[Federal Register Volume 76, Number 7 (Tuesday, January 11, 2011)]
[Notices]
[Pages 1653-1655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-321]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63642; File No. SR-NYSE-2010-87]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Exchange Price List
January 4, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 1654]]
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 22, 2010, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
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 amend its 2011 Price List (``Price List'')
for equity transactions to (i) Increase the credits to customers and
floor brokers for transactions when adding liquidity in NYSE-listed
securities, (ii) increase the fees charged to customers, floor brokers
and Designated Market Makers (``DMMs'') for transactions when taking
liquidity in NYSE-listed securities, (iii) create a second tier of
charges for executions of Market-On-Close (``MOC'') and Limit-On-Close
(``LOC'') orders in NYSE-listed securities, with a reduced charge per
share for member organizations that execute an average daily trading
volume (``ADV'') of greater than 14 million shares of MOC/LOC activity
on the Exchange in the current month, (iv) create a tiered structure of
credits to Supplemental Liquidity Providers (``SLPs'') for adding
liquidity to the Exchange in NYSE-listed securities, based on an SLP's
ADV in added liquidity in the applicable month, and (v) adopt a trading
license fee for calendar year 2011. All of the foregoing changes will
only apply to those NYSE-listed securities with a per share stock price
of $1.00 or more. The amended pricing will take effect on January 3,
2011. The text of the proposed rule change is available at the
Exchange, at http://www.nyse.com, at the Commission's Public Reference
Room, and on the Commission's Web site at http://www.sec.gov.
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 for equity
transactions to increase the credits to customers and floor brokers for
transactions when adding liquidity in NYSE-listed securities. Under the
proposed new pricing for the trading of NYSE-listed securities,
customers will receive a credit of $0.0015 per share for adding
liquidity, and floor brokers will receive a credit of $0.0017 per share
for adding liquidity. In each case, this is an increase of $0.0002 per
share from the currently applicable rate.
The Exchange proposes to further amend its Price List for equity
transactions to increase the fees charged to customers, floor brokers
and DMMs for transactions when taking liquidity in NYSE-listed
securities. Under the proposed new pricing for the trading of NYSE-
listed securities, customers and floor brokers will be charged a fee of
$0.0023 per share for taking liquidity, and DMMs will be charged a fee
of $0.0015 per share for taking liquidity. In each case, this is an
increase of $0.0002 per share from the currently applicable rate.
In addition, the Exchange is proposing to create a second tier of
charges for executions of MOC and LOC orders in NYSE-listed securities,
with a reduced charge of $0.00055 per share for member organizations
that execute an ADV of greater than 14 million shares of MOC/LOC
activity on the Exchange in the current month. Otherwise, the current
rate of $0.00085 per share for executed MOC/LOC orders will be
applicable. The Exchange notes that it has, in the past, had a tiered
structure of charges for MOC/LOC orders based on ADV parameters.\3\ The
proposed second tier of charges for executions of MOC and LOC orders
will reduce charges for those member organizations executing greater
volume at the NYSE close, thereby encouraging market participants to
increase their MOC/LOC activity on the NYSE and facilitating greater
liquidity and improved pricing at the close.\4\
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\3\ See Securities Exchange Act Release No. 60436 (August 5,
2009), 74 FR 40252 (August 11, 2009) (File No. SR-NYSE-2009-77)
(notice of filing and immediate effectiveness of proposed rule
change by NYSE adding a second MOC/LOC tier).
\4\ See e-mail from William Love, Chief Counsel, NYSE Euronext,
to Nathan Saunders, Special Counsel, and Andrew Madar, Special
Counsel, Commission, dated January 3, 2011 (``NYSE e-mail'').
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The Exchange further proposes to create a tiered structure of
credits to SLPs for adding liquidity to the Exchange in NYSE-listed
securities, based on an SLP's ADV in added liquidity in the applicable
month. Under the proposal, SLPs that meet the SLP 10% quoting
requirement will receive a credit per share per transaction for adding
liquidity, based on total ADV of added liquidity in the applicable
month for all assigned SLP securities, as follows:
$0.0022 credit per share per transaction if total ADV of
added liquidity is more than 50 million shares
$0.0021 credit per share per transaction if total ADV of
added liquidity is more than 20 million shares but not more than 50
million shares
$0.0020 credit per share per transaction if total ADV of
added liquidity is more than 10 million shares but not more than 20
million shares
For all other SLP transactions that add liquidity to the Exchange
but do not qualify for any of the foregoing credits, the credit will be
$0.0015 per share per transaction, representing an increased credit of
$0.0002 per share from the current rate for that lowest tier.
