member organizations could qualify for the tier under the revised qualification criteria if they choose to direct order flow to, and increase quoting on, the Exchange. However, without having a view of member organization’s activity on other exchanges and off-exchange venues, the Exchange has no way of knowing whether this proposed rule 11 The current Tier 6 Adding Credit uses ‘‘1Q’’, which the Exchange proposes to change to ‘‘Q1’’ for consistency and clarity. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 63433 change would result in any member organization directing orders to the Exchange in order to qualify for the new tier. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,12 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,13 in particular, because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. The Proposed Change Is Reasonable Elimination of Underutilized Credits and Adding Tier in Tape A Securities The Exchange believes that the proposed elimination of the underutilized additional credits for member organizations that add liquidity in Tape B and C Securities when qualifying for certain non-tier and tiered credits by adding liquidity in Tape A Securities is reasonable because member organizations have underutilized this incentive. No member organization has qualified for an additional credit year to date in any of the non-tier or tiers in which it is offered. The Exchange does not anticipate any member organization in the near future qualifying for the rebate that is the subject of this proposed rule change. Similarly, the Exchange believes that the proposed elimination of the Adding Tier for NonDisplayed Providers in Tape A Securities is reasonable. No member organization has qualified for the rebate since it was adopted in April 2021, and the Exchange does not anticipate any member organization in the near future qualifying for the tier. The Exchange believes it is reasonable to eliminate credits when such incentives become underutilized. The Exchange also believes eliminating underutilized incentives would add clarity and transparency to the Price List. Alternative Qualification for Tier 5 Adding Credit in Tape A Securities As discussed above, the Exchange operates in a highly competitive market. 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 12 15 13 15 E:\FR\FM\16NON1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(4) & (5). 16NON1 lotter on DSK11XQN23PROD with NOTICES1 63434 Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / Notices 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.’’ 14 While Regulation NMS has enhanced competition, it has also fostered a ‘‘fragmented’’ market structure where trading in a single stock can occur across multiple trading centers. When multiple trading centers compete for order flow in the same stock, the Commission has recognized that ‘‘such competition can lead to the fragmentation of order flow in that stock.’’ 15 Given the current competitive environment, the Exchange believes that the proposed revision to the requirements for member organizations to qualify for Tier 5 Adding Credit represents a reasonable attempt to attract additional order flow to the Exchange. Specifically, the Exchange believes that the proposed revision is reasonable because it would provide further incentives for member organizations to route additional liquidity-providing orders to a public exchange, thereby promoting price discovery and transparency and enhancing order execution opportunities for member organizations. All member organizations would benefit from the greater amounts of liquidity that will be present on the Exchange, which would provide greater execution opportunities. As noted above, the Exchange operates in a competitive environment, particularly as relates to attracting nonmarketable orders, which add liquidity to the Exchange. The Exchange believes that an alternative method to qualify for the tier will provide greater incentives for member organizations to add more liquidity to the Exchange. The Exchange does not know how much order flow member organizations choose to route to other exchanges or to off-exchange venues. Based on the profile of liquidity-adding firms generally, the Exchange believes that additional member organizations could qualify for the tier under the revised qualification criteria if they choose to direct order flow to, and increase quoting on, the Exchange. However, without having a view of member organizations’ activity on other exchanges and off-exchange venues, the Exchange has no way of 14 See Regulation NMS, supra note 4, at 37499. Securities Exchange Act Release No. 61358, 75 FR 3594, 3597 (January 21, 2010) (File No. S7– 02–10) (Concept Release on Equity Market Structure). 15 See VerDate Sep<11>2014 17:03 Nov 15, 2021 Jkt 256001 knowing whether this proposed rule change would result in any additional member organizations directing orders to the Exchange in order to qualify for the Tier 5 Adding Credit. The Proposal Is an Equitable Allocation of Fees Elimination of Underutilized Credits and Adding Tier in Tape A Securities The Exchange believes the proposal equitably allocates fees among its market participants because the underutilized additional credits and Adding Tier the Exchange proposes to eliminate would be eliminated in their entirety, and would no longer be available to any member organization in any form. Similarly, the Exchange believes the proposal equitably allocates fees among its market participants because elimination of the underutilized credits would apply to all similarlysituated member organizations on an equal basis. All such member organizations would continue to be subject to the same fee structure, and access to the Exchange’s market would continue to be offered on fair and nondiscriminatory terms. Alternative Qualification for Tier 5 Adding Credit in Tape A Securities The Exchange believes the proposed rule change equitably allocates its fees among its market participants. The proposed change would continue to encourage member organizations to submit additional liquidity to the Exchange and execute orders on the Exchange, thereby contributing to robust levels of liquidity, to the benefit of all market participants. The Exchange believes that providing an additional way to qualify for the Tier 5 Adding Credit would encourage the submission of additional liquidity to the Exchange, thereby providing customers with a higher quality venue for price discovery, liquidity, competitive quotes and price improvement. 