Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a Fee for Limited Underwriting Members

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103704; File No. SR-NYSE-2025-29]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a Fee for Limited Underwriting Members</SUBJECT> <DATE>August 14, 2025.</DATE> Pursuant to Section 19(b)(1)  <SU>1</SU> <FTREF/> of the Securities Exchange Act of 1934 (“Act”)  <SU>2</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>3</SU> <FTREF/> notice is hereby given that, on August 5, 2025, New York Stock Exchange LLC (“Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  15 U.S.C. 78a. </FTNT> <FTNT> <SU>3</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> The Exchange proposes to adopt a fee for Limited Underwriting Members as defined in recently adopted Rule 310. The proposed rule change is available on the Exchange's website at <E T="03">www.nyse.com</E> and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to adopt a fee for Limited Underwriting Members as defined in recently adopted Rule 310 (Limited Underwriting Members and Associated Persons). As proposed, registered brokers or dealers that become Limited Underwriting Members pursuant to Rule 310 would be eligible for a $350 per month fee from the month an application is approved. The Exchange proposes to implement the fee changes effective August 5, 2025. <SU>4</SU> <FTREF/> <FTNT> <SU>4</SU>  The Exchange originally filed to amend the Price List on July 28, 2025 (SR-NYSE-2025-27). SR-NYSE-2025-27 was withdrawn on August 5, 2025, and replaced by this filing. </FTNT> <HD SOURCE="HD3">Background</HD> <HD SOURCE="HD3">Current Market and Competitive Environment</HD> 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.”  <SU>5</SU> <FTREF/> <FTNT> <SU>5</SU>   <E T="03">See</E> 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”). </FTNT> 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.”  <SU>6</SU> <FTREF/> Indeed, cash equity trading is currently dispersed across 16 exchanges, <SU>7</SU> <FTREF/> numerous alternative trading systems, <SU>8</SU> <FTREF/> and broker-dealer internalizers and wholesalers, all competing for order flow. Based on publicly-available information, no single exchange currently has more than 20% market share. <SU>9</SU> <FTREF/> Therefore, no exchange possesses significant pricing power in the execution of cash equity order flow. More specifically, the Exchange's share of executed volume of equity trades in Tapes A, B and C securities is less than 12%. <SU>10</SU> <FTREF/> <FTNT> <SU>6</SU>   <E T="03">See</E> Securities Exchange Act Release No. 61358, 75 FR 3594, 3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on Equity Market Structure). </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Cboe U.S. Equities Market Volume Summary, available at <E T="03">https://markets.cboe.com/us/equities/market_share</E> . <E T="03">See generally https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html</E> . </FTNT> <FTNT> <SU>8</SU>   <E T="03">See</E> FINRA ATS Transparency Data, available at <E T="03">https://otctransparency.finra.org/otctransparency/AtsIssueData</E> . A list of alternative trading systems registered with the Commission is <E T="03">available at https://www.sec.gov/foia/docs/atslist.htm</E> . </FTNT> <FTNT> <SU>9</SU>   <E T="03">See</E> Cboe Global Markets U.S. Equities Market Volume Summary, available at <E T="03">https://markets.cboe.com/us/equities/market_share/</E> . </FTNT> <FTNT> <SU>10</SU>   <E T="03">See id.</E> </FTNT> 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, in response to fee changes. Moreover, in the current competitive market environment, market participants also have a choice of where to become members. <HD SOURCE="HD3">Proposed Rule Change</HD> The Exchange proposes to introduce a $350 per month fee for registered brokers or dealers that qualify to become Limited Underwriting Members pursuant to Rule 310. <SU>11</SU> <FTREF/> The proposed fee would begin the month in which a Limited Underwriting Member's application is approved. The proposed fee would be available to all applicants approved as Limited Underwriting Members on an equal and non-discriminatory basis. The proposed fee is also less than that of the other national securities exchange that offers a limited underwriter membership. <SU>12</SU> <FTREF/> Limited Underwriting Members would not be subject to any other Exchange fees. <FTNT> <SU>11</SU>  A Limited Underwriting Member is a type of non-trading Exchange membership solely for the limited purpose of acting as a principal underwriter of an underwritten public offering in connection with which a company seeks to list on the Exchange. Any registered broker or dealer with a disciplinary history satisfactory to the Exchange can become a Limited Underwriting Member, except such registered brokers or dealers as are excluded under Rule 346 (Statutory Disqualification—Association of Member Organizations, and Persons Associated With Member Organizations). A Limited Underwriting Member is subject to Exchange jurisdiction solely for purposes of Rule 310 and the rules enumerated in Rule 310(c)(1). </FTNT> <FTNT> <SU>12</SU>  The proposed fee equals $4,200 annually. Nasdaq Limited Underwriting Members are subject to an annual membership fee of $5,000 plus a $2,000 application fee. <E T="03">See</E> Nasdaq Equity Rule 7, Section 10(a). </FTNT> The proposed change is not otherwise intended to address other issues, and the Exchange is not aware of any significant problems that market participants would have in complying with the proposed change. <HD SOURCE="HD3">2. Statutory Basis</HD> The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, <SU>13</SU> <FTREF/> in general, and furthers the objectives of Sections 6(b)(4) and (5) of the Act, <SU>14</SU> <FTREF/> 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. <FTNT> <SU>13</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>14</SU>  15 U.S.C. 78f(b)(4) & (5). </FTNT> <HD SOURCE="HD3">The Proposed Change Is Reasonable</HD> As discussed above, the Exchange operates in a highly fragmented and competitive market where market participants have, among other things, a choice of where to become members. Considering the competitive environment in which the Exchange currently operates, the Exchange believes that there is value in attracting additional brokers or dealers to act as principal underwriters of an underwritten public offering on the Exchange and that the proposed fee is reasonable. As noted above, the proposed fee is less than that of the other national securities exchange that offers a limited underwriter membership. <SU>15</SU> <FTREF/> The Exchange also believes that the proposed fee is reasonable because Limited Underwriting Members would not be subject to any other Exchange fees. <FTNT> <SU>15</SU>   <E T="03">See</E> note 11, <E T="03">supra</E> . </FTNT> <HD SOURCE="HD3">The Proposed Fee Is Equitably Allocated and Not Unfairly Discriminatory</HD> The Exchange believes that the proposed fee equitably allocates fees and credits among market participants because all market participants that participate on the Exchange as Limited Underwriting ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 16k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━