Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend the NYSE American Equities Price List and Fee Schedule, 3143-3149 [2022-00979]
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Federal Register / Vol. 87, No. 13 / Thursday, January 20, 2022 / Notices
prepare, conduct and/or review
interviews regarding the client’s
financial situation and investment
objectives as required by the rule.6
Furthermore, the staff estimates that
each year the investment advisory
program sponsors’ staff spends 1 hour
per client to prepare and mail quarterly
client account statements, including
notices to update information.7 Based
on the estimates above, the Commission
estimates that the total annual burden of
the rule’s paperwork requirements is
57,022,493 hours.8
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
the costs of Commission rules and
forms. An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid
control number.
Written comments are invited on: (a)
Whether the collections of information
are necessary for the proper
performance of the functions of the
Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burdens of the collections of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burdens of the collections
of information on respondents,
including through the use of automated
collection techniques or other forms of
information technology. Consideration
will be given to comments and
suggestions submitted in writing within
60 days of this publication.
Please direct your written comments
to David Bottom, c/o John R. Pezzullo,
Director/Chief Information Officer,
Securities and Exchange Commission,
100 F Street NE, Washington, DC 20549;
or send an email to: PRA_Mailbox@
sec.gov.
Dated: January 14, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–01060 Filed 1–19–22; 8:45 am]
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BILLING CODE 8011–01–P
6 These estimates are based upon consultation
with investment advisers that operate investment
advisory programs that rely on rule 3a–4.
7 The staff bases this estimate in part on the fact
that, by business necessity, computer records
already will be available that contain the
information in the quarterly reports.
8 This estimate is based on the following
calculation: (25,852,313 continuing clients × 1
hour) + (2,127,147 new clients × 1.5 hours) +
(27,979,460 total clients × (0.25 hours × 4
statements)) = 57,022,493 hours.
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93973; File No. SR–
NYSEAMER–2021–54]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change To Amend the NYSE American
Equities Price List and Fee Schedule
January 13, 2022.
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 December
30, 2021, NYSE American LLC (‘‘NYSE
American’’ 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 selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
certain Standard Rates and requirements
for transaction fees and credits that add
and remove liquidity in securities at or
above $1 and reformat the section of the
NYSE American Equities Price List and
Fee Schedule (‘‘Price List’’) setting forth
transactions fees for all transactions
other than transactions using Retail
Order Rates, transactions in securities
below $1, and transactions by an
Electronic Designated Market Makers
(‘‘eDMM’’) in assigned securities. The
Exchange proposes to implement the fee
changes effective January 3, 2022. The
proposed 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,
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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3143
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Standard Rates for transaction fees and
credits that add and remove liquidity in
securities at or above $1 and reformat
the section of the Price List setting forth
transactions fees for all transactions
other than transactions using Retail
Order Rates, transactions in securities
below $1, and transactions by an eDMM
in assigned securities.
The proposed changes respond to the
current competitive environment where
order flow providers have a choice of
where to direct liquidity-providing and
liquidity-removing orders by offering
further incentives for ETP Holders to
send additional adding and removing
liquidity to the Exchange.
The Exchange proposes to implement
the fee changes effective January 3,
2022.
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. 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
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.’’ 5 Indeed, cash equity trading is
currently dispersed across 16
4 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(File No. S7–10–04) (Final Rule) (‘‘Regulation
NMS’’).
5 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).
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exchanges,6 numerous alternative
trading systems,7 and broker-dealer
internalizers and wholesalers, all
competing for order flow. Based on
publicly-available information, no
single exchange currently has more than
17% market share.8 Therefore, no
exchange possesses significant pricing
power in the execution of cash equity
order flow. More specifically, the
Exchange currently has less than 1%
market share of executed volume of cash
equities trading.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. While it is not possible to
know a firm’s reason for shifting order
flow, the Exchange believes that one
such reason is because of fee changes at
any of the registered exchanges or nonexchange venues to which the firm
routes order flow.
In response to this competitive
environment, the Exchange has
established incentives for ETP Holders
who submit orders that provide
liquidity on the Exchange. The
proposed fee change is designed to
attract additional order flow to the
Exchange by incentivizing ETP Holders
to send additional adding liquidity to
the Exchange to qualify for the liquidity
removing tiers and fees. The Exchange
has also established incentives for ETP
Holders to remove liquidity from the
Exchange. In addition, as detailed
below, the proposed higher credits for
Mid-Point Liquidity Orders (‘‘MPL
Orders’’) 10 adding liquidity to the
Exchange are intended to create
incentives for price improving liquidity
and increasing the quality of order
execution on the Exchange’s market,
which benefits all market participants,
insofar as MPL Orders provide
opportunities for market participants to
interact with orders priced at the
midpoint of the Protected Best Bid and
Offer (‘‘PBBO’’).11
6 See Cboe U.S Equities Market Volume
Summary, available at https://markets.cboe.com/us/
equities/market_share. See generally https://
www.sec.gov/fast-answers/divisionsmarketregmr
exchangesshtml.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.
10 See Rule 7.31E(d)(3) (description of MPL
Order).
11 See Rule 1.1E(dd) (definition of PBBO).
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Proposed Rule Change
Currently, for transactions in
securities priced at or above $1.00, other
than transactions by eDMMs in assigned
securities, the Exchange offers the
following credits for displayed orders
that add liquidity to the Exchange:
• Displayed orders and MPL Orders
that add liquidity to the Exchange
where the ETP Holder has an average
daily volume (‘‘ADV’’) of at least
2,500,000 shares (‘‘Adding ADV’’) 12
currently receive a credit of $0.0026 per
share.
• Displayed orders and MPL Orders
that add liquidity to the Exchange
where an ETP Holder has Adding ADV
of at least 750,000 shares currently
receive a $0.0025 credit per displayed
and MPL share. Where an ETP Holder
does not have an Adding ADV of at least
750,000 shares, such orders currently
receive a $0.0024 per share.
• Orders that add displayed liquidity
to the Exchange and that set a new best
bid or offer (‘‘BBO’’) on NYSE
American 13 where an ETP Holder has
an Adding ADV of at least 2,500,000
shares currently receive a $0.0027 per
share credit. Where an ETP Holder does
not have an Adding ADV of at least
2,500,000 shares, such orders currently
receive a $0.0026 per share credit.
• The current fee for orders removing
liquidity from the Exchange where an
ETP Holder has an Adding ADV of at
least 10,000 shares is $0.0026 per share.
Where an ETP Holder does not have an
Adding ADV of at least 10,000 shares,
the Exchange charges $0.0030 per share
for all executions that remove liquidity
from the Exchange.
The Exchange proposes to restructure
its tier requirements, credits, and fees in
order to attract liquidity to the
Exchange. The Exchange has not made
substantial changes to its pricing in
several years and believes that some of
the current tier requirements, credits,
and fees no longer incentivize ETP
Holders to send liquidity to the
Exchange, and therefore should be
modified. In addition, the Exchange
believes that harmonizing the tier
requirements for orders that add
liquidity and orders that remove
liquidity from the Exchange will make
its Price List clearer and more
transparent for ETP Holders. The
Exchange believes that this combination
of changes, taken together, will cause
ETP Holders to send more liquidity to
the Exchange.
12 As defined in the Fee Schedule, Adding ADV
means an ETP Holder’s average daily volume of
shares executed on the Exchange that provided
liquidity.
13 See Rule 1.1E(h) (definition of BBO).
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Specifically, the Exchange proposes to
revise these fees and credits by: (a)
Reorganizing the fees as ‘‘Tier 1,’’ ‘‘Tier
2,’’ or ‘‘Non-Tier’’; (b) adjusting the
Adding ADV levels required to qualify
for Tier 1 and Tier 2 fees and credits
and harmonizing such levels for orders
adding liquidity and orders removing
liquidity; (c) proposing separate fees
and credits for MPL Orders adding
liquidity; and (d) adjusting the fees and
credits available for ETP Holders
qualifying for proposed Tier 1, Tier 2,
and Non-Tier rates, as follows.
