8011-01p
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95760; File No. SR-NYSEARCA-2022-59]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness
of Proposed Rule Change to Amend the NYSE Arca Equities Fees and Charges
September 13, 2022.
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 on September 1, 2022, NYSE Arca, Inc.
(“NYSE Arca” or the “Exchange”) filed with the Securities and Exchange Commission (“SEC”
or “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.
I.

Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed
Rule Change
The Exchange proposes to amend the NYSE Arca Equities Fees and Charges (“Fee

Schedule”) to amend the Retail Tiers. 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 Statutory Basis
for, the Proposed Rule Change

15 U.S.C. 78s(b)(1).

17 CFR 240.19b-4.

1.

Purpose

The Exchange proposes to amend the Fee Schedule to amend the Retail Tiers. The
proposed changes respond to the current competitive environment where order flow providers
have a choice of where to direct liquidity-providing orders by offering further incentives for ETP
Holders to send additional displayed liquidity to the Exchange.
The Exchange proposes to implement the fee changes effective September 1, 2022.
Background
The Exchange operates in a highly competitive market. The Commission has repeatedly
expressed its preference for competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and SRO revenues and, also,
recognized that current regulation of the market system “has been remarkably successful in
promoting market competition in its broader forms that are most important to investors and listed
companies.”3
While Regulation NMS has enhanced competition, it has also fostered a “fragmented”
market structure where trading in a single stock can occur across multiple trading centers. When
multiple trading centers compete for order flow in the same stock, the Commission has
recognized that “such competition can lead to the fragmentation of order flow in that stock.”4
Indeed, equity trading is currently dispersed across 16 exchanges,5 numerous alternative trading
systems,6 and broker-dealer internalizers and wholesalers, all competing for order flow. Based

See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499
(June 29, 2005) (File No. S7-10-04) (Final Rule) (“Regulation NMS”).

See Securities Exchange Act Release No. 61358, 75 FR 3594, 3597 (January 21, 2010)
(File No. S7-02-10) (Concept Release on Equity Market Structure).

See Cboe U.S Equities Market Volume Summary, available at
https://markets.cboe.com/us/equities/market_share. See generally
https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.

See FINRA ATS Transparency Data, available at

on publicly available information, no single exchange currently has more than 17% market
share.7 Therefore, no exchange possesses significant pricing power in the execution of equity
order flow. More specifically, the Exchange currently has less than 10% market share of
executed volume of equities trading.8
The Exchange believes that the ever-shifting market share among the exchanges from
month to month demonstrates that market participants can move order flow, or discontinue or
reduce use of certain categories of products. While it is not possible to know a firm’s reason for
shifting order flow, the Exchange believes that one such reason is because of fee changes at any
of the registered exchanges or non-exchange venues to which a firm routes order flow. The
competition for Retail Orders9 is even more stark, particularly as it relates to exchange versus
off-exchange venues.
The Exchange thus needs to compete in the first instance with non-exchange venues for
Retail Order flow, and with the 15 other exchange venues for that Retail Order flow that is not
directed off-exchange. Accordingly, competitive forces compel the Exchange to use exchange
transaction fees and credits, particularly as they relate to competing for Retail Order flow,
because market participants can readily trade on competing venues if they deem pricing levels at
those other venues to be more favorable.
To respond to this competitive environment, the Exchange has established a number of
Retail Tiers, which are designed to provide an incentive for ETP Holders to route Retail Orders

https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of alternative
trading systems registered with the Commission is available
at https://www.sec.gov/foia/docs/atslist.htm.
See Cboe Global Markets U.S. Equities Market Volume Summary, available at
https://markets.cboe.com/us/equities/market_share/.

See id.

