[Federal Register Volume 77, Number 218 (Friday, November 9, 2012)]
[Notices]
[Pages 67431-67433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-27353]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68150; File No. SR-NYSE-2012-56]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Proposing To Make Changes to Certain Fees and Credits Within the New
York Stock Exchange LLC Price List
November 5, 2012.
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 October 22, 2012, New York Stock Exchange LLC (the
``Exchange'' or ``NYSE'') 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 make changes to certain fees and credits
within its Price List, which the Exchange proposes to become operative
on November 1, 2012. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to make changes to certain fees and credits
within its Price List, which the Exchange proposes to become operative
on November 1, 2012.
Currently, for transactions in stocks with a per share stock price
of $1.00 or more, the Exchange charges a transaction fee of $0.00055
per share for all market at-the-close (``MOC'') and limit at-the-close
(``LOC'') orders from any member organizations that execute an average
daily trading volume (``ADV'') of MOC and LOC activity on the Exchange
in that month of at least 14 million shares. Member organizations that
do not execute an ADV of MOC and LOC activity on the Exchange of at
least 14 million shares are charged a transaction fee of $0.00095 per
share. The Exchange proposes to modify the threshold for the $0.00055
transaction fee for MOC and LOC orders from an ADV of at least 14
million shares to an ADV of at least 0.375% of consolidated average
daily volume in NYSE-listed securities during the billing month (``NYSE
CADV'').
The Exchange believes that modifying the transaction fee threshold
for MOC and LOC orders with a per share stock price of $1.00 or more as
proposed would provide a more flexible method by which member
organizations may qualify for the lower fee for MOC and LOC orders by
changing from a fixed volume to one that will adjust automatically
based on higher or lower NYSE CADV. The Exchange believes that the
proposed change would continue to allocate a lower fee to member
organizations that make significant contributions to market quality by
providing higher volumes of liquidity.
Currently, the Exchange provides a credit of $0.0018 per share for
transactions in stocks with a per share stock price of $1.00 or more
when adding displayed liquidity to the Exchange if either:
(i) The member organization has ADV that adds liquidity to the
Exchange during the billing month (``Adding ADV,'' which excludes any
liquidity added by a Designated Market Maker (``DMM'')) that is at
least 1.5% of NYSE CADV, and executes MOC and LOC orders of at least
0.375% of NYSE CADV; or
(ii) The member organization has Adding ADV that is at least 0.8%
of NYSE CADV, executes MOC and LOC orders of at least 0.12% of NYSE
CADV, and adds liquidity to the Exchange as a Supplemental Liquidity
Provider (``SLP'') for all assigned SLP securities in the aggregate
(including shares of both an SLP proprietary trading unit (``SLP-
Prop'') and an SLP market maker (``SLMM'') of the same member
organization) of more than 0.25% of NYSE CADV.
The Exchange proposes to modify the second method by which member
organizations may qualify for the credit and add a third method by
which member organizations may qualify for the credit when adding
displayed liquidity. More specifically, the Exchange proposes to revise
the second method to qualify for the credit such that a member
organization would qualify for the credit if the member organization
has Adding ADV that is at least 0.8% of NYSE CADV, executes MOC and LOC
orders of at least 0.12% of NYSE CADV, and adds liquidity to the
Exchange as a SLP for all assigned SLP securities in the aggregate
(including shares of both an SLP-Prop and an SLMM of the same member
organization) of more than 0.15% of NYSE CADV. Currently, a member
organization would have to provide liquidity to the Exchange as an SLP
for all assigned SLP securities in the aggregate of more than 0.25% of
NYSE CADV, as opposed to the proposed 0.15% of NYSE CADV. The Exchange
believes that reducing the threshold to 0.15% of NYSE CADV would allow
more member organizations to qualify for the higher credit, and
therefore, in turn, attract multiple sources of liquidity to the
Exchange.
