Notice2025-05965
Self-Regulatory Organizations; NYSE Texas, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fee Schedule of NYSE Texas, Inc.
Primary source
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Published
April 8, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 66 (Tuesday, April 8, 2025)</title>
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[Federal Register Volume 90, Number 66 (Tuesday, April 8, 2025)]
[Notices]
[Pages 15172-15175]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-05965]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102761; File No. SR-NYSETEX-2025-01]
Self-Regulatory Organizations; NYSE Texas, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the Fee
Schedule of NYSE Texas, Inc.
April 2, 2025.
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 April 1, 2025, the NYSE Texas, Inc. (``NYSE Texas'' 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 the Fee Schedule of NYSE Texas, Inc.
(the ``Fee Schedule'') to increase existing credits applicable to
certain Exchange members. The Exchange proposes to implement the fee
changes effective April 1, 2025. 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 the Fee Schedule to increase
existing credits applicable to certain Exchange members. Specifically,
the Exchange proposes to amend Section F.2 of the Fee Schedule to
increase the Transaction Fee Credit and the Clearing Submission Fee
Credit applicable to Clearing Brokers. The Exchange proposes to
implement the fee changes effective April 1, 2025.
Background
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 National Market System
(``NMS''), the Commission highlighted the importance of market forces
in determining prices and Self-Regulatory Organizations (``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\
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\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'').
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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, 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%
[[Page 15173]]
market share.\8\ Therefore, no exchange possesses significant pricing
power in the execution of 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 1%.\9\
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\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>.
\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="http://markets.cboe.com/us/equities/market_share/">http://markets.cboe.com/us/equities/market_share/</a>.
\9\ See id.
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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 a 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
Section F.2 of the Fee Schedule currently provides for a
Transaction Fee Credit and a Clearing Submission Fee Credit and
generally states that the total monthly fees owed by an Exchange-
registered Institutional Broker \10\ to the Exchange will be reduced
(and Institutional Brokers will be paid for any unused credits) by the
application of a Transaction Fee Credit and a Clearing Submission Fee
Credit. Specifically, a Clearing Broker \11\ currently receives a
``Transaction Fee Credit'' equal to 10% of the transaction fees
received by the Exchange each month for agency trades executed through
the Institutional Broker (i.e., Section E.3(a) fees) for the portion(s)
of the transaction handled by the Clearing Broker. Similarly, a
Clearing Broker currently receives a ``Clearing Submission Fee Credit''
equal to 10% of the Clearing Submission Fees received by the Exchange
pursuant to Section E.7 of the Fee Schedule for the portion(s) of the
transaction handled by the Clearing Broker. Also, only Institutional
Brokers that are members of the Financial Industry Regulatory
Authority, Inc. are eligible for the Clearing Submission Fee Credit.
The Transaction Fee Credit and the Clearing Submission Fee Credit are
both provided by the Exchange to the Clearing Broker, who then passes
on these credits to the Institutional Broker associated with the
transaction.
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\10\ The term ``Institutional Broker'' is defined in Article 1,
Rule 1(n) to mean a member of the Exchange who is registered as an
Institutional Broker pursuant to the provisions of Article 17 and
has satisfied all Exchange requirements to operate as an
Institutional Broker on the Exchange.; see also generally NYSE Texas
Article 17.
\11\ Section F.2 of the Fee Schedule defines ``Clearing Broker''
as the Exchange-registered Institutional Broker that did not execute
the trade, but acted as the broker for the ultimate Clearing
Participant. ``Clearing Participant'' means a Participant which has
been admitted to membership in a Qualified Clearing Agency pursuant
to the provisions of the Rules of the Qualified Clearing Agency. See
Article 1, Rule 1(ee).
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The Exchange proposes to amend Section F.2 of the Fee Schedule by
increasing both the Transaction Fee Credit and the Clearing Submission
Fee Credit from 10% to 12%. The Exchange believes that increasing the
Transaction Fee Credit and the Clearing Submission Fee Credit, which
would result in reduced fees, would increase trading and post-trade
activity on the Exchange.\12\
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\12\ The Exchange previously amended the Fee Schedule to
increase the Transaction Fee Credit and the Clearing Submission Fee
Credit, initially from 5% to 8%, and then from 8% to 10%. See
Securities Exchange Act Release Nos. 96461 (December 7, 2022), 87 FR
76225 (December 13, 2022) (SR-NYSECHX-2022-28); and 99804 (March 20,
2024), 89 FR 21077 (March 26, 2024) (SR-NYSECHX-2024-12).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Sections 6(b)(4) of the Act,\14\ 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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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4).