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 member organizations from the substantial amounts of liquidity present on the Exchange. All member organizations would benefit from the greater amounts of liquidity that will be present on the Exchange, which would provide greater execution opportunities. The proposal neither targets nor will it have a disparate impact on any particular category of market participant. Specifically, the Exchange PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 believes that the proposal constitutes an equitable allocation of fees because all similarly situated member organizations would be eligible for the same credits if they meet the revised requirements for the tier. As to those member organizations that do not presently qualify for the adding liquidity credit, the proposal will not adversely impact their existing pricing or their ability to qualify for other credits provided by the Exchange. The Proposal Is Not Unfairly Discriminatory Elimination of Underutilized Credits and Adding Tier in Tape A Securities The Exchange believes that the proposal is not unfairly discriminatory. The proposal is not unfairly discriminatory because it neither targets nor will it have a disparate impact on any particular category of market participant. The Exchange believes that the proposal is not unfairly discriminatory because the proposed elimination of the underutilized additional credits and Adding Tier would affect all similarly-situated market participants on an equal and non-discriminatory basis. The Exchange believes that eliminating credits that are underutilized and ineffective would no longer be available to any member organization on an equal basis. The Exchange also believes that the proposed change would protect investors and the public interest because the deletion of underutilized fees would make the Price List more accessible and transparent and facilitate market participants’ understanding of the fees charged for services currently offered by the Exchange. Alternative Qualification for Tier 5 Adding Credit in Tape A Securities The Exchange believes that the proposal is not unfairly discriminatory. In the prevailing competitive environment, member organizations are free to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. The proposed changes to the Tier 5 Adding Credit are not unfairly discriminatory because the alternate requirements to achieve the credit would be applied to all similarly situated member organizations and other market participants, who would all be subject to the same modified requirements to qualify for the tier and the same credits on an equal basis. For the same reason, the proposal neither targets nor will it have a disparate impact on any particular category of market participant. Accordingly, no E:\FR\FM\16NON1.SGM 16NON1 Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / Notices lotter on DSK11XQN23PROD with NOTICES1 member organization already operating on the Exchange would be disadvantaged by this allocation of fees. Further, the Exchange believes the proposal would incentivize member organizations to send more orders to the Exchange to qualify for higher credits. The Exchange believes that the proposed changes would not permit unfair discrimination among member organizations because the tiered rates are available equally to all member organizations. As described above, in today’s competitive marketplace, order flow providers have a choice of where to direct liquidity-providing order flow, and the Exchange believes there are additional member organizations that could qualify if they chose to direct their order flow to the Exchange. Finally, the submission of orders to the Exchange is optional for member organizations in that they could choose whether to submit orders to the Exchange and, if they do, the extent of its activity in this regard. 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,16 the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, as discussed above, the proposal relates to the elimination of an underutilized credits and an adding tier and, as such, would not have any impact on intra- or inter-market competition because the proposed change is solely designed to accurately reflect the services that the Exchange currently offers, thereby adding clarity to the Price List. In accordance with Section 6(b)(8) of the Act,17 the Exchange further believes that the proposed rule change offering an alternative method to qualify for the Tier 5 Adding Credit would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, as discussed above, the Exchange believes that the proposed change would encourage the submission of additional liquidity and order flow to a public exchange, thereby enhancing order execution opportunities for member U.S.C. 78f(b)(8). 17 15 U.S.C. 78f(b)(8). organizations. As a result, the Exchange believes that the proposed change furthers the Commission’s goal in adopting Regulation NMS of fostering competition among orders, which promotes ‘‘more efficient pricing of individual stocks for all types of orders, large and small.’’ 18 Intramarket Competition. The proposed change is designed to attract additional order flow to the Exchange. As described above, the Exchange believes that the proposed change would provide additional incentives for market participants to route liquidityproviding orders to 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 on the Exchange. The current and proposed credits 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 exchanges 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 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. 16 15 VerDate Sep<11>2014 17:03 Nov 15, 2021 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) 19 of the Act and subparagraph (f)(2) of Rule 19b–4 20 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) 21 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–2021–65 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–NYSE–2021–65. 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 19 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 21 15 U.S.C. 78s(b)(2)(B). 