Notice2025-09974
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
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 23586-23589]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09974]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103142; File No. SR-NYSEARCA-2025-37]
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
May 28, 2025.
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 May 19, 2025, NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'')
filed with the Securities and Exchange Commission (``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.
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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 NYSE Arca Equities Fees and
Charges (``Fee Schedule'') to adopt fees and credits for Primary Only
Orders routed to NYSE Texas, Inc. 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 adopt fees and
credits for Primary Only (``PO'') Orders routed to NYSE Texas, Inc.
(``NYSE Texas''). The Exchange proposes to implement the fee change
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 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.'' \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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[[Page 23587]]
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 currently has less than 12% market share of
executed volume of equities trading.\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 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
On May 19, 2025, NYSE Texas, Inc. (``NYSE Texas''), an affiliate of
the Exchange, plans to introduce auction functionality applicable to
Tape B securities.\9\ In connection with the introduction of auctions
on NYSE Texas, the Exchange proposes to amend Section V. of the Fee
Schedule titled Standard Rates--Routing and adopt a fee of $0.0005 per
share for PO Orders \10\ in Tape B securities priced at or above $1.00
that are routed to NYSE Texas for execution in the opening or closing
auction on that market. For PO Orders in Tape B securities routed to
NYSE Texas that add liquidity, the Exchange proposes to not provide any
credit. The fees and credits proposed for PO Orders in Tape B
securities routed to NYSE Texas are identical to the fees and credits
adopted by the Exchange for PO Orders in Tape B securities routed to
NYSE American LLC, also an affiliate of the Exchange.\11\
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\9\ See Securities Exchange Act Release No. 103039 (May 13,
2025) (Federal Register notice pending) (SR-NYSETEX-2025-08) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change to
Adopt Rule 7.35 and Amend Rule 7.31).
\10\ A PO Order is a market or limit order that on arrival is
routed directly to the primary listing market without being assigned
a working time or interacting with interest on the NYSE Arca Book.
See NYSE Arca Rule 7.31(f)(1).
\11\ Under the Standard Rates--Routing pricing table on the Fee
Schedule, the Exchange currently charges a per share fee of $0.0005
for PO Orders in Tape B securities priced at or above $1.00 that are
routed to NYSE American Auction. For PO Orders in Tape B securities
routed to NYSE American that add liquidity, the Exchange does not
provide any credit.
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The proposed fee change would maintain consistency with respect to
the fees charged and credits provided by the Exchange when it routes PO
Orders to an away market that is an affiliate of the Exchange.
In connection with the Exchange's proposal to adopt fees and
credits for PO Orders routed to NYSE Texas, the Exchange proposes to
adopt a definition of the term ``NYSE Texas Auction'' under Section I.
of the Fee Schedule. As proposed, the term ``NYSE Texas Auction'' would
mean orders routed for execution in the open or closing auction on NYSE
Texas.
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 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.'' \14\
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\14\ 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 the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue to reduce use of certain categories of
products, in response to fee changes. With respect to non-marketable
order which provide liquidity on an Exchange, ETP Holders can choose
from any one of the 16 currently operating registered exchanges to
route such order flow. Accordingly, competitive forces reasonably
constrain exchange transaction fees that relate to orders that would
provide displayed liquidity on an exchange. Stated otherwise, changes
to exchange transaction fees can have a direct effect on the ability of
an exchange to compete for order flow.
The Exchange believes the proposed amendment to the routing fees is
reasonable. The Exchange believes it is reasonable to adopt a fee when
it routes orders to away markets. In particular, the Exchange believes
that the proposed rule change is reasonable because it seeks to recoup
costs incurred by the Exchange when routing orders to away markets. The
proposed routing fees are also similar to fees currently charged by the
Exchange for routing PO Orders to NYSE American for execution on that
market's opening or closing auction.
The Exchange believes that the proposed rule change constitutes an
equitable allocation of reasonable fees because the proposed fee is
designed to reflect the costs incurred by the Exchange for orders
submitted by ETP Holders that remove liquidity from auctions conducted
on away markets and would apply equally to all ETP Holders that choose
to use the Exchange to route PO Orders to NYSE Texas. Furthermore, the
Exchange notes that routing through the Exchange is voluntary, and,
because the Exchange operates in a highly competitive environment as
discussed below, ETP Holders that do not favor the Exchange's pricing
can readily direct order flow directly to NYSE Texas or through
competing venues or providers of routing services. The proposed change
[[Page 23588]]
may impact the submission of orders to a national securities exchange,
and to the extent that ETP Holders continue to submit PO Orders to the
Exchange, the proposed rule change would not have a negative impact to
ETP Holders trading on the Exchange because the proposed fees and
credits are consistent with the fees and credits adopted by the
Exchange for routing PO Orders to an away market that is an affiliate
of the Exchange.\15\ However, without having a view of ETP Holder's
activity on other markets and off-exchange venues, the Exchange has no
way of knowing whether this proposed rule change would result in a
change in trading behavior by ETP Holders.
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\15\ See, note 12, supra.
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The proposal to adopt fees and credits for PO Orders routed to NYSE
Texas for execution in that market's opening or closing auction or that
add liquidity on that market are not unfairly discriminatory because
the proposed pricing would be applied on an equal basis to all ETP
Holders that choose to send PO Orders to the Exchange. Additionally,
the proposed rule change neither targets nor will it have a disparate
impact on any particular category of market participants. The proposal
does not permit unfair discrimination because the proposed fees and
credits would be applied to all ETP Holders, who would all be assessed
the same pricing on an equal basis. Accordingly, no ETP Holder already
operating on the Exchange would be disadvantaged by this allocation of
fees and credits.
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, the Exchange believes that the proposed
rule change could promote competition between the Exchange and
competing venues or providers of routing services. 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 Regulation NMS, 70 FR 37498-99.
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Intramarket Competition. The Exchange does not believe the proposed
rule change will impose any burden on intramarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
As noted above, the Exchange would uniformly assess the proposed fees
and credits on all ETP Holders who choose to route PO Orders through
the Exchange to NYSE Texas. The Exchange does not believe that the
proposed rule change will impair the ability of ETP Holders to compete
in the financial markets. There are 16 exchanges, numerous alternative
trading systems and broker-dealer internalizers and wholesalers, all
competing for order flow from which ETP Holders may choose to send
their quotes and trades. The Exchange also does not believe the
proposed rule change would impact intramarket competition as the
proposed rule change would apply to all ETP Holders equally that
transact on the Exchange, 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 current market share of intraday trading (i.e.,
excluding auctions) is 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. In
particular, the proposed rule change is a response to this competitive
environment where the Exchange is adopting a fee for functionality that
is widely available among its competitors. 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#4032352c256d232f2d2d252e3433003325236e272f36"><span class="__cf_email__" data-cfemail="0c7e796069216f6361616962787f4c7f696f226b637a">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-37 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-2025-37. 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
[[Page 23589]]
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-NYSEARCA-2025-37 and should be submitted on or before June 24, 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. 2025-09974 Filed 6-2-25; 8:45 am]
BILLING CODE 8011-01-P
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