[Federal Register Volume 88, Number 34 (Tuesday, February 21, 2023)]
[Notices]
[Pages 10574-10577]
[FR Doc No: 2023-03487]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96928; File No. SR-CboeEDGX-2023-009]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Adopt Order-to-Trade Ratio Fees

February 14, 2023.
    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 February 1, 2023, Cboe EDGX Exchange, Inc. (the
``Exchange'' or ``EDGX'') 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

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'')
proposes to amend its Fee Schedule. The text of the proposed rule
change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, 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 Exchange 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 these 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 aspects 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 Fee Schedule to adopt Order-to-
Trade Ratio Fees, effective February 1, 2023.
    The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 18% of the market share and
currently the Exchange represents only approximately 6% of the market
share.\4\ Thus, in such a low-concentrated and highly competitive
market, no single options exchange, including the Exchange, possesses
significant pricing power in the execution of option order flow. The
Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue to reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain the Exchange's transaction fees, and market participants can
readily trade on competing venues if they deem pricing levels at those
other venues to be more favorable.
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    \4\ See Cboe Global Markets U.S. Options Market Monthly Volume
Summary (January 23, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
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    The Exchange proposes to adopt Order-to-Trade Ratio Fees. The
proposed fees will be charged to market participants registered as
Market Makers on EDGX Options based on the number of orders (including
modification messages) entered compared to the number of orders traded
in a calendar month. The calculation of the ratio will not include
quotes or trades resulting from such quotes. A Market Maker's order
flow will be aggregated together with any affiliated Member sharing at
least 75% common ownership. The proposed fees are as follows:

------------------------------------------------------------------------
            Tier                   Order-to-trade ratio           Fee
------------------------------------------------------------------------
Tier 1.....................  0 to 999........................         $0
Tier 2.....................  1,000 to 1,999..................      2,500
Tier 3.....................  2,000 to 4,999..................      5,000
Tier 4.....................  5,000 to 9,999..................     10,500
Tier 5.....................  10,000 to 14,999................     35,000
Tier 6.....................  15,000 to 19,999................    100,000
Tier 7.....................  20,000 and above................    150,000
------------------------------------------------------------------------

    The Exchange notes that market participants with incrementally
higher order-to-trade ratios have the potential residual effect of
exhausting system resources, bandwidth, and capacity. Higher order-to-
trade ratios may, in turn, create latency and impact other Members'
ability to receive timely executions. Recognizing Market Maker quoting
activity is an important source of liquidity on exchanges, and that
orders and executions often occur in large numbers, the purpose of this
proposal is to focus on activity that is truly disproportionate while
fairly allocating costs. The proposed fee structure has multiple
thresholds, and the proposed fees are incrementally greater at higher
order-to-trade ratios because the potential impact on exchange systems,
bandwidth and capacity becomes greater with increased order-to-trade
ratios. The proposal contemplates that a Market Maker would have to
exceed the high order to trade ratio of 999 before that Market Maker
would be charged a fee under the proposed tiers. The Exchange believes
that it is in the interests of all Members and market participants who
access the Exchange to not allow other market participants to exhaust
System resources, but to encourage efficient usage of network capacity.
The Exchange also believes this proposal will reduce the potential for
market participants to engage in excessive order and trade activity
that may require the Exchange to increase its storage capacity and will
encourage such activity to be submitted in good faith for legitimate
purposes.
    The Exchange also represents that the proposed fees are not
intended to raise revenue; rather, as noted above, it is intended to
encourage efficient behavior so that market participants do not exhaust
System resources. The Exchange also notes that it intends to provide
Market Makers with daily reports, free of charge, which will detail
their order and trade activity in order for those firms to be fully
aware of all order and trade activity they (and their affiliates) are
sending to the Exchange. This will allow firms to monitor their
behavior and determine whether it is approaching any of the order-to-
trade thresholds that trigger the proposed fees.
    The Exchange lastly notes that other exchanges have adopted similar
fee programs that assesses incrementally higher fees to Members that
have incrementally higher order-to-trade ratios for similar reasons.\5\
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    \5\ See e.g., Securities Exchange Act Release No. 60102 (June
11, 2009), 74 FR 29251 (June 19, 2009) (SR-NYSEArca-2009-50).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ Id.
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    First, the Exchange notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. The Exchange is only one of
16 options exchanges which market participants may direct their order
flow and/or participate on as a Market-Maker, and it represents a small
percentage of the overall market. Competing options exchanges similarly
assess fees based on a Member's order-to-trade ratio.\9\
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    \9\ See e.g., NYSE Arca Options Fees and Charges, Ratio
Threshold Fee.
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    The Exchange believes adopting order-to-trade ratio fees is
reasonable as unfettered usage of System capacity and network resource
consumption can have a detrimental effect on all market participants
who access and use the Exchange. As discussed, high order-to-trade
ratios may adversely impact system resources, bandwidth, and capacity
which may, in turn, create latency and impact other Members' ability to
receive timely executions. The Exchange believes the proposed fees are
therefore reasonable as they are designed to focus on activity that is
truly disproportionate while fairly allocating costs.
    The Exchange believes the proposed fees are also reasonable as
Market Makers that do not exceed the high order to trade ratio of 999
will not be charged any fee under the proposed tiers. Quoting activity
(and trades resulting from quotes) are also not included in the order-
to-trade ratio, thereby ensuring Market Makers quoting activity, which
acts as important source of liquidity, is not impeded by the proposal.
The Exchange believes it's reasonable, equitable and not unfairly
discriminatory to assess higher fees for greater higher order-to-trade
ratios because the potential impact on exchange systems, bandwidth and
capacity becomes greater with increased order-to-trade ratios. The
Exchange believes the proposed fee amounts are reasonable and
commensurate with the proposed thresholds as they are designed to
incentivize Market Makers to reduce excessive order and trade activity
that can be detrimental to all market participants and encourage such
activity to be made in good faith and for legitimate purposes. Indeed,
the Exchange believes that it is in the interests of all Members and
market participants who access the Exchange to not allow other market
participants to exhaust System resources, but to encourage efficient
usage of network capacity. The Exchange therefore also believes that
the proposed order-to-trade ratio fees appropriately reflect the
benefits to different firms of being able to send orders into the
Exchange's System and facilitates the Commission's goal of ensuring
that critical market infrastructure has ``levels of capacity,
integrity, resiliency, availability, and security adequate to maintain
their operational capability and promote the maintenance of fair and
orderly markets.'' \10\
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    \10\ See Securities Exchange Act Release No. 73639 (November 19,
2014), 79 FR 72251 (December 5, 2014) (File No. S7-01-13)
(Regulation SCI Adopting Release).
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    The Exchange believes the proposed change is also equitable and not
unfairly discriminatory because it applies uniformly to all Market
Makers registered on EDGX Options. While the Exchange has no way of
predicting with certainty how the proposed changes will impact Member
activity, based on trading activity from the prior months,

