Notice2025-09967
Self-Regulatory Organizations; NYSE Texas, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fee Schedule of NYSE Texas To Adopt Fees Applicable to Orders Executed in Auctions
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Published
June 3, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 105 (Tuesday, June 3, 2025)</title>
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[Federal Register Volume 90, Number 105 (Tuesday, June 3, 2025)]
[Notices]
[Pages 23574-23577]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09967]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103135; File No. SR-NYSETEX-2025-13]
Self-Regulatory Organizations; NYSE Texas, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the Fee
Schedule of NYSE Texas To Adopt Fees Applicable to Orders Executed in
Auctions
May 28, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 19, 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 and II
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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 adopt fees applicable to orders executed in
auctions. The Exchange proposes to implement the fee changes effective
May 19, 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the table in Section E.1. of the Fee
Schedule to adopt fees applicable to orders executed in auctions. The
Exchange proposes to implement the fee changes effective May 19, 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
[[Page 23575]]
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.'' \3\
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\3\ 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.'' \4\ Indeed, equity trading is currently dispersed across
16 exchanges,\5\ numerous alternative trading systems,\6\ 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.\7\ 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%.\8\
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\4\ 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).
\5\ 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>.
\6\ 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>.
\7\ 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>.
\8\ 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 E.1. of the Fee Schedule currently includes a table setting
forth fees for executions resulting from single-sided orders. In
connection with the Exchange's recent adoption of rules to provide for
the operation of auctions,\9\ the Exchange proposes to add a new column
to the table to provide for fees for orders executed in auctions. This
new column would be titled ``Auction Fees'' and would provide for the
following rates, for Tape A, B, and C symbols in all trading sessions:
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\9\ See Securities Exchange Act Release No. 103039 (May 13,
2025), 90 FR 21369 (May 19, 2025) (SR-NYSETEX-2025-08) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt
Rule 7.35 and Amend Rule 7.31).
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<bullet> For securities priced at or above $1.00 per share:
[cir] $0.0015 for Opening Orders
[cir] $0.0012 for Closing Orders
[cir] $0.0006 for executions in auctions other than from Auction Orders
<bullet> For securities priced below $1.00 per share, 0.10% of
trade value.\10\
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\10\ The Fee Schedule defines trade value as a dollar amount
equal to the price per share multiplied by the number of shares
executed. The Exchange proposes a non-substantive, formatting change
to incorporate this definition into the bulleted list of definitions
proposed in this filing.
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The Exchange also proposes to adopt the following definitions for
terms used in Section E.1.:
<bullet> ``Auction Orders'' means Market Orders, Market-On-Close
Orders, Limit-On-Close Orders, and Auction-Only Orders executed in an
NYSE Texas auction.
<bullet> ``Closing Orders'' means Market Orders, Market-On Close
Orders, Limit-On-Close Orders, and Auction-Only Orders executed in a
Closing Auction.
<bullet> ``Opening Orders'' means Market Orders and Auction-Only
Orders executed in an Early Open Auction, Core Open Auction, or Trading
Halt Auction.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\11\ in general, and furthers the
objectives of Sections 6(b)(4) of the Act,\12\ 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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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
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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.'' \13\
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\13\ See Regulation NMS, 70 FR 37499.
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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 Exchange believes that the proposed fees for orders executed in
auctions on the Exchange are reasonable, as they are within the range
of transaction fees that the Exchange currently charges and are
identical to fees charged by the Exchange's affiliated equities
exchange NYSE Arca, Inc. (``NYSE Arca'') for orders executed in
auctions.\14\ The Exchange notes that market participants are free to
direct 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 encourage Participants
to direct order flow to the Exchange to participate in auctions.
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\14\ See NYSE Arca Equities Fees and Charges Sections III
(Standard Rates--Transactions (applicable when Tier Rates do not
apply)) (providing for $0.0015 fee for Opening Orders and $0.0012
fee for Closing Orders in securities priced at or above $1.00, and
0.1% of Dollar Value fee for orders in securities priced below
$1.00) and IV (Other Standard Rates for Securities with a Per Share
Price $1.00 or Above) (providing for $0.0006 fee for executions in
an auction other than for executions from Auction Orders, for orders
in securities priced at or above $1.00).
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The Exchange believes that the proposed change is an equitable
allocation of fees and credits among its market participants and is not
unfairly discriminatory, as it applies equally to all similarly
situated market participants. Moreover, the proposed rule change
neither targets, nor will it have a disparate impact on, any particular
category of market participant. The proposed fees are based
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on the type of business transacted on the Exchange, and Participants
are not required to submit orders to the Exchange for execution in
auctions or otherwise. The Exchange believes that the proposal would
equitably allocate fees among market participants and would not permit
unfair discrimination because the proposed fees would apply uniformly
to all Participants that execute orders in auctions on the Exchange. As
noted above, in today's competitive marketplace, market participants
have a choice of where to direct their order flow or which market to
transact on. 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 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,\15\ 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 proposed change
is intended to facilitate 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.'' \16\
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\15\ 15 U.S.C. 78f(b)(8).
\16\ See Regulation NMS, 70 FR at 37498-99.
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Intramarket Competition. The Exchange believes the proposed fees
for orders executed in auctions would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The proposed change is intended to encourage
additional order flow to be directed to the Exchange to participate in
auctions, and Participants that do not execute orders in auctions would
not be impacted by the proposed rule change. The Exchange also does not
believe the proposed rule change would impact intramarket competition
because the proposed fee would apply to all orders executed in auctions
on an equal and non-discriminatory basis, 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 credits 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
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) of the Act \17\ and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(2).
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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. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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#5321263f367e303c3e3e363d2720132036307d343c25"><span class="__cf_email__" data-cfemail="e193948d84cc828e8c8c848f9592a1928482cf868e97">[email protected]</span></a>. Please include
file number SR-NYSETEX-2025-13 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-NYSETEX-2025-13. 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
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-2025-13 and should
be submitted on or before June 24, 2025.
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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09967 Filed 6-2-25; 8:45 am]
BILLING CODE 8011-01-P
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