Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Fees and Charges

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103938; File No. SR-NYSEARCA-2025-69]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Fees and Charges</SUBJECT> <DATE>September 10, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on August 29, 2025, NYSE Arca, Inc. (“NYSE Arca” 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. <FTNT> <SU>1</SU> 15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</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 amend the NYSE Arca Equities Fees and Charges (“Fee Schedule”) to modify Ratio Threshold Fees. 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 on 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 Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to amend the Fee Schedule to modify Ratio Threshold Fees, which apply to orders ranked Priority 2—Display Orders and to shares of Auction-Only Orders that have a disproportionate ratio of orders that are not executed. <SU>3</SU> <FTREF/> More specifically, the Exchange proposes to eliminate the Ratio Threshold Fee that applies to orders ranked Priority 2—Display Orders and to modify the manner in which the Ratio Threshold Fee that applies to Auction-Only Orders is calculated. The Exchange also proposes to adopt an exemption from the RT—Auction Fee for the first month that an ETP Holder is subject to the fee during a 12-month period. <FTNT> <SU>3</SU> <E T="03">See</E> Securities Exchange Act Release No. 88930 (May 21, 2020), 85 FR 32068 (May 28, 2020) (SR-NYSEARCA-2020-45) (“Ratio Threshold Fee Filing”). <E T="03">See also</E> Securities Exchange Act Release No. 97681 (June 9, 2023), 88 FR 39275 (June 15, 2023) (SR-NYSEARCA-2023-39). </FTNT> The Exchange proposes to implement the fee changes effective August 29, 2025. <SU>4</SU> <FTREF/> <FTNT> <SU>4</SU> The Exchange originally filed to amend the Fee Schedule on August 1, 2025 (SR-NYSEARCA-2025-56). SR-NYSEARCA-2025-56 was withdrawn on August 12, 2025, and replaced by SR-NYSEARCA-2025-58. SR-NYSEARCA-2025-58 was withdrawn on August 21, 2025, and replaced by SR-NYSEARCA-2025-62. SR-NYSEARCA-2025-62 was withdrawn on August 29, 2025, and replaced by this filing. </FTNT> <HD SOURCE="HD3">Background</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, 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 17% market share. <SU>9</SU> <FTREF/> Therefore, no exchange possesses significant pricing power in the execution of equity order flow. More specifically, the Exchange currently has less than 10% market share of executed volume of equities trading. <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> . </FTNT> <FTNT> <SU>8</SU> <E T="03">See</E> FINRA ATS Transparency Data, <E T="03">available at 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">http://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, based on transaction fees and credits. Accordingly, the Exchange's fees, including the proposed modification to the Ratio Threshold Fee, are reasonably constrained by competitive alternatives and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. <HD SOURCE="HD3">Proposed Rule Change</HD> The Ratio Threshold Fee currently applies to orders ranked Priority 2—Display Orders (“RT—Display Fee”) and to shares of Auction-Only Orders during the period when Auction Imbalance information is being disseminated for a Core Open Auction or Closing Auction (“RT—Auction Fee”). The purpose of this proposed rule change is to eliminate the RT—Display Fee in its entirety and remove reference to the RT—Display Fee from the Fee Schedule. The Exchange has observed that ETP Holders have altered their order entry practices since the RT—Display Fee was initially adopted and very few ETP Holders have been subject to the RT—Display Fee since the inception of the fee. The Exchange believes it is appropriate to eliminate this fee and remove it from the Fee Schedule. The Exchange would rather redirect future resources into other programs, including as proposed herein, by modifying the RT—Auction Fee. With this proposed rule change, the Exchange also proposes to modify the manner in which the RT—Auction Fee is calculated. The purpose of the modification to the RT—Auction Fee is to disincentivize the cancellation of shares close to the commencement of the Opening Auction and the Closing Auction. As described below, pursuant to a formula, shares cancelled closer to the Opening Auction and the Closing Auction would be weighted more than shares that are cancelled further away from such auctions. As proposed, the RT—Auction Fee would be calculated based on the number of shares cancelled by an ETP Holder and would no longer be based on the ratio of shares that are cancelled relative to shares that are executed by an ETP Holder. The proposed modifications are discussed below. Currently, for Auction-Only Orders, <SU>11</SU> <FTREF/> ETP Holders with an average daily number of orders of 10,000 or more are charged an RT—Auction Fee on a monthly basis. <SU>12</SU> <FTREF/> With this proposed rule change, the Exchange proposes that, in calculating the RT—Auction Fee, the Exchange would replace the average daily number of orders with the average daily number of cancelled shares. As proposed, ETP Holders with an average daily number of 500,000 or more cancelled shares for each auction would be charged an RT—Auction Fee, if the ETP Holder's Weighted Ratio Shares Threshold (described below) is greater than or equal to 25. <FTNT> <SU>11</SU> An Auction-Only Order is a Limit or Market Order that is to be traded only within an auction pursuant to Rule 7.35-E or routed pursuant to Rule 7.34-E. <E T="03">See</E> Rule 7.31-E(c). Auction-Only Orders are orders submitted by an ETP Holder during the Early Open Auction, Core Open Auction, Closing Auction and Trading Halt Auction. <E T="03">See</E> Rule 7.35-E. </FTNT> <FTNT> <SU>12</SU> The current fee focuses on Auction-Only Orders because a disproportionate amount of such orders that are not executed use more system resources, including updates to the Auction Imbalance Information as such orders ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 46k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━