the Exchange anticipates that, absent any changes to Member behavior,
the vast majority of Members will fall within proposed Tier 1 (and thus
not be subject to any new fees). With respect to Market Makers that
exceed this threshold, the Exchange anticipates, absent any change in
behavior, approximately two Members will fall within Tier 2, one Member
will fall within Tier 3, no Members will fall within Tiers 4 or 5 and
one Member will fall within Tier 6 and no Members will fall within Tier
7. As discussed above however, the Exchange believes it's equitable and
not unfairly discriminatory to assess incrementally higher fees for
Market Makers that have higher order-to-trade ratios because the
potential impact on exchange systems, bandwidth and capacity becomes
greater with increased order-to-trade ratios. In addition, the Exchange
believes that excluding quoting activity from the calculation of the
ratio for the proposed fees is not unfairly discriminatory because it
will ensure Market Makers are able to continue providing important
liquidity to the Exchange and meet their quoting obligations.
    The Exchange lastly believes that its proposal is reasonable,
equitably allocated and not unfairly discriminatory because it is not
intended to raise revenue for the Exchange; rather, it is intended to
encourage efficient behavior so that market participants do not exhaust
System resources, while balancing the increase in order-to-trade ratio
has seen from some market participants.

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. In particular, 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. Particularly, the proposed fees
applies uniformly to all Market Makers registered on EDGX Options.
Further, any Market Maker who exceeds the order-to-trade ratio of 999
will be subject to a fee under the proposed tiers. The Exchange
believes that the proposed change neither favors nor penalizes one or
more categories of market participants in a manner that would impose an
undue burden on competition. Rather, the proposal seeks to benefit all
market participants by encouraging the efficient utilization of the
Exchange's network while taking into account the important liquidity
provided by Market Makers. As discussed above potential impact on
exchange systems, bandwidth and capacity becomes greater with increased
order-to-trade ratios. The Exchange also anticipates that the vast
majority of Market Makers on the Exchange will not be subject to any
fees under the proposed tiers. Accordingly, the Exchange believes that
the proposed Excessive Quoting Fee does not favor certain categories of
market participants in a manner that would impose a burden on
competition.
    The Exchange also 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. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues they may participate on and
direct their order flow, including 15 other options exchanges.
Additionally, the Exchange represents a small percentage of the overall
market. Based on publicly available information, no single options
exchange has more than 18% of the market share. Therefore, no exchange
possesses significant pricing power in the execution of order flow.
Indeed, participants can readily choose to send their orders to other
exchanges if they deem fee levels at those other venues to be more
favorable. Moreover, 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 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.'' The fact that
this market is competitive has also long been recognized by the courts.
In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit
stated as follows: ``[n]o one disputes that competition for order flow
is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .''. Accordingly, the Exchange
does not believe its proposed fee change imposes 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

    The Exchange neither solicited nor received comments on 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) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \13\ 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-CboeEDGX-2023-009 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-CboeEDGX-2023-009. 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-CboeEDGX-2023-009, and should be
submitted on or before March 14, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03487 Filed 2-17-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Pages 3143-3149]
[FR Doc No: 2022-00979]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93973; File No. SR-NYSEAMER-2021-54]

Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend the NYSE
American Equities Price List and Fee Schedule

January 13, 2022.
    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 December 30, 2021, NYSE American LLC (``NYSE American''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend certain Standard Rates and
requirements for transaction fees and credits that add and remove
liquidity in securities at or above $1 and reformat the section of the
NYSE American Equities Price List and Fee Schedule (``Price List'')
setting forth transactions fees for all transactions other than
transactions using Retail Order Rates, transactions in securities below
$1, and transactions by an Electronic Designated Market Makers
(``eDMM'') in assigned securities. The Exchange proposes to implement
the fee changes effective January 3, 2022. The proposed 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 the Standard Rates for transaction
fees and credits that add and remove liquidity in securities at or
above $1 and reformat the section of the Price List setting forth
transactions fees for all transactions other than transactions using
Retail Order Rates, transactions in securities below $1, and
transactions by an eDMM in assigned securities.
    The proposed changes respond to the current competitive environment
where order flow providers have a choice of where to direct liquidity-
providing and liquidity-removing orders by offering further incentives
for ETP Holders to send additional adding and removing liquidity to the
Exchange.
    The Exchange proposes to implement the fee changes effective
January 3, 2022.
Competitive Environment
    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.'' \4\
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    \4\ 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'').
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    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.'' \5\ Indeed, cash equity trading is currently dispersed
across 16

