[Federal Register Volume 79, Number 25 (Thursday, February 6, 2014)]
[Notices]
[Pages 7270-7271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-02497]
[[Page 7270]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71451; File No. SR-NYSEMKT-2014-11]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending Its Price List
To Introduce Fees and Credits for A New Order Type Called a Midpoint
Passive Liquidity Order
January 31, 2014.
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 22, 2014, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') 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 its Price List to introduce fees for
a new order type called a Midpoint Passive Liquidity (``MPL'') Order.
The proposed fees would be operative on January 27, 2014. 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 amend its Price List to introduce fees for
a new order type called a MPL Order. The proposed fees would be
operative on January 27, 2014.
The Exchange recently introduced the MPL Order type,\4\ which is an
undisplayed limit order that automatically executes at the mid-point of
the protected best bid or offer (``PBBO''). An MPL Order is not
eligible for manual executions, including openings, re-openings, or
closing transactions. An MPL Order also is not eligible to trade if it
would trade at a price below $1.00 or if the execution price would be
out to five decimal places above $1.00. All market participants--
customers, Floor brokers, Designated Market Makers (``DMMs''), and
Supplemental Liquidity Providers (``SLPs'')--may use the MPL order
type.
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\4\ See Rule 13--Equities and Securities Exchange Act Release
No. 71329 (January 16, 2014) (SR-NYSEMKT-2013-84).
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The Exchange proposes to charge $0.0028 for listed securities and
$0.0030 for NASDAQ securities traded pursuant to Unlisted Trading
Privileges (``UTP'') for all MPL Orders that remove liquidity from the
Exchange if the security is priced $1.00 or more. The Exchange also
proposes to offer a credit of $0.0016 for listed securities and $0.0025
for NASDAQ securities traded pursuant to UTP for all MPL Orders that
provide liquidity to the Exchange if the security is priced $1.00 or
more.\5\ The fees and credits will apply to all market participants.
MPL Orders that add liquidity will contribute to any adding liquidity
requirements. However, the Exchange notes that MPL Orders will not be
eligible for any additional credits or reduced fees even if the MPL
Orders contribute to a member organization qualifying for an additional
credit. For example, if a DMM qualified for the $0.0042 equity per
share credit when adding liquidity to the Exchange because its
consolidated average daily volume in all Exchange-listed stocks during
the current month was equal to or greater than 135 million shares per
day, the DMM will receive the proposed $0.0016 per share credit for MPL
Orders, not $0.0042 per share credit for such order. Where the MPL
Order fee or credit does not differ from the current fee or credit, the
Exchange has not proposed a change to the Price List.
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\5\ The Exchange's current rates for transactions in securities
with a per share price less of than $1.00 would continue to apply.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\7\ 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed fees of $0.0028 for listed
securities and $0.0030 for NASDAQ securities traded pursuant to UTP for
all MPL Orders that remove liquidity from the Exchange and the proposed
credits of $0.0016 for listed securities and $0.0025 for NASDAQ
securities traded pursuant to UTP for all MPL Orders that provide
liquidity to the Exchange if the security is priced $1.00 or more are
reasonable because the fees and credits would be the same as the fees
and credits that would otherwise apply for all other transactions
(i.e., $0.0028 or $0.0030 fee for taking liquidity from the Exchange
and $0.0016 or $0.0025 credit when adding liquidity to the Exchange).
The Exchange notes that the proposed credits and fees are within the
same range as at least one other exchange for MPL Orders.\8\ The
Exchange also believes that the proposed fees and credits are equitable
and not unfairly discriminatory because they may provide opportunities
for market participants to interact with orders priced at the midpoint
of the PBBO, thus providing price improving liquidity to market
participants and thereby increase the quality of order execution on the
Exchange's market, which benefits all market participants. The Exchange
also believes that providing the same fees and credits for MPL Orders
that would otherwise apply is equitable and not unfairly
discriminatory. Moreover, all market participants will be eligible for
the proposed fees and credits. The Exchange believes that it is
reasonable, equitable, and not unfairly
[[Page 7271]]
discriminatory to limit higher credits for MPL Orders for which market
participants may otherwise qualify because it will ensure that all
market participants pay the same fees and receive the same credits
regardless of Floor broker, DMM, or SLP designation. The Exchange
believes that it is reasonable to allow MPL Orders to count toward
adding liquidity because it is consistent with the purpose of those
credits. The Exchange also believes it is equitable and not unfairly
discriminatory because all market participants that use the MPL Order
type will pay the same fee and receive the same credit.
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\8\ For Tape A Securities under its Tier 1, Tier 2, and Basic
Rate Tier, the Exchange's affiliate, NYSE Arca Equities, Inc.,
currently charges $0.0030 per share for all MPL Orders that remove
liquidity and provides a credit of $0.0015 per share for all MPL
Orders that provide liquidity. See NYSE Arca Equities, Inc. Schedule
of Fees and Charges, available at https://usequities.nyx.com/sites/usequities.nyx.com/files/nyse_arca_marketplace_fees__for_1-2-14.pdf.
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\9\ 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. The Exchange believes the proposed MPL Order fees
and credits will enhance order execution opportunities for member
organizations. Further, the Exchange believes that providing the same
fees and credits for MPL Orders that would otherwise apply will enhance
competition between the Exchange and other exchanges that currently
offer similar order types by offering investors another option to
access liquidity at the midpoint of the PBBO.
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\9\ 15 U.S.C. 78f(b)(8).
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Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee or credit levels at a particular
venue to be unattractive. In such an environment, the Exchange must
continually review, and consider adjusting, its fees and credits to
remain competitive with other exchanges. For these reasons, the
Exchange believes that the proposed rule change reflects this
competitive environment and is therefore consistent with 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) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 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 proposal 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-NYSEMKT-2014-11 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-NYSEMKT-2014-11. 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-NYSEMKT-2014-11 and should
be submitted on or before February 27, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02497 Filed 2-5-14; 8:45 am]
BILLING CODE 8011-01-P