[Federal Register Volume 78, Number 29 (Tuesday, February 12, 2013)]
[Notices]
[Pages 9985-9987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-03105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68848; File No. SR-NYSEARCA-2013-09]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Proposing To Amend
the NYSE Arca Equities Schedule of Fees and Charges for Exchange
Services
February 6, 2013.
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 January 29, 2013, 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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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 (i)
eliminate the Tape B Step Up Tier and (ii) modify the rebate for Mid-
Point Passive Liquidity (``MPL'') Orders that provide liquidity in Tape
C Securities. 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 (i) eliminate
the Tape B Step Up Tier and (ii) modify the rebate for MPL Orders that
provide liquidity in Tape C Securities. The Exchange proposes to
implement the fee changes on February 1, 2013.
The Tape B Step Up Tier currently provides for a $0.0026 per share
fee for orders of qualifying ETP Holders that take liquidity from the
Book in Tape B Securities. The Exchange has determined to eliminate the
Tape B Step Up Tier because it generally has not incentivized ETP
Holders to submit additional liquidity in Tape B Securities as
intended.\4\
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\4\ See Securities Exchange Act Release No. 66568 (March 9,
2012), 77 FR 15819, 15822 (March 16, 2012) (SR-NYSEArca-2012-17).
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Currently, under Tier 1,\5\ Tier 2,\6\ and the Basic Rates \7\ of
the Fee Schedule, the Exchange offers a $0.0015 credit per share for
MPL Orders \8\ that provide
[[Page 9986]]
liquidity in Tape C Securities, except that for certain Tape C
Securities deemed ``Active Tape C Securities,'' a $0.0025 credit per
share is offered. The Active Tape C Securities are:
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\5\ Tier 1 rates are available to ETP Holders and Market Makers
that provide liquidity an average daily share volume per month of
0.70% or more of the US consolidated average daily volume (``CADV'')
or (2) that (a) provide liquidity an average daily share volume per
month of 0.15% or more of the US CADV and (b) are affiliated with an
OTP Holder or OTP Firm that provides an ADV of electronic posted
executions (including all account types) in Penny Pilot issues on
NYSE Arca Options of at least 100,000 contracts, of which at least
25,000 contracts must be for the account of a market maker.
\6\ Tier 2 rates are available to ETP Holders and Market Makers
that provide liquidity an average daily share volume per month of
0.30% or more, but less than 0.70% of the US CADV.
\7\ Basic Rates are applicable when tier rates do not apply. The
Exchange notes that the Active Tape C Securities are erroneously
referred to as the ``Most Active Tape C Securities'' in the Basic
Rate section of the Fee Schedule. See SR-NYSEArca-2012-104, Exhibit
5, at 26, available at http://www.sec.gov/rules/sro/nysearca/2012/34-67986-ex5.pdf. The changes proposed herein will remove the
erroneous reference.
\8\ See Rules 7.31(h)(4) and (5). MPL Orders allow for
additional opportunities for passive interaction with trading
interest on the Exchange and are designed to offer potential price
improvement to incoming marketable orders submitted to the Exchange.
See Securities Exchange Act Release No. 67986 (October 4, 2012), 77
FR 61803 (October 11, 2012) (SR-NYSEArca-2012-104) (``2012
Release'').
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Company name Symbol
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Cisco Systems, Inc........................ CSCO
Dell Inc.................................. DELL
Facebook, Inc............................. FB
Intel Corporation......................... INTC
Microsoft Corporation..................... MSFT
Micron Technology Inc..................... MU
Oracle Corporation........................ ORCL
Research In Motion Limited................ RIMM
SIRIUS XM Radio Inc....................... SIRI
Zynga, Inc................................ ZNGA
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The Exchange proposes to remove the distinction between MPL Orders
that provide liquidity in Active Tape C Securities and MPL Orders that
provide liquidity in other Tape C Securities by eliminating the Active
Tape C Securities MPL Order credit. At the same time, the Exchange
proposes to increase the existing credits for MPL Orders that provide
liquidity in all Tape C Securities from $0.0015 to $0.0020 per share.
The Exchange believes that the proposed change will increase the
liquidity available on the Exchange in Tape C Securities generally, and
therefore could increase the potential price improvement to incoming
marketable orders submitted to the Exchange in Tape C Securities.
The proposed change is not otherwise intended to address any other
problem, and the Exchange is not aware of any significant problem that
the affected market participants would have in complying with the
proposed change.
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''),\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that eliminating the Tape B Step Up Tier is
reasonable because such tier has generally not incentivized ETP Holders
to submit additional liquidity in Tape B Securities as intended.\11\
The Exchange believes that removal of the Tape B Step Up Tier is
equitable and not unfairly discriminatory because it would be
eliminated for all ETP Holders.
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\11\ See note 4, supra.
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In addition, the Exchange believes that the proposed change to have
the same credit apply to liquidity providing MPL Orders in Active Tape
C Securities and MPL Orders that provide liquidity in other Tape C
Securities is reasonable because the Exchange believes that it will
incentivize ETP Holders to submit more liquidity providing MPL Orders
to the Book for all Tape C Securities, thereby increasing the liquidity
available on the Exchange in Tape C Securities generally, and therefore
could increase the potential price improvement and benefit all market
participants. The Exchange also believes the change to the MPL Order
credit in Tape C Securities is reasonable because the $0.0025 credit
for just the Active Tape C Securities has not generally incentivized
ETP Holders to submit additional liquidity in Active Tape C Securities
as intended.\12\ The Exchange, however, believes that that the
increased $0.0020 MPL credit in all Tape C Securities will have the
desired effect of incentivizing ETP holders to increase liquidity in
Tape C Securities because ETP Holders will not be limited to Active
Tape C Securities only to receive the higher MPL credit. The Exchange
believes the proposed change also is equitable and not unfairly
discriminatory because it will apply uniformly to all ETP Holders and
all MPL Orders in Tape C Securities will be eligible for the credit.
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\12\ See 2012 Release, supra note 8.
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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 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. In particular, the removal
of the Tape B Step Up Tier will not impose a burden on competition
because the tier will be removed in its entirety and generally has not
encouraged liquidity as intended. In addition, because the Tape B Step
Up Tier did not operate as intended--which was to increase liquidity in
Tape B Securities--the Exchange does not believe that firms will be
adversely affected as they generally were not availing themselves of
that tier in any event. Eliminating the Active Tape C Securities MPL
Order credit and replacing it with a MPL Order credit in all Tape C
Securities will not impose a burden in competition because now all Tape
C Securities will eligible for the credit, albeit at a slightly reduced
level than for Active Tape C Securities.
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) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by NYSE Arca.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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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
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-2013-09 on the subject line.
[[Page 9987]]
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-2013-09. 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-NYSEArca-2013-09 and should
be submitted on or before March 5, 2013.
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. 2013-03105 Filed 2-11-13; 8:45 am]
BILLING CODE 8011-01-P