Notice2026-12022
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
June 16, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 115 (Tuesday, June 16, 2026)</title>
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[Federal Register Volume 91, Number 115 (Tuesday, June 16, 2026)]
[Notices]
[Pages 36222-36224]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-12022]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105657; File No. SR-NYSEARCA-2026-61]
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
June 11, 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 June 1, 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'') to modify the application of the Ratio
Threshold Fee. 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. 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 modify the
application of the Ratio Threshold Fee, which applies to Auction-Only
Orders during the period when auction imbalance information is being
disseminated for a Core Open Auction or Closing Auction.\4\
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\4\ See Securities Exchange Act Release No. 103938 (September
10, 2025), 90 FR 44442 (September 15, 2025) (SR-NYSEARCA-2025-69).
The Ratio Threshold Fee was originally adopted in 2020. See
Securities Exchange Act Release No. 88930 (May 21, 2020), 85 FR
32068 (May 28, 2020) (SR-NYSEARCA-2020-45). The Ratio Threshold Fee
was subsequently modified in 2023. See Securities Exchange Act
Release No. 97681 (June 9, 2023), 88 FR 39275 (June 15, 2023) (SR-
NYSEARCA-2023-39).
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The Exchange proposes to implement the fee changes effective June
1, 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.'' \5\
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\5\ 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.'' \6\ Indeed, equity trading is currently dispersed across
17 exchanges,\7\ numerous alternative trading systems,\8\ 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.\9\ 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.\10\
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\6\ 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).
\7\ 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>.
\8\ 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>.
\9\ 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>.
\10\ 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, based on transaction fees and credits. Accordingly, the
Exchange's fees, including the proposed modification to the Ratio
Threshold Fee, are reasonably constrained by competitive alternatives
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
The Ratio Threshold Fee currently applies to shares of Auction-Only
Orders \11\ during the period when Auction Imbalance information is
being disseminated for a Core Open Auction or Closing Auction (``RT--
Auction Fee'').
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\11\ An Auction-Only Order is a Limit or Market Order that is to
be traded only within an auction pursuant to Rule 7.35-E or routed
pursuant to Rule 7.34-E. See Rule 7.31-E(c). Auction-Only Orders are
orders submitted by an ETP Holder during the Early Open Auction,
Core Open Auction, Closing Auction and Trading Halt Auction. See
Rule 7.35-E.
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The purpose of the RT--Auction Fee is the same as it was since it
was originally adopted, e.g., to disincentivize the cancellation of
shares close to the commencement of the Opening Auction and the Closing
Auction. Under the current formula, shares cancelled nearer to the
Opening Auction and the Closing Auction are weighted more heavily than
those cancelled earlier.\12\ The RT--Auction Fee is currently
calculated based on the number of shares cancelled by an ETP Holder. An
ETP Holder is charged the fee if its average daily cancelled shares
reach 500,000 shares and its Weighted Ratio Shares Threshold reaches
25. However, the current calculation produces distorted results in
certain
[[Page 36223]]
cases, as described below. To address such edge cases, the Exchange
proposes to modify how the RT--Auction Fee is calculated.
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\12\ The current fee focuses on Auction-Only Orders because a
disproportionate amount of such orders that are not executed use
more system resources, including updates to the Auction Imbalance
Information as such orders are entered and cancelled, than other
order entry and cancellation practices of ETP Holders. Accordingly,
for Auction-Only Orders, Ratio Shares would include shares of
Auction-Only Orders cancelled during the period when Auction
Imbalance Information is being disseminated for the Core Open
Auction and Closing Auction. The proposed modification to the
calculation method would maintain the same focus and is intended to
disincentivize the activity noted above.
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More specifically, the Exchange proposes to add a second threshold:
an ETP Holder would be charged a fee only if both its average daily
cancelled shares and its average daily weighted cancelled shares each
equal or exceed 500,000. As proposed, an ETP Holder would be charged an
RT--Auction Fee if the ETP Holder has an average daily number of
cancelled shares of 500,000 or more and an average daily number of
weighted cancelled shares of 500,000 or more for each auction.
The current formula can produce a distorted result when an ETP
Holder cancels a large number of shares but executes very few. For
example, an ETP Holder that cancels 1,000,000 shares--yielding only 100
weighted shares under the formula--but executes just 1 share would have
a Weighted Ratio Shares Threshold of 100, triggering the fee even
though its actual market impact is minimal. The proposed dual threshold
addresses this distortion by ensuring the fee applies only when both
raw and weighted cancellation activity are substantial.
In revising how the RT--Auction Fee would be calculated, the
Exchange also proposes to modify the definition of ``Weighted Ratio
Shares Threshold'' to address a gap in the current formula. The current
definition does not account for an ETP Holder that does not execute any
shares during the billing month. Currently, the threshold is calculated
by dividing an ETP Holder's total Weighted Ratio Shares by its total
executed shared, which leaves the ratio undefined when an ETP Holder
executes zero shares (division by zero). To address this, the Exchange
proposes to add the following sentence to the current definition: ``If
no shares are executed in an auction by the ETP Holder, a value of 1
will be used in the denominator.'' For example, an ETP Holder with
1,000,000 Weighted Ratio Shares and 0 shares executed would have a
threshold of 1,000,000 rather than an undefined value.
