Notice2021-22076
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Reformat the Designated Market Makers Section of the NYSE Price List
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Published
October 12, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 194 (Tuesday, October 12, 2021)</title>
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[Federal Register Volume 86, Number 194 (Tuesday, October 12, 2021)]
[Notices]
[Pages 56737-56740]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-22076]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93263; File No. SR-NYSE-2021-58]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Reformat the Designated Market Makers Section of the NYSE Price List
October 5, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 30, 2021, New York Stock Exchange LLC
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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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 Fees and Credits Applicable to Designated Market
Makers (``DMMs'') without any substantive changes. The Exchange
proposes to implement the fee changes effective immediately.\4\ 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.
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\4\ The Exchange originally filed to amend the Fee Schedule on
September 24, 2021 (SR-NYSE-2021-55). SR-NYSE-2021-55 was
subsequently withdrawn and replaced by this filing.
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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 Fees and Credits Applicable to DMMs 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
DMM rates and requirements in its entirety. The Exchange would also
delete footnotes 5, 6, 7, and * that would be relocated to new
footnotes or the new section marked ``General.'' In order to maintain
the current numbering of the footnotes, the Exchange would mark
footnotes 5, 6 and 7 ``Reserved.''
Second, the Exchange proposes a table presentation of the current
DMM rates and requirements. The proposed changes would appear in the
Price List in six tables.
Under the existing heading ``Fees and Credits applicable to
Designated Market Makers (``DMMs'')'' and before the first table, the
Exchange would include a heading marked ``General'' followed by 7
bullets, as follows.
Bullet 1 would clarify that ``DMM Additional Quoting'' refers to
DMM increased quoting at the National Best Bid or Offer (``NBBO'') by
at least 5% over the DMM's quoting at the NBBO in September 2019, in at
least 300 assigned securities. This information is unchanged from the
current Price List.
Bullet 2 would clarify that ``DMM Providing Liquidity'' refer to
DMM orders that provide liquidity to the NYSE as a percentage of the
NYSE's total intraday adding liquidity. This information is also
unchanged from the current Price List.
Bullet 3 would clarify that ``DMM NBBO Quoting'' means DMM quoting
at the NBBO.
Bullet 4 would clarify that ``DMM Quoted Size'' is calculated by
multiplying the average number of shares of the applicable security
quoted at the NBBO by the DMM by the percentage of time during which
the DMM quoted at the NBBO.
Bullet 5 would clarify that ``Less Active Securities'' refers to
securities
[[Page 56738]]
that have an average daily consolidated volume (``Security CADV'') of
less than 1,000,000 shares per month in the previous month.
Bullet 6 would clarify that ``NYSE Quoted Size'' is calculated by
multiplying the average number of shares quoted on the NYSE at the NBBO
by the percentage of time the NYSE had a quote posted at the NBBO.
The final bullet would clarify that ``More Active Securities''
refers to securities with a Security CADV in the previous month at
least 1,000,000 (shares per month).
The information in these bullets would be transposed from the
current Price List without change.
The first table would follow the proposed General section and
appear under the phrase ``Rebate Per Share* when adding liquidity,
other than MPL Orders for stock price of at least $1.00 for DMM symbols
that meet the following requirements:'' from the current Price List.
The table would summarize the current DMM rebates and requirements for
providing liquidity to the Exchange as well as the additional credits
available to DMMs if the additional quoting requirements are met. The
requirements and credits are unchanged. The proposed table would appear
as follows in the Price List:
Minimum Requirements
----------------------------------------------------------------------------------------------------------------
Additional
credit if DMM
DMM NBBO DMM quoted DMM providing meets
Security quoting (%) size (%) liquidity (%) Credit additional
quoting
requirement
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More Active Securities.......... 10 5 .............. $0.0027 $0.0004
20 10 ** 5 0.0031 0.0003
30 15 ** 15 0.0034 0.0001
50 25 ** 15 0.0035 ..............
0.0015 0.0012
Less Active Securities.......... 15 .............. .............. 0.0035 0.0010
30 .............. .............. 0.0045 ..............
0.0015 0.0020
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Current footnote 6 would be transposed to new footnote * without
change. The DMM providing liquidity requirement to qualify for the
three eligible credits in a month where NYSE CADV is at least 5.5
billion shares and the notation that, unless otherwise stated, the NYSE
total intraday adding liquidity will be totaled monthly and includes
all NYSE adding liquidity, by all NYSE participants, would be
consolidated into a new footnote ** without substantive change.
The second table would set forth the rates and requirements for the
DMM incremental rebate for more active securities. The chart and
presentation would be unchanged from the current Price List, as
follows:
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Incremental Rebate Per Share for each More $0.0002 per share in
Active Security with a stock price of at least each eligible
$1.00 on current rebates of $0.0034 or less, in assigned More Active
a month where NYSE CADV is equal to or greater Security.
than 4.0 billion shares, when adding liquidity
with orders, other than MPL Orders, in such
securities and the DMM has providing liquidity
in all assigned securities as a percentage of
NYSE CADV that is an increase of 0.30% more
than the DMM's April 2020 providing liquidity
in all assigned securities as a percentage of
NYSE CADV.