The Exchange proposes to define a
‘‘Tier 1,’’ pursuant to which it would
make its best rates available to ETP
Holders with Adding ADV of at least
3,500,000 shares. This Adding ADV
requirement of 3,500,000 shares is an
increase from the current Adding ADV
level of 2,500,000 shares required for
ETP Holders to access the Exchange’s
best rates for orders adding liquidity,
and from the current Adding ADV level
of 10,000 shares required for ETP
Holders to access the Exchange’s best
rates for orders removing liquidity. As
proposed, ETP Holders that qualify for
Tier 1 would be eligible for the
following rates:
• A credit of $0.0026 per share for
orders adding displayed liquidity (no
change from the current rate);
• A credit of $0.0030 per share for
MPL Orders adding liquidity (an
increase from the current credit of
$0.0026 per share);
• A credit of $0.0029 per share for
orders adding displayed liquidity that
set a new BBO on the Exchange (an
increase from the current credit of
$0.0027 per share); and
• A fee of $0.0026 per share for orders
removing liquidity (no change from the
current rate).
The Exchange also proposes to define
a ‘‘Tier 2,’’ setting out rates available to
ETP Holders with Adding ADV of at
least 700,000 shares. This Adding ADV
requirement of 700,000 is a decrease
from the current Adding ADV level of
750,000 shares required for ETP Holders
to access certain pricing for orders
adding liquidity. (Currently, there is no
second-tier Adding ADV requirement
for orders removing liquidity.) As
proposed, ETP Holders that qualify for
Tier 2 would be eligible for the
following rates:
• A credit of $0.0023 per share for
orders adding displayed liquidity (a
decrease from the current credit of
$0.0025 per share);
• A credit of $0.0029 per share for
MPL Orders adding liquidity (an
increase from the current credit of
$0.0025 per share);
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• A credit of $0.0024 per share for
orders adding liquidity that set a new
BBO on the Exchange (a decrease from
the current credit of $0.0026 per share);
and
• A fee of $0.0027 for orders
removing liquidity (an increase from the
current fee of $0.0026 per share).
The Exchange also proposes to define
‘‘Non-Tier’’ rates, which would specify
the rates available to ETP Holders that
do not qualify for either Tier 1 or Tier
2, as follows:
• A credit of $0.0020 per share for
orders adding displayed liquidity (a
decrease from the current credit of
$0.0024 per share);
• A credit of $0.0024 per share for
MPL Orders adding liquidity (no change
from the current rate);
• A credit of $0.0020 per share for
orders adding liquidity that set a new
BBO on the Exchange (a decrease from
the current credit of $0.0026 per share);
and
• A fee of $0.0030 per share for orders
removing liquidity (no change from the
current rate).
The Exchange proposes to keep the
current credit of $0.0020 per share for
non-displayed orders adding liquidity
and the current fee of $0.0005 per share
for orders executing in the opening or
closing auctions, without any change.
Neither of those rates depends on an
ETP Holder achieving a certain level of
Adding ADV.
Adding
liquidity—
displayed
3,500,000
700,000
N/A
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,14 in general, and
furthers the objectives of Sections
U.S.C. 78f(b).
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MPL adding
liquidity
$(0.0029)
(0.0024)
(0.0020)
$(0.0030)
(0.0029)
(0.0024)
6(b)(4) and (5) of the Act,15 in particular,
because it provides for the equitable
allocation of reasonable dues, fees, and
other charges among its members,
issuers and other persons using its
facilities, is designed to prevent
fraudulent and manipulative acts and
practices and to promote just and
equitable principles of trade, and does
not unfairly discriminate between
customers, issuers, brokers or dealers.
As discussed above, the Exchange
operates in a highly fragmented and
competitive market. The Commission
has repeatedly expressed its preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
15 15
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Setting
new NYSE
American BBO
$(0.0026)
(0.0023)
(0.0020)
The Exchange proposes this nonsubstantive change to reorganize and
enhance the presentation in the Price
List in order to add clarity and
transparency, thereby making the Price
List easier to navigate.
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.
14 15
promoting price discovery and
transparency and enhancing order
execution opportunities for ETP
Holders. As noted, 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
ETP Holders choose to route to other
exchanges or to off-exchange venues.
Because the proposed reconfiguration of
fees for removing liquidity from the
Exchange involves the introduction of
new fees and/or new requirements, the
Exchange does not know how many ETP
Holders could qualify for such new fees
based on their current trading profile on
the Exchange and if they choose to
direct order flow to the Exchange.
Without having a view of ETP Holder’s
activity on other exchanges and offexchange venues, the Exchange has no
way of knowing whether this proposed
rule change would result in any ETP
Holder directing orders to the Exchange.
The proposed rule change is designed
to be available to all ETP Holders on the
Exchange and is intended to provide
ETP Holders a greater incentive to direct
more of their orders to the Exchange.
Finally, the Exchange would delete
the current presentation of the Standard
Rates for liquidity adding and removing
orders and replace it with the following
table in the Price List, reflecting all of
the rates proposed above:
Fees and credits per share
Minimum
adding ADV
requirement
(shares)
Tier 1 ............................
Tier 2 ............................
Non-Tier .......................
These proposed changes are intended
to incentivize ETP Holders to increase
the liquidity-providing orders they send
to the Exchange, which would support
the quality of price discovery on the
Exchange and provide additional
liquidity for incoming orders. The
Exchange believes that by correlating
the level of credits to the level of
executed adding volume on the
Exchange, the Exchange’s fee structure
would encourage ETP Holders to submit
more liquidity-providing orders to the
Exchange that are likely to be executed,
thereby increasing the potential for
incoming marketable orders submitted
to the Exchange to receive an execution.
As noted above, the Exchange operates
in a competitive environment,
particularly as it relates to attracting
non-marketable orders that add liquidity
to the Exchange. The Exchange believes
that the proposed tiering of credits
applicable to displayed orders, MPL
Orders, and orders setting a new NYSE
American BBO for ETP Holders that
meet the proposed Adding ADV
requirements would serve as an
additional incentive for ETP Holders to
send liquidity to and improve quoting
on the Exchange in order to qualify for
such credits.
In addition, the Exchange believes
that the proposed changes to the fees for
removing liquidity, taken together, will
incentivize submission of additional
liquidity to a public exchange, thereby
PO 00000
U.S.C. 78f(b)(4) and (5).
Frm 00079
Fmt 4703
Sfmt 4703
Adding
liquidity—
non-displayed
$(0.0020)
(0.0020)
(0.0020)
Removing
liquidity
$0.0026
0.0027
0.0030
Executions
at open
and close
$0.0005
0.0005
0.0005
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.’’ 16
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can shift order flow, or discontinue to
reduce use of certain categories of
products, in response to fee changes.
16 See Regulation NMS, supra note 6, 70 FR at
37499.
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ETP Holders can choose from any one
of the 16 currently operating registered
exchanges, and numerous off-exchange
venues, to route such order flow.
Accordingly, competitive forces
constrain exchange transaction fees that
relate to orders on an exchange. Stated
otherwise, changes to exchange
transaction fees can have a direct effect
on the ability of an exchange to compete
for order flow.
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The Proposed Fee Change Is Reasonable
In light of the competitive
environment in which the Exchange
currently operates, the proposed rule
change is a reasonable attempt to
increase liquidity on the Exchange and
improve the Exchange’s market share
relative to its competitors. The
Exchange believes the proposed change
is also reasonable because it is designed
to attract higher volumes of orders
transacted on the Exchange by ETP
Holders, which would benefit all market
participants by offering greater price
discovery and an increased opportunity
to trade on the Exchange.
