Notice2021-14500
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Reformat the Section of the NYSE Price List Setting Forth Credits Applicable to Supplemental Liquidity Providers
Primary source
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Published
July 8, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 128 (Thursday, July 8, 2021)</title>
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[Federal Register Volume 86, Number 128 (Thursday, July 8, 2021)]
[Notices]
[Pages 36169-36172]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14500]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92308; File No. SR-NYSE-2021-37]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Reformat the Section of the NYSE Price List Setting Forth Credits
Applicable to Supplemental Liquidity Providers
July 1, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on June 21, 2021, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to reformat the section of the NYSE Price
List setting forth Credits Applicable to Supplemental Liquidity
Providers (``SLPs'') without any substantive changes. The Exchange
proposes to implement the fee changes effective immediately. The
proposed rule change is available on the Exchange's website at
<a href="http://www.nyse.com">www.nyse.com</a>, 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 reformat the section of the NYSE Price
List setting forth Credits Applicable to SLPs without any substantive
changes. The Exchange proposes to implement the fee changes effective
immediately.
The Exchange proposes the following non-substantive changes 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.
First, the Exchange would delete the current presentation of the
SLP rates and requirements except for the basic rate, which would
remain unchanged. The Exchange would also delete footnotes **, 8 and +
that, as discussed below, would be relocated to new section marked
``General.'' Footnote 8 would be marked ``Reserved'' to preserve the
current footnote numbering in the Price List. Footnotes 9 and 10, which
do not appear in the current SLP section of the Price List, would
remain unchanged.
Second, the Exchange proposes a table presentation of the current
SLP rates and requirements. The proposed changes would appear in the
Price List in two tables. The first table would appear under the new
heading ``SLP Adding Tiers'' and the phrase ``For SLP symbols that meet
the 10% average quoting requirement in an assigned security pursuant to
Rule 107B, other than MPL Orders, in securities with a per share price
of $1.00 or more:'' from the current Price List. The table would
summarize the current rates and requirements for SLP Tiers for Adding
Liquidity (SLP Step Up, SLP Tier 5, SLP Tier 4, SLP Tier 3, SLP Tier 2,
SLP Tier 1A and SLP Tier [sic]) and set forth the requirements and the
tiered display credits and non-tiered display credits. The requirements
and credits are unchanged. The proposed changes would appear as follows
in the Price List:
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Minimum requirements
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Tier for adding liquidity SLP adding ADV % Tape A CADV Tiered Tiered
display non display
credit credit
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SLP Step Up................... 0.085% over April 2018 Baseline $(0.0018) $(0.0001)
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SLP Tier 5.................... 0.65% and 0.85% including Non SLP and 250,000 (0.00310) (0.00120)
ADV in Retail Price Improvement Orders
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SLP Tier 4.................... First 2 calendar months 0.03% and averaging (0.0029) (0.00105)
as an SLP OR. less than 0.01% in
each of the prior 3
months.
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SLP Tier 3.................... 0.20% (0.0023) (0.0006)
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SLP Tier 2.................... 0.45% (0.0026) (0.0009)
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SLP Tier 1A................... 0.60% (0.00275) (0.00105)
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SLP Tier 1.................... 0.90%.................. 0.75% if qualifying for (0.0029) (0.0012)
SLP Cross Tape
Incentive Tier 1.
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[[Page 36170]]
Following the proposed chart, the Exchange would include three
bullets, as follows.
Bullet 1 would clarify that for SLPs that are also DMMs and subject
to Rule 107B(i)(2)(A), the above SLP Tier 1, Tier 1A, Tier 2, Tier 3,
Tier 4, Tier 5 and Step Up Tier requirements are after a discount of
the percentage for the prior quarter of NYSE CADV in DMM assigned
securities as of the last business day of the prior month. This is
unchanged from the current Price List.
Bullet 2 would include text clarifying that SLPs that meet the
requirements of one of the above tiers (Tiers 1A, 2, 3, 4 and the SLP
Step Up Tier) and add liquidity in Tapes B and C securities of at least
0.25% of Tape B and Tape C CADV combined, will receive an additional
credit of $0.0001 if at SLP Step Up Tier, SLP Tier 3, SLP Tier 2, SLP
Tier 1A OR $0.00005 if at SLP Tier 1, SLP Tier 4 and SLP Tier 5. This
is unchanged from the current Price List.
Bullet 3 would provide that in SLP Tier 1 and Tier 5, SLPs will
receive an additional $0.00005 per share for adding liquidity, other
than MPL and Non-Display Reserve orders, in securities where they are
not assigned as an SLP or do not meet the 10% average or more quoting
requirement in an assigned security pursuant to Rule 107B. This
information will be transposed without change from current SLP Tiers 1
and 5 in the Price List.
Following this proposed text, the Exchange would summarize the
current Incremental SLP Step Up Tiers 1, 2 and 3 credits and
requirements, renamed ``SLP Incremental Tier,'' in the following chart:
------------------------------------------------------------------------
SLP adding ADV
% Tape A CADV Tiered display
Tier step up over incremental
baseline credit *
------------------------------------------------------------------------
SLP Incremental Tier 3.................. 0.100 $(0.00010)
SLP Incremental Tier 2.................. 0.150 (0.00020)
SLP Incremental Tier1................... 0.250 (0.00030)
------------------------------------------------------------------------
The requirements and tiered displayed incremental credits
applicable to each incremental step up are unchanged from the current
Price List.
Proposed footnote * in the proposed chart would provide that the
combined SLP credits shall not exceed $0.0032 per share in a billing
month, which is the same languages used in the current Price List. The
footnote would also clarify that the Baseline for SLP Incremental Step
Up Tiers is the second quarter of 2018, third quarter of 2018, or the
month of January 2021, whichever is lowest.