Finally, the Exchange proposes that a member organization would
qualify for the credit of $0.0018 per share if the member organization
has ADV that adds liquidity in customer electronic orders to the
Exchange (``Customer Electronic Adding ADV,'' which would exclude any
liquidity added by a Floor broker,
[[Page 67432]]
DMM, or SLP) during the billing month that is at least 0.5% of NYSE
CADV, executes MOC and LOC orders of at least 0.12% of NYSE CADV, and
has Customer Electronic Adding ADV during the billing month that, taken
as a percentage of NYSE CADV, is at least equal to the member
organization's Customer Electronic Adding ADV during September 2012 as
a percentage of consolidated average daily volume in NYSE-listed
securities during September 2012 (``September 2012 NYSE CADV'') plus
15%.\3\ For example, if a member organization's Customer Electronic
Adding ADV during September 2012 was 0.10% of September 2012 NYSE CADV,
then the member organization's Customer Electronic Adding ADV during
the billing month must be at least 0.115% of NYSE CADV in order to
qualify for the proposed credit.
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\3\ For purposes of determining whether a firm that becomes a
member organization after September 2012 qualifies for this proposed
third method by which member organizations may qualify for the
$0.0018 per share credit, the new member organization's September
2012 NYSE CADV would be zero, and therefore, the member organization
would only need to have Customer Electronic Adding ADV of at least
0.5% of NYSE CADV and execute MOC and LOC orders of at least 0.12%
of NYSE CADV to qualify for the credit of $0.0018 per share.
Additionally, the September 2012 NYSE CADV of a firm that becomes a
member organization during September 2012 would be calculated based
on the number of trading days during September 2012, not the number
of trading days during September 2012 during which the firm was a
member organization.
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The Exchange believes that adding this third method by which member
organizations may qualify for the $0.0018 per share credit would
encourage additional displayed liquidity on the Exchange. In addition,
the method would provide discounts that are reasonably related to the
value to the Exchange's market quality associated with higher volumes
and would encourage multiple sources of liquidity by providing member
organizations without a DMM, SLP, or Floor broker unit an alternative
method to qualify for the credit when adding displayed liquidity.
The proposed changes are not otherwise intended to address any
other problem, and the Exchange is not aware of any significant problem
that the affected member organizations would have in complying with the
proposed changes.
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''),\4\ in general, and furthers the objectives of Section 6(b)(4)
of the Act,\5\ in particular, because it provides for the equitable
allocation of reasonable dues, fees, and other charges among its
members and issuers and other persons using its facilities and does not
unfairly discriminate between customers, issuers, brokers, or dealers.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that modifying the transaction fee threshold
for MOC and LOC orders with a per share stock price of $1.00 or more is
reasonable because it provides a more flexible method by which member
organizations may qualify for the lower fee for MOC and LOC orders. In
addition, the proposed change is reasonable because the threshold would
adjust automatically based on higher or lower NYSE CADV. The Exchange
believes that the proposed change to MOC and LOC orders is equitable
and not unfairly discriminatory because all similarly situated member
organizations would be subject to the same fee structure, which
automatically adjusts based on prevailing market conditions, and would
continue to allocate a lower fee to member organizations that make
significant contributions to market quality by providing higher volumes
of liquidity.
The Exchange believes that modifying the second method by which
member organizations may qualify for the credit of $0.0018 per share
for transactions in stocks with a per share stock price of $1.00 or
more when adding displayed liquidity is reasonable because lowering the
threshold for SLP provide volume to 0.15% of NYSE CADV would allow more
member organizations to qualify for the reduced fee, which in turn
would attract multiple sources of liquidity to the Exchange. In
addition, the proposed change is equitable and not unfairly
discriminatory because it would continue to provide a higher credit to
member organizations that is reasonably related to the value to the
Exchange's market quality associated with higher volumes.
The Exchange believes the new method by which member organizations
may qualify for the credit for transactions in stocks with a per share
stock price of $1.00 or more when adding displayed liquidity is
reasonable because it would encourage additional displayed liquidity on
the Exchange. The Exchange believes the new method is equitable and not
unfairly discriminatory because it is open to all member organizations
on an equal basis and provides discounts that are reasonably related to
the value to the Exchange's market quality associated with higher
volumes. In addition, the Exchange believes that the proposed change is
equitable and not unfairly discriminatory because it would encourage
multiple sources of liquidity by providing member organizations without
a DMM, SLP, or Floor broker unit an alternative method to qualify for
the credit.
Finally, 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) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge
imposed by the NYSE.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 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:
[[Page 67433]]
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-NYSE-2012-56 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-NYSE-2012-56. 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
10:00 a.m. and 3:00 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-NYSE-2012-56 and should be
submitted on or before November 30, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27353 Filed 11-8-12; 8:45 am]
BILLING CODE 8011-01-P