exchanges,\6\ numerous alternative trading systems,\7\ and broker-
dealer internalizers and wholesalers, all competing for order flow.
Based on publicly-available information, no single exchange currently
has more than 17% market share.\8\ Therefore, no exchange possesses
significant pricing power in the execution of cash equity order flow.
More specifically, the Exchange currently has less than 1% market share
of executed volume of cash equities trading.\9\
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    \5\ 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).
    \6\ 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.
    \7\ See FINRA ATS Transparency Data, available at 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.
    \8\ See Cboe Global Markets U.S. Equities Market Volume Summary,
available at http://markets.cboe.com/us/equities/market_share/.
    \9\ See id.
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    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 the firm routes order flow.
    In response to this competitive environment, the Exchange has
established incentives for ETP Holders who submit orders that provide
liquidity on the Exchange. The proposed fee change is designed to
attract additional order flow to the Exchange by incentivizing ETP
Holders to send additional adding liquidity to the Exchange to qualify
for the liquidity removing tiers and fees. The Exchange has also
established incentives for ETP Holders to remove liquidity from the
Exchange. In addition, as detailed below, the proposed higher credits
for Mid-Point Liquidity Orders (``MPL Orders'') \10\ adding liquidity
to the Exchange are intended to create incentives for price improving
liquidity and increasing the quality of order execution on the
Exchange's market, which benefits all market participants, insofar as
MPL Orders provide opportunities for market participants to interact
with orders priced at the midpoint of the Protected Best Bid and Offer
(``PBBO'').\11\
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    \10\ See Rule 7.31E(d)(3) (description of MPL Order).
    \11\ See Rule 1.1E(dd) (definition of PBBO).
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Proposed Rule Change
    Currently, for transactions in securities priced at or above $1.00,
other than transactions by eDMMs in assigned securities, the Exchange
offers the following credits for displayed orders that add liquidity to
the Exchange:
     Displayed orders and MPL Orders that add liquidity to the
Exchange where the ETP Holder has an average daily volume (``ADV'') of
at least 2,500,000 shares (``Adding ADV'') \12\ currently receive a
credit of $0.0026 per share.
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    \12\ As defined in the Fee Schedule, Adding ADV means an ETP
Holder's average daily volume of shares executed on the Exchange
that provided liquidity.
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     Displayed orders and MPL Orders that add liquidity to the
Exchange where an ETP Holder has Adding ADV of at least 750,000 shares
currently receive a $0.0025 credit per displayed and MPL share. Where
an ETP Holder does not have an Adding ADV of at least 750,000 shares,
such orders currently receive a $0.0024 per share.
     Orders that add displayed liquidity to the Exchange and
that set a new best bid or offer (``BBO'') on NYSE American \13\ where
an ETP Holder has an Adding ADV of at least 2,500,000 shares currently
receive a $0.0027 per share credit. Where an ETP Holder does not have
an Adding ADV of at least 2,500,000 shares, such orders currently
receive a $0.0026 per share credit.
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    \13\ See Rule 1.1E(h) (definition of BBO).
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     The current fee for orders removing liquidity from the
Exchange where an ETP Holder has an Adding ADV of at least 10,000
shares is $0.0026 per share. Where an ETP Holder does not have an
Adding ADV of at least 10,000 shares, the Exchange charges $0.0030 per
share for all executions that remove liquidity from the Exchange.
    The Exchange proposes to restructure its tier requirements,
credits, and fees in order to attract liquidity to the Exchange. The
Exchange has not made substantial changes to its pricing in several
years and believes that some of the current tier requirements, credits,
and fees no longer incentivize ETP Holders to send liquidity to the
Exchange, and therefore should be modified. In addition, the Exchange
believes that harmonizing the tier requirements for orders that add
liquidity and orders that remove liquidity from the Exchange will make
its Price List clearer and more transparent for ETP Holders. The
Exchange believes that this combination of changes, taken together,
will cause ETP Holders to send more liquidity to the Exchange.
    Specifically, the Exchange proposes to revise these fees and
credits by: (a) Reorganizing the fees as ``Tier 1,'' ``Tier 2,'' or
``Non-Tier''; (b) adjusting the Adding ADV levels required to qualify
for Tier 1 and Tier 2 fees and credits and harmonizing such levels for
orders adding liquidity and orders removing liquidity; (c) proposing
separate fees and credits for MPL Orders adding liquidity; and (d)
adjusting the fees and credits available for ETP Holders qualifying for
proposed Tier 1, Tier 2, and Non-Tier rates, as follows.
    The Exchange proposes to define a ``Tier 1,'' pursuant to which it
would make its best rates available to ETP Holders with Adding ADV of
at least 3,500,000 shares. This Adding ADV requirement of 3,500,000
shares is an increase from the current Adding ADV level of 2,500,000
shares required for ETP Holders to access the Exchange's best rates for
orders adding liquidity, and from the current Adding ADV level of
10,000 shares required for ETP Holders to access the Exchange's best
rates for orders removing liquidity. As proposed, ETP Holders that
qualify for Tier 1 would be eligible for the following rates:
     A credit of $0.0026 per share for orders adding displayed
liquidity (no change from the current rate);
     A credit of $0.0030 per share for MPL Orders adding
liquidity (an increase from the current credit of $0.0026 per share);
     A credit of $0.0029 per share for orders adding displayed
liquidity that set a new BBO on the Exchange (an increase from the
current credit of $0.0027 per share); and
     A fee of $0.0026 per share for orders removing liquidity
(no change from the current rate).
    The Exchange also proposes to define a ``Tier 2,'' setting out
rates available to ETP Holders with Adding ADV of at least 700,000
shares. This Adding ADV requirement of 700,000 is a decrease from the
current Adding ADV level of 750,000 shares required for ETP Holders to
access certain pricing for orders adding liquidity. (Currently, there
is no second-tier Adding ADV requirement for orders removing
liquidity.) As proposed, ETP Holders that qualify for Tier 2 would be
eligible for the following rates:
     A credit of $0.0023 per share for orders adding displayed
liquidity (a decrease from the current credit of $0.0025 per share);
     A credit of $0.0029 per share for MPL Orders adding
liquidity (an increase from the current credit of $0.0025 per share);

