[Federal Register Volume 84, Number 78 (Tuesday, April 23, 2019)]
[Notices]
[Pages 16903-16906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08102]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85674; File No. SR-NYSENAT-2019-09]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Schedule of Fees and Rebates

April 17, 2019.
    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 April 9, 2019, NYSE National, Inc. (``NYSE National'' or 
the ``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 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 Schedule of Fees and Rebates to 
(1) charge a fee for removing liquidity; (2) offer the current adding 
tier fees (Adding Tier 1, Adding Tier 2, Adding Tier 3, Adding Tier 4, 
and Step Up Adding Tier) for adding displayed liquidity in Tape B and 
Tape C securities and introduce separate fees for adding liquidity in 
Tape A securities; and (3) replace the current Taking Tier with three 
Taking Tiers (Tiers 1, 2 and 3). The Exchange proposes to implement the 
rule change on April 9, 2019. The proposed rule change is available on 
the Exchange's website 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Schedule of Fees and Rebates to 
(1) charge a fee for removing liquidity; (2) offer the current adding 
tier fees (Adding Tier 1, Adding Tier 2, Adding Tier 3, Adding Tier 4, 
and Step Up Adding Tier) for adding displayed liquidity in Tape B and 
Tape C securities and introduce separate fees for adding displayed 
liquidity in Tape A securities; and (3) replace the current Taking Tier 
with three Taking Tiers (Tiers 1, 2 and 3).
    The Exchange proposes to implement the rule change on April 9, 
2019.\4\
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    \4\ The Exchange originally filed to amend the Schedule of Fees 
and Rebates on March 29, 2019 (SR-NYSENAT-2019-06). SR-NYSE-2019-06 
[sic] was subsequently withdrawn and replaced by this filing.
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Proposed Rule Change
Liquidity Removing Fees
    The Exchange currently does not charge a fee for executions on the 
Exchange of orders that remove liquidity from the Exchange in 
securities priced at or above $1.00. The Exchange proposes to charge a 
fee of $0.0005 per share for executions on the Exchange of orders that 
remove liquidity from the Exchange in securities priced at or above 
$1.00, unless a better tiered credit or fee set forth in the Schedule 
of Fees and Rebates applies. Hence, for example, an ETP Holder that 
would meet the requirements for the proposed Taking Tier 1 credit 
discussed below would not be charged the proposed fee of $0.0005 per 
share for removing liquidity.
Proposed Changes to Adding Tiers
Adding Tier 1
    Under current Adding Tier 1, the Exchange offers the following fees 
for transactions in stocks with a per share price of $1.00 or more when 
adding liquidity to the Exchange if the ETP Holder has at least 0.015% 
of Adding average daily volume (``ADV'') as a percent of US 
consolidated ADV (``CADV''): \5\
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    \5\ The Adding Tier 1 volumes are currently waived. See footnote 
* in the current Schedule of Fees and Rebates.
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     $0.0020 per share for displayed orders;

[[Page 16904]]