Proposed Tier Requirements
The Exchange believes that aligning
the Adding ADV tier requirements for
Tier 1 and Tier 2 for orders adding
liquidity and orders removing liquidity
will be clearer for investors and will
eliminate potential investor confusion,
thereby removing impediments to and
perfecting the mechanism of a free and
open market and a national market
system, and, in general, protecting
investors and the public interest.
The Exchange believes that the
proposed change increasing to 3,500,000
shares the minimum Adding ADV
required for ETP Holders to access its
best pricing for orders adding and
removing liquidity under proposed Tier
1 is a reasonable attempt to increase
liquidity on the Exchange and improve
the Exchange’s market share relative to
its competitors. Currently, ETP Holders
may qualify for the Exchange’s best
pricing for orders adding liquidity by
achieving an Adding ADV of 2,500,000
shares, and may qualify for the
Exchange’s best pricing for orders
removing liquidity by achieving an
Adding ADV of 10,000 shares. The
Exchange believes that these current
levels are not a sufficient incentive, and
that raising these Adding ADV
requirements to the proposed level of
3,500,000 shares would incentivize ETP
Holders to send more of their liquidityadding orders to the Exchange as
opposed to other venues, so that they
may qualify for the Exchange’s best
pricing for adding and removing
liquidity.
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Similarly, the Exchange believes that
adjusting the current Adding ADV
requirement of 750,000 shares to
700,000 shares for orders adding
displayed liquidity under proposed Tier
2, and adding specified fees under
proposed Tier 2 for orders removing
liquidity for ETP Holders with at least
700,000 shares, will enable more ETP
Holders to qualify for this tier, thereby
incentivizing more ETP Holders to send
their orders to the Exchange. This, in
turn, would increase liquidity on the
Exchange and improve the Exchange’s
market share relative to its competitors.
The proposed 700,000 share Adding
ADV requirement is a reduction from
the current requirement of 750,000
shares to qualify for certain credits for
orders adding liquidity, and would
introduce a Tier 2 Adding ADV
requirement for orders removing
liquidity. The Exchange believes that
establishing the Tier 2 Adding ADV
requirement at this level would
incentivize ETP Holders to send more of
their liquidity-adding orders to the
Exchange, so that they may qualify for
Tier 2 pricing for adding and removing
liquidity.
Proposed Fees and Credits
The Exchange believes that the
proposed changes to the credits
available for orders adding liquidity to
the Exchange are reasonable. The
Exchange believes it is reasonable to
increase the credits available under Tier
1 and Tier 2 for MPL Orders adding
liquidity as it is expected to create
incentives for ETP Holders to add priceimproving liquidity to the Exchange and
increase the quality of order execution
on the Exchange’s market, which
benefits all market participants, as MPL
Orders provide opportunities for market
participants to interact with orders
priced at the midpoint of the PBBO. The
Exchange also believes it is reasonable
to increase the credits available under
Tier 1 for orders setting a new BBO on
the Exchange, as it is expected provide
incentives for ETP Holders to provide
aggressively-priced orders that improve
the market by setting the BBO on the
Exchange. Similarly, the Exchange
believes that lowering the credits
available under Tier 2 and at the NonTier level for orders adding displayed
liquidity and for orders setting a new
BBO on the Exchange is reasonable
because the current higher credits did
not result in greater liquidity as the
Exchange had anticipated. The
Exchange believes it is reasonable to
revise credits when such incentives
become underutilized.
The Exchange believes that the
proposed changes to the fees for orders
PO 00000
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Fmt 4703
Sfmt 4703
removing liquidity to the Exchange are
reasonable. The purpose of these
changes is to encourage additional
liquidity on the Exchange because
market participants benefit from the
greater amounts of displayed liquidity
present on a public exchange. The
Exchange believes that the proposed
new fees will incentivize additional
liquidity on a public exchange to qualify
for lower fees for removing liquidity,
thereby promoting price discovery and
transparency and enhancing order
execution opportunities for ETP
Holders. The proposal is thus
reasonable because all ETP Holders
would benefit from such increased
levels of liquidity.
Because the proposal involves the
introduction of new requirements as
well as new fee and credit levels, the
Exchange does not know how many ETP
Holders could qualify for the new fees
and credits based on their current
trading profile on the Exchange and if
they choose to direct order flow to the
Exchange. As previously noted, without
a view of ETP Holder activity on other
exchanges and off-exchange venues, the
Exchange has no way of knowing
whether the proposed rule change
would result in any ETP Holder
qualifying for a particular tier, credit, or
fee. The Exchange believes the proposed
changes are reasonable as it would
provide an incentive for ETP Holders to
direct their order flow to the Exchange
and provide meaningful added levels of
liquidity in order to qualify for the
credits, thereby contributing to depth
and market quality on the Exchange.
Proposed Non-Substantive Reformatting
The Exchange believes that the
proposed changes are reasonable
because they are clarifying and nonsubstantive. The changes are designed
to make the Price List easier to read and
more user-friendly. The Exchange
believes that this proposed format will
provide additional transparency of
Exchange fees and credits, to the benefit
of market participants and the investing
public. The Exchange believes the
change is reasonable and would not be
inconsistent with the public interest and
the protection of investors because
investors will not be harmed and in fact
would benefit from increased clarity
and transparency on the Price List,
thereby reducing potential confusion.
The Proposed Change Is an Equitable
Allocation of Fees and Credits
The Exchange believes its proposal
equitably allocates its fees among its
market participants. The Exchange
believes its proposal equitably allocates
its fees among its market participants by
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fostering liquidity provision and
stability in the marketplace.
Proposed Tier Requirements
The Exchange believes its proposal
equitably allocates its fees and credits
among its market participants because
all ETP Holders that participate on the
Exchange may receive the proposed fees
and credits if they elect to send their
orders to the Exchange and meet the
minimum Adding ADV requirement
corresponding to the fee or credit.
Without having a view of ETP Holders’
activity on other markets and offexchange venues, the Exchange has no
way of knowing whether this proposed
rule change would result in any ETP
Holder sending more of their orders to
the Exchange. The Exchange cannot
predict with certainty how many ETP
Holders would avail themselves of this
opportunity, but additional orders
would benefit all market participants
because it would provide greater
execution opportunities on the
Exchange. The Exchange anticipates
that multiple ETP Holders would
endeavor to send more of their orders
for execution on the Exchange in order
to meet the proposed requirements for
Tier 1 and/or Tier 2 pricing, thereby
earning the proposed higher credits and
paying the proposed lower fees.
The Exchange further believes that the
proposed change is equitable because it
is reasonably related to the value to the
Exchange’s market quality associated
with higher volume in orders. The
Exchange believes that the proposed
pricing adjustments would attract order
flow and liquidity to the Exchange,
thereby contributing to price discovery
on the Exchange and benefiting
investors generally.
The Exchange believes that the
proposed rule change is equitable
because maintaining or increasing the
proportion of orders in exchange-listed
securities that are executed on a
registered national securities exchange
(rather than relying on certain available
off-exchange execution methods) would
contribute to investors’ confidence in
the fairness of their transactions and
would benefit all investors by
deepening the Exchange’s liquidity
pool, supporting the quality of price
discovery, promoting market
transparency, and improving investor
protection.
The proposal neither targets nor will
it have a disparate impact on any
particular category of market
participant. All ETP Holders would be
eligible to qualify for the proposed
credits if they meet the proposed
Adding ADV requirements for each
proposed tier. The Exchange believes
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that offering credits for providing
liquidity will continue to attract order
flow and liquidity to the Exchange,
thereby providing additional price
improvement opportunities on the
Exchange and benefiting investors
generally. As to those market
participants that do not presently meet
the Adding ADV requirements to qualify
for the Exchange’s best prices, the
proposal would provide a second tier
with lower requirements that could
allow those ETP Holders to still qualify
for preferential credits and fees. The
proposal will also not adversely impact
their ability to qualify for other credits
or fees provided by the Exchange.
