[Federal Register Volume 79, Number 70 (Friday, April 11, 2014)]
[Notices]
[Pages 20283-20285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08125]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71890; File No. SR-NYSE-2014-18]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Its Price List for Certain Executions at the Opening
April 7, 2014.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on March 26, 2014, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') 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 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 for certain
executions at the opening. The Exchange proposes to implement the fee
change effective April 1, 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.
[[Page 20284]]
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 its Price List for certain
executions at the opening.\4\ The Exchange proposes to implement the
fee change effective April 1, 2014.
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\4\ The proposed pricing would only apply to securities priced
$1.00 or greater. The existing pricing for executions at the opening
in securities priced below $1.00 would remain unchanged (i.e., 0.3%
of the total dollar value of the transaction). Designated Market
Maker (``DMM'') executions at the opening would continue to not be
charged.
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The Exchange currently charges a fee of $0.0005 per share for
executions at the opening or at the opening only orders, subject to a
monthly fee cap of $15,000 per member organization for such executions.
The Exchange proposes to raise the fee to $0.0010 per share and the
monthly fee cap to $20,000 per member organization.
The proposed change is not otherwise intended to address any other
issues, and the Exchange is not aware of any problems that members and
member organizations 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 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 it is reasonable to increase the fee and
corresponding fee cap for executions at the opening because members and
member organizations benefit from the substantial amounts of liquidity
that are present on the Exchange during such time. The proposed new
rate of $0.0010 for the fee is reasonable because it will strike a more
appropriate balance between encouraging liquidity at the opening and
generating adequate revenues for the Exchange. The Exchange notes that
it has not increased the fee in nearly five years or the fee cap in
more than two years.\7\ The increase to the fee cap is also reasonable
in light of the proposed increase in the fee because member
organizations would otherwise reach the fee cap twice as quickly. The
Exchange believes that it is reasonable to increase the fee cap for
executions at the opening because a member organization that reaches
the cap would continue to be charged a marginal [sic] rate for its
transactions at the opening that is lower than the $0.0010 rate that
would be applicable without the cap (i.e., once a member organization
reaches the cap, its per-transaction rate thereafter will be zero and
its marginal rate [sic] will decrease for each additional transaction
at the open thereafter). The proposed new rate for the fee and the
corresponding new level for the fee cap are also reasonable because
they are comparable to those for executions at the opening on other
markets.\8\
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\7\ See Securities Exchange Act Release Nos. 60436 (August 5,
2009), 74 FR 40252 (August 11, 2009) (SR-NYSE-2009-77); and 66600
(March 14, 2012), 77 FR 16298 (March 20, 2012) (SR-NYSE-2012-07).
\8\ For example, the Nasdaq Stock Market, LLC (``NASDAQ'')
similarly charges $0.0010 per share for certain orders executed in
the NASDAQ Opening Cross and applies a $20,000 fee cap per month per
firm for such executions. See NASDAQ Rule 7018(e).
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The proposed new rate of $0.0010 for the fee and the increased fee
cap of $20,000 are equitable and not unfairly discriminatory because,
even at such increased levels, this pricing would continue to encourage
robust levels of liquidity at the opening, which benefits all market
participants. This pricing is also equitable and not unfairly
discriminatory because it would apply equally to all similarly situated
member organizations.\9\
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\9\ As noted in note 1 [sic] above, DMM executions at the
opening would continue to not be charged. The Exchange believes that
this is reasonable because of the liquidity-providing function that
DMMs serve. This is also equitable and not unfairly discriminatory
because DMMs are subject to certain obligations to which other
members and member organizations are not.
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Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\10\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, the Exchange believes that the proposed
change would contribute to the Exchange's market quality and ultimately
competition. The proposed change would also lead to increased
competition among execution venues, including by permitting the
Exchange to compete with other markets that apply comparable pricing
for executions at the opening.\11\ The proposed change also would not
impose any burden on competition among market participants. Instead,
the pricing for executions at the opening would remain at relatively
low levels and would continue to reflect the benefit that market
participants receive through the ability to have their orders interact
with other liquidity at the opening.
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\10\ 15 U.S.C. 78f(b)(8).
\11\ See supra note 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 levels at a particular venue to be
excessive or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees and rebates to remain competitive with other exchanges and
with alternative trading systems that have been exempted from
compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees and credits in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited. As a result of all of these considerations, the
Exchange does not believe that the proposed changes will impair the
ability of member organizations or competing order execution venues to
maintain their competitive standing in the financial markets.
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) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
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[[Page 20285]]
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)\14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 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-NYSE-2014-18 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2014-18. 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 such 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-2014-18 and should be
submitted on or before May 2, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Kevin M. O'Neill,
Deputy Secretary.
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\15\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2014-08125 Filed 4-10-14; 8:45 am]
BILLING CODE 8011-01-P