Notice2021-27180
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List To Eliminate the Underutilized Supplemental Liquidity Provider National Best Bid and Offer Setter Tier Credits
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 16, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 239 (Thursday, December 16, 2021)</title>
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[Federal Register Volume 86, Number 239 (Thursday, December 16, 2021)]
[Notices]
[Pages 71531-71533]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-27180]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93748; File No. SR-NYSE-2021-70]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List To Eliminate the Underutilized Supplemental
Liquidity Provider National Best Bid and Offer Setter Tier Credits
December 10, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on November 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 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
underutilized Supplemental Liquidity Provider (``SLP'') National Best
Bid and Offer (``NBBO'') Setter Tier credits. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Price List to eliminate the
underutilized SLP NBBO Setter Tier credits.
The Exchange proposes to implement the rule change on December 1,
2021.
The Exchange adopted the SLP NBBO Setter Tier in August 2020 for
securities with a per share price of $1.00 or above that offers four
sets of tiered credits for orders from SLPs that set the NBBO or
provide other displayed liquidity in Tape A, B and C Securities, on a
monthly basis, in addition to the tiered or non-tiered SLP credit for
adding displayed liquidity. The purpose of the change was to
incentivize member organizations that are SLPs to increase aggressively
priced liquidity-providing orders that improve the market by setting
the NBBO, thereby encouraging higher levels of liquidity that would
support the quality of price discovery on the Exchange consistent with
the overall goal of enhancing market quality.\4\
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\4\ See Securities Exchange Act Release No. 89754 (September 2,
2020), 85 FR 55550, 55554 (September 8, 2020) (SR-NYSE-2020-71)
(adopting SLP NBBO Setter credits applicable to SLPs and member
organizations affiliated with SLPs); Securities Exchange Act Release
No. 90947 (January 19, 2021), 86 FR 7138 (January 26, 2021) (SR-
NYSE-2021-02) (restricting SLP NBBO Setter credits to member
organizations that are SLPs).
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The Exchange proposes to eliminate and remove the SLP NBBO Setter
Tier credits from the Price List. The credits have been underutilized
by member organizations insofar as only one SLP has achieved any of the
four tiers since the tiers were adopted and that firm's volume has
declined over time. Moreover, no SLP has achieved the higher levels of
liquidity or sent in additional liquidity to support the quality of
price discovery on the Exchange that the Exchange expected when
adopting the tiers. The Exchange does not anticipate that any
additional member organization in the near future would qualify for the
tiered credits that are the subject of this proposed rule change.
The proposed change is not otherwise intended to address any other
issues, and the Exchange is not aware of any problems that member
organizations
[[Page 71532]]
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,\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
underutilized SLP NBBO Setter Tier credits for member organizations
that are SLPs is reasonable because member organizations have
underutilized these incentives. As noted, only one SLP has achieved any
of the four tiers since the tiers were adopted and that firm's volume
has declined over time. Moreover, no SLP has achieved the higher levels
of liquidity or sent in additional liquidity to support the quality of
price discovery on the Exchange that the Exchange expected when
adopting the tiers. The Exchange does not anticipate that any
additional member organization in the near future would qualify for the
tiered credits that are the subject of this proposed rule change. The
Exchange believes it is reasonable to eliminate credits when such
incentives become underutilized. The Exchange also believes eliminating
underutilized incentives would add clarity and transparency to the
Price List.
The Proposal Is an Equitable Allocation of Fees
The Exchange believes the proposal equitably allocates fees among
its market participants because the underutilized 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 the underutilized
credits would apply to all similarly-situated member organizations that
are SLPs 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 because it neither targets nor will it have a disparate
impact on any particular category of market participant. The Exchange
believes that the proposal is not unfairly discriminatory because the
proposed elimination of the underutilized NBBO Setter Tier credits
would affect all similarly-situated market participants on an equal and
non-discriminatory basis. The Exchange believes that eliminating
credits that are underutilized and ineffective would no longer be
available to any member organization on an equal basis. The Exchange
also believes that the proposed change would protect investors and the
public interest because the deletion of underutilized credits would
make the Price List more accessible and transparent.
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
to the elimination of an underutilized credits 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#7705021b125a14181a1a121903043704121459101801"><span class="__cf_email__" data-cfemail="bccec9d0d991dfd3d1d1d9d2c8cffccfd9df92dbd3ca">[email protected]</span></a>. Please include
File Number SR-NYSE-2021-70 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-2021-70. 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
[[Page 71533]]
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-2021-70, and should be submitted on or before January 6, 2022.
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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. 2021-27180 Filed 12-15-21; 8:45 am]
BILLING CODE 8011-01-P
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