A Retail Order is an agency order that originates from a natural person and is submitted
to the Exchange by an ETP Holder, provided that no change is made to the terms of the
order to price or side of market and the order does not originate from a trading algorithm
or any other computerized methodology. See Securities Exchange Act Release No. 67540
(July 30, 2012), 77 FR 46539 (August 3, 2012) (SR-NYSEArca-2012-77).

to the Exchange by providing higher credits for adding liquidity correlated to an ETP Holder’s
higher trading volume in Retail Orders on the Exchange. Under three of these four tiers, ETP
Holders also do not pay a fee when such Retail Orders have a time-in-force of Day that remove
liquidity from the Exchange.
Proposed Rule Change
The proposed rule change is designed to be available to all ETP Holders on the Exchange
and is intended to provide ETP Holders an opportunity to receive enhanced rebates by quoting
and trading more on the Exchange.
The Exchange currently provides tiered credits for Retail Orders that provide liquidity on
the Exchange. Specifically, Section VI. Tier Rates - Round Lots and Odd Lots (Per Share Price
$1.00 or Above), provides a base Retail Order Tier credit of $0.0033 per share for Adding.
Additionally, the Exchange has established Retail Order Step-Up Tier 1, Retail Order Step-Up
Tier 2 and Retail Order Step-Up Tier 3 that provide a credit of $0.0038 per share, $0.0035 per
share, and $0.0036 per share, respectively, for Adding.10 The Retail Tiers are designed to
encourage ETP Holders that provide displayed liquidity in Retail Orders on the Exchange to
increase that order flow, which would benefit all ETP Holders by providing greater execution
opportunities on the Exchange. In order to provide an incentive for ETP Holders to direct
providing displayed Retail Order flow to the Exchange, the credits increase in the various tiers
based on increased levels of volume directed to the Exchange.
As described in greater detail below, the Exchange proposes to amend the requirements
and the associated per share credit payable under the current pricing tiers applicable to Retail
Orders that provide liquidity in Tape A, Tape B and Tape C securities.
Currently, to qualify for the Retail Order Tier, an ETP Holder must have Retail Adding
ADV of 0.15% or more of CADV. ETP Holders that meet the current Retail Order Tier

See Retail Tiers table under Section VI. Tier Rates - Round Lots and Odd Lots (Per Share
Price $1.00 or Above).

requirement are eligible to earn a credit of $0.0033 per share for Retail Orders that add liquidity
in Tape A, B and C securities.
The Exchange proposes the following changes to the current pricing tier:
ï‚·

Rename the Retail Order Tier to Retail Tier 3;

ï‚·

Modify the requirement to qualify for the renamed tier; and

ï‚·

Increase the credit applicable to the renamed tier.

More specifically, to qualify for proposed Retail Tier 3, an ETP Holder must execute
Retail Orders with a time-in-force of Day that add or remove liquidity equal to 0.10% of CADV.
ETP Holders that meet the proposed Retail Tier 3 requirement would be eligible to earn an
increased credit of $0.0034 per share for Retail Orders that add liquidity in Tape A, B and C
securities.
Next, to qualify for current Retail Order Step-Up Tier 1, an ETP Holder must execute an
ADV of Retail Orders with a time-in-force of Day that add or remove liquidity that is an increase
of 0.40% or more of CADV above its April 2018 ADV taken as a percentage of CADV and have
Adding ADV of 1.00% or more of CADV. Alternatively, in addition to providing an ADV of
1.00% or more of CADV, an ETP Holder can qualify for the current fees and credits by
executing an ADV of 55 million shares of Retail Orders with a time-in-force of Day that add or
remove liquidity. ETP Holders that meet the current Retail Order Step-Up Tier 1 requirement
are eligible to earn a credit of $0.0038 per share for Retail Orders that add liquidity in Tape A, B
and C securities.11 Under the Retail Order Step-Up Tier 1, the Exchange also does not charge a
fee for Retail Removing with a time-in-force of Day.
The Exchange proposes the following changes to the current pricing tier:

Pursuant to footnote (d) under Retail Tiers, ETP Holders that qualify for Retail Order
Step-Up Tier 1 are subject to the following rates in Tape C: ($0.0035) for Adding
displayed liquidity; $0.0027 for Removing; and Additional ($0.0002) for Adding nondisplayed liquidity. See Fee Schedule. With this proposed rule change, the Exchange
proposes to rename Retail Order Step-Up Tier 1 to Retail Tier 1 in footnote (d) under the
Retail Tiers table.

