Notice2024-03453
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Fees and Charges
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
February 21, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 35 (Wednesday, February 21, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 35 (Wednesday, February 21, 2024)]
[Notices]
[Pages 13117-13122]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03453]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99538; File No. SR-NYSEARCA-2024-13]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Equities Fees and Charges
February 14, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 1, 2024, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 the NYSE Arca Equities Fees and
Charges (``Fee Schedule'') to introduce additional base credit
adjustments for Lead Market Makers for Adding Displayed Liquidity in
certain assigned Exchange Traded Products listed on the Exchange. The
Exchange proposes to implement the proposed changes effective February
1, 2024.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.
[[Page 13118]]
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 the Fee Schedule to introduce
additional base credit adjustments for Lead Market Makers (``LMMs'')
\3\ for Adding Displayed Liquidity in certain assigned Exchange Traded
Products (``ETPs'') listed on the Exchange. The Exchange proposes to
implement the proposed changes effective February 1, 2024.
---------------------------------------------------------------------------
\3\ The term ``Lead Market Maker'' is defined in Rule 1.1(w) to
mean a registered Market Maker that is the exclusive Designated
Market Maker in listings for which the Exchange is the primary
market.
---------------------------------------------------------------------------
Current Market and 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 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 20% market share.\8\ Therefore, no exchange
possesses significant pricing power in the execution of cash equity
order flow. More specifically, the Exchange's share of executed volume
of equity trades in Tapes A, B and C securities is less than 12%.\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
<a href="https://markets.cboe.com/us/equities/market_share">https://markets.cboe.com/us/equities/market_share</a>. See generally
<a href="https://www.sec.gov/fastanswers/divisionsmarketregmrexchangesshtml.html">https://www.sec.gov/fastanswers/divisionsmarketregmrexchangesshtml.html</a>.
\7\ See FINRA ATS Transparency Data, available at <a href="https://otctransparency.finra.org/otctransparency/AtsIssueData">https://otctransparency.finra.org/otctransparency/AtsIssueData</a>. A list of
alternative trading systems registered with the Commission is
available at <a href="https://www.sec.gov/foia/docs/atslist.htm">https://www.sec.gov/foia/docs/atslist.htm</a>.
\8\ See Cboe Global Markets U.S. Equities Market Volume Summary,
available at <a href="https://markets.cboe.com/us/equities/market_share/">https://markets.cboe.com/us/equities/market_share/</a>.
\9\ See id.
---------------------------------------------------------------------------
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. Accordingly, competitive forces
compel the Exchange to use exchange transaction fees and credits
because market participants can readily trade on competing venues if
they deem pricing levels at those other venues to be more favorable.
Proposed Rule Change
The Exchange currently provides financial incentives to LMMs that
are based on whether the LMM meets certain prescribed metrics.
Specifically, the Exchange provides incremental credits to LMMs based
on how many performance metrics an LMM meets in each NYSE Arca-listed
security. The financial incentives are intended to encourage LMMs to
maintain better market quality in securities in which they are
registered as the LMM, including in lower volume and newly-listed
securities.
The Exchange notes that its listing business operates in a highly
competitive market in which market participants, including issuers of
securities, LMMs, and other liquidity providers, can readily transfer
their listings, or direct order flow to competing venues if they deem
fee levels, liquidity provision incentive programs, or other factors at
a particular venue to be insufficient or excessive. The proposed rule
change reflects the current competitive pricing environment and is
designed to incentivize market participants to participate as LMMs, and
thereby, further enhance the market quality on all securities listed on
the Exchange and encourage issuers to list new products on the
Exchange.
Currently, under the Lead Market Maker Transaction Fees and Credits
section of the Fee Schedule, pursuant to Section II titled ``LMM Base
Fees and Credits per Share,'' the Exchange currently charges LMMs a
base fee of $0.0029 per share for orders that remove liquidity and
provides the following base credits:
<bullet> $0.0033 per share for orders that provide liquidity in
securities for which the LMM is registered as the LMM and which have a
CADV in the previous month greater than 3,000,000 shares;
<bullet> $0.0040 per share for orders that provide liquidity in
securities for which the LMM is registered as the LMM and which have a
CADV in the previous month of between 1,000,000 and 3,000,000 shares;
and
<bullet> $0.0045 per share for orders that provide liquidity in
securities for which the LMM is registered as the LMM and which have a
CADV in the previous month of less than 1,000,000 shares.