The Exchange's proposed modifications are intended to more
precisely target the order entry practices that impose costs on other
market participants. The Exchange believes the proposed modification to
the calculation of the RT--Auction Fee will continue to strengthen the
Exchange's goal of providing a more efficient marketplace and enhance
the trading experience of all ETP Holders by encouraging them to more
efficiently participate on the Exchange.
The purpose of the Ratio Threshold Fee is not to create revenue,
but rather to provide an incentive for a small number of ETP Holders to
change their order entry practices. Based on an analysis of order entry
practices by ETP Holders between January 2026 and April 2026, only 4
ETP Holders would have incurred the RT--Auction Fee, as modified by
this proposed rule change. The Exchange does not anticipate the
proposed recalibration would subject any additional ETP Holders to the
RT--Auction Fee.
The Ratio Threshold Fee is intended to encourage efficient usage of
Exchange systems by ETP Holders. The Exchange believes that it is in
the best interests of all ETP Holders and investors who access the
Exchange to encourage efficient systems usage. Unproductive share entry
and cancellation practices, such as when ETP Holders flood the market
with orders that are frequently and/or rapidly cancelled, do little to
support meaningful price discovery, may create investor confusion about
the extent of trading interest in a security. The Exchange further
believes that inefficient order entry practices of a small number of
ETP Holders may place excessive burdens on Exchange systems and to the
systems of other ETP Holders that are ingesting market data, while also
negatively impacting the usefulness of market data feeds that transmit
each order and subsequent cancellation.\13\ ETP Holders with an
excessive amount of cancelled shares relative to executed shares do
little to support meaningful price discovery.
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\13\ See generally Recommendations Regarding Regulatory Reponses
to the Market Events of May 6, 2010, Joint CFTC-SEC Advisory
Committee on Emerging Regulatory Issues, at 11 (February 18, 2011)
(``The SEC and CFTC should also consider addressing the
disproportionate impact that [high frequency trading] has on
Exchange message traffic and market surveillance costs. . . . The
Committee recognizes that there are valid reasons for algorithmic
strategies to drive high cancellation rates, but we believe that
this is an area that deserves further study. At a minimum, we
believe that the participants of those strategies should properly
absorb the externalized costs of their activity.'').
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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 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.'' \16\
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\16\ See Regulation NMS, supra note 5, 70 FR at 37499.
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The proposed modification to the RT--Auction Fee is reasonable for
two reasons. First, it is designed to improve liquidity quality in
advance of auctions for the benefit of all market participants. Second,
it more precisely identifies the unproductive order entry behavior the
fee was designed to target, ensuring the fee falls only on ETP Holders
whose cancellation activity--measured both in raw and weighted terms--
is genuinely disruptive. Any affected ETP Holder can avoid the fee by
adjusting its order entry and/or cancellation practices, which would
itself advance the fee's purpose.
As a general principle, the Exchange believes that greater
participation on the Exchange by ETP Holders improves market quality
for all market participants. Thus, in modifying the current fee, the
Exchange balanced the desire to improve market quality against the need
to discourage inefficient order entry and/or cancellation practices.
The Exchange believes that the proposed change to the RT--Auction
Fee is equitably allocated among its market participants because it
applies equally to all similarly situated ETP Holders. Although only a
small number of ETP Holders may be subject to the RT--Auction Fee based
on their current trading practices, any ETP Holder could decide to
change its order entry practices at any time and thus avoid the fee.
The fee is therefore designed to encourage better order entry practices
by all ETP Holders for the benefit of all market participants.
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The Exchange believes that the proposed change to the RT--Auction
Fee is not unfairly discriminatory. In the prevailing competitive
environment, ETP Holders are free to disfavor the Exchange's pricing if
they believe that alternatives offer them better value and are free to
transact on competitor markets to avoid being subject to the Exchange's
fees that are the subject of this proposed rule change. The Exchange
believes that the proposed fee changes neither targets nor will it have
a disparate impact on any particular category of market participant.
The Exchange believes that the proposal does not permit unfair
discrimination because it would be applied to all similarly situated
ETP Holders, who would all be subject to the fee on an equal basis. All
ETP Holders would continue to be subject to the same fee structure, and
access to the Exchange's market would continue to be offered on fair
and non-discriminatory terms.
For the foregoing reasons, the Exchange believes that the proposed
rule change is consistent with Section 6(b)(4) and (5) of the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\17\ 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.
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\17\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition. The Exchange believes the proposed change
to the RT--Auction Fee would not place any undue burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because the proposed fee change is designed to
encourage ETP Holders to submit shares into the market that are
actionable. Further, the proposal would apply to all ETP Holders on an
equal basis, and, as such, the proposed change would not impose a
disparate burden on competition among market participants on the
Exchange. To the extent that these purposes are achieved, the Exchange
believes that the proposal would serve as an incentive for ETP Holders
to modify their order entry practices, thus enhancing the quality of
the market and increasing the volume of orders directed to, and shares
executed on, the Exchange. In turn, all the Exchange's market
participants would benefit from the improved market liquidity.
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 review, and consider adjusting 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, 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#4d3f382128602e2220202823393e0d3e282e632a223b"><span class="__cf_email__" data-cfemail="c6b4b3aaa3eba5a9ababa3a8b2b586b5a3a5e8a1a9b0">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2026-61 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-2026-61. 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-2026-61 and should be submitted
on or before July 7, 2026.
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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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-12022 Filed 6-15-26; 8:45 am]
BILLING CODE 8011-01-P
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