ï‚·

Rename Retail Order Step-Up Tier 1 to Retail Tier 1; and

ï‚·

Modify the percentage requirement to qualify for the renamed tier.

More specifically, to qualify for proposed Retail Tier 1, an ETP Holder must execute an
ADV of Retail Orders with a time-in-force of Day that add or remove liquidity that is 0.50% or
more of CADV and have Adding ADV of 1.00% or more of CADV. ETP Holders may also
alternatively qualify for proposed Retail Tier 1 by executing an ADV of 55 million shares of
Retail Orders with a time-in-force of Day that add or remove liquidity and have Adding ADV of
1.00% or more of CADV.12 With this proposed rule change, to qualify for proposed Retail Tier
1, ETP Holders would no longer be required to ‘step-up’ above their April 2018 CADV and
would instead qualify for the proposed tier by meeting the amended volume requirement during
the billing month. ETP Holders that meet the proposed Retail Tier 1 requirement will continue
to be eligible to earn a credit of $0.0038 per share for Retail Orders that add liquidity in Tape A,
B and C securities. The Exchange is not proposing any change to the level of the credit payable
under proposed Retail Tier 1. ETP Holders that qualify for the proposed Retail Tier 1 would also
not be a charged a fee for Retail Orders with a time-in-force of Day that remove liquidity.13
Next, to qualify for current Retail Order Step-Up Tier 2, an ETP Holder must execute an
ADV of Retail Orders with a time-in-force of Day that add or remove liquidity that is an increase
of 0.10% or more of CADV above its April 2018 ADV taken as a percentage of CADV. ETP

To streamline the Fee Schedule, the Exchange proposes a non-substantive change to
delete the words “of Retail Orders with a time-in-force of Day that add or remove” from
the proposed Retail Tier 1 table because these words are repetitive as they currently
appear in the heading for that column under Minimum Requirement of CADV.

Pursuant to footnote (e) under Retail Tiers, ETP Holders that qualify for current Retail
Order Step-Up Tier 1, Retail Order Step-Up Tier 2 and Retail Order Step-Up Tier 3 are
not charged a fee or provided a credit for Retail Orders where each side of the executed
order (1) shares the same MPID and (2) is a Retail Order with a time-in-force of Day.
See Fee Schedule. With this proposed rule change, the Exchange proposes to rename
Retail Order Step-Up Tier 1 to Retail Tier 1, Retail Order Step-Up Tier 2 as Retail StepUp Tier and Retail Order Step-Up Tier 3 as Retail Tier 2 in footnote (e) under the Retail
Tiers table.

Holders that meet the current Retail Order Step-Up Tier 2 requirement are eligible to earn a
credit of $0.0035 per share for Retail Orders that add liquidity in Tape A, B and C securities.
The Exchange proposes the following changes to the current pricing tier:
ï‚·

Rename Retail Order Step-Up Tier 2 to Retail Step-Up Tier; and

ï‚·

Modify the requirement to qualify for the renamed tier.

More specifically, to qualify for proposed Retail Step-Up Tier, an ETP Holder must
execute an ADV of Retail Orders with a time-in-force of Day that add or remove liquidity that is
an increase of 0.075% or more of CADV above its April 2018 ADV taken as a percentage of
CADV. ETP Holders that meet the proposed Retail Step-Up Tier requirement will continue to
be eligible to earn a credit of $0.0035 per share for Retail Orders that add liquidity in Tape A, B
and C securities. The Exchange is not proposing any change to the level of the credit payable
under proposed Retail Step-Up Tier. ETP Holders that qualify for the proposed Retail Step-Up
Tier would also not be charged a fee for Retail Orders with a time-in-force of Day that remove
liquidity.14
Finally, to qualify for current Retail Order Step-Up Tier 3, an ETP Holder must execute
an ADV of Retail Orders with a time-in-force of Day that add or remove liquidity that is an
increase of 0.20% or more of CADV above its April 2018 ADV taken as a percentage of CADV.
ETP Holders that meet the current Retail Order Step-Up Tier 3 requirement are eligible to earn a
credit of $0.0036 per share for Retail Orders that add liquidity in Tape A, B and C securities.
The Exchange proposes the following changes to the current pricing tier:
ï‚·