Additionally, LMMs are provided a credit of $0.0030 per share for
orders that provide undisplayed liquidity in Non-Routable Limit Orders
in securities for which the LMM is registered as the LMM, and a credit
of $0.0015 per share for Non-Displayed Limit Orders that provide
liquidity in securities for which the LMM is registered as the LMM. The
Exchange also does not charge LMMs a fee for orders executed in the
Closing Auction.
Further, pursuant to Section III titled ``LMM Performance Metrics-
based Incremental Base Credit Adjustments,'' the base credit earned by
an LMM for Adding Displayed Liquidity (as provided in Section II) in an
assigned ETP is adjusted based on the number of Performance Metrics
\10\ met by the LMM in the billing month for each assigned ETP, as
follows:
---------------------------------------------------------------------------
\10\ The Performance Metrics are enumerated on the Fee Schedule
in Section III under LMM Transaction Fees and Credits.
----------------------------------------------------------------------------------------------------------------
Incremental base credit
Number of performance metrics met Incremental base credit adjustment per leveraged
adjustment per ETP ETP
----------------------------------------------------------------------------------------------------------------
4....................................................... ($0.0001) ($0.0001)
[[Page 13119]]
3....................................................... (0.00005) (0.00005)
2....................................................... 0.0000 0.0000
1....................................................... 0.0001 0.0000
0....................................................... 0.0002 0.0000
----------------------------------------------------------------------------------------------------------------
The Exchange proposes to introduce four new categories of ETPs in
which a LMM is registered as the LMM and provide an incremental credit
to such LMMs based on the number of Performance Metrics met by the LMM
in the billing month for each assigned ETP. The proposed new categories
of ETPs are Less Active ETP,\11\ Less Active Leveraged ETP,\12\ New ETP
\13\ and New Leveraged ETP.
---------------------------------------------------------------------------
\11\ A ``Less Active ETP'' is currently defined on the Fee
Schedule in Section I under LMM Transaction Fees and Credits to mean
``ETPs that have a CADV in the prior calendar quarter that is the
greater of either less than 100,000 shares or less than 0.013% of
Consolidated Tape B ADV.''
\12\ A ``Leveraged ETP'' is currently defined on the Fee
Schedule in Section I under LMM Transaction Fees and Credits to mean
``an ETP that tracks an underlying index by a ratio other than on a
one-to-one basis.''
\13\ The Exchange proposes to adopt a definition of New ETP on
the Fee Schedule in Section I under LMM Transaction Fees and
Credits. As proposed, a ``New ETP would mean an ETP for the first 12
months of listing on NYSE Arca.'' Under the proposal, the Exchange
would treat an ETP listed for the first 12 months as a New ETP even
if it qualifies as a Less Active ETP.
---------------------------------------------------------------------------
As proposed, LMMs that are registered as the LMM in a Less Active
ETP would be able to earn an incremental credit of $0.0001 per share if
the LMM meets 3 Performance Metrics or earn an incremental credit of
$0.0002 per share if the LMM meets all 4 Performance Metrics. There
would be no adjustment to the base credit payable to the LMM if the LMM
meets 2 Performance Metrics. LMMs that meet just 1 Performance Metric
would have their base credit reduced by $0.0002 per share and LMMs that
do not meet any Performance Metric would have their base credit reduced
by $0.0004 per share.
Further, as proposed, LMMs that are registered as the LMM in a Less
Active Leveraged ETP would be able to earn an incremental credit of
$0.0001 per share if the LMM meets 3 Performance Metrics or earn an
incremental credit of $0.0002 per share if the LMM meets all 4
Performance Metrics. There would be no adjustment to the base credit
payable to the LMM if the LMM meets 1 or 2 Performance Metrics or if
the LMM does not meet any Performance Metric.