Proposed Fees and Credits
The Exchange believes the proposal
equitably allocates fees and credits
among market participants because all
ETP Holders that participate on the
Exchange may qualify for the proposed
credits and fees. The Exchange believes
that the proposed changes, taken
together, will incentivize ETP Holders
to send additional adding liquidity to
achieve lower fees when removing
liquidity from the Exchange, thereby
increasing the number of orders that are
executed on the Exchange, promoting
price discovery and transparency and
enhancing order execution
opportunities and improving overall
liquidity on a public exchange. The
Exchange also believes that the
proposed change is equitable because it
would apply to all similarly situated
ETP Holders that add or remove
liquidity. The proposed change also is
equitable because it would be consistent
with the applicable rate on other
marketplaces.17
As previously noted, the Exchange
operates in a competitive environment,
particularly as it relates to attracting
orders that add liquidity to the
Exchange. The Exchange does not know
how much order flow ETP Holders
choose to route to other exchanges or to
off-exchange venues. Because the
proposed reconfiguration of the fees
involves the introduction of
requirements as well as new fees and
credits, the Exchange does not know
how many ETP Holders could qualify
for the new rates based on their current
trading profiles on the Exchange and if
they choose to direct order flow to the
Exchange. Without having a view of
ETP Holder’s activity on other
exchanges and off-exchange venues, the
17 For example, Cboe EDGX offers credits for
adding non-retail displayed liquidity ranging from
$0.0016 to $0.0034 and fees for removing liquidity
from $0.00275 to $0.0030. See https://
www.cboe.com/us/equities/membership/fee_
schedule/edgx/.
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3147
Exchange has no way of knowing
whether this proposed rule change
would result in any ETP Holder
directing orders to the Exchange.
Proposed Non-Substantive Reformatting
The Exchange believes that the
proposed changes are equitable because
they are clarifying and non-substantive.
The changes are designed to make the
Price List easier to read and more userfriendly. The Exchange believes that
this proposed format will provide
additional transparency of Exchange
fees and credits, to the benefit of market
participants and the investing public.
The Exchange believes the change is
reasonable and would not be
inconsistent with the public interest and
the protection of investors because
investors will not be harmed and in fact
would benefit from increased clarity
and transparency on the Price List,
thereby reducing potential confusion.
The Exchange believes that the
proposed reformatted the Price List is
equitable because the resulting
streamlined Price List would continue
to apply to all ETP Holders on an equal
basis.
The Proposed Fee Change Is Not
Unfairly Discriminatory
Proposed Tier Requirements
The Exchange believes that the
proposal is not unfairly discriminatory.
In the prevailing competitive
environment, ETP Holders are free to
disfavor the Exchange’s pricing if they
believe that alternatives offer them
better value. The Exchange believes it is
not unfairly discriminatory to provide
revised requirements and corresponding
tiered fees and credits, as the proposed
fees and credits would be provided on
an equal basis to all ETP Holders that
meet the proposed tier requirements.
Further, the Exchange believes the
proposed fees and credits would
incentivize ETP Holders that meet the
new tiered requirements to send more
orders to the Exchange. Since the
minimum Adding ADV requirements
and some of the proposed fees and
credits would be new, no ETP Holder
currently qualifies for them. As noted,
without a view of ETP Holder activity
on other exchanges and off-exchange
venues, the Exchange has no way of
knowing whether this proposed rule
change would result in any ETP Holders
qualifying for the proposed adding tiers.
The Exchange believes the proposal is
reasonable as it would provide an
incentive for ETP Holders to direct their
order flow to the Exchange and provide
meaningful added levels of liquidity in
order to qualify for the credits, thereby
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contributing to depth and market
quality on the Exchange.
In addition, the Exchange believes
that the proposal is not unfairly
discriminatory because it neither targets
nor will it have a disparate impact on
any particular category of market
participant. All ETP Holders that
provide liquidity could be eligible to
qualify for the proposed credits under
Tier 1 or Tier 2 if they meet the
proposed Adding ADV requirements.
The Exchange believes that offering
credits for providing liquidity will
continue to attract order flow and
liquidity to the Exchange, thereby
providing additional price improvement
opportunities on the Exchange and
benefiting investors generally. As to
those market participants that do not
presently qualify for the adding
liquidity credits, the proposal will not
adversely impact their ability to qualify
for other credits provided by the
Exchange. Finally, the submission of
orders is optional for ETP Holders in
that they could choose whether to
submit orders to the Exchange and, if
they do, they can choose the extent of
their activity in this regard. The
Exchange believes that it is subject to
significant competitive forces, as
described below in the Exchange’s
statement regarding the burden on
competition.
Proposed Fees and Credits
The Exchange believes that that the
proposed fees and credits for ETP
Holders that add or remove liquidity
will incentivize submission of
additional liquidity to a public
exchange to qualify for the revised fees
and credits, thereby promoting price
discovery and transparency and
enhancing order execution
opportunities for ETP Holders. The
proposal does not permit unfair
discrimination because the proposed
rates would be applied to all similarly
situated ETP Holders and other market
participants, who would all be eligible
for the same rates on an equal basis.
Accordingly, no ETP Holder already
operating on the Exchange would be
disadvantaged by this allocation of fees
and credits.
Finally, the Exchange notes that the
submission of orders to the Exchange is
optional for ETP Holders in that they
could choose whether to submit orders
to the Exchange and, if they do, the
extent of its activity in this regard.
Proposed Non-Substantive Reformatting
The Exchange believes that the
proposed reformatted the Price List is
not unfairly discriminatory because the
resulting streamlined Price List would
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continue to apply to all ETP Holders
equally. The Exchange believes that the
reformatted Price List, as proposed, will
be clearer and less confusing for
investors and will eliminate potential
confusion, thereby removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system, and, in
general, protecting investors and the
public interest. The Exchange believes
the change is reasonable and would not
be inconsistent with the public interest
and the protection of investors because
investors will not be harmed and in fact
would benefit from increased clarity
and transparency on the Price List,
thereby reducing potential confusion.
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,18 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Instead, as
discussed above, the Exchange believes
that the proposed fee change would
encourage the submission of additional
liquidity to a public exchange, thereby
promoting market depth, price
discovery, and transparency and
enhancing order execution
opportunities for ETP Holders. As a
result, the Exchange believes that the
proposed change furthers the
Commission’s goal in adopting
Regulation NMS of fostering integrated
competition among orders, which
promotes ‘‘more efficient pricing of
individual stocks for all types of orders,
large and small.’’ 19
Intramarket Competition. The
Exchange believes the proposed change
would not impose any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. The proposed
change is designed to attract additional
orders to the Exchange. The Exchange
believes that the proposed changes
would incentivize market participants
to direct their orders to the Exchange.
Greater overall order flow, trading
opportunities, and pricing transparency
benefit all market participants on the
Exchange by enhancing market quality
and continuing to encourage ETP
Holders to send orders, thereby
U.S.C. 78f(b)(8).
Securities Exchange Act Release No. 51808,
70 FR 37495, 37498–99 (June 29, 2005) (S7–10–04)
(Final Rule).
contributing towards a robust and wellbalanced market ecosystem.
Intermarket Competition. The
Exchange operates in a highly
competitive market in which market
participants can readily choose to send
their orders to other exchange and offexchange venues if they deem fee levels
at those other venues to be more
favorable. As noted above, the Exchange
currently has less than 1% market share
of executed volume of equities trading.
In such an environment, the Exchange
must continually adjust its fees and
credits to remain competitive with other
exchanges and with off-exchange
venues. Because competitors are free to
modify their own fees and credits in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
does not believe its proposed fee change
can impose any burden on intermarket
competition.
The Exchange believes that the
proposed change could promote
competition between the Exchange and
other execution venues, including those
that currently offer similar order types
and comparable transaction pricing, by
encouraging additional orders to be sent
to the Exchange for execution.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 20 of the Act and
subparagraph (f)(2) of Rule 19b–4 21
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) 22 of the Act to
determine whether the proposed rule
18 15
19 See
PO 00000
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20 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
22 15 U.S.C. 78s(b)(2)(B).
