Notice2026-04896
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
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Published
March 13, 2026
Issuing agencies
Securities and Exchange Commission
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<title>Federal Register, Volume 91 Issue 49 (Friday, March 13, 2026)</title>
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[Federal Register Volume 91, Number 49 (Friday, March 13, 2026)]
[Notices]
[Pages 12466-12469]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04896]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104959; File No. SR-NYSEARCA-2026-25]
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
March 10, 2026.
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 2, 2026, 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\ 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 Arca Equities Fees and
Charges (``Fee Schedule'') by adopting a cap to the credit payable
under Step Up Tier 3 under the Step Up Tiers pricing table. The
proposed rule change is available on the Exchange's website at
<a href="http://www.nyse.com">www.nyse.com</a>, and at the principal office of the Exchange.
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.
[[Page 12467]]
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 by adopting a cap
to the credit payable under Step Up Tier 3 under the Step Up Tiers
pricing table. The Exchange proposes to implement the fee change
effective March 2, 2026.
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.'' \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
17 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 currently has less than 15% market share of
executed volume of equities trading.\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 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
Currently, under the Step Up Tiers pricing table in Section VII.
Tier Rates--Round Lots and Odd Lots (Per Share Price $1.00 or Above) of
the Fee Schedule, the Exchange provides credits to ETP Holders who
submit orders that provide displayed liquidity on the Exchange. The
Exchange currently has multiple levels of credits for orders that
provide displayed liquidity that are based on the amount of volume of
such orders that ETP Holders send to the Exchange.
Given the competitive environment in which the Exchange operates,
the Exchange has established multiple Step Up Tiers, which are designed
to encourage ETP Holders that provide displayed liquidity on the
Exchange to increase that order flow, which would benefit all ETP
Holders by providing greater execution opportunities on the Exchange.
In order to provide an incentive for ETP Holders to direct providing
displayed order flow to the Exchange, the credits increase in the
current tiers based on increased levels of volume directed to the
Exchange.
Currently, the following credits are available to ETP Holders that
provide increased levels of displayed liquidity on the Exchange:
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Credit for adding displayed
Tier liquidity
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Step Up Tier 2......................... $0.0033 (Tapes A and C)
$0.0034 (Tape B).
Step Up Tier 3......................... $0.0031 (Tapes A, B and C).
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ETP Holders that currently qualify for Step Up Tier 2 do not
receive any additional incremental Tape B Tier credits for adding
displayed liquidity, including any additional credits associated with
Less Active ETP Securities and are currently capped at $0.0033 per
share in Tape A and Tape C securities and $0.0034 per share in Tape B
securities. However, ETP Holders that are registered as a Lead Market
Maker (LMM) may receive up to a combined Step Up Tier 2 credit of
$0.0036 per share on all its adding volume in Tape B securities if the
ETP Holder, together with its affiliates,\10\ executes Tape B adding
ADV that is at least 40% over the ETP Holder's adding ADV in Q3 2019,
as a percentage of Tape B CADV.
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\10\ The term ``affiliate'' means any ETP Holder under 75%
common ownership or control of that ETP Holder. See Fee Schedule,
NYSE Arca Marketplace: General, Section II. Aggregate Billing of
Affiliated ETP Holders.
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With this proposed rule change, the Exchange proposes to extend the
current cap to the Step Up Tier 3 credit in Tape B securities.
Accordingly, ETP Holders that qualify for Step Up Tier 2 or Step Up
Tier 3 shall not receive additional Tape B Tier credits for adding
displayed liquidity, including any additional credits associated with
Less Active Securities.
With this proposed rule change, ETP Holders that currently qualify
for Step Up Tier 2 that are registered as a LMM would continue to
receive up to a combined Step Up Tier 2 credit of $0.0036 per share on
all its adding volume in Tape B securities if the ETP Holder, together
with its affiliates, executes Tape B adding ADV that is at least 40%
over the ETP Holder's adding ADV in Q3 2019, as a percentage of Tape B
CADV.
The Exchange proposes to amend current footnote (b) in the Step Up
Tiers pricing table to reflect the extension of the proposed cap to ETP
Holders that qualify for Step Up Tier 3. The Exchange proposes to
further amend the text of footnote (b) to clarify that ETP Holders that
are currently eligible to receive the combined credit of $0.0036 per
share would continue to be eligible for such enhanced credit.
The purpose of the proposed rule change is to continue to
incentivize order flow providers to send liquidity-providing orders to
the Exchange while capping the level of credit that such participants
would receive under the
[[Page 12468]]
current Step Up Tier 3. The Exchange believes that, although it is
proposing to limit the financial incentive for orders that provide
displayed liquidity in Tape B securities, the current rebate payable
under Step Up Tier 3, i.e., $0.0031 per share, is among one of the
highest credits paid by the Exchange and should continue to serve as an
incentive for ETP Holders to direct displayed liquidity providing
orders to the Exchange.
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) and (5) 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) and (5).
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As discussed above, the Exchange operates in a highly fragmented
and competitive market in which market participants can readily direct
order flow to competing venues if they deem fee levels at a particular
venue to be excessive or incentives to be insufficient, and the
Exchange represents only a small percentage of the overall 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 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 or reduce use of certain categories of
products, in response to new or different pricing structures being
introduced into the market. Accordingly, competitive forces reasonably
constrain exchange transaction fees and credits that relate to orders
that would provide and remove liquidity on an exchange. Stated
otherwise, changes to exchange transaction fees and credits can have a
direct effect on the ability of an exchange to compete for order flow.
