Notice2025-06034
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List
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Published
April 9, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 67 (Wednesday, April 9, 2025)</title>
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[Federal Register Volume 90, Number 67 (Wednesday, April 9, 2025)]
[Notices]
[Pages 15287-15290]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06034]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102765; File No. SR-NYSE-2025-10]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List
April 3, 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 March 31, 2025, 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 adopt fees for
orders routed pursuant to the Midpoint Ping routing strategy. 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 NYSE Price List to adopt fees
for orders routed pursuant to the Midpoint Ping routing strategy, as
defined in Rule 7.37(c)(9)(A). The Exchange proposes to implement the
fee change effective April 1, 2025.
Background
The Exchange operates in a highly competitive market. The
Securities and Exchange Commission (``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\
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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
[[Page 15288]]
``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 combined is currently
less than 12%.\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>. See generally
<a href="https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html">https://www.sec.gov/fast-answers/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="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
constrain exchange transaction fees 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 has amended its rules to provide for the optional
Midpoint Ping routing strategy, which is available for MPL-IOC
Orders.\10\ An MPL-IOC Order designated with the Midpoint Ping routing
strategy would first check the Exchange Book for available shares. Any
remaining quantity of the order would then route as an MPL-IOC Order to
one or more other NYSE Group equity exchanges sequentially, in
accordance with the Exchange's routing table (as described in Rule
7.37(c)(9) and published on the Exchange's website). At each routing
destination, the order would check the book for available shares, and
any further unexecuted quantity would then route to the next
destination on the routing table, as applicable. Any shares that remain
unexecuted after the order has been routed to each destination on the
routing table (to the extent that there were shares remaining to be
routed) will be cancelled.
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\10\ See Rule 7.37(c)(9)(A); see also Securities Exchange Act
Release No. 102603 (March 11, 2025), 90 FR 12382 (March 17, 2025)
(SR-NYSE-2025-06).
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In connection with the upcoming availability of the Midpoint Ping
routing strategy on April 7, 2025,\11\ the Exchange proposes to amend
the NYSE Price List to adopt routing fees that will apply to orders
routed pursuant to the Midpoint Ping routing strategy.
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\11\ See <a href="https://www.nyse.com/trader-update/history#110000947845">https://www.nyse.com/trader-update/history#110000947845</a>.
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<bullet> Under ``Transactions in stocks with a per share stock
price of $1.00 or more,'' in ``Routing Fee--per share,'' the Exchange
proposes to add new rule text to provide for a routing fee of ``$0.0030
for orders routed pursuant to the Midpoint Ping routing strategy (as
defined in Rule 7.37(c)(9)(A)).'' \12\
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\12\ For orders in securities priced below $1.00 routed pursuant
to the Midpoint Ping routing strategy, the routing fee of 0.3% of
total dollar value of the transaction set forth in the table under
the section titled ``Transactions in stocks with a per share stock
price less than $1.00'' in ``Routing Fee--per share in any stock
with a per share stock price below $1.00'' will apply.
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<bullet> In the section titled ``Transaction Fees and Credits For
Tape B and C Securities'' in the first bullet under ``Routing Fees,''
relating to securities at or above $1.00, the Exchange proposes to add
text specifying ``$0.0030 per share for orders routed pursuant to the
Midpoint Ping routing strategy (as defined in Rule 7.37(c)(9)(A)).''
\13\
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\13\ For orders in securities priced below $1.00 routed pursuant
to the Midpoint Ping routing strategy, the routing fee of 0.30% of
total dollar value of the transaction set forth in the second bullet
under ``Routing Fees'' will apply.
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The Exchange believes that this routing functionality would offer
member organizations the opportunity to access midpoint liquidity on
other trading venues (and, specifically, on the Exchange's affiliated
equity exchanges). This routing functionality is completely optional,
and member organizations can readily select from among various
providers of routing services, including other exchanges and non-
exchange venues. Member organizations that choose not to utilize this
routing strategy would continue to be able to trade on the Exchange as
they currently do.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\14\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\15\ 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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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4) and (5).
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As discussed above, 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.'' \16\ 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.'' \17\
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\16\ See supra note 4.
\17\ See supra note 5.
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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
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, changes to exchange
transaction fees can have a direct effect on the ability of an exchange
to compete for order flow.
