Notice2021-17306
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List
Primary source
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Published
August 13, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 154 (Friday, August 13, 2021)</title>
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[Federal Register Volume 86, Number 154 (Friday, August 13, 2021)]
[Notices]
[Pages 44759-44761]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-17306]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92615; File No. SR-NYSE-2021-41]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List
August 9, 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 August 2, 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 amend its Price List to eliminate the (1)
underutilized monthly rebate payable to Designated Market Makers
(``DMM'') with 30 or fewer assigned securities, and (2) expired waivers
for equipment and related service charges and trading license fees for
NYSE Trading Floor-based member organizations. The Exchange proposes to
implement the rule change on August 2, 2021. 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 amend its Price List to eliminate the (1)
underutilized monthly rebate payable to DMMs with 30 or fewer assigned
securities, and (2) expired waivers for equipment and related service
charges and trading license fees for NYSE Trading Floor-based member
organizations.
[[Page 44760]]
The Exchange proposes to implement the rule change on August 2,
2021.
Proposed Rule Change
The Exchange proposes to eliminate an underutilized DMM rebate and
obsolete waivers, as follows.
Underutilized DMM Rebate
The Exchange currently pays a DMM with 30 or fewer assigned
securities a monthly rebate of $1,500 per security, up to a maximum of
$10,000, for each security assigned to such a DMM in the previous month
(regardless of whether the stock price exceeds $1.00) for which that
DMM provides quotes at the National Best Bid (``NBB'') and National
Best Offer (``NBO,'' together the ``NBBO'') at least 25% of the time in
the applicable month. The monthly rebate is in addition to the current
rate on transactions and is prorated to the number of trading days in a
month that an eligible security is assigned to a DMM.
The Exchange proposes to eliminate this rebate in its entirety and
to remove it from the Price List because the rebate has been
underutilized by member organizations insofar as no DMMs with 30 or
fewer assigned securities has qualified for the rebate in the past six
months. As such, Exchange does not anticipate any member organization
in the near future would qualify for the rebate that is the subject of
this proposed rule change.
Expired Waivers
In response to the unprecedented events surrounding the spread of
COVID-19 in 2020, the Exchange waived certain equipment and related
service charges and trading license fees for NYSE Trading Floor-based
member organizations beginning in June 2020 through the earlier of the
first full month of a full reopening of the Trading Floor facilities to
Floor personnel or June 2021.\4\
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\4\ See Securities Exchange Act Release No. 89050 (March 25,
2021), 86 FR 16798 (March 31, 2021) (SR-NYSE-2021-19). See also
Securities Exchange Act Release No. 89050 (June 11, 2020), 85 FR
36637 (June 17, 2020) (SR-NYSE-2020-49); Securities Exchange Act
Release No. 89324 (July 15, 2020), 85 FR 44129 (July 21, 2020) (SR-
NYSE-2020-59); Securities Exchange Act Release No. 89754 (September
2, 2020), 85 FR 55550 (September 8, 2020) (SR-NYSE-2020-71);
Securities Exchange Act Release No. 89798 (September 9, 2020), 85 FR
57263 (September 15, 2020) (SR-NYSE2020-72); Securities Exchange Act
Release No. 90161 (October 13, 2020), 85 FR 66370 (October 19, 2020)
(SR-NYSE-2020-81); Securities Exchange Act Release No. 90391
(November 10, 2020), 85 FR 73326 (November 17, 2020) (SR-NYSE2020-
92); Securities Exchange Act Release No. 90744 (December 21, 2020),
85 FR 85712 (December 29, 2020) (SR-NYSE-2020-102); Securities
Exchange Act Release No. 91082 (February 9, 2021), 86 FR 9546
(February 16, 2021) (SR-NYSE-2021-10).
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Specifically, the Exchange waived 50% of the Annual Telephone Line
Charge of 400 per phone number; the $129 fee for a single line phone,
jack, and data jack; the related service charges ($161.25 to install
single jack (voice or data); $107.50 to relocate a jack; $53.75 to
remove a jack; $107.50 to install voice or data line; $53.75 to
disconnect data line; $53.75 to change a phone line subscriber; and
miscellaneous telephone charges billed at $106 per hour in 15 minute
increments); and the monthly portion of all applicable annual fees for
member organizations that (1) had at least one trading license, a
physical trading Floor presence and Floor broker executions accounting
for 40% or more of the member organization's combined adding, taking
and auction volumes during March 1 to March 20, 2020 or, if not a
member organization during March 1 to March 20, 2020, based on the
member organization's combined adding, taking, and auction volumes
during its first month as a member organization on or after May 26,
2020, and (2) were unable to operate at more than 50% of their March
2020 on-Floor staffing levels or, for member organizations that began
Floor operations after March 2020, are unable to operate at more than
50% of their Exchange-approved on-Floor staffing levels, both excluding
part-time Floor brokers known as ``flex brokers''.