Rename Retail Order Step-Up Tier 3 to Retail Tier 2; and

ï‚·

Modify the requirement to qualify for the renamed tier

More specifically, to qualify for proposed Retail Tier 2, an ETP Holder must execute an
ADV of Retail Orders with a time-in-force of Day that add or remove liquidity that is 0.20% or

See id.

more of CADV. With this proposed rule change, ETP Holders would no longer be required to
‘step-up’ above their April 2018 CADV and would instead qualify for the proposed tier by
meeting the volume requirement during the billing month. ETP Holders that meet the proposed
Retail Tier 2 requirement will continue to be eligible to earn a credit of $0.0036 per share for
Retail Orders that add liquidity in Tape A, B and C securities. ETP Holders that qualify for
proposed Retail Tier 2 would also not be charged a fee for Retail Orders with a time-in-force of
Day that remove liquidity.15
With this proposed rule change, the Exchange proposes to reformat the credits payable
under the Retail Tiers such that the tier that pays the highest credit would appear at the top of the
table followed by the tier that pays the second highest credit, then the tier that pays the lowest
credit, followed by the tier that requires ETP Holders to ‘step-up’ from their baseline CADV.
Accordingly, the Retail Tiers table would appear as follows:
Tier
Retail Tier 1

Credit for Retail Adding
$0.0038 (Tape A, Tape B and Tape C)

Retail Tier 2

$0.0036 (Tape A, Tape B and Tape C)

Retail Tier 3

$0.0034 (Tape A, Tape B and Tape C)

Retail Step-Up Tier

$0.0035 (Tape A, Tape B and Tape C)

The purpose of the proposed rule change is to encourage greater participation from ETP
Holders and promote additional liquidity in Retail Orders. The Exchange notes that the current
Retail Tiers have been underutilized by ETP Holders. The Exchange believes that modifying the
requirement of the existing tiers should incentivize ETP Holders to direct more of their Retail
Orders to the Exchange and thus qualify for the credits payable under the Retail Tiers. As
described above, ETP Holders with liquidity-providing orders have a choice of where to send
those orders. The Exchange believes that the proposed amendment to the volume requirement

See id.

and credit payable for Retail Orders could lead to more ETP Holders choosing to route their
liquidity-providing Retail Orders to the Exchange rather than to a competing exchange.
The Exchange does not know how much Retail Order flow ETP Holders choose to route
to other exchanges or to off-exchange venues. Without having a view of ETP Holders’ activity
on other markets and off-exchange venues, the Exchange has no way of knowing whether this
proposed rule change would result in any ETP Holders sending more of their Retail Orders to the
Exchange to qualify for the proposed Retail Order credits. The Exchange cannot predict with
certainty how many ETP Holders would avail themselves of this opportunity, but additional
liquidity-providing Retail Orders would benefit all market participants because it would provide
greater execution opportunities on the Exchange.
The proposed changes are not otherwise intended to address any other issues, and the
Exchange is not aware of any significant problems that market participants would have in
complying with the proposed changes.
2.