     A credit of $0.0024 per share for orders adding liquidity
that set a new BBO on the Exchange (a decrease from the current credit
of $0.0026 per share); and
     A fee of $0.0027 for orders removing liquidity (an
increase from the current fee of $0.0026 per share).
    The Exchange also proposes to define ``Non-Tier'' rates, which
would specify the rates available to ETP Holders that do not qualify
for either Tier 1 or Tier 2, as follows:
     A credit of $0.0020 per share for orders adding displayed
liquidity (a decrease from the current credit of $0.0024 per share);
     A credit of $0.0024 per share for MPL Orders adding
liquidity (no change from the current rate);
     A credit of $0.0020 per share for orders adding liquidity
that set a new BBO on the Exchange (a decrease from the current credit
of $0.0026 per share); and
     A fee of $0.0030 per share for orders removing liquidity
(no change from the current rate).
    The Exchange proposes to keep the current credit of $0.0020 per
share for non-displayed orders adding liquidity and the current fee of
$0.0005 per share for orders executing in the opening or closing
auctions, without any change. Neither of those rates depends on an ETP
Holder achieving a certain level of Adding ADV.
    These proposed changes are intended to incentivize ETP Holders to
increase the liquidity-providing orders they send to the Exchange,
which would support the quality of price discovery on the Exchange and
provide additional liquidity for incoming orders. The Exchange believes
that by correlating the level of credits to the level of executed
adding volume on the Exchange, the Exchange's fee structure would
encourage ETP Holders to submit more liquidity-providing orders to the
Exchange that are likely to be executed, thereby increasing the
potential for incoming marketable orders submitted to the Exchange to
receive an execution. As noted above, the Exchange operates in a
competitive environment, particularly as it relates to attracting non-
marketable orders that add liquidity to the Exchange. The Exchange
believes that the proposed tiering of credits applicable to displayed
orders, MPL Orders, and orders setting a new NYSE American BBO for ETP
Holders that meet the proposed Adding ADV requirements would serve as
an additional incentive for ETP Holders to send liquidity to and
improve quoting on the Exchange in order to qualify for such credits.
    In addition, the Exchange believes that the proposed changes to the
fees for removing liquidity, taken together, will incentivize
submission of additional liquidity to a public exchange, thereby
promoting price discovery and transparency and enhancing order
execution opportunities for ETP Holders. As noted, the Exchange
operates in a competitive environment, particularly as it relates to
attracting non-marketable orders, which add liquidity to the Exchange.
The Exchange does not know how much order flow ETP Holders choose to
route to other exchanges or to off-exchange venues. Because the
proposed reconfiguration of fees for removing liquidity from the
Exchange involves the introduction of new fees and/or new requirements,
the Exchange does not know how many ETP Holders could qualify for such
new fees based on their current trading profile on the Exchange and if
they choose to direct order flow to the Exchange. Without having a view
of ETP Holder's activity on other exchanges and off-exchange venues,
the Exchange has no way of knowing whether this proposed rule change
would result in any ETP Holder directing orders to the Exchange.
    The proposed rule change is designed to be available to all ETP
Holders on the Exchange and is intended to provide ETP Holders a
greater incentive to direct more of their orders to the Exchange.
    Finally, the Exchange would delete the current presentation of the
Standard Rates for liquidity adding and removing orders and replace it
with the following table in the Price List, reflecting all of the rates
proposed above:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Fees and credits per share
                                          Minimum adding -----------------------------------------------------------------------------------------------
                                                ADV           Adding        Setting new                       Adding
                                            requirement     liquidity--    NYSE American    MPL adding      liquidity--      Removing      Executions at
                                             (shares)        displayed          BBO          liquidity     non-displayed     liquidity    open and close
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tier 1..................................       3,500,000       $(0.0026)       $(0.0029)       $(0.0030)       $(0.0020)         $0.0026         $0.0005
Tier 2..................................         700,000        (0.0023)        (0.0024)        (0.0029)        (0.0020)          0.0027          0.0005
Non-Tier................................             N/A        (0.0020)        (0.0020)        (0.0024)        (0.0020)          0.0030          0.0005
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Exchange proposes this non-substantive change to reorganize and
enhance the presentation in the Price List in order to add clarity and
transparency, thereby making the Price List easier to navigate.
    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,\14\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\15\ 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, is designed to prevent fraudulent and
manipulative acts and practices and to promote just and equitable
principles of trade, and does not unfairly discriminate between
customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    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 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.'' \16\
---------------------------------------------------------------------------

    \16\ See Regulation NMS, supra note 6, 70 FR at 37499.
---------------------------------------------------------------------------

    The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue to reduce use of certain categories of
products, in response to fee changes.

ETP Holders can choose from any one of the 16 currently operating
registered exchanges, and numerous off-exchange venues, to route such
order flow. Accordingly, competitive forces constrain exchange
transaction fees that relate to orders on an exchange. Stated
otherwise, changes to exchange transaction fees can have a direct
effect on the ability of an exchange to compete for order flow.
The Proposed Fee Change Is Reasonable
    In light 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 Exchange believes the proposed
change is also reasonable because it is designed to attract higher
volumes of orders transacted on the Exchange by ETP Holders, which
would benefit all market participants by offering greater price
discovery and an increased opportunity to trade on the Exchange.
Proposed Tier Requirements
    The Exchange believes that aligning the Adding ADV tier
requirements for Tier 1 and Tier 2 for orders adding liquidity and
orders removing liquidity will be clearer for investors and will
eliminate potential investor confusion, thereby removing impediments to
and perfecting the mechanism of a free and open market and a national
market system, and, in general, protecting investors and the public
interest.
    The Exchange believes that the proposed change increasing to
3,500,000 shares the minimum Adding ADV required for ETP Holders to
access its best pricing for orders adding and removing liquidity under
proposed Tier 1 is a reasonable attempt to increase liquidity on the
Exchange and improve the Exchange's market share relative to its
competitors. Currently, ETP Holders may qualify for the Exchange's best
pricing for orders adding liquidity by achieving an Adding ADV of
2,500,000 shares, and may qualify for the Exchange's best pricing for
orders removing liquidity by achieving an Adding ADV of 10,000 shares.
The Exchange believes that these current levels are not a sufficient
incentive, and that raising these Adding ADV requirements to the
proposed level of 3,500,000 shares would incentivize ETP Holders to
send more of their liquidity-adding orders to the Exchange as opposed
to other venues, so that they may qualify for the Exchange's best
pricing for adding and removing liquidity.
    Similarly, the Exchange believes that adjusting the current Adding
ADV requirement of 750,000 shares to 700,000 shares for orders adding
displayed liquidity under proposed Tier 2, and adding specified fees
under proposed Tier 2 for orders removing liquidity for ETP Holders
with at least 700,000 shares, will enable more ETP Holders to qualify
for this tier, thereby incentivizing more ETP Holders to send their
orders to the Exchange. This, in turn, would increase liquidity on the
Exchange and improve the Exchange's market share relative to its
competitors. The proposed 700,000 share Adding ADV requirement is a
reduction from the current requirement of 750,000 shares to qualify for
certain credits for orders adding liquidity, and would introduce a Tier
2 Adding ADV requirement for orders removing liquidity. The Exchange
believes that establishing the Tier 2 Adding ADV requirement at this
level would incentivize ETP Holders to send more of their liquidity-
adding orders to the Exchange, so that they may qualify for Tier 2
pricing for adding and removing liquidity.
Proposed Fees and Credits
    The Exchange believes that the proposed changes to the credits
available for orders adding liquidity to the Exchange are reasonable.
The Exchange believes it is reasonable to increase the credits
available under Tier 1 and Tier 2 for MPL Orders adding liquidity as it
is expected to create incentives for ETP Holders to add price-improving
liquidity to the Exchange and increase the quality of order execution
on the Exchange's market, which benefits all market participants, as
MPL Orders provide opportunities for market participants to interact
with orders priced at the midpoint of the PBBO. The Exchange also
believes it is reasonable to increase the credits available under Tier
1 for orders setting a new BBO on the Exchange, as it is expected
provide incentives for ETP Holders to provide aggressively-priced
orders that improve the market by setting the BBO on the Exchange.
Similarly, the Exchange believes that lowering the credits available
under Tier 2 and at the Non-Tier level for orders adding displayed
liquidity and for orders setting a new BBO on the Exchange is
reasonable because the current higher credits did not result in greater
liquidity as the Exchange had anticipated. The Exchange believes it is
reasonable to revise credits when such incentives become underutilized.
    The Exchange believes that the proposed changes to the fees for
orders removing liquidity to the Exchange are reasonable. The purpose
of these changes is to encourage additional liquidity on the Exchange
because market participants benefit from the greater amounts of
displayed liquidity present on a public exchange. The Exchange believes
that the proposed new fees will incentivize additional liquidity on a
public exchange to qualify for lower fees for removing liquidity,
thereby promoting price discovery and transparency and enhancing order
execution opportunities for ETP Holders. The proposal is thus
reasonable because all ETP Holders would benefit from such increased
levels of liquidity.
    Because the proposal involves the introduction of new requirements
as well as new fee and credit levels, the Exchange does not know how
many ETP Holders could qualify for the new fees and credits based on
their current trading profile on the Exchange and if they choose to
direct order flow to the Exchange. As previously noted, without a view
of ETP Holder activity on other exchanges and off-exchange venues, the
Exchange has no way of knowing whether the proposed rule change would
result in any ETP Holder qualifying for a particular tier, credit, or
fee. The Exchange believes the proposed changes are reasonable as it
would provide an incentive for ETP Holders to direct their order flow
to the Exchange and provide meaningful added levels of liquidity in
order to qualify for the credits, thereby contributing to depth and
market quality on the Exchange.
Proposed Non-Substantive Reformatting
    The Exchange believes that the proposed changes are reasonable
because they are clarifying and non-substantive. The changes are
designed to make the Price List easier to read and more user-friendly.
The Exchange believes that this proposed format will provide additional
transparency of Exchange fees and credits, to the benefit of market
participants and the investing public. The Exchange believes the change
is reasonable and would not be inconsistent with the public interest
and the protection of investors because investors will not be harmed
and in fact would benefit from increased clarity and transparency on
the Price List, thereby reducing potential confusion.
The Proposed Change Is an Equitable Allocation of Fees and Credits
    The Exchange believes its proposal equitably allocates its fees
among its market participants. The Exchange believes its proposal
equitably allocates its fees among its market participants by