     $0.0018 per share for orders that set a new Exchange BBO;
     $0.0022 per share for non-displayed orders; and
     $0.0005 per share for MPL orders.
    The Exchange proposes to retain the current fee structure for Tape 
B and Tape C securities and introduce new fees for Tape A securities.
    For transactions in stocks with a per share price of $1.00 or more 
when adding liquidity to the Exchange if the ETP Holder has at least 
0.015% of Adding ADV as a percent of CADV, the proposed fees would be 
as follows:
     $0.0020 per share for displayed orders in Tapes B and C 
securities and $0.0022 per share for displayed orders in Tape A 
securities;
     $0.0018 per share for orders that set a new Exchange BBO 
in Tapes B and C securities and $0.0020 per share in Tape A securities;
     $0.0022 per share for non-displayed orders in Tapes B and 
C securities and $0.0024 per share for non-displayed orders in Tape A 
securities; and
     $0.0005 per share for MPL orders, which would remain 
unchanged.
Adding Tier 2
    Under current Adding Tier 2, the Exchange offers the following fees 
for transactions in stocks with a per share price of $1.00 or more when 
adding liquidity to the Exchange if the ETP Holder quotes: (i) At least 
5% of the NBBO \6\ in 1,000 or more symbols on an average daily basis, 
calculated monthly, and 0.20% or more Adding ADV as a percentage of US 
CADV, or (ii) at least 5% of the NBBO in 2,500 or more symbols on an 
average daily basis, calculated monthly, and 0.10% or more Adding ADV 
as a % of US CADV:
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    \6\ See footnote ** in the current Schedule of Fees and Rebates.
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     $0.0005 per share for adding displayed orders;
     $0.0005 per share for orders that set a new Exchange BBO;
     $0.0007 per share for adding non-displayed orders; and
     $0.0005 per share for MPL orders.
    The Exchange proposes to retain the current fee structure for Tape 
B and Tape C securities and introduce new fees for Tape A securities.
    For transactions in stocks with a per share price of $1.00 or more 
when adding liquidity to the Exchange if the ETP Holder quotes: (i) At 
least 5% of the NBBO in 1,000 or more symbols on an average daily 
basis, calculated monthly, and 0.20% or more Adding ADV as a percentage 
of US CADV, or (ii) at least 5% of the NBBO in 2,500 or more symbols on 
an average daily basis, calculated monthly, and 0.10% or more Adding 
ADV as a % of US CADV, the proposed fees would be as follows:
     $0.0005 per share for adding displayed orders in Tape B 
and C securities and $0.0008 per share in Tape A securities;
     $0.0005 per share for orders that set a new Exchange BBO 
in Tape B and C securities and $0.0008 per share in Tape A securities;
     $0.0007 per share for adding non-displayed orders in Tape 
B and C securities and $0.0010 per share in Tape A securities; and
     $0.0005 per share for MPL orders, which would remain 
unchanged.
Adding Tier 3
    Under current Adding Tier 3, the Exchange offers the following fees 
for transactions in stocks with a per share price of $1.00 or more when 
adding liquidity to the Exchange if the ETP Holder quotes at least 5% 
of the NBBO in 2000 or more symbols on an average daily basis, 
calculated monthly, and executes 0.10% or more Adding ADV as a 
percentage of US CADV:
     $0.0009 per share for adding displayed orders;
     $0.0009 per share for orders that set a new Exchange BBO;
     $0.0011 per share for adding non-displayed orders; and
     $0.0005 per share for MPL orders.
    The Exchange proposes to retain the current fee structure for Tape 
B and Tape C securities and introduce new fees for Tape A securities.
    For transactions in stocks with a per share price of $1.00 or more 
when adding liquidity to the Exchange if the ETP Holder quotes at least 
5% of the NBBO in 2000 or more symbols on an average daily basis, 
calculated monthly, and executes 0.10% or more Adding ADV as a 
percentage of US CADV, the proposed fees would be as follows:
     $0.0009 per share for adding displayed orders in Tape B 
and C securities and $0.0012 per share in Tape A securities;
     $0.0009 per share for orders that set a new Exchange BBO 
in Tape B and C securities and $0.0012 per share in Tape A securities;
     $0.0011 per share for adding non-displayed orders in Tape 
B and C securities and $0.0014 per share in Tape A securities; and
     $0.0005 per share for MPL orders, which would remain 
unchanged.
Adding Tier 4
    Under current Adding Tier 4, the Exchange offers the following fees 
for transactions in stocks with a per share price of $1.00 or more when 
adding liquidity to the Exchange if the ETP Holder quotes at least 5% 
of the NBBO in 600 or more symbols on an average daily basis, 
calculated monthly:
     $0.0012 per share for adding displayed orders;
     $0.0012 per share for orders that set a new Exchange BBO;
     $0.0014 per share for adding non-displayed orders; and
     $0.0005 per share for MPL orders.
    The Exchange proposes to retain the current fee structure for Tape 
B and Tape C securities and introduce new fees for Tape A securities.
    For transactions in stocks with a per share price of $1.00 or more 
when adding liquidity to the Exchange if the ETP Holder quotes at least 
5% of the NBBO in 600 or more symbols on an average daily basis, 
calculated monthly, the proposed fees would be as follows:
     $0.0012 per share for adding displayed orders in Tape B 
and C securities and $0.0014 per share in Tape A securities;
     $0.0012 per share for orders that set a new Exchange BBO 
in Tape B and C securities and $0.0014 per share in Tape A securities;
     $0.0014 per share for adding non-displayed orders in Tape 
B and C securities and $0.0016 per share in Tape A securities; and
     $0.0005 per share for MPL orders, which would remain 
unchanged.
Step Up Adding Tier
    Under the current Step [sic] Adding Tier, the Exchange offers the 
following fees for transactions in stocks with a per share price of 
$1.00 or more when adding liquidity to the Exchange if the ETP Holder 
has 0.04% or more of Adding ADV as a percent of US CADV over the ETP 
Holder's Adding ADV as a % of US CADV in November 2018:
     $0.0015 per share for adding displayed orders;
     $0.0015 per share for orders that set a new Exchange BBO3 
[sic];
     $0.0017 per share for adding non-displayed orders; and
     $0.0005 per share for MPL orders.
    The Exchange proposes to retain the current fee structure for Tape 
B and Tape C securities and introduce new fees for Tape A securities.
    For transactions in stocks with a per share price of $1.00 or more 
when adding liquidity to the Exchange if the ETP Holder has 0.04% or 
more of Adding ADV as a percent of US CADV over the ETP Holder's Adding 
ADV as a % of US CADV in November 2018 the proposed fees would be as 
follows:
     $0.0015 per share for adding displayed orders in Tape B 
and C securities and $0.0018 per share in Tape A securities;