The Exchange is also adding a new footnote 4 to the Price List
stating that the ADV calculations described above will exclude early
closing days. The Exchange notes that it had this same footnote in its
Price List in the recent past,\5\ but it was inadvertently eliminated
when a paragraph containing it was deleted.
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\5\ See, e.g., Exhibit 5, footnote 9, in File No. SR-NYSE-2010-
34.
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These changes are intended to be effective immediately for all
transactions beginning January 3, 2011 and are only applicable to those
NYSE-listed securities with a per share stock price of $1.00 or more.
Finally, NYSE Rule 300(b) provides that, in each annual offering,
up to 1366 trading licenses for the following calendar year will be
sold annually at a price per trading license to be established each
year by the Exchange pursuant to a rule filing submitted to the
Commission and that the price per trading license will be published
each year in the Exchange's price list. The Exchange proposes to
establish a trading license fee for calendar year 2011 of $40,000. This
is the same as the trading
[[Page 1655]]
license fee charged in calendar years 2009 and 2010.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\6\ in general, and Section 6(b)(4) of the Act,\7\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. The Exchange believes
that the proposal does not constitute an inequitable allocation of
fees, as all similarly situated member organizations will be subject to
the same fee structure and access to the Exchange's market is offered
on fair and non-discriminatory terms. The Exchange believes that the
proposed amendments to the Price List represent an equitable allocation
of dues and fees in that the increase in the credit to customers and
floor brokers when adding liquidity is the same ($0.0002 per share) and
such credits are intended to encourage greater liquidity at the NYSE
quote and narrower spreads.\8\ The proposed increase in the charge for
transactions taking liquidity from the NYSE is the same for customers,
floor brokers and DMMs ($0.0002 per share) and corresponds to the
increase in credits for providing liquidity.\9\
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
\8\ See NYSE e-mail, supra note 4. The Exchange notes that the
reasons for the difference between floor broker and customer credits
on the NYSE (the floor broker credit is currently $0.0002 higher and
will remain $0.0002 higher after the proposed fee changes are
effective) were originally discussed in a 2008 filing by the
Exchange, SR-NYSE-2008-15. In that filing, which established a
credit of $0.0004 per share for execution of orders sent directly to
the floor broker for representation on the NYSE when adding
liquidity to the NYSE Display Book system, the Exchange stated:
``Technological limitations make it impossible for floor brokers to
post orders on other markets while at the point of sale on the
Exchange. Therefore, unlike other Exchange users, they are unable to
benefit from the incentives certain other markets provide to
customers who provide liquidity. The time that would elapse if a
floor broker sent the order to his booth or upstairs trading desk
for execution on another market means that, if the floor broker
utilized this alternative, the trade would likely not get executed
at the desired price. The Exchange believes this disparity places
floor brokers at a competitive disadvantage to other Exchange
customers and believes that the proposed credit will mitigate the
effects of that disadvantage while also attracting additional
liquidity to the Exchange.'' The Statutory Basis section of that
2008 filing further stated that, ``The Exchange believes that the
proposed credit represents an equitable allocation of reasonable
dues, fees, and other charges because floor brokers are integral to
the Exchange's market model and the proposed credit lessens the
impact on floor brokers of the competitive disadvantage arising out
of the difficulty they experience in availing themselves or their
customers of liquidity credits on other markets.'' See Securities
Exchange Act Release No. 57433 (March 5, 2008), 73 FR 13064 (March
11, 2008) (File No. SR-NYSE-2008-15). The Exchange believes that the
rationale stated in the 2008 filing applies equally to the current
situation in which floor broker credits for adding liquidity are
slightly higher than customer credits for adding liquidity. See NYSE
e-mail, supra note 4.
\9\ See NYSE e-mail, supra note 4.
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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) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed on its members by the NYSE.
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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 the 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 to
determine whether the proposed rule change should be approved or
disapproved.
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 e-mail to [email protected]. Please include
File Number SR-NYSE-2010-87 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-2010-87. This
file number should be included on the subject line if e-mail 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 a.m. and 3 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-2010-87 and should be submitted on or before February 1, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-321 Filed 1-10-11; 8:45 am]
BILLING CODE 8011-01-P