fostering liquidity provision and stability in the marketplace.
Proposed Tier Requirements
    The Exchange believes its proposal equitably allocates its fees and
credits among its market participants because all ETP Holders that
participate on the Exchange may receive the proposed fees and credits
if they elect to send their orders to the Exchange and meet the minimum
Adding ADV requirement corresponding to the fee or credit. 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 Holder sending more of
their orders to the Exchange. The Exchange cannot predict with
certainty how many ETP Holders would avail themselves of this
opportunity, but additional orders would benefit all market
participants because it would provide greater execution opportunities
on the Exchange. The Exchange anticipates that multiple ETP Holders
would endeavor to send more of their orders for execution on the
Exchange in order to meet the proposed requirements for Tier 1 and/or
Tier 2 pricing, thereby earning the proposed higher credits and paying
the proposed lower fees.
    The Exchange further believes that the proposed change is equitable
because it is reasonably related to the value to the Exchange's market
quality associated with higher volume in orders. The Exchange believes
that the proposed pricing adjustments would attract order flow and
liquidity to the Exchange, thereby contributing to price discovery on
the Exchange and benefiting investors generally.
    The Exchange believes that the proposed rule change is equitable
because maintaining or increasing the proportion of 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, supporting the quality of
price discovery, promoting market transparency, and improving investor
protection.
    The proposal neither targets nor will it have a disparate impact on
any particular category of market participant. All ETP Holders would be
eligible to qualify for the proposed credits if they meet the proposed
Adding ADV requirements for each proposed tier. The Exchange believes
that offering credits for providing liquidity will continue to attract
order flow and liquidity to the Exchange, thereby providing additional
price improvement opportunities on the Exchange and benefiting
investors generally. As to those market participants that do not
presently meet the Adding ADV requirements to qualify for the
Exchange's best prices, the proposal would provide a second tier with
lower requirements that could allow those ETP Holders to still qualify
for preferential credits and fees. The proposal will also not adversely
impact their ability to qualify for other credits or fees provided by
the Exchange.
Proposed Fees and Credits
    The Exchange believes the proposal equitably allocates fees and
credits among market participants because all ETP Holders that
participate on the Exchange may qualify for the proposed credits and
fees. The Exchange believes that the proposed changes, taken together,
will incentivize ETP Holders to send additional adding liquidity to
achieve lower fees when removing liquidity from the Exchange, thereby
increasing the number of orders that are executed on the Exchange,
promoting price discovery and transparency and enhancing order
execution opportunities and improving overall liquidity on a public
exchange. The Exchange also believes that the proposed change is
equitable because it would apply to all similarly situated ETP Holders
that add or remove liquidity. The proposed change also is equitable
because it would be consistent with the applicable rate on other
marketplaces.\17\
---------------------------------------------------------------------------

    \17\ For example, Cboe EDGX offers credits for adding non-retail
displayed liquidity ranging from $0.0016 to $0.0034 and fees for
removing liquidity from $0.00275 to $0.0030. See https://www.cboe.com/us/equities/membership/fee_schedule/edgx/.
---------------------------------------------------------------------------