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The third table would appear under the phrase ``DMM NBBO Setter
Tier Credit--Incremental Rebate Per Share for securities with a stock
price of at least $1.00 in Tape A, B and C Securities, when adding
liquidity, other than MPL Orders, for DMMs with providing liquidity in
all assigned securities as a percentage of NYSE CADV of all assigned
securities as follows'' and would set forth the current DMM setter tier
credits and requirements unchanged from the current Price List, as
follows:
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Minimum requirement as a percentage of NYSE CADV Credit for Credit for Credit for all
----------------------------------------------------------------- adding orders adding orders other adding
that set the that set the orders, other
Providing NBBO BBO than MPL
liquidity -------------------------------- Orders
Providing liquidity setting the Liquidity ---------------
NBBO or BBO Liquidity Indicator:
combined indicator: ASP ASB, AJP
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0.65............................................ 0.120 .............. $0.00005 ..............
0.90............................................ 0.225 $0.0002 0.000075 0.00005
1.25............................................ 0.375 0.0003 0.0001 0.0001
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The fourth table would set forth other equity per share charges
unchanged from the current Price List and would appear as follows under
the heading ``Other Equity Per Share Charges'':
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Taking liquidity.......................... $0.00275.
At the opening, at the opening only orders No Charge.
or executions at the close.
Routing Fee ***........................... $0.0030.
Routing Fee--in any stock with a per share 0.3% of the total dollar
stock price below $1.00. value of the transaction.
[[Page 56739]]
Rebate per Share *--for all MPL orders in $0.00275.
securities with a per share price of at
least $1.00 that add liquidity.
Rebate * when adding liquidity in shares $0.0004.
of More Active Securities if the More
Active Security has a stock price of less
than $1.00.
Rebate * when adding liquidity in shares $0.0004.
of Less Active Securities if the Less
Active Security has a stock price of less
than $1.00.
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Current footnotes * and 5 would be transposed to footnote + and
***, respectively, without change. As noted above, footnote 6 would be
transposed from the current Price List to new footnote * without
change.
The fifth table would set forth the rates and requirements for the
DMM rebate for less active securities. The rates and requirements would
be unchanged from the current Price List and would appear as follows:
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Minimum requirement for DMM quoting at the NBBO and credit per symbol
Security CADV in the previous -------------------------------------------------------------------------------
month 15% 20% 30% 40% 50%
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250,000 up to 1,500,000 shares.. $200.00 $275.00 $350.00 $425.00 $500.00
100,000 up to 250,000 shares.... 150.00 225.00 300.00 375.00 450.00
less than 100,000 shares........ 100.00 175.00 250.00 325.00 400.00
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The final table would set forth the DMM share of the market data
quote revenue, known as the Quoting Share, received by the Exchange
from the Consolidated Tape Association under the Revenue Allocation
Formula of Regulation NMS unchanged from the current Price List and
would appear as follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
DMM share of the market data quote revenue (the ``Quoting Share'')
received by the Exchange from the Consolidated Tape Association under
the Revenue Allocation Formula of Regulation NMS with respect to any
security that has a Security CADV of less than 1,500,000 shares in the
previous month (regardless of whether the stock price exceeds $1.00) in
any month in which the DMM quotes at the NBBO at least 20% of the time
in the applicable month as follows:....................................
------------------------------------------------------------------------
Minimum requirement: DMM NBBO Quoting... 15% 20%
DMM share of the Quoting Share if 50% 100%
meeting the above DMM NBBO Quoting
Requirement............................
------------------------------------------------------------------------
As noted above, the Exchange is not proposing any substantive
change to any current DMM 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.\5\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\6\ 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) \7\ requirement that the rules of
an exchange not be designed to permit unfair discrimination 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).
\7\ 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 DMM
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 DMMs, 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 DMMs,
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 DMMs as it does
currently because the Exchange is not adopting any new fees or credits
or removing any current fees or credits that impact DMMs. All DMMs
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,\8\ 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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\8\ 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
[[Page 56740]]
furtherance of the purposes of the Act because all DMMs 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 DMMs 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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\11\ 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#e290978e87cf818d8f8f878c9691a2918781cc858d94"><span class="__cf_email__" data-cfemail="f183849d94dc929e9c9c949f8582b1829492df969e87">[email protected]</span></a>. Please include
File Number SR-NYSE-2021-58 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-2021-58. 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-2021-58, and should be submitted on
or before November 2, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22076 Filed 10-8-21; 8:45 am]
BILLING CODE 8011-01-P
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