The Exchange believes the proposed rule change to adopt a cap on
the credit applicable to the Step Up Tier 3 credit in Tape B securities
is reasonable because the current credit, which is among the highest
paid by the Exchange should continue to incentivize ETP Holders to
participate on the Exchange and execute a greater number of orders in
Tape B securities on the Exchange. The Exchange believes the current
level of credit payable under the Step Up Tier 3 pricing tier should
continue to encourage ETP Holders to submit additional liquidity to a
national securities exchange. Submission of additional liquidity to the
Exchange would promote price discovery and transparency and enhance
order execution opportunities for ETP Holders from the substantial
amounts of liquidity present on the Exchange. All ETP Holders would
benefit from the greater amounts of liquidity that will be present on
the Exchange, which would provide greater execution opportunities.
The Exchange notes that volume-based incentives and discounts have
been widely adopted by exchanges, including the Exchange, and are
reasonable, equitable and not unfairly discriminatory because they are
available to all ETP Holders on an equal basis. Additionally, the
Exchange is one of many venues and off-exchange venues to which market
participants may direct their order flow, and it represents a small
percentage of the overall market. Competing exchanges offer similar
tiered pricing structures to that of the Exchange, including schedules
of rebates and fees that apply based on members achieving certain
volume thresholds.
The Exchange believes its proposal equitably allocates its fees and
credits among its market participants.
The Exchange believes the proposed amendment to adopt a cap under
Step Up Tier 3 equitably allocates its fees and credits among market
participants. The Exchange believes the level of the credit currently
payable under Step Up Tier 3, which is among the highest paid by the
Exchange, should continue to incentivize ETP Holders to participate on
the Exchange and execute their orders in Tape B securities. The
Exchange believes the current level of credit payable under Step Up
Tier 3 should continue to encourage ETP Holders to send orders that add
liquidity to the Exchange, thereby contributing to robust levels of
liquidity for the benefit all market participants.
The Exchange believes the proposed rule change would thereby
encourage the submission of additional orders to a national securities
exchange, thus promoting price discovery and transparency and enhancing
order execution opportunities for ETP Holders from the substantial
amounts of liquidity present on the Exchange, which would benefit all
market participants on the Exchange. ETP Holders that currently qualify
for credits associated with Step Up pricing tiers on the Exchange will
continue to receive credits when they provide liquidity to the
Exchange. The Exchange believes that recalibrating the requirements for
providing liquidity will continue to attract order flow and liquidity
to the Exchange for the benefit of investors generally.
The Exchange believes that the proposal is not unfairly
discriminatory.
The Exchange believes it is not unfairly discriminatory to cap the
current level of credit payable under Step Up Tier 3 for providing
displayed liquidity in Tape B securities because the proposed cap would
be applied on an equal basis to all ETP Holders, who would all be
subject to the proposed change on an equal basis. Additionally, the
proposal neither targets nor will it have a disparate impact on any
particular category of market participant. The proposal does not permit
unfair discrimination because the proposed change would be applied to
all ETP Holders, who would all be subject to the proposed cap on an
equal basis. Accordingly, no ETP Holder already operating on the
Exchange would be disadvantaged by this allocation of fees. In the
prevailing competitive environment, ETP Holders are free to disfavor
the Exchange's pricing if they believe that alternatives offer them
better value. 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.
For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act \14\ in that it provides for the equitable allocation of
reasonable dues, fees and other charges among its members and other
persons using its facilities and is not designed to unfairly
discriminate between customers, issuers, brokers, or dealers. As
described more fully below in the Exchange's statement regarding the
burden on competition, the Exchange believes that its transaction
[[Page 12469]]
pricing is subject to significant competitive forces.
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\14\ 15 U.S.C. 78f(b)(4) and (5).
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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 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 ETP Holders. 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 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
amendments 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 Exchange does not believe that the proposed
change represents a significant departure from previous pricing offered
by the Exchange or its competitors. The Exchange believes that the
proposed adoption of a cap for the credit payable under Step Up Tier 3,
which continues to be among the highest credits that ETP Holders can
qualify for, would continue to incentivize market participants to
direct liquidity adding order flow 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 and continuing to encourage ETP
Holders to send orders in Tape B securities, thereby contributing
towards a robust and well-balanced market ecosystem.
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 15%. 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
imposes any burden on intermarket competition.
The Exchange believes that the proposed changes could promote
competition between the Exchange and other execution venues, including
those that currently offer similar order types and comparable
transaction pricing, by encouraging additional orders to be sent to the
Exchange for execution.
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,\17\ and Rule 19b-
4(f)(2) thereunder \18\ 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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\17\ 15 U.S.C. 78s(b)(3)(A)(ii).
\18\ 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#ec9e998089c18f8381818982989fac9f898fc28b839a"><span class="__cf_email__" data-cfemail="5725223b327a34383a3a323923241724323479303821">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2026-25 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-2026-25. 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 filing 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-2026-25 and
should be submitted on or before April 3, 2026.
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. 2026-04896 Filed 3-12-26; 8:45 am]
BILLING CODE 8011-01-P
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