    As previously noted, the Exchange operates in a competitive
environment, particularly as it relates to attracting orders that add
liquidity to the Exchange. The Exchange does not know how much order
flow ETP Holders choose to route to other exchanges or to off-exchange
venues. Because the proposed reconfiguration of the fees involves the
introduction of requirements as well as new fees and credits, the
Exchange does not know how many ETP Holders could qualify for the new
rates based on their current trading profiles on the Exchange and if
they choose to direct order flow to the Exchange. Without having a view
of ETP Holder's activity on other exchanges and off-exchange venues,
the Exchange has no way of knowing whether this proposed rule change
would result in any ETP Holder directing orders to the Exchange.
Proposed Non-Substantive Reformatting
    The Exchange believes that the proposed changes are equitable
because they are clarifying and non-substantive. The changes are
designed to make the Price List easier to read and more user-friendly.
The Exchange believes that this proposed format will provide additional
transparency of Exchange fees and credits, to the benefit of market
participants and the investing public. The Exchange believes the change
is reasonable and would not be inconsistent with the public interest
and the protection of investors because investors will not be harmed
and in fact would benefit from increased clarity and transparency on
the Price List, thereby reducing potential confusion. The Exchange
believes that the proposed reformatted the Price List is equitable
because the resulting streamlined Price List would continue to apply to
all ETP Holders on an equal basis.
The Proposed Fee Change Is Not Unfairly Discriminatory
Proposed Tier Requirements
    The Exchange believes that the proposal 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. The Exchange believes it is not
unfairly discriminatory to provide revised requirements and
corresponding tiered fees and credits, as the proposed fees and credits
would be provided on an equal basis to all ETP Holders that meet the
proposed tier requirements. Further, the Exchange believes the proposed
fees and credits would incentivize ETP Holders that meet the new tiered
requirements to send more orders to the Exchange. Since the minimum
Adding ADV requirements and some of the proposed fees and credits would
be new, no ETP Holder currently qualifies for them. As noted, without a
view of ETP Holder activity on other exchanges and off-exchange venues,
the Exchange has no way of knowing whether this proposed rule change
would result in any ETP Holders qualifying for the proposed adding
tiers. The Exchange believes the proposal is reasonable as it would
provide an incentive for ETP Holders to direct their order flow to the
Exchange and provide meaningful added levels of liquidity in order to
qualify for the credits, thereby

contributing to depth and market quality on the Exchange.
    In addition, the Exchange believes that the proposal is not
unfairly discriminatory because it neither targets nor will it have a
disparate impact on any particular category of market participant. All
ETP Holders that provide liquidity could be eligible to qualify for the
proposed credits under Tier 1 or Tier 2 if they meet the proposed
Adding ADV requirements. The Exchange believes that offering credits
for providing liquidity will continue to attract order flow and
liquidity to the Exchange, thereby providing additional price
improvement opportunities on the Exchange and benefiting investors
generally. As to those market participants that do not presently
qualify for the adding liquidity credits, the proposal will not
adversely impact their ability to qualify for other credits provided by
the Exchange. Finally, the submission of orders is optional for ETP
Holders in that they could choose whether to submit orders to the
Exchange and, if they do, they can choose the extent of their 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.
Proposed Fees and Credits
    The Exchange believes that that the proposed fees and credits for
ETP Holders that add or remove liquidity will incentivize submission of
additional liquidity to a public exchange to qualify for the revised
fees and credits, thereby promoting price discovery and transparency
and enhancing order execution opportunities for ETP Holders. The
proposal does not permit unfair discrimination because the proposed
rates would be applied to all similarly situated ETP Holders and other
market participants, who would all be eligible for the same rates on an
equal basis. Accordingly, no ETP Holder already operating on the
Exchange would be disadvantaged by this allocation of fees and credits.
    Finally, the Exchange notes that the submission of orders to the
Exchange is optional for ETP Holders in that they could choose whether
to submit orders to the Exchange and, if they do, the extent of its
activity in this regard.
Proposed Non-Substantive Reformatting
    The Exchange believes that the proposed reformatted the Price List
is not unfairly discriminatory because the resulting streamlined Price
List would continue to apply to all ETP Holders equally. The Exchange
believes that the reformatted Price List, as proposed, will be clearer
and less confusing for investors and will eliminate potential
confusion, thereby removing impediments to and perfecting the mechanism
of a free and open market and a national market system, and, in
general, protecting investors and the public interest. The Exchange
believes the change is reasonable and would not be inconsistent with
the public interest and the protection of investors because investors
will not be harmed and in fact would benefit from increased clarity and
transparency on the Price List, thereby reducing potential confusion.
    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,\18\ 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 fee change 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.'' \19\
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b)(8).
    \19\ See Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    Intramarket Competition. The Exchange believes the proposed change
would not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
change is designed to attract additional orders to the Exchange. The
Exchange believes that the proposed changes would incentivize market
participants to direct their orders to the Exchange. Greater overall
order flow, trading opportunities, and pricing transparency benefit all
market participants on the Exchange by enhancing market quality and
continuing to encourage ETP Holders to send orders, thereby
contributing towards a robust and well-balanced market ecosystem.
    Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily choose to
send their orders to other exchange and off-exchange venues if they
deem fee levels at those other venues to be more favorable. As noted
above, the Exchange currently has less than 1% market share of executed
volume of equities trading. In such an environment, the Exchange must
continually adjust its fees and credits 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 its proposed fee change can 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) \20\ of the Act and subparagraph (f)(2) of Rule
19b-4 \21\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \22\ of the Act to determine whether the proposed
rule

change should be approved or disapproved.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2021-54 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-NYSEAMER-2021-54. 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 (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 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-NYSEAMER-2021-54 and should
be submitted on or before February 10, 2022.
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00979 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 52 (Monday, March 18, 2019)]
[Proposed Rules]
[Pages 9724-9727]
[FR Doc No: 2019-04954]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2019-0107]
RIN 1625-AA08

Special Local Regulation; Choptank River, Cambridge, MD

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard is proposing to establish special local
regulations for certain waters of the Choptank River. This action is
necessary to provide for the safety of life on these navigable waters
located at Cambridge, MD, during a high-speed power boat racing event
on July 27, 2019, and July 28, 2019. This proposed rulemaking would
prohibit persons and vessels from being in the regulated area unless
authorized by the Captain of the Port Maryland-National Capital Region
or Coast Guard Patrol Commander. We invite your comments on this
proposed rulemaking.

DATES: Comments and related material must be received by the Coast
Guard on or before April 17, 2019.