Statutory Basis

The Exchange believes that the proposed rule change is consistent with Section 6(b) of
the Act,16 in general, and furthers the objectives of Sections 6(b)(4) and (5) of the Act,17 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.
The Proposed Fee Change is Reasonable
As discussed above, the Exchange operates in a highly fragmented and competitive
market. The Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services in the securities markets.
Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in

15 U.S.C. 78f(b).

15 U.S.C. 78f(b)(4) and (5).

determining prices and SRO revenues and, also, recognized that current regulation of the market
system “has been remarkably successful in promoting market competition in its broader forms
that are most important to investors and listed companies.”18
Given this competitive environment, the proposal represents a reasonable attempt to
attract additional order flow to the Exchange.
As noted above, the competition for Retail Order flow is stark given the amount of retail
limit orders that are routed to non-exchange venues. The Exchange believes that the evershifting market share among the exchanges from month to month demonstrates that market
participants can shift order flow, or discontinue or reduce use of certain categories of products, in
response to fee changes. This competition is particularly acute for non-marketable, or limit,
retail orders, i.e., retail orders that can provide liquidity on an exchange. That competition is
even more fierce for retail limit orders that provide displayed liquidity on an exchange. With
respect to such orders, ETP Holders can choose from any one of the 16 currently operating
registered exchanges to route such order flow. Accordingly, competitive forces constrain
exchange transaction fees, particularly as they relate to competing for retail orders. Stated
otherwise, changes to exchange transaction fees can have a direct effect on the ability of an
exchange to compete for order flow.
In particular, the Exchange believes that the proposed modification of the volume
requirement to qualify for the proposed Retail Tiers is reasonable because it is designed to
encourage greater participation from ETP Holders and promote additional liquidity in Retail
Orders. The Exchange believes it is reasonable to require ETP Holders to meet the applicable
volume threshold to qualify for the Retail Tier credits, which the Exchange proposes to increase
to encourage ETP Holders to direct more of their liquidity-providing Retail Orders to the
Exchange. Further, the proposed change is reasonable as it would allow ETP Holders additional

See supra note 3.

opportunities to qualify for the credit payable under the various pricing tiers. The Exchange
believes it is reasonable to modify two of the existing three Retail Tiers, from a ‘step-up,’ to a
straight volume requirement, without significantly modifying the volume requirement to qualify
for each of the proposed Retail Tiers. The Exchange believes it is reasonable to replace the
‘step-up’ tiers to ‘straight’ tiers as the revised criteria would allow ETP Holders that may have
been unable to meet the existing requirement to reach the proposed volume requirement more
easily, particularly when there has been an overall decline of Retail Orders as a percentage of
total volume in the equity markets, and yet sustained high consolidated daily volumes.
The Exchange believes that the proposal represents a reasonable effort to provide
enhanced order execution opportunities for ETP Holders. All ETP Holders would benefit from
the greater amounts of liquidity on the Exchange, which would represent a wider range of
execution opportunities. The Exchange notes that market participants are free to shift their order
flow to competing venues if they believe other markets offer more favorable fees and credits.
The Exchange believes the proposed change is also reasonable because the increased
credits proposed herein would continue to encourage ETP Holders to send Retail Orders to the
Exchange to qualify for the proposed pricing tiers. As noted above, the Exchange operates in a
highly competitive environment, particularly for attracting Retail Order flow that provides
displayed liquidity on an exchange. The Exchange believes it is reasonable to continue to
provide credits for adding liquidity, in general, and higher credits for Retail Orders that provide
displayed liquidity if an ETP Holder meets the amended requirement for the Retail Tiers.
Further, given the competitive market for attracting Retail Orders, the Exchange notes
that with this proposed rule change, the Exchange’s pricing for Retail Orders would be
comparable, and in some cases, higher, to credits currently in place on other exchanges that the
Exchange competes with for order flow. For example, the Nasdaq Stock Market LLC
(“Nasdaq”) provides its members with a credit of $0.0033 per share if such member has an 85%