20 17 18 Regulation Jkt 256001 PO 00000 Frm 00107 NMS, 70 FR at 37498–99. Fmt 4703 Sfmt 4703 63435 E:\FR\FM\16NON1.SGM 16NON1 63436 Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / Notices 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–2021–65, and should be submitted on or before December 7, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–24897 Filed 11–15–21; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Docket No. SBA–2020–0048] Termination of Nonmanufacturer Rule Class Waiver U.S. Small Business Administration. ACTION: Notification of intent to terminate the class waiver to the Nonmanufacturer Rule for radiology equipment. AGENCY: The U.S. Small Business Administration (SBA) is considering terminating a class waiver of the Nonmanufacturer Rule (NMR) for irradiation apparatus manufacturing, computerized axial tomography (CT/ CAT) scanners manufacturing; CT/CAT (computerized axial tomography) scanners manufacturing; fluoroscopes manufacturing; fluoroscopic X-ray apparatus and tubes manufacturing; generators, X-ray, manufacturing; irradiation equipment manufacturing; X-ray generators manufacturing; and Xray irradiation equipment manufacturing under manufacturing categorized under North American Industry Classification System (NAICS) code 334517 and Product Service Code (PSC) 6525. lotter on DSK11XQN23PROD with NOTICES1 SUMMARY: 22 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:03 Nov 15, 2021 Jkt 256001 Comments and source information must be submitted on or before xx/xx/xxxx. ADDRESSES: You may submit comments and source information via the Federal Rulemaking Portal at https:// www.regulations.gov under Docket ID SBA–2020–1148]. If you wish to submit confidential business information (CBI) as defined in the User Notice at https:// www.regulations.gov, please submit the information to Carol Hulme, Attorney Advisor, Office of Government Contracting, U.S. Small Business Administration, 409 Third Street SW, 8th Floor, Washington, DC 20416. Highlight the information that you consider to be CBI and explain why you believe this information should be held confidential. SBA will review the information and make a final determination as to whether the information will be published. FOR FURTHER INFORMATION CONTACT: Carol Hulme, Attorney Advisor, by telephone at 202–205–6347 or by email at Carol-Ann.Hulme@sba.gov. SUPPLEMENTARY INFORMATION: An awardee of a Federal small business setaside contract valued over $250,000.00, service-disabled veteran-owned small business contract, HUBZone contract, women-owned small business contract, or 8(a) contract must provide its own product or that of a small business manufacturer unless a waiver is in place. If the above-identified class waiver is terminated, small businesses will no longer be authorized to provide the product of any manufacturer regardless of size on the identified items, unless a Federal contracting officer obtains an individual waiver to the NMR. Section 8(a)(17) and 46 of the Small Business Act (Act), 15 U.S.C. 637(a)(17) and 657s, and SBA’s implementing regulations, found at 13 CFR 121.406(b), require that recipients of Federal supply contracts issued as a small business setaside (except as stated below), servicedisabled veteran-owned small business (SDVO SB) set-aside or sole source contract, Historically Underutilized Business Zone (HUBZone) set-aside or sole source contract, WOSB (womenowned small business) or economically disadvantaged women-owned small business (EDWOSB) set-aside or sole source contract, 8(a) set-aside or sole source contract, partial set-aside, or set aside of an order against a multiple award contract provide the product of a small business manufacturer or processor if the recipient is other than the actual manufacturer or processor of the product. This requirement is commonly referred to as the DATES: PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 Nonmanufacturer Rule (NMR). 13 CFR 121.406(b). Note that the NMR does not apply to small business set-aside acquisitions with an estimated value between the micro-purchase threshold and the simplified acquisition threshold but continues to apply to socioeconomic categories over the micropurchase threshold. Sections 8(a)(17)(B)(iv)(II) and 46(a)(4)(B) of the Act authorize SBA to waive the NMR for a ‘‘class of products’’ for which there are no small business manufacturers or processors available to participate in the Federal market. The SBA defines ‘‘class of products’’ based on a combination of (1) the six-digit NAICS code, (2) the four-digit PSC, and (3) a description of the class of products. As implemented in SBA’s regulations at 13 CFR 121.1202(c), in order to be considered available to participate in the Federal market for a class of products, a small business manufacturer must have submitted a proposal for a contract solicitation or been awarded a contract to supply the class of products within the last 24 months. In accordance with the SBA’s regulations at 13 CFR 121.1204(a)(7), SBA will periodically review existing class waivers to the NMR to determine whether small business manufacturers or processors have become available to participate in the Federal market. Upon receipt of information that such a small business manufacturer or processor exists, the SBA will announce its intent to terminate the NMR waiver for a class of products. 13 CFR 121.1204(a)(7)(ii). Unless public comment reveals no small business exists for the class of products in question, SBA will publish a Final Notice of Termination in the Federal Register. On October 31, 2007, the SBA published in the Federal Register a notice of intent to waiver the Nonmanufacturer Rule for Irradiation Apparatus Manufacturing (X-Ray Equipment and Supplies). The comments submitted in response failed to establish the existence of a small business manufacturer of these products. As such, on December 26, 2007, after the comment and notice period passed, SBA issued a class waiver for those products effective January 10, 2008. That notice can be found at 77 FR 73057. On April 20, 2020, SBA received a request to terminate the previously issued waiver. The requester provided information that established the existence of a small business manufacturer of the identified products. Thus SBA is proposing to terminate the class waiver for irradiation apparatus manufacturing, computerized axial E:\FR\FM\16NON1.SGM 16NON1