As set forth in footnotes 11 and 15 of the Price List, the waivers
expired in June 2021 and have not been renewed. The Exchange
accordingly proposes to delete footnote 11, which sets forth the
equipment waivers described above, in its entirety, and to delete that
portion of footnote 15 which addresses the waiver of the monthly
portion of all applicable annual fees for member organizations, as
obsolete.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\6\ in
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) & (5).
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The Proposed Change Is Reasonable
The Exchange believes that the proposed elimination of the monthly
rebate of $1,500 per security, up to a maximum of $10,000, for DMMs
with 30 or fewer assigned securities is reasonable because DMMs have
underutilized the incentive. No DMM has qualified for the rebate in the
past six months. The Exchange does not anticipate any member
organization in the near future qualifying for the rebate that is the
subject of this proposed rule change. The Exchange believes it is
reasonable to eliminate requirements and credits when such incentives
become underutilized. The Exchange also believes eliminating
underutilized incentive programs would also simplify the Price List.
The Exchange further believes that removing the optional DMM rebate and
credit from the Price List would also add clarity and transparency to
the Price List.
Further, the Exchange believes that it is reasonable to delete the
expired waivers for NYSE Trading Floor-based member organizations from
the Price List because the waivers are no longer offered and the fees
are currently being charged. Deleting obsolete waivers would add
greater clarity of the Exchange's rules and enable market participants
to navigate the Exchange's Price List more easily.
The Proposal Is an Equitable Allocation of Fees
The Exchange believes the proposal equitably allocates fees among
its market participants because elimination of underutilized and
ineffective DMM rebate and credits the Exchange proposes to eliminate
would be eliminated in their entirety, and would no longer be available
to any member organization in any form. Similarly, the Exchange
believes the proposal equitably allocates fees among its market
participants because elimination of obsolete waivers would apply to all
similarly-situated member organizations on an equal basis. All such
member organizations would continue to be subject to the same fee
structure, and access to the Exchange's market would continue to be
offered on fair and nondiscriminatory terms.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. The proposal is not unfairly discriminatory because it
neither targets nor will it have a disparate impact on any particular
category of market participant. The Exchange believes that the proposal
is not unfairly discriminatory because the proposed elimination of the
optional DMM rebate and credits would affect all similarly-
[[Page 44761]]
situated market participants on an equal and non-discriminatory basis.
The Exchange believes that eliminating optional DMM rebate and credits
that are underutilized and ineffective would no longer be available to
any DMM on an equal basis. Further, the proposal does not permit unfair
discrimination because elimination of obsolete waivers would apply to
all similarly situated member organizations on an equal basis. In
addition, the Exchange believes that the proposed elimination of
obsolete waivers would remove impediments to and perfect the mechanism
of a free and open market by eliminating references to waivers that are
no longer offered, thereby improving the clarity of the Exchange's
rules and enabling market participants to more easily navigate the
Exchange's Price List. The Exchange also believes that the proposed
change would protect investors and the public interest because the
deletion of underutilized and obsolete fees would make the Price List
more accessible and transparent and facilitate market participants'
understanding of the fees charged for services currently offered by the
Exchange.
Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\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. Instead, as discussed above, the proposal relates
solely to elimination of an underutilized rebate and obsolete waivers
and, as such, would not have any impact on intra- or inter-market
competition because the proposed change is solely designed to
accurately reflect the services that the Exchange currently offers,
thereby adding clarity to the Price List.
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\7\ 15 U.S.C. 78f(b)(8).
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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
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0270776e672f616d6f6f676c7671427167612c656d74"><span class="__cf_email__" data-cfemail="6e1c1b020b430d0103030b001a1d2e1d0b0d40090118">[email protected]</span></a>. Please include
File Number SR-NYSE-2021-41 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-2021-41. 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-2021-41 and should be submitted on
or before September 3, 2021.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-17306 Filed 8-12-21; 8:45 am]
BILLING CODE 8011-01-P
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