The Exchange would next set forth the current SLP NBBO Setter Tier
Credits'' and requirements in the following chart under a new heading
titled ``SLP NBBO Setter Tier Credits:
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Minimum requirements for tapes
A, B and C
--------------------------------
SLP NBBO setter tier credit tier for adding NBBO setting Tiered credit Tiered credit
liquidity Adding ADV % ADV % Tape ABC for Setting for other
Tape ABC CADV, CADV, NBBO (ASP) displayed add
including DMM including DMM
ADV ADV
----------------------------------------------------------------------------------------------------------------
Setter Tier 4................................... 0.55 0.05 $(0.00350) $(0.00305)
Setter SLP Tier 3............................... 0.65 0.09 (0.00360) (0.00310)
Setter SLP Tier 2............................... 0.95 0.18 (0.00370) (0.00320)
Setter SLP Tier 1............................... 1.25 0.30 (0.00380) (0.00330)
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Once again, the rates and requirements are unchanged from the
current Price List.
The Exchange would transpose the last two current credits and
requirements in the SLP section of the Price List for SLPs adding
liquidity with orders designated as ``retail'' and in all assigned SLP
securities without change under a new heading titled ``Other Credits.''
Finally, the Exchange would introduce a section titled ``General''
that would summarize information from the current Price List in the
form of the following four bullets.
Bullet 1 would provide that Adding shares of both an SLP-Prop and
an SLMM of the same or an affiliated member organization are aggregated
and that quotes of an SLP-Prop and an SLMM of the same member
organization are not be aggregated. This information will also be
transposed without change from the current SLP tiers.
Bullet 2 would provide that affiliated member organizations that
are SLPs are eligible for the most favorable rate for any such security
traded in an applicable month provided that one or both affiliated
member organizations request and are approved for aggregation of
eligible activity pursuant to the requirements set forth in this Price
List. This information will also be transposed without change from
current footnote +, which the Exchange proposes to delete.
Bullet 3 would provide that in a month where NYSE CADV equals or
exceeds 5.5 billion shares per day for the billing month, NYSE CADV for
that month will be subject to a cap of 5.5 billion shares per day for
the billing month. In a month where Tape B and Tape C CADV combined
equals or exceeds 6.0 billion shares per day for the billing month,
Tape B and Tape C CADV combined for that month will be subject to a cap
of 6.0 billion shares per day for the billing month. This information
will also be transposed without change from current footnote **, which
will be deleted as redundant.
Finally, bullet 4 would provide that SLPs becoming DMMs after the
beginning of a billing month would not be eligible until the next full
billing month. This information will also be transposed without change
from current footnote 8 of the Price List. As noted, current footnote 8
will be deleted and marked ``Reserved'' to maintain the current
footnote numbering.
[[Page 36171]]
As noted above, the Exchange is not proposing any substantive
change to any current SLP fee, credit or requirement. The purpose of
the proposed rule change is to make a non-substantive change to
reorganize the presentation of the Price List in order to enhance its
clarity and transparency, thereby making the Price List easier to
comprehend and 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 the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\4\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\5\ which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and other persons using its facilities.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \6\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
\6\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed changes are reasonable and
equitable because they are clarifying and non-substantive, and the
Exchange is not changing any current fees or credits that apply to SLP
trading activity on the Exchange or to routed executions. 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 for SLPs, 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 also believes that the proposal is non-discriminatory
because it applies uniformly to all member organizations that are SLPs,
and again, the Exchange is not making any changes to existing fees and
credits. Finally, 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 that the proposed reformatted the Price List
is equitable and not unfairly discriminatory because the resulting
streamlined Price List would continue to apply to all SLPs as it does
currently because the Exchange is not adopting any new fees or credits
or removing any current fees or credits that impact SLPs. All SLPs
would continue to be subject to the same fees and credits that
currently apply to them.
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,\7\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
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\7\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition. The Exchange's proposal to reformat its
Price List will not place any undue burden on intramarket competition
that is not necessary or appropriate in furtherance of the purposes of
the Act because all SLPs would continue to be subject to the same fees
and credits that currently apply to them. The Exchange notes that the
proposal does not change the amount of any current fees or rebates, but
rather makes clarifying and formatting changes, and therefore does not
raise any competitive issues. To the extent the proposed rule change
places a burden on competition, any such burden would be outweighed by
the fact that a streamlined Price List would promote clarity and reduce
confusion with respect to the fees and credits that SLPs would be
subject to. As noted, the proposal would apply to all similarly
situated member organizations on the same and equal terms, who would
benefit from the changes on the same basis. Accordingly, the proposed
change would not impose a disparate burden on competition among market
participants on the Exchange.
Intermarket Competition. The Exchange believes the proposed rule
change does not impose any burden on intermarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange operates in a highly competitive market in which market
participants can readily choose to send their orders to other exchanges
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Market share statistics provide ample evidence
that price competition between exchanges is fierce, with liquidity and
market share moving freely from one execution venue to another in
reaction to pricing changes.
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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \10\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\10\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
[[Page 36172]]
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#f486819891d9979b9999919a8087b4879197da939b82"><span class="__cf_email__" data-cfemail="f684839a93db95999b9b93988285b6859395d8919980">[email protected]</span></a>. Please include
File Number SR-NYSE-2021-37 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2021-37. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2021-37 and should be submitted on
or before July 29, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-14500 Filed 7-7-21; 8:45 am]
BILLING CODE 8011-01-P
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