Agencies

[Federal Register Volume 86, Number 218 (Tuesday, November 16, 2021)]
[Notices]
[Pages 63431-63436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24897]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93545; File No. SR-NYSE-2021-65]


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

November 9, 2021.
    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 November 1, 2021, 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, 
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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.

---------------------------------------------------------------------------

[[Page 63432]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to to[sic] amend its Price List to (1) 
eliminate the underutilized additional credits for member organizations 
that add liquidity in Tape B and C Securities when qualifying for 
certain non-tier and tiered credits by adding liquidity in Tape A 
Securities; (2) eliminate the underutilized Adding Tier for Non-
Displayed Providers in Tape A Securities; and (3) revise the 
requirements to qualify for the Tier 5 Adding Credit in Tape A 
Securities. The Exchange proposes to implement the rule change on 
November 1, 2021. 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 (1) eliminate the 
underutilized additional credits for member organizations that add 
liquidity in Tape B and C Securities when qualifying for certain non-
tier and tiered credits by adding liquidity in Tape A Securities; (2) 
eliminate the underutilized Adding Tier for Non-Displayed Providers in 
Tape A Securities; and (3) revise the requirements to qualify for the 
Tier 5 Adding Credit in Tape A Securities.
    The proposed revision to the Tier 5 Adding Credit responds to the 
current competitive environment where order flow providers have a 
choice of where to direct liquidity-providing orders by offering 
further incentives for member organizations to send additional 
displayed liquidity to the Exchange.
    The Exchange proposes to implement the rule change on November 1, 
2021.
Current Market and Competitive Environment
    The Exchange operates in a highly 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.'' \4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (Final Rule) 
(``Regulation NMS'').
---------------------------------------------------------------------------