21 17
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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:
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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–
NYSEAMER–2021–54 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–NYSEAMER–2021–54. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEAMER–2021–54 and
should be submitted on or before
February 10, 2022.
23 17
CFR 200.30–3(a)(12).
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18:14 Jan 19, 2022
Jkt 256001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–00979 Filed 1–19–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No 270–488, OMB Control No.
3235–0542]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Rule 605 of Regulation NMS
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 605 (17 CFR 242.605) under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) (‘‘Exchange Act’’).
Rule 605 of Regulation NMS,1
formerly known as, Rule 11Ac1–5,
requires market centers to make
available to the public monthly order
execution reports in electronic form.
The Commission believes that many
market centers retain most, if not all, of
the underlying raw data necessary to
generate these reports in electronic
format. Once the necessary data is
collected, market centers could either
program their systems to generate the
statistics and reports, or transfer the
data to a service provider (such as an
independent company in the business of
preparing such reports or a self1 Regulation NMS, adopted by the Commission in
June 2005, redesignated the national market system
rules previously adopted under Section 11A of the
Exchange Act. Rule 11Ac1–5 under the Exchange
Act was redesignated Rule 605 of Regulation NMS.
See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005). In
2018, Commission amended Rule 605(a)(2) to
require market centers to keep reports required
pursuant to Rule 605(a)(1) posted on an internet
website that is free of charge and readily accessible
to the public for a period of three years from the
initial date of posting on the internet website. See
Securities Exchange Act Release No. 84528
(November 2, 2018), 83 FR 58338 (November 19,
2018).
PO 00000
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3149
regulatory organization) that would
generate the statistics and reports.
The collection of information
obligations of Rule 605 apply to all
market centers that receive covered
orders in national market system
securities. The Commission estimates
that approximately 319 market centers
are subject to the collection of
information obligations of Rule 605.
Each of these respondents is required to
respond to the collection of information
on a monthly basis.
The Commission staff estimates that,
on average, Rule 605 causes each
respondent to spend 6 hours per month
to collect the data necessary to generate
the reports, or 72 hours per year. With
an estimated 319 market centers subject
to Rule 605, the total data collection
time burden to comply with the
monthly reporting requirement is
estimated to be 22,968 hours per year.
Based on discussions with industry
sources, the Commission staff estimates
that an individual market center could
retain a service provider to prepare a
monthly report using the data collected
for approximately $2,978 per month or
$35,736 per year. This per-respondent
estimate is based on the rate that a
market center could expect to obtain if
it negotiated on an individual basis.
Based on the $2,978 estimate, the
monthly cost to all 319 market centers
to retain service providers to prepare
reports would be approximately
$949,982, and the total annual cost for
all 319 market centers would be
approximately $11,399,784.
The collection of information
obligation imposed by Rule 605 is
mandatory. The response will be
available to the public and will not be
kept confidential.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) www.reginfo.gov/public/do/
PRAMain and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission,
c/o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
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]]>Agencies
[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Pages 3143-3149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00979]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93973; File No. SR-NYSEAMER-2021-54]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend the NYSE
American Equities Price List and Fee Schedule
January 13, 2022.
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 December 30, 2021, NYSE American LLC (``NYSE American''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend certain Standard Rates and
requirements for transaction fees and credits that add and remove
liquidity in securities at or above $1 and reformat the section of the
NYSE American Equities Price List and Fee Schedule (``Price List'')
setting forth transactions fees for all transactions other than
transactions using Retail Order Rates, transactions in securities below
$1, and transactions by an Electronic Designated Market Makers
(``eDMM'') in assigned securities. The Exchange proposes to implement
the fee changes effective January 3, 2022. The proposed 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 the Standard Rates for transaction
fees and credits that add and remove liquidity in securities at or
above $1 and reformat the section of the Price List setting forth
transactions fees for all transactions other than transactions using
Retail Order Rates, transactions in securities below $1, and
transactions by an eDMM in assigned securities.
The proposed changes respond to the current competitive environment
where order flow providers have a choice of where to direct liquidity-
providing and liquidity-removing orders by offering further incentives
for ETP Holders to send additional adding and removing liquidity to the
Exchange.
The Exchange proposes to implement the fee changes effective
January 3, 2022.
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. 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) (File No. S7-10-04) (Final
Rule) (``Regulation NMS'').
---------------------------------------------------------------------------
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.'' \5\ Indeed, cash equity trading is currently dispersed
across 16
[[Page 3144]]
exchanges,\6\ numerous alternative trading systems,\7\ and broker-
dealer internalizers and wholesalers, all competing for order flow.
Based on publicly-available information, no single exchange currently
has more than 17% market share.\8\ Therefore, no exchange possesses
significant pricing power in the execution of cash equity order flow.
More specifically, the Exchange currently has less than 1% market share
of executed volume of cash equities trading.\9\
---------------------------------------------------------------------------
\5\ 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).
\6\ See Cboe U.S Equities Market Volume Summary, available at
https://markets.cboe.com/us/equities/market_share. See generally
https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
\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.
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The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
move order flow, or discontinue or reduce use of certain categories of
products. While it is not possible to know a firm's reason for shifting
order flow, the Exchange believes that one such reason is because of
fee changes at any of the registered exchanges or non-exchange venues
to which the firm routes order flow.
In response to this competitive environment, the Exchange has
established incentives for ETP Holders who submit orders that provide
liquidity on the Exchange. The proposed fee change is designed to
attract additional order flow to the Exchange by incentivizing ETP
Holders to send additional adding liquidity to the Exchange to qualify
for the liquidity removing tiers and fees. The Exchange has also
established incentives for ETP Holders to remove liquidity from the
Exchange. In addition, as detailed below, the proposed higher credits
for Mid-Point Liquidity Orders (``MPL Orders'') \10\ adding liquidity
to the Exchange are intended to create incentives for price improving
liquidity and increasing the quality of order execution on the
Exchange's market, which benefits all market participants, insofar as
MPL Orders provide opportunities for market participants to interact
with orders priced at the midpoint of the Protected Best Bid and Offer
(``PBBO'').\11\
---------------------------------------------------------------------------
\10\ See Rule 7.31E(d)(3) (description of MPL Order).
\11\ See Rule 1.1E(dd) (definition of PBBO).
---------------------------------------------------------------------------
Proposed Rule Change
Currently, for transactions in securities priced at or above $1.00,
other than transactions by eDMMs in assigned securities, the Exchange
offers the following credits for displayed orders that add liquidity to
the Exchange:
Displayed orders and MPL Orders that add liquidity to the
Exchange where the ETP Holder has an average daily volume (``ADV'') of
at least 2,500,000 shares (``Adding ADV'') \12\ currently receive a
credit of $0.0026 per share.
---------------------------------------------------------------------------
\12\ As defined in the Fee Schedule, Adding ADV means an ETP
Holder's average daily volume of shares executed on the Exchange
that provided liquidity.
---------------------------------------------------------------------------
Displayed orders and MPL Orders that add liquidity to the
Exchange where an ETP Holder has Adding ADV of at least 750,000 shares
currently receive a $0.0025 credit per displayed and MPL share. Where
an ETP Holder does not have an Adding ADV of at least 750,000 shares,
such orders currently receive a $0.0024 per share.
Orders that add displayed liquidity to the Exchange and
that set a new best bid or offer (``BBO'') on NYSE American \13\ where
an ETP Holder has an Adding ADV of at least 2,500,000 shares currently
receive a $0.0027 per share credit. Where an ETP Holder does not have
an Adding ADV of at least 2,500,000 shares, such orders currently
receive a $0.0026 per share credit.
---------------------------------------------------------------------------
\13\ See Rule 1.1E(h) (definition of BBO).