[[Page 16905]]

     $0.0015 per share for orders that set a new Exchange BBO 
in Tape B and C securities and $0.0018 per share in Tape A securities;
     $0.0017 per share for adding non-displayed orders in Tape 
B and C securities and $0.0020 per share in Tape A securities; and
     $0.0005 per share for MPL orders, which would remain 
unchanged.
Proposed Changes to Taking Tiers
    Under the current Taking Tier, the Exchange offers the following 
credits for transactions in stocks with a per share price of $1.00 or 
more when removing liquidity from the Exchange if the ETP Holder has at 
least 50,000 shares of Adding ADV:
     ($0.0020) per share for orders; and
     ($0.0002) per share for MPL orders.
    The Exchange proposes to replace the current Taking Tier with three 
Taking Tiers, as follows.
    Proposed Taking Tier 1 would offer the same credits as the current 
Taking Tier--($0.0020) per share for orders and ($0.0002) per share for 
MPL orders--for transactions in stocks with a per share price of $1.00 
or more when removing liquidity from the Exchange if the ETP Holder has 
at least:
     0.025% Adding ADV as a percentage of US CADV; or
     0.0125% Adding ADV as a percentage of US CADV and 0.032% 
removing ADV as a percentage of US CADV; or
     0.00125% Adding ADV as a percentage of US CADV and 0.25% 
removing ADV as a percentage of US CADV.
    Under proposed Taking Tier 2, the Exchange would offer the 
following credits for transactions in stocks with a per share price of 
$1.00 or more when removing liquidity from the Exchange if the ETP 
Holder has at least 0.0125% Adding ADV as a percentage of US CADV:
     ($0.0018) per share for orders; and
     ($0.0002) per share for MPL orders, which would remain 
unchanged.
    Finally, under proposed Taking Tier 3, the Exchange would offer the 
following credits for transactions in stocks with a per share price of 
$1.00 or more when removing liquidity from the Exchange if the ETP 
Holder has at least 50,000 shares of Adding ADV:
     ($0.0010) per share for orders; and
     ($0.0002) per share for MPL orders, which would remain 
unchanged.
    As previously noted, an ETP Holder that meets the requirements of 
either proposed Taking Tiers 1, 2 or 3 would be eligible for the 
relevant rate and would not be charged the proposed fee of $0.0005 per 
share for removing liquidity. For example, an ETP Holder with at least 
0.0125% Adding ADV as a % of US CADV in a given month would receive a 
credit of ($0.0018) per share for removing liquidity from the Exchange 
under proposed Taking Tier 2 and would not pay the proposed fee of 
$0.0005 per share for removing liquidity discussed above.
    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems 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 Act,\7\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) & (5).
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Liquidity Removing Fees
    The Exchange believes that charging $0.0005 per share for removing 
liquidity from the Exchange will incentivize submission of additional 
liquidity to a public exchange, thereby promoting price discovery and 
transparency and enhancing order execution opportunities for ETP 
Holders. Specifically, the Exchange believes that introducing a charge 
for removing liquidity would incentivize ETP Holders to send additional 
liquidity to the Exchange in order to receive a higher credit and avoid 
the proposed fee by meeting the higher liquidity requirements for a 
Taking Tier credit.
    The Exchange also believes that the proposed fee is equitable 
because it would apply to all similarly situated ETP Holders. The 
proposed fee also is equitable and not unfairly discriminatory because 
it would be consistent with the applicable rate on other marketplaces. 
For example, Investors Exchange charges a Standard Match Fee of $0.0009 
and a Reduced Match Fee of $0.0003.\9\
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    \9\ See Investors Exchange Fee Schedule, available at https://iextrading.com/trading/fees/.
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Proposed Changes to Adding Tiers
    The Exchange believes that the proposed changes to the tiered 
adding requirements for displayed and non-displayed orders in Tape A, 
Tape B and Tape C securities priced at or above $1.00 are reasonable, 
equitable and not unfairly discriminatory, as follows.
    The proposed Adding Tier 1, Adding Tier 2, Adding Tier 3, Adding 
Tier 4 and Step Up Adding Tier fees for adding liquidity in Tape B and 
C securities and the proposed Adding Tier 1, Adding Tier 2, Adding Tier 
3, Adding Tier 4 and Step Up Adding Tier fees for Tape A securities for 
ETP Holders meeting the current requirements for each tier, which the 
Exchange does not propose to change, are reasonable because the 
proposed rates would contribute to incent ETP Holders to provide 
increased liquidity on the Exchange. Specifically, the proposed rates 
for Tapes B and C, which the Exchange does not propose to change, would 
continue to provide the same incentives to ETP Holders to provide 
liquidity to the Exchange on those tapes while the higher rates for 
Tape A would incentive ETP Holders to provide additional liquidity on 
the Exchange in Tape A securities, both of which benefit all ETP 
Holders. The proposed fees in Tape A securities are also equitable and 
not unfairly discriminatory because those fees would be consistent with 
or lower than the applicable rate on other marketplaces that charge for 
adding liquidity. For example, Cboe BYX charges a standard fee of 
$0.0019 per share, and their lowest fee for adding is $0.0012.\10\
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    \10\ See Cboe BYX U.S. Equities Exchange Fee Schedule, available 
at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/
.
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    In addition, the Exchange believes that the proposed Adding Tier 1, 
Adding Tier 2, Adding Tier 3, Adding Tier 4 and Step Up Adding Tier 
fees for adding liquidity in Tape B and C securities and the proposed 
Adding Tier 1, Adding Tier 2, Adding Tier 3, Adding Tier 4 and Step Up 
Adding Tier fees for Tape A securities fees are equitable and not 
unfairly discriminatory as all similarly situated market participants 
will be subject to the same fees on an equal and non-discriminatory 
basis.
Proposed Changes to Taking Tiers
    The Exchange believes that the proposed replacement of the current 
Taking Tier with three taking tiers for orders that remove liquidity in 
securities priced at or above $1.00 are reasonable, equitable and not 
unfairly discriminatory, as follows.
    The proposed Taking Tier 1 credits of ($0.0020) per share for 
orders that remove liquidity and ($0.0002) per share for MPL for ETP 
Holders with at least (1) 0.025% Adding ADV as a percentage of US CADV, 
or (2) 0.0125% Adding ADV as a percentage of US