    As the Commission itself has recognized, the market for trading 
services in NMS stocks has become ``more fragmented and competitive.'' 
\5\ Indeed, equity trading is currently dispersed across 16 
exchanges,\6\ 31 alternative trading systems,\7\ and numerous broker-
dealer internalizers and wholesalers. Based on publicly-available 
information, no single exchange has more than 18% of the market.\8\ 
Therefore, no exchange possesses significant pricing power in the 
execution of equity order flow. More specifically, the Exchange's share 
of executed volume of equity trades in Tapes A, B and C securities is 
less than 12%.\9\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51808[sic], 84FR 
5202, 5253 (February 20, 2019) (File No. S7-05-18) (Transaction Fee 
Pilot for NMS Stocks Final Rule) (``Transaction Fee Pilot'').
    \6\ See Cboe Global Markets, 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.
    \7\ 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.
    \8\ See Cboe Global Markets U.S. Equities Market Volume Summary, 
available at https://markets.cboe.com/us/equities/market_share/.
    \9\ 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, in response to fee changes. With respect to non-marketable 
order flow that would provide displayed liquidity on an Exchange, 
member organizations can choose from any one of the numerous currently 
operating registered exchanges to route such order flow. Accordingly, 
competitive forces constrain exchange transaction fees that relate to 
orders that would provide liquidity on an exchange.
Proposed Rule Change
    The Exchange proposes to eliminate certain underutilized additional 
credits for adding liquidity in Tape B and C Securities and the 
underutilized Adding Tier for Non-Displayed Providers in Tape A 
Securities, as follows.
Underutilized Additional Credits
    Member organizations adding liquidity in Tape A Securities and 
meeting all of the requirements of the Non-Tier Adding Credit, the Tier 
1 Adding Credit, the Tier 2 Adding Credit, the Tier 3 Adding Credit, 
the Tier 4 Adding Credit, the Tier 5 Adding Credit, the Tier 6 Adding 
Credit, the Step Up Tier 1 Adding Credit, the Step Up Tier 2 Adding 
Credit and the Step Up Tier 4 Adding Credit are currently eligible for 
an additional credit of $0.0001 per share (under the Non-Tier Adding 
Credit, Tier 3 Adding Credit, Tier 4 Adding Credit, Tier 5 Adding 
Credit, Tier 6 Adding Credit, and Step Up Tier 4 Adding Credit) or 
$0.0005 per share (under the Tier 1 Adding Credit, Tier 2 Adding 
Credit, Step Up Tier 1 Adding Credit, and Step Up Tier 2 Adding Credit) 
if the member organization also adds a specified amount of liquidity, 
excluding liquidity added as an Supplemental Liquidity Provider 
(``SLP''), in Tapes B and C Securities.
    The Exchange proposes to eliminate and remove these additional 
credits from the Non-Tier Adding Credit, Tier 1 Adding Credit, Tier 2 
Adding Credit, Tier 3 Adding Credit, Tier 4 Adding Credit, Tier 5 
Adding Credit, Tier 6 Adding Credit, Step Up Tier 1 Adding Credit, Step 
Up Tier 2 Adding Credit and Step Up Tier 4 Adding Credit sections of 
the Price List. The additional credit has been underutilized by member 
organizations insofar as no member organization qualified for an 
additional credit year to date in any of the non-tier or tiers in which 
it is offered. As such, Exchange does not anticipate that any member 
organization in the near future would qualify for the additional 
credits that are the subject of this proposed rule change.
Underutilized Adding Tier for Non-Displayed Providers in Tape A 
Securities
    Under the current Adding Tier for Non-Displayed Providers, the 
Exchange provides credits in Tape A securities for all orders, other 
than MPL Orders, from

[[Page 63433]]

qualifying member organizations that have at least
     an average daily trading volume (``ADV'') that adds 
liquidity to the Exchange during the billing month (``Adding ADV'') of 
0.35% of Tape A consolidated ADV (``Tape A CADV''), excluding any 
liquidity added by a Designated Market Maker (``DMM''); \10\ and
---------------------------------------------------------------------------

    \10\ Footnote 2 to the Price List defines ADV as ``average daily 
volume'' and ``Adding ADV'' as ADV that adds liquidity to the 
Exchange during the billing month. CADV is defined in footnote * of 
the Price List.
---------------------------------------------------------------------------