add to total volume (adding and removing) ratio during a billing month.19 Cboe BZX Exchange,
Inc. (“BZX”) provides its members with a credit of $0.0032 per share for retail orders that add
liquidity to that market.20 In addition, Cboe EDGX Exchange, Inc. (‘EDGX”) provides its
members with a credit of $0.0037 per share for retail orders that add liquidity to that market if an
EDGX member adds liquidity in Retail Orders of 0.45% of CADV or more and a credit of
$0.0034 per share for retail orders that add liquidity to that market if an EDGX member adds
liquidity in Retail Orders of 0.35% of CADV or more.21
The Exchange believes the proposed change is also reasonable because it is designed to
attract higher volumes of Retail Orders transacted on the Exchange by ETP Holders which would
benefit all market participants by offering greater price discovery, increased transparency, and an
increased opportunity to trade on the Exchange.
On the backdrop of the competitive environment in which the Exchange currently
operates, the proposed rule change is a reasonable attempt to increase liquidity on the Exchange
and improve the Exchange’s market share relative to its competitors.
The Proposed Fee Change is an Equitable Allocation of Fees and Credits
The Exchange believes that the proposed rule change to modify the requirement and
credit payable under the proposed Retail Tiers equitably allocates fees and credits among its
market participants because it is reasonably related to the value of the Exchange’s market quality
associated with higher volume in Retail Orders. The Exchange believes that pricing is just one
of the factors that ETP Holders consider when determining where to direct their order flow.
Among other things, factors such as execution quality, fill rates, and volatility, are important and

See Nasdaq Price List, Rebate to Add Displayed Designated Retail Liquidity, at
http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.

See BZX Fee Schedule, Fee Codes and Associated Fees, at
https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/.

See EDGX Fee Schedule, Fee Codes and Associated Fees, at
https://markets.cboe.com/us/equities/membership/fee_schedule/edgx/.

deterministic to ETP Holders in deciding where to send their order flow.
Further, the Exchange notes that, with this proposed rule change, the difference between
the highest credit provided for Retail Orders, $0.0038 per share, as proposed, and the credit for
Retail Orders that do not qualify for any Retail Order pricing tiers, $0.0032 per share, is $0.0006,
or 15%, which the Exchange believes is relatively small given the heightened requirements that
ETP Holders must meet to qualify for the higher credit. Similarly, with this proposed rule
change, the difference in the highest credit for Retail Orders, $0.0038 per share under proposed
Retail Tier 1 and the credit provided for Retail Orders to those ETP Holders qualifying for Retail
Tier 3, $0.0034 per share, would only be $0.0004 per share, or 11%. Therefore, the Exchange
believes the proposed amendment to the proposed Retail Tiers is equitably allocated and
provides credits that are reasonably related to the value to the Exchange's market quality
associated with higher volumes.
Finally, the Exchange believes that the proposed amendment to the Retail Tiers is
equitable because the magnitude of the proposed credits is not unreasonably high relative to
credits paid by other exchanges for orders that provide additional liquidity in Retail Orders.22
The Exchange believes the proposed rule change would improve market quality for all market
participants on the Exchange and, as a consequence, attract more Retail Orders to the Exchange,
thereby improving market-wide quality and price discovery.
The Exchange believes that the proposed rule change equitably allocates its fees and
credits because maintaining the proportion of Retail Orders in exchange-listed securities that are
executed on a registered national securities exchange (rather than relying on certain available
off-exchange execution methods) would contribute to investors' confidence in the fairness of
their transactions and would benefit all investors by deepening the Exchange's liquidity pool,

See supra notes 19 - 21.