ADDRESSES: You may submit comments identified by docket number USCG-
2019-0107 using the Federal eRulemaking Portal at http://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
proposed rulemaking, call or email Mr. Ron

Houck, U.S. Coast Guard Sector Maryland-National Capital Region;
telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
COTP Captain of the Port
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
PATCOM Coast Guard Patrol Commander
Sec.  Section
U.S.C. United States Code

II. Background, Purpose, and Legal Basis

    On February 10, 2019, the Kent Narrows Racing Association of
Chester, MD, notified the Coast Guard that it will be conducting the
Thunder on the Choptank from 10 a.m. to 6 p.m. on July 27, 2019, and
from 10 a.m. to 6 p.m. on July 28, 2019. The high-speed power boat
racing event consists of approximately 60 participating inboard and
outboard hydroplane and runabout race boats of various classes, 10 to
20 feet in length. The vessels will be competing on a designated,
marked 1-mile oval course located in the Choptank River in a cove
located between Hambrooks Bar and the shoreline at Cambridge, MD.
Hazards from the power boat racing event include risks of injury or
death resulting from near or actual contact among participant vessels
and spectator vessels or waterway users if normal vessel traffic were
to interfere with the event. Additionally, such hazards include
participants operating near designated navigation channels, as well as
operating near approaches to local public boat ramps, private marinas
and yacht clubs, and waterfront businesses. The COTP Maryland-National
Capital Region has determined that potential hazards associated with
the power boat races would be a safety concern for anyone intending to
operate within certain waters of the Choptank River at Cambridge, MD.
    The purpose of this rulemaking is to protect event participants,
spectators, and transiting vessels on certain waters of Choptank River
before, during, and after the scheduled event. The Coast Guard proposes
this rulemaking under authority in 46 U.S.C. 70041, which authorizes
the Coast Guard to establish and define special local regulations.

III. Discussion of Proposed Rule

    The COTP Maryland-National Capital Region is proposing to establish
special local regulations to be enforced from 9:30 a.m. to 6:30 p.m. on
July 27, 2019, and from 9:30 a.m. to 6:30 on July 28, 2019. The
regulated area would cover all navigable waters within Hambrooks Bay
and Choptank River west and south of a line commencing at the
shoreline, at latitude 38[deg]35'00'' N longitude 076[deg]04'43'' W,
thence east to latitude 38[deg]35'00'' N longitude 076[deg]04'23.7'' W,
thence north to latitude 38[deg]35'22.7'' N, longitude
076[deg]04'23.7'' W, thence northwest to latitude 38[deg]35'42.2'' N,
longitude 076[deg]04'51.1'' W at Hambrooks Bar Light LLNR 24995, thence
southwest to latitude 38[deg]35'34.2'' N, longitude 076[deg]05'12.3''
W, terminating at the Hambrooks Bay breakwall as it intersects the
shoreline.
    This proposed rule provides additional information about areas
within the regulated area, and the restrictions that apply to mariners.
These areas include a ``Race Area'', ``Buffer Zone'' and ``Spectator
Area''.
    The proposed duration of the rule and size of the regulated area
are intended to ensure the safety of life on these navigable waters
before, during, and after the high-speed power boat races, scheduled
from 10 a.m. until 6 p.m. on July 27, 2019, and July 28, 2019. The COTP
and Coast Guard Patrol Commander (PATCOM) would have authority to
forbid and control the movement of all vessels and persons, including
event participants, in the regulated area. When hailed or signaled by
an official patrol, a vessel or person in the regulated area would be
required to immediately comply with the directions given by the COTP or
PATCOM. If a person or vessel fails to follow such directions, the
Coast Guard may expel them from the area, issue them a citation for
failure to comply, or both.
    Except for Thunder on the Choptank participants and vessels already
at berth, a vessel or person would be required to get permission from
the COTP or PATCOM before entering the regulated area while the rule is
being enforced. Vessel operators could request permission to enter and
transit through the regulated area by contacting the PATCOM on VHF-FM
channel 16. Vessel traffic would be able to safely transit the
regulated area once the PATCOM deems it safe to do so. A person or
vessel not registered with the event sponsor as a participant or
assigned as official patrols would be considered a spectator. Official
Patrols are any vessel assigned or approved by the Commander, Coast
Guard Sector Maryland-National Capital Region with a commissioned,
warrant, or petty officer on board and displaying a Coast Guard ensign.
    If permission is granted by the COTP or PATCOM, a person or vessel
would be allowed to enter the regulated area or pass directly through
the regulated area as instructed. Vessels would be required to operate
at a safe speed that minimizes wake while within the regulated area.
Official patrol vessels will direct spectator vessels while within the
regulated area. Vessels would be prohibited from loitering within the
navigable channel. Only participant vessels and official patrol vessels
would be allowed to enter the race area.
    The regulatory text we are proposing appears at the end of this
document.

IV. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and Executive orders related to rulemaking. Below we summarize our
analyses based on a number of these statutes and Executive orders and
we discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This NPRM has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, the NPRM has not been reviewed by the Office of
Management and Budget (OMB), and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771.
    This regulatory action determination is based on the size, duration
and time of year of the racing event, which would impact a small
designated area of the Choptank River for 18 total enforcement hours.
The Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM
marine channel 16 about the status of the special local regulation.
Moreover, the rule would allow vessels to seek permission to enter the
regulated area, and vessel traffic would be able to safely transit the
regulated area once the PATCOM deems it safe to do so.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their

fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this
proposed rule would not have a significant economic impact on a
substantial number of small entities.
    While some owners or operators of vessels intending to transit the
regulated area may be small entities, for the reasons stated in section
IV.A above, this proposed rule would not have a significant economic
impact on any vessel owner or operator.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule. If the rule would affect
your small business, organization, or governmental jurisdiction and you
have questions concerning its provisions or options for compliance,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section. The Coast Guard will not retaliate against small entities that
question or complain about this proposed rule or any policy or action
of the Coast Guard.

C. Collection of Information

    This proposed rule would not call for a new collection of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this proposed rule under that Order and
have determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this proposed rule does not have tribal implications under
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this proposed rule has implications for federalism or
Indian tribes, please contact the person listed in the FOR FURTHER
INFORMATION CONTACT section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this proposed rule would not
result in such an expenditure, we do discuss the effects of this rule
elsewhere in this preamble.

F. Environment

    We have analyzed this proposed rule under Department of Homeland
Security Directive 023-01 and Commandant Instruction M16475.1D, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary
determination that this action is one of a category of actions that do
not individually or cumulatively have a significant effect on the human
environment. This proposed rule involves implementation of regulations
within 33 CFR part 100 applicable to organized marine events on the
navigable waters of the United States that could negatively impact the
safety of waterway users and shore side activities in the event area
lasting for 33 hours. Normally such actions are categorically excluded
from further review under paragraph L61 of Appendix A, Table 1 of DHS
Instruction Manual 023-01-001-01, Rev. 01. We seek any comments or
information that may lead to the discovery of a significant
environmental impact from this proposed rule.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places, or vessels.