     Adding ADV of Non-Displayed Limit Orders of at least 4 
million shares; and
     35% of the Member Organization's Total Adding ADV is 
comprised of Non-Displayed Limit Orders.
    A member organization that meets the above requirements receives a 
credit of $0.0023 per share ($0.0006 per share for Non-Displayed Limit 
Orders) if the member organization has an Adding ADV of at least 0.35% 
of Tape A CADV or a credit of $0.0026 per share ($0.0007 per share for 
Non-Displayed Limit Orders) if the member organization has Adding ADV 
of at least 0.45% of Tape A CADV.
    In addition, Member Organizations meeting the above requirements 
and adding liquidity, excluding liquidity added as an SLP, in Tapes B 
and C Securities of at least 0.20% of Tape B and Tape C CADV combined 
will receive an additional $0.00005 per share.
    The Exchange proposes to eliminate the Adding Tier for Non-
Displayed Providers in its entirety and remove it from the Price List. 
The tier, including the additional $0.00005 per share credit, has been 
underutilized by member organizations insofar as no member organization 
has qualified for the tier since its introduction in April 2021. As 
such, Exchange does not anticipate any member organization in the near 
future would qualify for the credit that is the subject of this 
proposed rule change.
Alternative Qualification for Tier 5 Adding Credit
    In response to the competitive environment described above, the 
Exchange has established incentives for its member organizations who 
submit orders that provide liquidity on the Exchange. The proposed fee 
change is also designed to attract additional order flow to the 
Exchange by incentivizing member organizations to submit additional 
displayed liquidity to the Exchange.
    Under the current Tier 5 Adding Credit, the Exchange provides a 
$0.0017 credit in Tape A securities for orders, other than MPL and Non-
Display Reserve orders, that add liquidity to the Exchange where a 
member organization's Adding ADV, excluding liquidity added as an SLP 
and as a DMM, is at least 0.29% of NYSE CADV. Further, member 
organizations that meet the above requirements and add liquidity, 
excluding liquidity added as an SLP, in Tape B and C Securities of at 
least 0.20% of Tape B and Tape C CADV combined, would receive an 
additional $0.0001 per share. As discussed above, the Exchange proposes 
to delete this additional credit as underutilized.
    The Exchange further proposes to provide an alternative way for 
member organizations to qualify for the Tier 5 Adding Credit. As 
proposed, as an alternative to where a member organization's Adding 
ADV, excluding liquidity added as an SLP and as a DMM, is at least 
0.29% of NYSE CADV, member organizations that have an Adding ADV, 
excluding liquidity added as an SLP and as a DMM, of at least 0.125% of 
NYSE CADV and two times more than the Member Organization's Adding ADV 
in Tape A Securities in Q1 2021 \11\ as a percentage of NYSE CADV would 
also qualify for the $0.0017 credit.
---------------------------------------------------------------------------

    \11\ The current Tier 6 Adding Credit uses ``1Q'', which the 
Exchange proposes to change to ``Q1'' for consistency and clarity.
---------------------------------------------------------------------------

    The Exchange believes that the alternative way to qualify for the 
Tier 5 Adding Credit will incentivize greater participation from member 
organizations to increase liquidity-providing orders in the Tape A 
securities they send to the Exchange to qualify for the Tier 5 Adding 
Credit, which would support the quality of price discovery on the 
Exchange and provide additional liquidity for incoming orders. As noted 
above, the Exchange operates in a competitive environment, particularly 
as it relates to attracting non-marketable orders, which add liquidity 
to the Exchange. The Exchange does not know how much order flow member 
organizations choose to route to other exchanges or to off-exchange 
venues. Based on the profile of liquidity-adding firms generally, the 
Exchange believes that additional member organizations could qualify 
for the tier under the revised qualification criteria if they choose to 
direct order flow to, and increase quoting on, the Exchange. However, 
without having a view of member organization's activity on other 
exchanges and off-exchange venues, the Exchange has no way of knowing 
whether this proposed rule change would result in any member 
organization directing orders to the Exchange in order to qualify for 
the new tier.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\13\ 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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4) & (5).
---------------------------------------------------------------------------