Additionally, as proposed, LMMs that are registered as the LMM in a
New ETP would be able to earn an incremental credit of $0.0002 per
share if the LMM meets 3 Performance Metrics or earn an incremental
credit of $0.0004 per share if the LMM meets all 4 Performance Metrics.
LMMs that meet 2 Performance Metrics would have their base credit
reduced by $0.0002 per share while LMMs that meet just 1 Performance
Metric would have their base credit reduced by of $0.0004 per share.
LMMs that do not meet any Performance Metric would have their base
credit reduced by $0.0005 per share.
Lastly, as proposed, LMMs that are registered as the LMM in a New
Leveraged ETP would be able to earn an incremental credit of $0.0002
per share if the LMM meets 3 Performance Metrics or earn an incremental
credit of $0.0004 per share if the LMM meets all 4 Performance Metrics.
There would be no adjustment to the base credit payable to the LMM if
the LMM meets 1 or 2 Performance Metrics or if the LMM does not meet
any Performance Metric.
The table below illustrates the proposed new incremental base
credit adjustments discussed above.
----------------------------------------------------------------------------------------------------------------
Incremental Incremental
base credit Incremental base Incremental base credit
Number of performance metrics met adjustment per credit adjustment base credit adjustment per
less active per less active adjustment per new leveraged
ETP leveraged ETP new ETP ETP
----------------------------------------------------------------------------------------------------------------
4............................................ ($0.0002) ($0.0002) ($0.0004) ($0.0004)
3............................................ (0.0001) (0.0001) (0.0002) (0.0002)
2............................................ 0.0000 0.0000 0.0002 0.0000
1............................................ 0.0002 0.0000 0.0004 0.0000
0............................................ 0.0004 0.0000 0.0005 0.0000
----------------------------------------------------------------------------------------------------------------
The Exchange believes the proposed rule change would further
enhance market quality on New ETPs and Less Active ETPs by
incentivizing LMMs to meet the Performance Metrics across all ETPs,
including Less Active ETPs (and Less Active Leveraged ETPs) and New
ETPs (and New Leveraged ETPs), which would support the quality of price
discovery in such securities on the Exchange and provide additional
liquidity for incoming orders for the benefit of all market
participants.
The Exchange believes the proposed rule change would also provide
superior market quality and price discovery for Exchange-listed
securities, specifically securities that are new or less active,
through new financial incentives for achieving various performance
metrics illustrated in Section III under the Lead Market Maker
Transaction Fees and Credits section of the Fee Schedule, i.e., LMM
spread, LMM shares within 1% of NBBO and LMM quoting size requirements
in Core Open Auction and Closing Auction, thus promoting liquidity in
in such securities. The proposed rule change is intended to provide a
more meaningful incentive to LMMs to provide liquidity in new and less
active securities by providing financial incentives to the Exchange's
members as long as they meet certain prescribed quoting criteria. The
Exchange believes that a performance-driven incentive would encourage
such members to provide meaningful quotes and size in new and less
active securities listed and traded on the Exchange.
[[Page 13120]]
Additionally, for newly-listed and less active ETPs, the cost to a
firm for making a market, such as holding inventory in the security, is
often not fully offset by the revenue through rebates provided by the
Exchange. In some cases, firms may even operate at a loss in new and
less active ETPs. The Exchange believes the proposed incentives, which
would compensate members as long as they meet the prescribed
performance metrics, is a more deterministic program from a member's
perspective. The member would decide how many, if any, new and less
active ETPs it wants to provide tight and deep markets in. The more
securities the member provides heightened quoting in, the more the
member could collect in the form of a rebate.
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.\14\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\15\ 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) \16\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange notes that its
ETP listing business operates in a highly-competitive market in which
market participants, which includes LMMs, as well as ETP issuers, can
opt not to participate on the Exchange or readily transfer their
listings from the Exchange, respectively, if they deem fee levels,
liquidity provision incentive programs, or any other factor at a
particular venue to be insufficient or excessive. The proposed rule
change reflects a competitive pricing structure designed to incentivize
issuers to list new products and transfer existing products to the
Exchange and market participants to enroll and participate as LMMs on
the Exchange, which the Exchange believes will enhance market quality
in all ETPs listed on the Exchange.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4).
