[Federal Register Volume 77, Number 197 (Thursday, October 11, 2012)]
[Notices]
[Pages 61795-61797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-24970]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67987; File No. SR-NYSEARCA-2012-110]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Equities Schedule of Fees and Charges for Exchange Services To
Amend the Fees Charged for Routing Orders to the New York Stock
Exchange LLC
October 4, 2012.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 28, 2012, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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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[[Page 61796]]
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 Schedule of
Fees and Charges for Exchange Services (``Fee Schedule'') to modify the
fees that it charges for routing orders to the New York Stock Exchange
LLC (``NYSE''). The text of the proposed rule change is available on
the Exchange's Web site at www.nyse.com, 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 modify the fees
that it charges for routing orders to the NYSE. The Exchange proposes
to implement the fee changes on October 1, 2012.\4\
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\4\ The Exchange filed a separate fee filing, which the Exchange
proposes to implement on October 1, 2012. See SR-NYSEArca-2012-104
(Sept. 24, 2012).
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The NYSE has proposed modifications to its transaction fee
structures, including changes to the rates for taking liquidity, to
become effective on October 1, 2012.\5\ The Exchange's current fees for
routing orders in securities with a per share price of $1.00 or more to
the NYSE are closely related to the NYSE's fees for taking liquidity in
such securities, and the Exchange is proposing an adjustment to its
routing fees to maintain the existing relationship to the new fees in
place at the NYSE.
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\5\ See SR-NYSE-2012-50 (Sept. 26, 2012) (the ``NYSE Fee
Filing'').
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Currently, the NYSE charges a transaction fee for certain
transactions in securities with a per share price of $1.00 or more
based on the characteristics of the transaction, including order
type.\6\ Among other changes, the NYSE Fee Filing proposed to increase
the charge for transactions that do not have a specified per share
charge based on their characteristics (``all other'' transactions). The
NYSE Fee Filing proposed to increase the per share charge for all other
non-floor broker transactions (i.e., when taking liquidity from the
Exchange) from $0.0023 to $0.0025 per transaction.
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\6\ For example, the NYSE charges $0.0005 per share (subject to
a monthly cap) for at the opening or at the opening only orders,
$0.0055 per share per transaction for all market at-the-close
(``MOC'') and limit at-the-close (``LOC'') orders from any member
organization executing an average daily volume of MOC/LOC activity
on the NYSE in that month of at least 14 million shares, and $0.0095
per share per transaction for all other MOC and LOC orders.
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Currently, for NYSE Arca Tier 1, Tier 2, Tier 3, Step Up Tier 1,
and Step Up Tier 2 customers, the fee for routing orders in Tape A
securities to the NYSE outside the book is equal to the NYSE fee of
$0.0023 per share for all other non-floor broker transactions in
securities with a per share price of $1.00 or more, and the fee for
routing such orders to the NYSE for non-tier (i.e., Basic Rate)
customers is $0.0025 per share.\7\ Consequently, the Exchange is
proposing to increase each of those fees by $0.0002 to $0.0025 per
share and $0.0027 per share, respectively, consistent with the $0.0002
increase in the NYSE fee for all other non-floor broker transactions.
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\7\ The other tiers in the Fee Schedule (e.g., the Tape B and C
Step Up Tiers, Investor Tiers, Cross-Asset Tier and Retail Order
Tier) do not specify a fee for routing orders in Tape A securities
to the NYSE outside the book. However, such tiers provide that if a
fee (or credit) is not included in the tier, the relevant tiered or
Basic Rate applies based on a firm's qualifying levels. Accordingly,
for orders in Tape A securities routed to the NYSE outside the book,
ETP Holders and Market Makers that qualify for another tier would
default to the Tier 1, Tier 2, Tier 3, Step Up Tier 1, Step Up Tier
2 or Basic Rate that applied to them based on their qualifying
levels.