The Proposed Change Is Reasonable
Elimination of Underutilized Credits and Adding Tier in Tape A 
Securities
    The Exchange believes that the proposed elimination of the 
underutilized additional credits for member organizations that add 
liquidity in Tape B and C Securities when qualifying for certain non-
tier and tiered credits by adding liquidity in Tape A Securities is 
reasonable because member organizations have underutilized this 
incentive. No member organization has qualified for an additional 
credit year to date in any of the non-tier or tiers in which it is 
offered. The Exchange does not anticipate any member organization in 
the near future qualifying for the rebate that is the subject of this 
proposed rule change. Similarly, the Exchange believes that the 
proposed elimination of the Adding Tier for Non-Displayed Providers in 
Tape A Securities is reasonable. No member organization has qualified 
for the rebate since it was adopted in April 2021, and the Exchange 
does not anticipate any member organization in the near future 
qualifying for the tier. The Exchange believes it is reasonable to 
eliminate credits when such incentives become underutilized. The 
Exchange also believes eliminating underutilized incentives would add 
clarity and transparency to the Price List.
Alternative Qualification for Tier 5 Adding Credit in Tape A Securities
    As discussed above, the Exchange operates in a highly competitive 
market. 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

[[Page 63434]]

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.'' \14\ While 
Regulation NMS has enhanced competition, it has also fostered a 
``fragmented'' market structure where trading in a single stock can 
occur across multiple trading centers. When multiple trading centers 
compete for order flow in the same stock, the Commission has recognized 
that ``such competition can lead to the fragmentation of order flow in 
that stock.'' \15\
---------------------------------------------------------------------------

    \14\ See Regulation NMS, supra note 4, at 37499.
    \15\ See Securities Exchange Act Release No. 61358, 75 FR 3594, 
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on 
Equity Market Structure).
---------------------------------------------------------------------------

    Given the current competitive environment, the Exchange believes 
that the proposed revision to the requirements for member organizations 
to qualify for Tier 5 Adding Credit represents a reasonable attempt to 
attract additional order flow to the Exchange. Specifically, the 
Exchange believes that the proposed revision is reasonable because it 
would provide further incentives for member organizations to route 
additional liquidity-providing orders to a public exchange, thereby 
promoting price discovery and transparency and enhancing order 
execution opportunities for member organizations. All member 
organizations would benefit from the greater amounts of liquidity that 
will be present on the Exchange, which would provide greater execution 
opportunities.
    As noted above, the Exchange operates in a competitive environment, 
particularly as relates to attracting non-marketable orders, which add 
liquidity to the Exchange. The Exchange believes that an alternative 
method to qualify for the tier will provide greater incentives for 
member organizations to add more liquidity to the Exchange. The 
Exchange does not know how much order flow member organizations choose 
to route to other exchanges or to off-exchange venues. Based on the 
profile of liquidity-adding firms generally, the Exchange believes that 
additional member organizations could qualify for the tier under the 
revised qualification criteria if they choose to direct order flow to, 
and increase quoting on, the Exchange. However, without having a view 
of member organizations' activity on other exchanges and off-exchange 
venues, the Exchange has no way of knowing whether this proposed rule 
change would result in any additional member organizations directing 
orders to the Exchange in order to qualify for the Tier 5 Adding 
Credit.
The Proposal Is an Equitable Allocation of Fees
Elimination of Underutilized Credits and Adding Tier in Tape A 
Securities
    The Exchange believes the proposal equitably allocates fees among 
its market participants because the underutilized additional credits 
and Adding Tier the Exchange proposes to eliminate would be eliminated 
in their entirety, and would no longer be available to any member 
organization in any form. Similarly, the Exchange believes the proposal 
equitably allocates fees among its market participants because 
elimination of the underutilized credits would apply to all similarly-
situated member organizations on an equal basis. All such member 
organizations would continue to be subject to the same fee structure, 
and access to the Exchange's market would continue to be offered on 
fair and nondiscriminatory terms.
Alternative Qualification for Tier 5 Adding Credit in Tape A Securities
    The Exchange believes the proposed rule change equitably allocates 
its fees among its market participants. The proposed change would 
continue to encourage member organizations to submit additional 
liquidity to the Exchange and execute orders on the Exchange, thereby 
contributing to robust levels of liquidity, to the benefit of all 
market participants.
    The Exchange believes that providing an additional way to qualify 
for the Tier 5 Adding Credit would encourage the submission of 
additional liquidity to the Exchange, thereby providing customers with 
a higher quality venue for price discovery, liquidity, competitive 
quotes and price improvement. 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 member organizations 
from the substantial amounts of liquidity present on the Exchange. All 
member organizations would benefit from the greater amounts of 
liquidity that will be present on the Exchange, which would provide 
greater execution opportunities.
    The proposal neither targets nor will it have a disparate impact on 
any particular category of market participant. Specifically, the 
Exchange believes that the proposal constitutes an equitable allocation 
of fees because all similarly situated member organizations would be 
eligible for the same credits if they meet the revised requirements for 
the tier. As to those member organizations that do not presently 
qualify for the adding liquidity credit, the proposal will not 
adversely impact their existing pricing or their ability to qualify for 
other credits provided by the Exchange.
The Proposal Is Not Unfairly Discriminatory
Elimination of Underutilized Credits and Adding Tier in Tape A 
Securities
    The Exchange believes that the proposal is not unfairly 
discriminatory. The proposal is not unfairly discriminatory because it 
neither targets nor will it have a disparate impact on any particular 
category of market participant. The Exchange believes that the proposal 
is not unfairly discriminatory because the proposed elimination of the 
underutilized additional credits and Adding Tier would affect all 
similarly-situated market participants on an equal and non-
discriminatory basis. The Exchange believes that eliminating credits 
that are underutilized and ineffective would no longer be available to 
any member organization on an equal basis. The Exchange also believes 
that the proposed change would protect investors and the public 
interest because the deletion of underutilized fees would make the 
Price List more accessible and transparent and facilitate market 
participants' understanding of the fees charged for services currently 
offered by the Exchange.
Alternative Qualification for Tier 5 Adding Credit in Tape A Securities
    The Exchange believes that the proposal is not unfairly 
discriminatory. In the prevailing competitive environment, member 
organizations are free to disfavor the Exchange's pricing if they 
believe that alternatives offer them better value.
    The proposed changes to the Tier 5 Adding Credit are not unfairly 
discriminatory because the alternate requirements to achieve the credit 
would be applied to all similarly situated member organizations and 
other market participants, who would all be subject to the same 
modified requirements to qualify for the tier and the same credits on 
an equal basis. For the same reason, the proposal neither targets nor 
will it have a disparate impact on any particular category of market 
participant. Accordingly, no