The Midpoint Ping routing strategy is intended to provide member
organizations with the option to, after interacting with interest on
the Exchange Book, route remaining quantities of MPL-IOC Orders to
other NYSE Group equity exchanges. This routing functionality is
provided by the Exchange on a voluntary basis, and no
[[Page 15289]]
rule or regulation requires that the Exchange offer it. Nor does any
rule or regulation require market participants to route orders in this
manner. As noted above, the Exchange operates in a highly competitive
market in which market participants can readily select between various
providers of routing services with different product offerings and
different pricing. The Exchange believes the proposed fees are
reasonable, as they are within the range of other routing fees the
Exchange currently charges.
The Exchange believes its proposal equitably allocates its fees
among market participants. The Exchange believes that the proposal
represents an equitable allocation of fees because it would apply
uniformly to all member organizations, in that all member organizations
will have the ability to utilize the Midpoint Ping routing strategy,
and each such member organization would be charged the proposed fee
when utilizing the functionality. Without having a view of member
organizations' activity on other exchanges and off-exchange venues, the
Exchange has no way of knowing whether this proposed rule change would
serve as a disincentive to utilize the order type. However, the
Exchange believes that a number of member organizations would seek to
utilize the functionality, which would facilitate access to midpoint
liquidity on other trading venues.
The Exchange reiterates that the routing functionality offered by
the Exchange is completely optional and that the Exchange operates in a
highly competitive market in which market participants can readily
select between various providers of routing services with different
product offerings and different pricing. The Exchange believes that the
proposed fee structure for orders routed pursuant to the Midpoint Ping
routing strategy is a fair and equitable approach to pricing.
The Exchange believes that the proposal is not unfairly
discriminatory. The Exchange believes it is not unfairly discriminatory
as the proposal to charge a fee would be assessed on an equal basis to
all member organizations that use the Midpoint Ping routing strategy.
Moreover, this proposed rule change neither targets, nor will it have a
disparate impact on, any particular category of market participant. The
Exchange believes that this proposal does not permit unfair
discrimination because the changes described in this proposal would be
applied to all similarly situated member organizations. Accordingly, no
member organization already operating on the Exchange would be
disadvantaged by the proposed allocation of fees. The Exchange further
believes that the proposed rule change would not permit unfair
discrimination among member organizations because the Midpoint Ping
routing strategy would remain available to all member organizations on
an equal basis, and each such participant would be charged the same fee
for using the functionality.
Finally, the submission of orders to the Exchange is optional for
member organizations 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,\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. 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\ The Exchange does not believe that the proposed fee
change represents a significant departure from previous pricing offered
by the Exchange or pricing offered by the Exchange's competitors.
Member organizations may opt to disfavor the Exchange's pricing if they
believe that alternatives offer them better value. Accordingly, the
Exchange does not believe that the proposed change will impair the
ability of member organizations or competing venues to maintain their
competitive standing in the financial markets.
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\18\ 15 U.S.C. 78f(b)(8).
\19\ See supra note 4.
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Intramarket Competition. The Exchange believes the proposed
amendment to its Price List would not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Midpoint Ping routing strategy is available to all member
organizations, and all member organizations that use the functionality
to route their orders would be charged the proposed fee. This routing
functionality is provided by the Exchange on a voluntary basis, and no
rule or regulation requires that the Exchange offer it. Member
organizations have the choice whether or not to use the Midpoint Ping
routing strategy, and those that choose not to utilize it will not be
impacted by the proposed rule change. The Exchange also does not
believe the proposed rule change would impact intramarket competition,
as the proposed fee would apply equally to all member organizations
that choose to utilize the Midpoint Ping routing strategy, and
therefore the proposed change would not impose a disparate burden on
competition among market participants on the Exchange.
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 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.
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,\20\ and Rule 19b-
4(f)(2) thereunder \21\ 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
[[Page 15290]]
investors, or otherwise in furtherance of the purposes of the Act.
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\20\ 15 U.S.C. 78s(b)(3)(A)(ii).
\21\ 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#4133342d246c222e2c2c242f3532013224226f262e37"><span class="__cf_email__" data-cfemail="542621383179373b3939313a2027142731377a333b22">[email protected]</span></a>. Please include
file number SR-NYSE-2025-10 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-2025-10. 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
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-NYSE-2025-10 and should be
submitted on or before April 30, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-06034 Filed 4-8-25; 8:45 am]
BILLING CODE 8011-01-P
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