V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at http://www.regulations.gov. If your material cannot be
submitted using http://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
    We accept anonymous comments. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, visit http://www.regulations.gov/privacyNotice.
    Documents mentioned in this NPRM as being available in the docket,
and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that website's
instructions. Additionally, if you go to the online docket and sign up
for email alerts, you will be notified when comments are posted or a
final rule is published.

List of Subjects in 33 CFR Part 100

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard proposes
to amend 33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority:  46 U.S.C. 70041; 33 CFR 1.05-1.

0
2. Add Sec.  100.501T05-0107 to read as follows:

Sec.  100.501T05-0107   Special Local Regulation; Choptank River,
Cambridge, MD.

    (a) Definitions. As used in this section:
    Captain of the Port (COTP) Maryland-National Capital Region means
the Commander, U.S. Coast Guard Sector

Maryland-National Capital Region or any Coast Guard commissioned,
warrant or petty officer who has been authorized by the COTP to act on
his behalf.
    Coast Guard Patrol Commander (PATCOM) means a commissioned,
warrant, or petty officer of the U.S. Coast Guard who has been
designated by the Commander, Coast Guard Sector Maryland-National
Capital Region.
    Official Patrol means any vessel assigned or approved by Commander,
Coast Guard Sector Maryland-National Capital Region with a
commissioned, warrant, or petty officer on board and displaying a Coast
Guard ensign.
    Participants means all persons and vessels registered with the
event sponsor as participating in the Thunder on the Choptank or
otherwise designated by the event sponsor as having a function tied to
the event.
    Spectators means all persons and vessels not registered with the
event sponsor as participants or assigned as official patrols.
    (b) Locations. All coordinates reference Datum NAD 1983.
    (1) Regulated area. All navigable waters within Hambrooks Bay and
Choptank River west and south of a line commencing at the shoreline, at
latitude 38[deg]35'00'' N longitude 076[deg]04'43'' W, thence east to
latitude 38[deg]35'00'' N longitude 076[deg]04'23.7'' W, thence north
to latitude 38[deg]35'22.7'' N, longitude 076[deg]04'23.7'' W, thence
northwest to latitude 38[deg]35'42.2'' N, longitude 076[deg]04'51.1'' W
at Hambrooks Bar Light LLNR 24995, thence southwest to latitude
38[deg]35'34.2'' N, longitude 076[deg]05'12.3'' W, terminating at the
Hambrooks Bay breakwall as it intersects the shoreline. The following
locations are within the regulated area:
    (2) Race Area. Located within the waters of Hambrooks Bay and
Choptank River, between Hambrooks Bar and Great Marsh Point, MD.
    (3) Buffer Zone. All waters within Hambrooks Bay and Choptank River
(with the exception of the Race Area designated by the marine event
sponsor) bound to the north by the breakwall and continuing along a
line drawn from the east end of breakwall located at latitude
38[deg]35'27.6'' N, longitude 076[deg]04'50.1'' W, thence southeast to
latitude 38[deg]35'17.7'' N longitude 076[deg]04'29'' W, thence south
to latitude 38[deg]35'01'' N longitude 076[deg]04'29'' W, thence west
to the shoreline at latitude 38[deg]35'01'' N, longitude
076[deg]04'41.3'' W.
    (4) Spectator Area. All waters of the Choptank River, eastward and
outside of Hambrooks Bay breakwall, thence bound by line that commences
at latitude 38[deg]35'27.6'' N, longitude 076[deg]04'50.1'' W, thence
southeast to latitude 38[deg]35'21.3'' N, longitude 076[deg]04'37.2''
W, thence southeast to latitude 38[deg]35'21.3'' N longitude
076[deg]04'37.2'' W, thence northeast to latitude 38[deg]35'27.8'' N
longitude 076[deg]04'30.5'' W, thence northwest to latitude
38[deg]35'42.2'' N longitude 076[deg]04'51.1'' W at Hambrooks Bar Light
LLNR 24995, thence south to and terminating at the point of origin.
    (c) Special local regulations: (1) The COTP Maryland-National
Capital Region or PATCOM may forbid and control the movement of all
vessels and persons, including event participants, in the regulated
area. When hailed or signaled by an official patrol, a vessel or person
in the regulated area shall immediately comply with the directions
given by the patrol. Failure to do so may result in the Coast Guard
expelling the person or vessel from the area, issuing a citation for
failure to comply, or both. The COTP Maryland-National Capital Region
or PATCOM may terminate the event, or a participant's operations at any
time the COTP Maryland-National Capital Region or PATCOM believes it
necessary to do so for the protection of life or property.
    (2) Except for participants and vessels already at berth, a person
or vessel within the regulated area at the start of enforcement of this
section must immediately depart the regulated area.
    (3) A spectator must contact the PATCOM to request permission to
either enter or pass through the regulated area. The PATCOM, and
official patrol vessels enforcing this regulated area, can be contacted
on marine band radio VHF-FM channel 16 (156.8 MHz) and channel 22A
(157.1 MHz). If permission is granted, the spectator may enter the
designated Spectator Area or must pass directly through the regulated
area as instructed by PATCOM. A vessel within the regulated area must
operate at safe speed that minimizes wake. A spectator vessel must not
loiter within the navigable channel while within the regulated area.
    (4) A person or vessel that desires to transit, moor, or anchor
within the regulated area must first obtain authorization from the COTP
Maryland-National Capital Region or PATCOM. A person or vessel seeking
such permission can contact the COTP Maryland-National Capital Region
at telephone number<PHONE_NUMBER> or on Marine Band Radio, VHF-FM
channel 16 (156.8 MHz) or the PATCOM on Marine Band Radio, VHF-FM
channel 16 (156.8 MHz).
    (5) The Coast Guard will publish a notice in the Fifth Coast Guard
District Local Notice to Mariners and issue a marine information
broadcast on VHF-FM marine band radio announcing specific event date
and times.
    (d) Enforcement officials. The Coast Guard may be assisted with
marine event patrol and enforcement of the regulated area by other
Federal, State, and local agencies.
    (e) Enforcement periods. This section will be enforced from 9:30
a.m. to 6:30 p.m. on July 27, 2019, and, from 9:30 a.m. to 6:30 p.m. on
July 28, 2019.

    Dated: March 12, 2019.
Joseph B. Loring,
Captain, U.S. Coast Guard, Captain of the Port Maryland-National
Capital Region.
[FR Doc. 2019-04954 Filed 3-15-19; 8:45 am]
BILLING CODE 9110-04-P