[Federal Register Volume 78, Number 54 (Wednesday, March 20, 2013)]
[Notices]
[Pages 17247-17249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-06353]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69134; File No. SR-NYSEARCA-2013-24]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Arca Equities Schedule of Fees and Charges for Exchange Services With
Respect to the Retail Order Tier
March 14, 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 March 1, 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'') with respect
to the Retail Order Tier. The Exchange proposes to implement the fee
changes on March 1, 2013. 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.
[[Page 17248]]
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 with respect to the
Retail Order Tier. The Exchange proposes to implement the fee changes
on March 1, 2013.
Currently, ETP Holders, including Market Makers, receive a $0.0032
per share credit for Retail Orders \4\ that provide liquidity in Tape
A, Tape B, and Tape C Securities if the ETP Holder executes an average
daily volume (``ADV'') of Retail Orders during the month that is 0.40%
or more of the United States Consolidated Average Daily Volume (``US
CADV'') for transactions reported to the Consolidated Tape. For all
other fees and credits, tiered or basic rates apply based on a firm's
qualifying levels. The Exchange proposes to (i) lower the ADV
requirement for the Retail Order Tier from 0.40% of US CADV to 0.20% of
US CADV and (ii) increase the credit from $0.0032 to $0.0033 per share.
The Exchange is proposing these changes because it wants to encourage
participation from a greater number of ETP Holders, which would promote
additional liquidity in Retail Orders.
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\4\ A Retail Order is an agency order that originates from a
natural person and is submitted to the Exchange by an ETP Holder,
provided that no change is made to the terms of the order with
respect to price or side of market and the order does not originate
from a trading algorithm or any other computerized methodology. See
Securities Exchange Act Release No. 67540 (July 30, 2012), 77 FR
46539 (August 3, 2012) (SR-NYSEArca-2012-77).
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The proposed change is not otherwise intended to address any other
problem, and the Exchange is not aware of any significant problem that
ETP Holders 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''),\5\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\6\ 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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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that lowering the ADV requirement for the
Retail Order Tier from 0.40% of US CADV to 0.20% of US CADV and
increasing the credit from $0.0032 to $0.0033 per share is reasonable
because the Exchange believes it would encourage participation from a
greater number of ETP Holders, which would promote additional liquidity
in Retail Orders. In this regard, the Exchange believes that
maintaining or increasing the proportion of Retail Orders in exchange-
listed securities that are executed on a registered national securities
exchange (rather than relying on certain available off-exchange
execution methods) would contribute to investors' confidence in the
fairness of their transactions and would benefit all investors by
deepening the Exchange's liquidity pool, supporting the quality of
price discovery, promoting market transparency and improving investor
protection. The Exchange also believes that lowering the threshold and
increasing the credit is reasonable because the current threshold and
credit have not encouraged sufficient additional liquidity and
competition in Retail Orders on the Exchange. The Exchange believes
that lowering the ADV requirement for the Retail Order Tier is
equitable and not unfairly discriminatory because all similarly ETP
Holders would be subject to the same fee structure. The Exchange also
believes that the proposed change is equitable and not unfairly
discriminatory because it is not the only manner in which ETP Holders
may qualify for additional credits. The Exchange notes that certain
other existing pricing Tiers within the Fee Schedule make credits
available to ETP Holders that are also based on the ETP Holder's level
of activity as a percentage of US CADV. These existing percentage
thresholds, depending on other related factors and the level of the
corresponding credits, are within a range that is consistent with the
0.20% proposed herein.\7\ Lastly, the Exchange believes that lowering
the ADV requirement for the Retail Order Tier would allow more ETP
Holders to qualify for the $0.0033 credit, which is equitable and not
unfairly discriminatory because the Retail Order Tier is optional and
available to all ETP Holders on an equal and non-discriminatory basis.
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\7\ For example, Tier 3 requires, in part, that an ETP Holder
provide liquidity of 0.20% or more, but less than 0.30% of the US
CADV in order to qualify for a credit of $0.0022 or $0.0025 per
share for orders that provide liquidity on the Exchange. However,
Tier 3 is not limited to providing liquidity in Retail Orders.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act because lowering the ADV
requirement for the Retail Order Tier would encourage more ETP Holders
to place Retail Orders, which would promote competition in Retail
Orders on the Exchange. As stated above, the Exchange believes that the
proposed change would impact all similarly situated market participants
equally, and as such, the proposed change would not impose a disparate
burden on competition either among or between classes of market
participants. In addition, 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 promotes a
competitive environment.
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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due,
[[Page 17249]]
fee, or other charge imposed by the Exchange.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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) \10\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\10\ 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-2013-24 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-2013-24. 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-2013-24 and should
be submitted on or before April 10, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06353 Filed 3-19-13; 8:45 am]
BILLING CODE 8011-01-P