---------------------------------------------------------------------------
The current fee for orders removing liquidity from the
Exchange where an ETP Holder has an Adding ADV of at least 10,000
shares is $0.0026 per share. Where an ETP Holder does not have an
Adding ADV of at least 10,000 shares, the Exchange charges $0.0030 per
share for all executions that remove liquidity from the Exchange.
The Exchange proposes to restructure its tier requirements,
credits, and fees in order to attract liquidity to the Exchange. The
Exchange has not made substantial changes to its pricing in several
years and believes that some of the current tier requirements, credits,
and fees no longer incentivize ETP Holders to send liquidity to the
Exchange, and therefore should be modified. In addition, the Exchange
believes that harmonizing the tier requirements for orders that add
liquidity and orders that remove liquidity from the Exchange will make
its Price List clearer and more transparent for ETP Holders. The
Exchange believes that this combination of changes, taken together,
will cause ETP Holders to send more liquidity to the Exchange.
Specifically, the Exchange proposes to revise these fees and
credits by: (a) Reorganizing the fees as ``Tier 1,'' ``Tier 2,'' or
``Non-Tier''; (b) adjusting the Adding ADV levels required to qualify
for Tier 1 and Tier 2 fees and credits and harmonizing such levels for
orders adding liquidity and orders removing liquidity; (c) proposing
separate fees and credits for MPL Orders adding liquidity; and (d)
adjusting the fees and credits available for ETP Holders qualifying for
proposed Tier 1, Tier 2, and Non-Tier rates, as follows.
The Exchange proposes to define a ``Tier 1,'' pursuant to which it
would make its best rates available to ETP Holders with Adding ADV of
at least 3,500,000 shares. This Adding ADV requirement of 3,500,000
shares is an increase from the current Adding ADV level of 2,500,000
shares required for ETP Holders to access the Exchange's best rates for
orders adding liquidity, and from the current Adding ADV level of
10,000 shares required for ETP Holders to access the Exchange's best
rates for orders removing liquidity. As proposed, ETP Holders that
qualify for Tier 1 would be eligible for the following rates:
A credit of $0.0026 per share for orders adding displayed
liquidity (no change from the current rate);
A credit of $0.0030 per share for MPL Orders adding
liquidity (an increase from the current credit of $0.0026 per share);
A credit of $0.0029 per share for orders adding displayed
liquidity that set a new BBO on the Exchange (an increase from the
current credit of $0.0027 per share); and
A fee of $0.0026 per share for orders removing liquidity
(no change from the current rate).
The Exchange also proposes to define a ``Tier 2,'' setting out
rates available to ETP Holders with Adding ADV of at least 700,000
shares. This Adding ADV requirement of 700,000 is a decrease from the
current Adding ADV level of 750,000 shares required for ETP Holders to
access certain pricing for orders adding liquidity. (Currently, there
is no second-tier Adding ADV requirement for orders removing
liquidity.) As proposed, ETP Holders that qualify for Tier 2 would be
eligible for the following rates:
A credit of $0.0023 per share for orders adding displayed
liquidity (a decrease from the current credit of $0.0025 per share);
A credit of $0.0029 per share for MPL Orders adding
liquidity (an increase from the current credit of $0.0025 per share);
[[Page 3145]]
A credit of $0.0024 per share for orders adding liquidity
that set a new BBO on the Exchange (a decrease from the current credit
of $0.0026 per share); and
A fee of $0.0027 for orders removing liquidity (an
increase from the current fee of $0.0026 per share).
The Exchange also proposes to define ``Non-Tier'' rates, which
would specify the rates available to ETP Holders that do not qualify
for either Tier 1 or Tier 2, as follows:
A credit of $0.0020 per share for orders adding displayed
liquidity (a decrease from the current credit of $0.0024 per share);
A credit of $0.0024 per share for MPL Orders adding
liquidity (no change from the current rate);
A credit of $0.0020 per share for orders adding liquidity
that set a new BBO on the Exchange (a decrease from the current credit
of $0.0026 per share); and
A fee of $0.0030 per share for orders removing liquidity
(no change from the current rate).
The Exchange proposes to keep the current credit of $0.0020 per
share for non-displayed orders adding liquidity and the current fee of
$0.0005 per share for orders executing in the opening or closing
auctions, without any change. Neither of those rates depends on an ETP
Holder achieving a certain level of Adding ADV.
These proposed changes are intended to incentivize ETP Holders to
increase the liquidity-providing orders they send to the Exchange,
which would support the quality of price discovery on the Exchange and
provide additional liquidity for incoming orders. The Exchange believes
that by correlating the level of credits to the level of executed
adding volume on the Exchange, the Exchange's fee structure would
encourage ETP Holders to submit more liquidity-providing orders to the
Exchange that are likely to be executed, thereby increasing the
potential for incoming marketable orders submitted to the Exchange to
receive an execution. As noted above, the Exchange operates in a
competitive environment, particularly as it relates to attracting non-
marketable orders that add liquidity to the Exchange. The Exchange
believes that the proposed tiering of credits applicable to displayed
orders, MPL Orders, and orders setting a new NYSE American BBO for ETP
Holders that meet the proposed Adding ADV requirements would serve as
an additional incentive for ETP Holders to send liquidity to and
improve quoting on the Exchange in order to qualify for such credits.
In addition, the Exchange believes that the proposed changes to the
fees for removing liquidity, taken together, will incentivize
submission of additional liquidity to a public exchange, thereby
promoting price discovery and transparency and enhancing order
execution opportunities for ETP Holders. As noted, 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 ETP Holders choose to
route to other exchanges or to off-exchange venues. Because the
proposed reconfiguration of fees for removing liquidity from the
Exchange involves the introduction of new fees and/or new requirements,
the Exchange does not know how many ETP Holders could qualify for such
new fees based on their current trading profile on the Exchange and if
they choose to direct order flow to the Exchange. Without having a view
of ETP Holder'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 ETP Holder directing orders to the Exchange.
The proposed rule change is designed to be available to all ETP
Holders on the Exchange and is intended to provide ETP Holders a
greater incentive to direct more of their orders to the Exchange.
Finally, the Exchange would delete the current presentation of the
Standard Rates for liquidity adding and removing orders and replace it
with the following table in the Price List, reflecting all of the rates
proposed above:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fees and credits per share
Minimum adding -----------------------------------------------------------------------------------------------
ADV Adding Setting new Adding
requirement liquidity-- NYSE American MPL adding liquidity-- Removing Executions at
(shares) displayed BBO liquidity non-displayed liquidity open and close
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tier 1.................................. 3,500,000 $(0.0026) $(0.0029) $(0.0030) $(0.0020) $0.0026 $0.0005
Tier 2.................................. 700,000 (0.0023) (0.0024) (0.0029) (0.0020) 0.0027 0.0005
Non-Tier................................ N/A (0.0020) (0.0020) (0.0024) (0.0020) 0.0030 0.0005
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange proposes this non-substantive change to reorganize and
enhance the presentation in the Price List in order to add clarity and
transparency, thereby making the Price List easier to navigate.
The proposed changes are not otherwise intended to address any
other issues, and the Exchange is not aware of any significant problems
that market participants would have in complying with the proposed
changes.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\14\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\15\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities, is designed to prevent fraudulent and
manipulative acts and practices and to promote just and equitable
principles of trade, and does not unfairly discriminate between
customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
As discussed above, the Exchange operates in a highly fragmented
and competitive market. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \16\
---------------------------------------------------------------------------
\16\ See Regulation NMS, supra note 6, 70 FR at 37499.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue to reduce use of certain categories of
products, in response to fee changes.
[[Page 3146]]
ETP Holders can choose from any one of the 16 currently operating
registered exchanges, and numerous off-exchange venues, to route such
order flow. Accordingly, competitive forces constrain exchange
transaction fees that relate to orders on an exchange. Stated
otherwise, changes to exchange transaction fees can have a direct
effect on the ability of an exchange to compete for order flow.
