
[Federal Register Volume 77, Number 149 (Thursday, August 2, 2012)]
[Notices]
[Pages 46144-46146]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18843]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67525; File No. SR-NYSEMKT-2012-29]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending the NYSE MKT 
Equities Price List To Change Certain Fees Relating to Trading Pursuant 
to Unlisted Trading Privileges of Securities Listed on the Nasdaq Stock 
Market LLC and Other Conforming Changes

July 27, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on July 20, 2012, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 
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 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 the NYSE MKT Equities Price List 
(``Price List'') to change certain fees relating to trading pursuant to 
unlisted trading privileges (``UTP'') of securities listed on the 
Nasdaq Stock Market LLC (``Nasdaq'') and to make other conforming 
changes. The Exchange proposes to make the rule change operative on 
August 1, 2012. 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 the Price List to change certain 
fees relating to trading pursuant to UTP of securities listed on Nasdaq 
and to make other conforming changes.
    For fees and credits applicable to market participants for 
transactions in Nasdaq securities traded pursuant to UTP, the Exchange 
proposes to provide a $0.0025 equity per share credit per transaction 
when adding liquidity, including displayed and non-displayed orders, 
when the share price is $1.00 or more; currently, the Exchange does not 
provide a credit. The Exchange proposes to change the $0.0003 equity 
per share credit for all other transactions (i.e., when taking 
liquidity from the Exchange) with a per share price of $1.00 or more to 
a $0.0030 equity per share charge.\3\ The Exchange proposes to increase 
the $0.0027 per share routing fee to $0.0030 when the share price is 
$1.00 or more. The Exchange proposes to increase the equity per share 
credit per transaction for displayed liquidity when adding liquidity in 
orders that originally display a minimum of 2,000 shares with a trading 
price of at least $5.00 per share, as long as the order is not 
cancelled in an amount that would reduce the original displayed amount 
below 2,000 shares, from $0.0020 to $0.0035. The Exchange does not 
propose to change any fees or credits applicable to market participants 
for transactions in Nasdaq securities traded pursuant to UTP when the 
share price is below $1.00.
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    \3\ The Exchange does not propose to change the current Price 
List for agency cross trades, non-electronic agency transactions 
between floor brokers in the crowd, or Discretionary e-Quotes and 
verbal agency interest by floor brokers.
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    For fees and credits applicable to Designated Market Makers 
(``DMMs'') for transactions in Nasdaq securities traded pursuant to 
UTP, the Exchange proposes to increase the equity per share credit per 
transaction when adding liquidity from $0.0020 to $0.0040 when the 
share price is $1.00 or more. The Exchange proposes to change the 
$0.0003 equity per share credit for all other transactions (i.e., when 
taking liquidity from the Exchange) with a per share price of $1.00 or 
more to a $0.0030 equity per share charge. The Exchange proposes to 
increase the $0.0027 per share routing fee to $0.0030 when the

[[Page 46145]]