\16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Proposed Change Is Reasonable
The Exchange believes that the proposal to adopt market quality-
based incentives is a reasonable means to incentivize liquidity
provision in ETPs listed on the Exchange. The marketplace for listings
is extremely competitive and the Exchange is not the only venue for
listing ETPs. Competition in ETPs is further exacerbated by the fact
that listings can and do transfer from one listing market to another.
The proposed rule change is intended to help the Exchange compete as a
listing venue for ETPs, specifically New and Less Active ETPs. Further,
the Exchange notes that the proposed incentives are not transaction
fees, nor are they fees paid by participants to access the Exchange.
Rather, the proposed rebates are based on achieving certain objective
market quality metrics. The Exchange believes providing rebates that
are based on the quality of the market in individual ETPs that
generally have low volume, or are newly-listed, will allow ETP Holders
to anticipate their revenue and will incentivize them to provide tight
and deep markets in those securities.
The Exchange cannot be certain that LMMs will choose to actively
compete for the proposed incentives. For LMMs that do choose to
actively participate by providing deep and tight markets in Less Active
ETPs and New ETPs, the Exchange expects those members to receive
payments comparable to what they currently receive, with the potential
for additional upside when they meet the Performance Metrics in a
greater number of securities. The Exchange believes the proposed
incentives, which would compensate LMMs as long as they meet the
prescribed Performance Metrics, is also reasonable because it is a more
deterministic program from an ETP Holder's perspective.
The Exchange believes the proposed rule change is intended to
encourage LMMs to promote price discovery and market quality in Less
Active ETPs and New ETPs for the benefit of all market participants.
The Exchange believes the proposed rule change is reasonable and
appropriate in that the incentives are based on the amount of business
transacted on the Exchange. The Exchange notes that the proposed
incremental credits offered by the Exchange is similar to market
quality incentive programs already in place on other markets, such as
the Designated Liquidity Provider incentives on the Nasdaq Stock Market
LLC (``Nasdaq''), which requires a member on that exchange to provide
meaningful and consistent support to market quality and price discovery
in low volume exchange-traded products by quoting at the National Best
Bid and Offer and adding liquidity in a minimum number of such
securities. In return, Nasdaq provides the member with an incremental
rebate.\17\
---------------------------------------------------------------------------
\17\ See Equity 7 Pricing Schedule, Section 114. Market Quality
Incentive Programs, at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Equity%207#section_114_market_quality_incentive_programs">https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Equity%207#section_114_market_quality_incentive_programs</a>.
---------------------------------------------------------------------------
The Proposal Is an Equitable Allocation of Fees
The Exchange believes the proposed rule change is equitable because
the proposal would provide discounts that are reasonably related to the
value to the Exchange's market quality associated with higher volumes
and improved quoting in Less Active ETPs and New ETPs. The Exchange
further believes that the proposed incentives are equitable because
they are consistent with the market quality and competitive benefits
associated with the fee program and because the magnitude of the
proposed incentives are not unreasonably high in comparison to the
rebate paid with respect to other displayed liquidity-providing orders.
The Exchange believes that it is equitable to offer increased rebates
to LMMs as they are currently subject to obligations specified in Rule
7.23-E, which are not applicable to non-Market Maker ETP Holders, and
LMMs would be subject to additional requirements and obligations (such
as meeting Performance Metrics) that other market participants are not.