[[Page 63435]]

member organization already operating on the Exchange would be 
disadvantaged by this allocation of fees. Further, the Exchange 
believes the proposal would incentivize member organizations to send 
more orders to the Exchange to qualify for higher credits.
    The Exchange believes that the proposed changes would not permit 
unfair discrimination among member organizations because the tiered 
rates are available equally to all member organizations. As described 
above, in today's competitive marketplace, order flow providers have a 
choice of where to direct liquidity-providing order flow, and the 
Exchange believes there are additional member organizations that could 
qualify if they chose to direct their order flow to the Exchange. 
Finally, the submission of orders to the Exchange is optional for 
member organizations in that they could choose whether to submit orders 
to the Exchange and, if they do, the extent of its activity in this 
regard.
    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,\16\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, as discussed above, the proposal relates 
to the elimination of an underutilized credits and an adding tier and, 
as such, would not have any impact on intra- or inter-market 
competition because the proposed change is solely designed to 
accurately reflect the services that the Exchange currently offers, 
thereby adding clarity to the Price List.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    In accordance with Section 6(b)(8) of the Act,\17\ the Exchange 
further believes that the proposed rule change offering an alternative 
method to qualify for the Tier 5 Adding Credit would not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. Instead, as discussed above, 
the Exchange believes that the proposed change would encourage the 
submission of additional liquidity and order flow to a public exchange, 
thereby enhancing order execution opportunities for member 
organizations. As a result, the Exchange believes that the proposed 
change furthers the Commission's goal in adopting Regulation NMS of 
fostering competition among orders, which promotes ``more efficient 
pricing of individual stocks for all types of orders, large and 
small.'' \18\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b)(8).
    \18\ Regulation NMS, 70 FR at 37498-99.
---------------------------------------------------------------------------

    Intramarket Competition. The proposed change is designed to attract 
additional order flow to the Exchange. As described above, the Exchange 
believes that the proposed change would provide additional incentives 
for market participants to route liquidity-providing orders to 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 on the Exchange. The 
current and proposed credits 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 exchanges 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 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) \19\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \20\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 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-2021-65 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-NYSE-2021-65. 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

[[Page 63436]]

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-2021-65, and should be submitted on or before December 7, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-24897 Filed 11-15-21; 8:45 am]
BILLING CODE 8011-01-P
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