share price is $1.00 or more. The Exchange proposes to eliminate the 
$0.0020 equity per share credit per transaction for the displayed 
portion of s-Quotes when adding liquidity in s-Quotes that display 
2,000 shares or more at the time of execution with a trading price of 
at least $5.00 per share. The Exchange does not propose to change any 
fees or credits applicable to DMMs for transactions in Nasdaq 
securities traded pursuant to UTP when the share price is below $1.00.
    For fees and credits applicable to Supplemental Liquidity Providers 
(``SLPs'') for transactions in Nasdaq securities traded pursuant to 
UTP, the Exchange proposes to increase the equity per share credit per 
transaction when adding liquidity, if the SLP meets quoting 
requirements pursuant to Rule 107B, from $0.0005 to $0.0030 when the 
share price is $1.00 or more. The Exchange proposes to add an equity 
per share credit per transaction when adding liquidity, if the SLP does 
not meet the quoting requirement pursuant to Rule 107B, to $0.0025 when 
the share price is $1.00 or more; currently, the Exchange does not 
provide a credit. Lastly, the Exchange proposes to increase the equity 
per share credit per transaction for displayed liquidity when adding 
liquidity in orders that originally display a minimum of 2,000 shares 
with a trading price of at least $5.00 per share, as long as the order 
is not cancelled in an amount that would reduce the original displayed 
amount below 2,000 shares, from $0.0020 to $0.0035. The Exchange does 
not propose to change any fees or credits applicable to SLPs for 
transactions in Nasdaq securities traded pursuant to UTP when the share 
price is below $1.00.
    NYSE Amex LLC (``NYSE Amex'') recently changed the name of its 
equities market to NYSE MKT LLC.\4\ Accordingly, the Exchange proposes 
to replace references to ``NYSE Amex'' with ``NYSE MKT'' to reflect the 
name change.
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    \4\ See Securities Exchange Act Release No. 67037 (May 21, 
2012), 77 FR 31415 (May 25, 2012) (SR-NYSEAmex-2012-32).
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    The Exchange proposes to make the rule change operative on August 
1, 2012.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \5\ of the Securities Exchange Act 
of 1934 (the ``Act''), in general, and Section 6(b)(4) \6\ of the Act, 
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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed fee changes are equitably 
allocated and not unfairly discriminatory because all similarly 
situated market participants, DMMs, and SLPs will be subject to the 
same fee structure, and access to the Exchange's market is offered on 
fair and non-discriminatory terms.
    With respect to the increased credits for providing liquidity, the 
Exchange believes that the credits will attract more volume to the 
Exchange by incentivizing market participants, DMMs and SLPs to submit 
orders that provide liquidity to the Exchange and thereby will result 
in a more competitive market in the trading of Nasdaq securities 
pursuant to UTP. The Exchange believes that offering a higher credit to 
DMMs and SLPs than market participants is consistent with an equitable 
allocation of fees because it allocates a higher credit to member 
organizations that contribute to price discovery by providing high 
volumes of liquidity. In addition, DMMs and SLPs have higher 
obligations, including quoting obligations; therefore, it is reasonable 
to pay them a higher credit. The Exchange further believes that the 
increases in the fees for DMMs, SLPs, and market participants for 
taking liquidity are appropriate in light of the increase in credits 
for providing liquidity.
    The Exchange believes that raising the fee for routing to other 
markets for orders in Nasdaq securities with a share price of $1.00 or 
more to $0.0030 is reasonable because the fee is same as the fee for 
routing to other markets for orders in Exchange-listed securities with 
a per share price of $1.00 or more, and it will help to cover the costs 
associated with routing orders away from the Exchange.
    With respect to the credit increase for market participants and 
SLPs that provide liquidity in 2,000 or more share orders for 
securities priced at $5.00 or more, as long as the order is not 
cancelled in an amount that would reduce the original displayed amount 
below 2,000 shares, the Exchange believes that the proposed credits are 
fair and reasonable given that the Exchange is increasing the general 
credits for market participants and SLPs for providing liquidity to an 
amount that is higher than the current block credits for providing 
liquidity. As such, the Exchange believes that is fair and reasonable 
to increase the credit for block orders to an amount that is higher 
than the proposed general credit for providing liquidity in order to 
encourage both market participants and SLPs to place block orders, 
which will promote liquidity on the Exchange. The Exchange believes 
that eliminating the credit for DMMs that provide liquidity in 2,000 or 
more share orders for securities priced at $5.00 or more, as long as 
the order is not cancelled in an amount that would reduce the original 
displayed amount below 2,000 shares, is fair and reasonable given that 
the proposed general credit for providing liquidity is greater than the 
current credit for block orders. The Exchange believes the fee changes 
will attract more displayed liquidity, lower transaction costs, and 
improve overall trading.
    The Exchange also believes that it is reasonable not to change the 
fees or credits for transactions in Nasdaq securities with a share 
price below $1.00 because there are only a small number of issues that 
trade below $1.00 and these shares are thinly traded. In addition, the 
Exchange believes it is reasonable not to increase the credits for 
providing liquidity in Nasdaq securities with a share price below $1.00 
because it could have the potential of being greater than the spread, 
creating an inappropriate incentive to trade.
    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. In such an 
environment, the Exchange must continually adjust its fees to remain 
competitive with other exchanges and with alternative trading systems 
that have been exempted from compliance with the statutory standards 
applicable to exchanges.
    Finally, the Exchange also believes that replacing references to 
``NYSE Amex'' with ``NYSE MKT'' is reasonable, equitable and not 
unfairly discriminatory because it would add clarity to the Exchange's 
Price List by correctly reflecting the current name.

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.

[[Page 46146]]

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) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge 
imposed by NYSE MKT.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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.

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 rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2012-29 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-2012-29. 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 
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-NYSEMKT-2012-29 and should 
be submitted on or before August 23, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-18843 Filed 8-1-12; 8:45 am]
BILLING CODE 8011-01-P


