Notice2025-09403
Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE National Schedule of Fees and Rebates
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Published
May 27, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 100 (Tuesday, May 27, 2025)</title>
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[Federal Register Volume 90, Number 100 (Tuesday, May 27, 2025)]
[Notices]
[Pages 22401-22404]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09403]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103087; File No. SR-NYSENAT-2025-11]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
NYSE National Schedule of Fees and Rebates
May 20, 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 May 13, 2025, NYSE National, Inc. (``NYSE National'' 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 NYSE National Schedule of Fees
and Rebates (``Fee Schedule'') to reflect the fee for orders routed
pursuant to the Retail Price Improvement Seeking routing strategy. The
proposed 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 reflect the fee
for orders routed pursuant to the Retail Price Improvement Seeking
routing strategy. The Exchange proposes to implement the fee change
effective May 13, 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 ``fragmented'' market structure where trading in a single stock can
occur
[[Page 22402]]
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% 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 combined 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>. 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, and market participants can
readily trade on competing venues if they deem pricing levels at those
other venues to be more favorable.
Proposed Rule Change
Pursuant to Commission approval, the Exchange has amended its rules
to provide for the optional Retail Price Improvement Seeking routing
strategy, which is available for Type 1 Retail Orders that participate
in the Exchange's Retail Liquidity Program.\10\ After checking the
Exchange Book for available shares, any remaining quantity of a Type 1
Retail Order designated with the Retail Price Improvement Seeking
routing strategy will be routed to New York Stock Exchange, LLC
(``NYSE''). Any shares that remain unexecuted after routing will be
cancelled. The Retail Price Improvement Seeking routing strategy is
intended to offer any remaining quantity of Type 1 Retail Orders, after
executing against interest on the Exchange Book, the opportunity to
access liquidity on the NYSE, which also operates a retail liquidity
program. Type 1 Retail Orders routed to the NYSE with the Retail Price
Improvement Seeking routing strategy would be able to interact with
Retail Price Improvement Orders and other interest on the NYSE book as
a Retail Order in the NYSE retail liquidity program, thereby providing
such orders with additional price improvement opportunities.
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\10\ See Securities Exchange Act Release No. 102912 (April 22,
2025), 90 FR 17655 (April 28, 2025) (SR-NYSENAT-2025-05) (Order
Approving a Proposed Rule Change To Amend NYSE National Rules 7.37
and 7.44); see also Rule 7.37(b)(9)(C).
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In connection with the availability of the Retail Price Improvement
Seeking routing strategy on May 13, 2025,\11\ the Exchange proposes to
amend the Fee Schedule to reflect the routing fee that will apply to
orders routed pursuant to the Retail Price Improvement Seeking routing
strategy. In the table under Section II of the Fee Schedule, which sets
forth routing fees applicable to all ETP Holders, the Exchange proposes
to add text specifying that, for orders in securities at or above
$1.00, there would be no fee for orders routed pursuant to the Retail
Price Improvement Seeking routing strategy (as described in Rule
7.37(b)(9)(C)).
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\11\ See <a href="https://www.nyse.com/trader-update/history#110000948947">https://www.nyse.com/trader-update/history#110000948947</a>.
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The Exchange believes that this routing functionality would provide
retail orders with access to additional retail liquidity and price
improvement opportunities on another trading venue. This routing
functionality is completely optional, and ETP Holders can readily
select from among various providers of routing services, including
other exchanges and non-exchange venues. ETP Holders 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,\12\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\13\ 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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\12\ 15 U.S.C. 78f(b).
\13\ 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.'' \14\ 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.'' \15\
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\14\ See supra note 4.
\15\ 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 Retail Price Improvement Seeking routing strategy is intended
to provide Type 1 Retail Orders with the option to, after interacting
with interest on the Exchange Book, route remaining quantities to the
NYSE to access additional retail liquidity. This routing functionality
is provided by the Exchange on a voluntary basis, and no 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 its proposal to not charge any fee for
orders routed pursuant to the Retail Price Improvement Seeking routing
strategy is reasonable to encourage use
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of the routing strategy and to facilitate additional trading
opportunities for retail order at no additional cost.
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 orders routed pursuant to the Retail Price Improvement
Seeking Strategy, in that all Type 1 Retail Orders may be optionally
designated with the Retail Price Improvement Seeking routing strategy,
and no such orders would be subject to any routing fee for utilizing
the functionality. Without having a view of ETP Holders' activity on
other exchanges and off-exchange venues, the Exchange has no way of
knowing whether this proposed rule change would serve as an incentive
or disincentive to utilize the routing strategy. However, the Exchange
believes that a number of ETP Holders would seek to utilize the routing
functionality, which would facilitate access to additional price
improvement opportunities for retail orders on another trading venue at
no charge.
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 for orders routed pursuant to the Retail Price Improvement
Seeking routing strategy is a fair and equitable approach to pricing.
The Exchange believes that the proposal is not unfairly
discriminatory because it applies on an equal basis to all orders
routed pursuant to the Retail Price Improvement Seeking 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 proposed fee described in this
proposal would apply to all retail orders designated with the Retail
Price Improvement Seeking routing strategy. 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 because
the routing functionality would remain available to similarly-situated
ETP Holders on an equal basis, and each such participant would be
subject to the same fee for using the functionality.
Finally, the submission of orders to the Exchange is optional for
ETP Holders 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. 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\ 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. ETP
Holders 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 ETP
Holders or competing venues to maintain their competitive standing in
the financial markets.
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\16\ 15 U.S.C. 78f(b)(8).
\17\ See supra note 4.
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Intramarket Competition. The Exchange believes the proposed
amendment to its Fee Schedule would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Retail Price Improvement Seeking routing
strategy is available to all Type 1 Retail Orders, and all orders
routed pursuant to the strategy would be subject to the same 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. ETP Holders have the choice whether or not to use the Retail
Price Improvement Seeking 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
ETP Holders that choose to utilize the Retail Price Improvement Seeking
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 (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
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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#641611080149070b0909010a1017241701074a030b12"><span class="__cf_email__" data-cfemail="0371766f662e606c6e6e666d7770437066602d646c75">[email protected]</span></a>. Please include
file number SR-NYSENAT-2025-11 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-NYSENAT-2025-11. 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-NYSENAT-2025-11 and should
be submitted on or before June 17, 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. 2025-09403 Filed 5-23-25; 8:45 am]
BILLING CODE 8011-01-P
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