supporting the quality of price discovery, promoting market transparency and improving investor
protection.
The Proposed Fee Change is not Unfairly Discriminatory
The Exchange believes that the proposed rule change to modify the requirement and
credit payable under the proposed Retail Tiers is not unfairly discriminatory. In the prevailing
competitive environment, ETP Holders are free to disfavor the Exchange’s pricing if they believe
that alternatives offer them better value. Moreover, the proposal neither targets nor will it have a
disparate impact on any particular category of market participant. The Exchange believes that
the proposal does not permit unfair discrimination because the proposal would be applied to all
similarly situated ETP Holders and all ETP Holders would be similarly subject to the proposed
volume requirement to qualify for the proposed modified Retail Tiers. Accordingly, no ETP
Holder already operating on the Exchange would be disadvantaged by the proposed allocation of
fees. The Exchange further believes that the proposed changes would not permit unfair
discrimination among ETP Holders because the general and tiered rates are available equally to
all ETP Holders.
As described above, in today’s competitive marketplace, order flow providers have a
choice of where to direct liquidity-providing order flow, and the Exchange believes the proposed
modification of the requirement and the credit payable under the proposed Retail Tiers will
incentivize greater number of ETP Holders to direct their order flow to the Exchange. Lastly, the
submission of Retail Orders is optional for ETP Holders in that they could choose whether to
submit Retail Orders and, if they do, the extent of its activity in this regard. 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,23 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, as discussed above, the Exchange believes that
the proposed changes would encourage the submission of additional liquidity to a public
exchange, thereby promoting market depth, price discovery and transparency and enhancing
order execution opportunities for ETP Holders. As a result, the Exchange believes that the
proposed change furthers the Commission’s goal in adopting Regulation NMS of fostering
integrated competition among orders, which promotes “more efficient pricing of individual
stocks for all types of orders, large and small.”24
Intramarket Competition. The Exchange believes the proposed rule change does not
impose any burden on intramarket competition that is not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange does not believe that the proposed change represents a
significant departure from previous pricing offered by the Exchange or its competitors. The
proposed change is designed to attract Retail Orders to the Exchange. The Exchange believes
that amending criteria of established tiers and associated credits would incentivize market
participants to direct liquidity adding retail order flow to the Exchange, bringing with it
additional execution opportunities for market participants and improved price transparency.
Greater overall order flow, trading opportunities, and pricing transparency would benefit all
market participants on the Exchange by enhancing market quality and would continue to
encourage ETP Holders to send their orders to the Exchange, thereby contributing towards a
robust and well-balanced market ecosystem. Additionally, the proposed changes would apply to
all ETP Holders equally in that all ETP Holders would be eligible for the proposed Retail Tiers,
have a reasonable opportunity to meet each tier’s criteria and would all receive the proposed

15 U.S.C. 78f(b)(8).

See supra note 3.

credit if such criteria is met.
Intermarket Competition. The Exchange believes the proposed rule change does not
impose any burden on intermarket competition that is not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange operates in a highly competitive market in which
market participants can readily choose to send their orders to other exchanges and off-exchange
venues if they deem fee levels at those other venues to be more favorable. As noted above, the
Exchange’s market share of intraday trading (i.e., excluding auctions) is currently less than 10%.
In such an environment, the Exchange must continually adjust its fees and rebates to remain
competitive with other exchanges and with off-exchange venues. 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 does not believe this proposed fee change
would impose any burden on intermarket competition.
The Exchange believes that the proposed change 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
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)25 of

the Act and subparagraph (f)(2) of Rule 19b-426 thereunder, because it establishes a due, fee, or
other charge imposed by the Exchange.
At any time within 60 days of the filing of such proposed rule change, the Commission

15 U.S.C. 78s(b)(3)(A).

17 CFR 240.19b-4(f)(2).

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)27 of the Act 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:
ï‚·

Use the Commission’s Internet comment form (https://www.sec.gov/rules/sro.shtml); or

ï‚·

Send an e-mail to rule-comments@sec.gov. Please include File Number SRNYSEARCA-2022-59 on the subject line.
Paper comments:

ï‚·

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-NYSEARCA-2022-59. 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 website (https://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

15 U.S.C. 78s(b)(2)(B).

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 offices 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 SRNYSEARCA-2022-59, and should be submitted on or before [insert date 21 days from
publication in the Federal Register].
For the Commission, by the Division of Trading and Markets, pursuant to delegated
authority.28

J. Matthew DeLesDernier,
Deputy Secretary.

[FR Doc. 2022-20145 Filed: 9/16/2022 8:45 am; Publication Date: 9/19/2022]

17 CFR 200.30-3(a)(12).