The Exchange believes that the proposal to offer incentives tied to
market quality metrics represents an equitable allocation of payments
because LMMs would be required to not only meet their Rule 7.23-E
obligations, but also meet prescribed quoting requirements to qualify
for the credits, as described above. Where an LMM does not meet at
least 3 Performance Metrics, that member will not receive any
additional financial benefit. Further, all LMMs on the Exchange are
eligible to participate and could do so by simply registering in a Less
Active ETP and/or a New ETP and meeting the prescribed market quality
metrics. The Exchange has designed the proposed pricing incentives to
be sustainable over the long-term and generally expects that credits
paid to LMMs will be comparable to credits the Exchange
[[Page 13121]]
currently provides to its members and comparable to pricing incentives
offered by the Exchange's competitors. As such, the Exchange believes
that the proposal represents an equitable allocation of dues, fees and
credits.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. In the prevailing competitive environment, LMMs 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 adopt
incremental credits applicable to LMMs because LMMs are already subject
to additional obligations, as specified in Rule 7.23-E, and the
proposed additional credits would be provided on an equal basis to all
similarly-situated participants provided each such participant meets
the prescribed market quality metrics. If an LMM does not meet the
required number of Performance Metrics, the LMM would not receive any
incremental credit. Further, the Exchange believes the incremental
credit would incentivize each of these participants to register in Less
Active ETPs and New ETPs and send more orders to the Exchange to
qualify for higher credits. The Exchange also believes that the
proposed rule change is not unfairly discriminatory because it is
reasonably related to the value to the Exchange's market quality
associated with higher volume.
The proposal to offer an additional credit tied to meeting certain
market quality requirements neither targets nor will it have a
disparate impact on any particular category of market participant. The
proposal does not permit unfair discrimination because LMMs already
have increased obligations vis-[aacute]-vis non-Market Maker ETP
Holders, as specified in Rule 7.23-E, and the proposed requirements
would be applied to all similarly-situated LMMs equally.
The Exchange believes that the proposed rule change is not unfairly
discriminatory because all LMMs that choose to qualify for the
incremental credits would be required to meet a minimum number of
Performance Metrics in order to receive the credits. Where a
participant does not achieve a certain number of Performance Metrics,
it will not receive any incremental credits. Further, all LMMs on the
Exchange are eligible to participate in the program and could do so by
being registered as the LMM in Less Active ETPs and/or New ETPs and
meeting a minimum number of Performance Metrics. The Exchange has
designed the pricing incentives proposed herein to be sustainable over
the long-term and generally expects that credits provided to LMMs would
be comparable to credits the Exchange currently provides to its LMMs
and comparable to pricing incentives offered by the Exchange's
competitors. As such, the Exchange believes that the proposal is not
unfairly discriminatory.
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 changes 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 LMMs. 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 proposed change is designed to attract
additional order flow to the Exchange. The Exchange believes that the
proposed Performance Metrics-based incremental credit applicable to
LMMs in Less Active ETPs (including Less Active Leveraged ETPs) and New
ETPs (including New Leveraged ETPs) in which they are registered as the
LMM would continue to incentivize market participants to direct their
displayed order flow to the Exchange. Greater liquidity benefits all
market participants on the Exchange by providing more trading
opportunities and encourages LMMs to send additional orders to the
Exchange, thereby contributing to robust levels of liquidity. The
proposed pricing incentive would be applicable to all similarly-
situated market participants that have obligations under Rule 7.23-E to
meet specified obligations, and, as such, the proposed changes would
not impose a disparate burden on competition among market participants
on the Exchange. Accordingly, the Exchange does not believe that the
proposed change will impair the ability of LMMs to maintain their
competitive standing. The Exchange does not believe that the proposed
change represents a significant departure from previous pricing offered
by the Exchange or its competitors.
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's market share of intraday trading (i.e., excluding
auctions) is currently less than 12%. In such an environment, the
Exchange must continually adjust its fees and rebates 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 rule change could promote competition between the
Exchange and other execution venues, including those that currently
offer 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 has become effective upon filing pursuant
to Section 19(b)(3)(A) \20\ of the Act and paragraph (f) thereunder. At
any time within 60 days of the filing of the 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.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
[[Page 13122]]
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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1062657c753d737f7d7d757e6463506375733e777f66"><span class="__cf_email__" data-cfemail="becccbd2db93ddd1d3d3dbd0cacdfecddbdd90d9d1c8">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2024-13 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-NYSEARCA-2024-13. 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="https://www.sec.gov/rules/sro.shtml">https://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. Do
not include personal identifiable information in submissions; you
should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-NYSEARCA-2024-13, and
should be submitted on or before March 13, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------
\21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03453 Filed 2-20-24; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on February 21, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.