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The Proposed Fee Change Is Reasonable
As discussed above, the Exchange operates in a highly fragmented
and competitive market. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
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.'' \15\
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\15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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The Exchange believes that increasing the Transaction Fee Credit,
which applies to executions effected on the Exchange, and the Clearing
Submission Fee Credit, which applies to off-exchange executions cleared
on the Exchange, from 10% to 12%, is reasonable because these credits
are designed to incent trading, in the case of the Transaction Fee
Credit, and clearing activity, in the case of the Clearing Submission
Fee Credit, by Institutional Brokers. The Exchange believes increasing
these credits, which would result in lower fees, is a reasonable means
to further incentivize Institutional Brokers to conduct more of their
trading and clearing activity on the Exchange.
The Exchange believes that the proposal represents a reasonable
effort to promote enhanced order execution opportunities as well as
promote post-trade clearing submissions by Exchange members. The
Exchange notes that market participants are free to shift their order
flow to competing venues if they believe other markets offer more
favorable fees and credits.
On the backdrop of the competitive environment in which the
Exchange currently operates, the proposed rule change is a reasonable
attempt to attract additional order flow and increase liquidity on the
Exchange and improve the Exchange's market share relative to its
competitors.
The Proposed Fee Change Is an Equitable Allocation of Fees and Credits
The Exchange believes that the proposed increase to the Transaction
Fee Credit and the Clearing Submission Fee Credit equitably allocates
its fees and credits among its market participants. The Exchange
believes it is equitable to provide Clearing Brokers with increased
credits, which would result in lower fees, because the credits would
serve to incentivize members to conduct more of their trading and
clearing activity on the Exchange.
The Exchange also believes that the proposed increase to the
Transaction Fee Credit and the Clearing Submission Fee Credit would
encourage Institutional Brokers to conduct more of their trading and
post-trade activity on the Exchange.
The Proposed Fee Change Is Not Unfairly Discriminatory
The Exchange believes that increasing the level of the Transaction
Fee Credit and the Clearing Submission Fee Credit is not unfairly
discriminatory. The Exchange believes that the proposal does not permit
unfair discrimination because the proposed increase to the
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Transaction Fee Credit and the Clearing Submission Fee Credit would be
applied to all Clearing Brokers on an equal basis. Accordingly, no
Exchange member already operating on the Exchange would be
disadvantaged by the proposed allocation of fees and credits under the
proposal. The Exchange further believes that the proposed fee change
would not permit unfair discrimination among Clearing Brokers because
the credits would be available equally to similarly situated Clearing
Brokers. As described above, in today's competitive marketplace, market
participants have a choice of where to direct their order flow or which
market to transact on. The Exchange believes this proposal would
benefit a number of members by lowering their current fees, regardless
of whether or not they increase their trading and clearing activity on
the Exchange.
In the prevailing competitive environment, Exchange members are
free to disfavor the Exchange's pricing if they believe that
alternatives offer them better value. Accordingly, no Exchange member
already operating on the Exchange would be disadvantaged by the
proposed allocation of the Exchange's fees and credits.
Finally, the submission of orders to the Exchange is optional for
Exchange members in that they could choose whether to submit orders to
the Exchange and, if they do, the extent of its activity in this
regard. 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,\16\ 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 all market participants on the Exchange. 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.'' \17\
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\16\ 15 U.S.C. 78f(b)(8).
\17\ See Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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Intramarket Competition. The Exchange believes the proposed
increase to the Transaction Fee Credit and the Clearing Submission Fee
Credit would not impose any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The Exchange
does not believe that the proposed change represents a significant
departure from previous pricing offered by the Exchange. The proposed
change is designed to attract additional trading and post-trade
activity to the Exchange. The Exchange believes that increasing the
level of the Transaction Fee Credit and the Clearing Submission Fee
Credit would incentivize market participants to direct more of their
trading and post-trading activity to the Exchange, bringing with it
additional execution opportunities for market participants and improved
price transparency. Greater overall order flow, trading opportunities,
and pricing transparency benefits all market participants on the
Exchange by enhancing market quality. Additionally, the proposed
changes would apply equally to all similarly situated Clearing Brokers,
in that they would all be equally eligible for the credits available
under Sections F.2 of the Fee Schedule.
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 1%. 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.
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
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\18\ and Rule 19b-
4(f)(2) thereunder \19\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge imposed on any
person, whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing. 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.
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\18\ 15 U.S.C. 78s(b)(3)(A)(ii).
\19\ 17 CFR 240.19b-4.
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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="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#681a1d040d450b0705050d061c1b281b0d0b460f071e"><span class="__cf_email__" data-cfemail="9defe8f1f8b0fef2f0f0f8f3e9eeddeef8feb3faf2eb">[email protected]</span></a>. Please include
file number SR-NYSETEX-2025-01 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-NYSETEX-2025-01. 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
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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 a.m. and 3
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-NYSETEX-2025-01 and should be submitted
on or before April 29, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-05965 Filed 4-7-25; 8:45 am]
BILLING CODE 8011-01-P
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