The Proposed Fee Change Is Reasonable
In light of the competitive environment in which the Exchange
currently operates, the proposed rule change is a reasonable attempt to
increase liquidity on the Exchange and improve the Exchange's market
share relative to its competitors. The Exchange believes the proposed
change is also reasonable because it is designed to attract higher
volumes of orders transacted on the Exchange by ETP Holders, which
would benefit all market participants by offering greater price
discovery and an increased opportunity to trade on the Exchange.
Proposed Tier Requirements
The Exchange believes that aligning the Adding ADV tier
requirements for Tier 1 and Tier 2 for orders adding liquidity and
orders removing liquidity will be clearer for investors and will
eliminate potential investor confusion, thereby removing impediments to
and perfecting the mechanism of a free and open market and a national
market system, and, in general, protecting investors and the public
interest.
The Exchange believes that the proposed change increasing to
3,500,000 shares the minimum Adding ADV required for ETP Holders to
access its best pricing for orders adding and removing liquidity under
proposed Tier 1 is a reasonable attempt to increase liquidity on the
Exchange and improve the Exchange's market share relative to its
competitors. Currently, ETP Holders may qualify for the Exchange's best
pricing for orders adding liquidity by achieving an Adding ADV of
2,500,000 shares, and may qualify for the Exchange's best pricing for
orders removing liquidity by achieving an Adding ADV of 10,000 shares.
The Exchange believes that these current levels are not a sufficient
incentive, and that raising these Adding ADV requirements to the
proposed level of 3,500,000 shares would incentivize ETP Holders to
send more of their liquidity-adding orders to the Exchange as opposed
to other venues, so that they may qualify for the Exchange's best
pricing for adding and removing liquidity.
Similarly, the Exchange believes that adjusting the current Adding
ADV requirement of 750,000 shares to 700,000 shares for orders adding
displayed liquidity under proposed Tier 2, and adding specified fees
under proposed Tier 2 for orders removing liquidity for ETP Holders
with at least 700,000 shares, will enable more ETP Holders to qualify
for this tier, thereby incentivizing more ETP Holders to send their
orders to the Exchange. This, in turn, would increase liquidity on the
Exchange and improve the Exchange's market share relative to its
competitors. The proposed 700,000 share Adding ADV requirement is a
reduction from the current requirement of 750,000 shares to qualify for
certain credits for orders adding liquidity, and would introduce a Tier
2 Adding ADV requirement for orders removing liquidity. The Exchange
believes that establishing the Tier 2 Adding ADV requirement at this
level would incentivize ETP Holders to send more of their liquidity-
adding orders to the Exchange, so that they may qualify for Tier 2
pricing for adding and removing liquidity.
Proposed Fees and Credits
The Exchange believes that the proposed changes to the credits
available for orders adding liquidity to the Exchange are reasonable.
The Exchange believes it is reasonable to increase the credits
available under Tier 1 and Tier 2 for MPL Orders adding liquidity as it
is expected to create incentives for ETP Holders to add price-improving
liquidity to the Exchange and increase the quality of order execution
on the Exchange's market, which benefits all market participants, as
MPL Orders provide opportunities for market participants to interact
with orders priced at the midpoint of the PBBO. The Exchange also
believes it is reasonable to increase the credits available under Tier
1 for orders setting a new BBO on the Exchange, as it is expected
provide incentives for ETP Holders to provide aggressively-priced
orders that improve the market by setting the BBO on the Exchange.
Similarly, the Exchange believes that lowering the credits available
under Tier 2 and at the Non-Tier level for orders adding displayed
liquidity and for orders setting a new BBO on the Exchange is
reasonable because the current higher credits did not result in greater
liquidity as the Exchange had anticipated. The Exchange believes it is
reasonable to revise credits when such incentives become underutilized.
The Exchange believes that the proposed changes to the fees for
orders removing liquidity to the Exchange are reasonable. The purpose
of these changes is to encourage additional liquidity on the Exchange
because market participants benefit from the greater amounts of
displayed liquidity present on a public exchange. The Exchange believes
that the proposed new fees will incentivize additional liquidity on a
public exchange to qualify for lower fees for removing liquidity,
thereby promoting price discovery and transparency and enhancing order
execution opportunities for ETP Holders. The proposal is thus
reasonable because all ETP Holders would benefit from such increased
levels of liquidity.
Because the proposal involves the introduction of new requirements
as well as new fee and credit levels, the Exchange does not know how
many ETP Holders could qualify for the new fees and credits based on
their current trading profile on the Exchange and if they choose to
direct order flow to the Exchange. As previously noted, without a view
of ETP Holder activity on other exchanges and off-exchange venues, the
Exchange has no way of knowing whether the proposed rule change would
result in any ETP Holder qualifying for a particular tier, credit, or
fee. The Exchange believes the proposed changes are reasonable as it
would provide an incentive for ETP Holders to direct their order flow
to the Exchange and provide meaningful added levels of liquidity in
order to qualify for the credits, thereby contributing to depth and
market quality on the Exchange.
Proposed Non-Substantive Reformatting
The Exchange believes that the proposed changes are reasonable
because they are clarifying and non-substantive. The changes are
designed to make the Price List easier to read and more user-friendly.
The Exchange believes that this proposed format will provide additional
transparency of Exchange fees and credits, to the benefit of market
participants and the investing public. The Exchange believes the change
is reasonable and would not be inconsistent with the public interest
and the protection of investors because investors will not be harmed
and in fact would benefit from increased clarity and transparency on
the Price List, thereby reducing potential confusion.
The Proposed Change Is an Equitable Allocation of Fees and Credits
The Exchange believes its proposal equitably allocates its fees
among its market participants. The Exchange believes its proposal
equitably allocates its fees among its market participants by
[[Page 3147]]
fostering liquidity provision and stability in the marketplace.
Proposed Tier Requirements
The Exchange believes its proposal equitably allocates its fees and
credits among its market participants because all ETP Holders that
participate on the Exchange may receive the proposed fees and credits
if they elect to send their orders to the Exchange and meet the minimum
Adding ADV requirement corresponding to the fee or credit. Without
having a view of ETP Holders' activity on other markets and off-
exchange venues, the Exchange has no way of knowing whether this
proposed rule change would result in any ETP Holder sending more of
their orders to the Exchange. The Exchange cannot predict with
certainty how many ETP Holders would avail themselves of this
opportunity, but additional orders would benefit all market
participants because it would provide greater execution opportunities
on the Exchange. The Exchange anticipates that multiple ETP Holders
would endeavor to send more of their orders for execution on the
Exchange in order to meet the proposed requirements for Tier 1 and/or
Tier 2 pricing, thereby earning the proposed higher credits and paying
the proposed lower fees.
The Exchange further believes that the proposed change is equitable
because it is reasonably related to the value to the Exchange's market
quality associated with higher volume in orders. The Exchange believes
that the proposed pricing adjustments would attract order flow and
liquidity to the Exchange, thereby contributing to price discovery on
the Exchange and benefiting investors generally.
The Exchange believes that the proposed rule change is equitable
because maintaining or increasing the proportion of orders in exchange-
listed securities that are executed on a registered national securities
exchange (rather than relying on certain available off-exchange
execution methods) would contribute to investors' confidence in the
fairness of their transactions and would benefit all investors by
deepening the Exchange's liquidity pool, supporting the quality of
price discovery, promoting market transparency, and improving investor
protection.
The proposal neither targets nor will it have a disparate impact on
any particular category of market participant. All ETP Holders would be
eligible to qualify for the proposed credits if they meet the proposed
Adding ADV requirements for each proposed tier. The Exchange believes
that offering credits for providing liquidity will continue to attract
order flow and liquidity to the Exchange, thereby providing additional
price improvement opportunities on the Exchange and benefiting
investors generally. As to those market participants that do not
presently meet the Adding ADV requirements to qualify for the
Exchange's best prices, the proposal would provide a second tier with
lower requirements that could allow those ETP Holders to still qualify
for preferential credits and fees. The proposal will also not adversely
impact their ability to qualify for other credits or fees provided by
the Exchange.