[[Page 16906]]

CADV and 0.032% removing ADV as a percentage of US CADV, or (3) 
0.00125% Adding ADV as a percentage of US CADV and 0.25% removing ADV 
as a percentage of US CADV; the proposed Taking Tier 2 credits of 
($0.0018) per share and ($0.0002) per share for MPL for ETP Holders 
with at least 0.0125% Adding ADV as a % of US CADV; and (3) the 
proposed Taking Tier 3 credits of ($0.0010) per share and ($.0002) per 
share for ETP Holders with at least 50,000 Adding ADV in securities 
with a per share price of $1.00 or more when removing liquidity from 
the Exchange is reasonable, equitable and not unfairly discriminatory 
because the proposed fees are in line with the fees for removing 
liquidity on other exchanges.\11\ For example, Cboe BYX offers tiered 
credits of ($0.0015), ($0.0016), and ($0.0017) per share.\12\ The 
Exchange notes that the ($0.0002) per share credit for taking MPL is 
unchanged from the current Taking Tier.
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    \11\ See CBOE BYX Exchange Fee Schedule at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/.
    \12\ See Cboe BYX U.S. Equities Exchange Fee Schedule, available 
at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/
.
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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 the foregoing 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,\13\ 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 
changes would encourage the submission of additional liquidity to a 
public exchange, thereby promoting price discovery and transparency and 
enhancing order execution opportunities for ETP Holders. The Exchange 
believes that this could promote competition between the Exchange and 
other execution venues, including those that currently offer similar 
order types and comparable transaction pricing, by encouraging 
additional orders to be sent to the Exchange for execution.
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    \13\ 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 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 ETP Holders 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) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder. 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) \16\ 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)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(2).
    \16\ 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-NYSENAT-2019-09 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-NYSENAT-2019-09. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSENAT-2019-09 and should be submitted 
on or before May 14, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-08102 Filed 4-22-19; 8:45 am]
BILLING CODE 8011-01-P