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In addition, the Exchange currently charges $0.0021 per share for
Primary Sweep Orders \8\ in Tape A securities that are routed outside
the book to the NYSE that remove liquidity from the NYSE.\9\ In order
to maintain the existing relationship to the other Exchange routing
fees that are being adjusted upward, the Exchange is also proposing to
increase this fee by $0.0002, to $0.0023 per share.
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\8\ A Primary Sweep Order is a Primary Only (``PO'') Order
(i.e., a market or limit order that is to be routed to the primary
market) that first sweeps the NYSE Arca book. See NYSE Arca Equities
Rules 7.31(x) and (kk).
\9\ This charge is included in the provisions for Tier 1, Tier
2, and the Basic Rate. The other tiers in the Fee Schedule do not
specify a fee for Primary Sweep Orders in Tape A securities that are
routed outside the book to the NYSE that remove liquidity from the
NYSE. Accordingly, for such orders ETP Holders and Market Makers
that qualify for another tier would default to the Tier 1, Tier 2 or
Basic Rate that applied to them based on their qualifying levels.
See note 7, supra.
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Finally, for Primary Only Plus (``PO+'') orders,\10\ the current
Exchange fee for orders routed to the NYSE that remove liquidity from
the NYSE is $0.0023 per share, which is equal to the current NYSE fee
for all other non-floor broker transactions in securities with a per
share price of $1.00 or more.\11\ Consequently, the Exchange is
proposing to increase its fees for routing PO+ orders to the NYSE that
remove liquidity by the same amount ($0.0002) as the increase in the
corresponding NYSE fees. The proposed new fee for PO+ orders routed to
the NYSE that remove liquidity is $0.0025 per share. This change would
maintain the current relationship with the NYSE rates.
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\10\ A PO+ Order is a PO Order that is entered for participation
in the primary market, other than for participation in the primary
market opening or primary market re-opening. See NYSE Arca Equities
Rule 7.31(x)(3).
\11\ This charge is included in the provisions for Tier 1, Tier
2, and the Basic Rate. The other tiers in the Fee Schedule do not
specify a fee for PO+ orders routed outside the book to the NYSE
that remove liquidity. Accordingly, for such orders ETP Holders and
Market Makers that qualify for another tier would default to the
Tier 1, Tier 2 or Basic Rate that applied to them based on their
qualifying levels. See note 7, supra.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (the
``Act''),\12\ in general, and furthers the objectives of Section
6(b)(4) 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).
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The Exchange believes that the proposed changes are reasonable
because the Exchange's fees for routing orders to the NYSE are closely
related to the NYSE's fees for its members for taking liquidity, and
the fee increases are consistent with the changes proposed by the NYSE
to increase its fees for taking liquidity. The proposed changes will
result in maintaining the existing relationship between the two sets of
fees. In addition, the Exchange believes that the proposed rule change
is reasonable, equitable, and not unfairly discriminatory because it
would result in an increase in the per share fee for orders, Primary
Sweep Orders, and PO+ Orders routed to the NYSE, thereby aligning the
rate that the
[[Page 61797]]
Exchange charges to ETP Holders with the rate that the Exchange is
charged by the NYSE. Accordingly, the Exchange is proposing this
increase so that the rate it charges to ETP Holders reflects the rate
that the Exchange is charged by the NYSE. In addition, the proposed
changes are equitable and not unfairly discriminatory because the fee
increases apply uniformly across pricing tiers and all similarly
situated ETP Holders would be subject to the same fee structure.
The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues. In
such an environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. For the reasons described above, the Exchange believes that
the proposed rule change reflects this competitive environment.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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) \14\ of the Act and subparagraph (f)(2) of Rule
19b-4 \15\ thereunder, because it establishes a due, fee, or other
charge imposed by the NYSE Arca.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such 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.
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
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEArca-2012-110 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2012-110. 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 Web site (http://www.sec.gov/rules/sro.shtml). 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 Web site 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. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2012-110 and should
be submitted on or before November 1, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24970 Filed 10-10-12; 8:45 am]
BILLING CODE 8011-01-P