Proposed Fees and Credits
The Exchange believes the proposal equitably allocates fees and
credits among market participants because all ETP Holders that
participate on the Exchange may qualify for the proposed credits and
fees. The Exchange believes that the proposed changes, taken together,
will incentivize ETP Holders to send additional adding liquidity to
achieve lower fees when removing liquidity from the Exchange, thereby
increasing the number of orders that are executed on the Exchange,
promoting price discovery and transparency and enhancing order
execution opportunities and improving overall liquidity on a public
exchange. The Exchange also believes that the proposed change is
equitable because it would apply to all similarly situated ETP Holders
that add or remove liquidity. The proposed change also is equitable
because it would be consistent with the applicable rate on other
marketplaces.\17\
---------------------------------------------------------------------------
\17\ For example, Cboe EDGX offers credits for adding non-retail
displayed liquidity ranging from $0.0016 to $0.0034 and fees for
removing liquidity from $0.00275 to $0.0030. See https://www.cboe.com/us/equities/membership/fee_schedule/edgx/.
---------------------------------------------------------------------------
As previously noted, the Exchange operates in a competitive
environment, particularly as it relates to attracting orders that add
liquidity to the Exchange. The Exchange does not know how much order
flow ETP Holders choose to route to other exchanges or to off-exchange
venues. Because the proposed reconfiguration of the fees involves the
introduction of requirements as well as new fees and credits, the
Exchange does not know how many ETP Holders could qualify for the new
rates based on their current trading profiles on the Exchange and if
they choose to direct order flow to the Exchange. Without having a view
of ETP Holder'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 ETP Holder directing orders to the Exchange.
Proposed Non-Substantive Reformatting
The Exchange believes that the proposed changes are equitable
because they are clarifying and non-substantive. The changes are
designed to make the Price List easier to read and more user-friendly.
The Exchange believes that this proposed format will provide additional
transparency of Exchange fees and credits, to the benefit of market
participants and the investing public. The Exchange believes the change
is reasonable and would not be inconsistent with the public interest
and the protection of investors because investors will not be harmed
and in fact would benefit from increased clarity and transparency on
the Price List, thereby reducing potential confusion. The Exchange
believes that the proposed reformatted the Price List is equitable
because the resulting streamlined Price List would continue to apply to
all ETP Holders on an equal basis.
The Proposed Fee Change Is Not Unfairly Discriminatory
Proposed Tier Requirements
The Exchange believes that the proposal is not unfairly
discriminatory. In the prevailing competitive environment, ETP Holders
are free to disfavor the Exchange's pricing if they believe that
alternatives offer them better value. The Exchange believes it is not
unfairly discriminatory to provide revised requirements and
corresponding tiered fees and credits, as the proposed fees and credits
would be provided on an equal basis to all ETP Holders that meet the
proposed tier requirements. Further, the Exchange believes the proposed
fees and credits would incentivize ETP Holders that meet the new tiered
requirements to send more orders to the Exchange. Since the minimum
Adding ADV requirements and some of the proposed fees and credits would
be new, no ETP Holder currently qualifies for them. As noted, without a
view of ETP Holder activity on other exchanges and off-exchange venues,
the Exchange has no way of knowing whether this proposed rule change
would result in any ETP Holders qualifying for the proposed adding
tiers. The Exchange believes the proposal is reasonable as it would
provide an incentive for ETP Holders to direct their order flow to the
Exchange and provide meaningful added levels of liquidity in order to
qualify for the credits, thereby
[[Page 3148]]
contributing to depth and market quality on the Exchange.
In addition, the Exchange believes that the proposal is not
unfairly discriminatory because it neither targets nor will it have a
disparate impact on any particular category of market participant. All
ETP Holders that provide liquidity could be eligible to qualify for the
proposed credits under Tier 1 or Tier 2 if they meet the proposed
Adding ADV requirements. The Exchange believes that offering credits
for providing liquidity will continue to attract order flow and
liquidity to the Exchange, thereby providing additional price
improvement opportunities on the Exchange and benefiting investors
generally. As to those market participants that do not presently
qualify for the adding liquidity credits, the proposal will not
adversely impact their ability to qualify for other credits provided by
the Exchange. Finally, the submission of orders is optional for ETP
Holders in that they could choose whether to submit orders to the
Exchange and, if they do, they can choose the extent of their activity
in this regard. The Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
Proposed Fees and Credits
The Exchange believes that that the proposed fees and credits for
ETP Holders that add or remove liquidity will incentivize submission of
additional liquidity to a public exchange to qualify for the revised
fees and credits, thereby promoting price discovery and transparency
and enhancing order execution opportunities for ETP Holders. The
proposal does not permit unfair discrimination because the proposed
rates would be applied to all similarly situated ETP Holders and other
market participants, who would all be eligible for the same rates on an
equal basis. Accordingly, no ETP Holder already operating on the
Exchange would be disadvantaged by this allocation of fees and credits.
Finally, the Exchange notes that the submission of orders to the
Exchange is optional for ETP Holders in that they could choose whether
to submit orders to the Exchange and, if they do, the extent of its
activity in this regard.
Proposed Non-Substantive Reformatting
The Exchange believes that the proposed reformatted the Price List
is not unfairly discriminatory because the resulting streamlined Price
List would continue to apply to all ETP Holders equally. The Exchange
believes that the reformatted Price List, as proposed, will be clearer
and less confusing for investors and will eliminate potential
confusion, thereby removing impediments to and perfecting the mechanism
of a free and open market and a national market system, and, in
general, protecting investors and the public interest. The Exchange
believes the change is reasonable and would not be inconsistent with
the public interest and the protection of investors because investors
will not be harmed and in fact would benefit from increased clarity and
transparency on the Price List, thereby reducing potential confusion.
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,\18\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed fee change would encourage the submission of
additional liquidity to a public exchange, thereby promoting market
depth, price discovery, and transparency and enhancing order execution
opportunities for ETP Holders. As a result, the Exchange believes that
the proposed change furthers the Commission's goal in adopting
Regulation NMS of fostering integrated competition among orders, which
promotes ``more efficient pricing of individual stocks for all types of
orders, large and small.'' \19\
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78f(b)(8).
\19\ See Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------
Intramarket Competition. The Exchange believes the proposed change
would not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
change is designed to attract additional orders to the Exchange. The
Exchange believes that the proposed changes would incentivize market
participants to direct their orders to the Exchange. Greater overall
order flow, trading opportunities, and pricing transparency benefit all
market participants on the Exchange by enhancing market quality and
continuing to encourage ETP Holders to send orders, thereby
contributing towards a robust and well-balanced market ecosystem.
Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily choose to
send their orders to other exchange and off-exchange venues if they
deem fee levels at those other venues to be more favorable. As noted
above, the Exchange currently has less than 1% market share of executed
volume of equities trading. In such an environment, the Exchange must
continually adjust its fees and credits to remain competitive with
other exchanges and with off-exchange venues. Because competitors are
free to modify their own fees and credits in response, and because
market participants may readily adjust their order routing practices,
the Exchange does not believe its proposed fee change can impose any
burden on intermarket competition.
The Exchange believes that the proposed change could promote
competition between the Exchange and other execution venues, including
those that currently offer similar order types and comparable
transaction pricing, by encouraging additional orders to be sent to the
Exchange for execution.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \20\ of the Act and subparagraph (f)(2) of Rule
19b-4 \21\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \22\ of the Act to determine whether the proposed
rule
[[Page 3149]]
change should be approved or disapproved.
---------------------------------------------------------------------------
\22\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2021-54 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-NYSEAMER-2021-54. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEAMER-2021-54 and should
be submitted on or before February 10, 2022.
---------------------------------------------------------------------------
\23\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00979 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P
