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. 34-104381; File No. SR-NYSEARCA-2025-84]</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>December 12, 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 December 1, 2025, NYSE Arca, Inc. (“NYSE Arca” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <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 (1) adopt a new pricing tier, Retail Tier 5, (2) eliminate current Retail Step-Up Tier and footnote (e) under the Retail Tiers pricing table, and (3) offer an alternative volume requirement to qualify for Retail Order rates. The Exchange proposes to implement the fee changes effective December 1, 2025. 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 amend the Fee Schedule to (1) adopt a new pricing tier, Retail Tier 5, (2) eliminate current Retail Step-Up Tier and footnote (e) under the Retail Tiers pricing table, and (3) offer an alternative volume requirement to qualify for Retail Order rates. The proposed change responds to the current competitive environment where ETP Holders have a choice among both exchange and off-exchange venues of where to route marketable retail order flow. The Exchange proposes to implement the fee changes effective December 1, 2025. <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>3</SU> <FTREF/> <FTNT> <SU>3</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>4</SU> <FTREF/> Indeed, equity trading is currently dispersed across 17 exchanges, <SU>5</SU> <FTREF/> numerous alternative trading systems, <SU>6</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>7</SU> <FTREF/> Therefore, no exchange possesses significant pricing power in the execution of equity order flow. More specifically, the Exchange currently has less than 12% market share of executed volume of equities trading. <SU>8</SU> <FTREF/> <FTNT> <SU>4</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>5</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. See </E> <E T="03">generally https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html</E> . </FTNT> <FTNT> <SU>6</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 available at <E T="03">https://www.sec.gov/foia/docs/atslist.htm</E> . </FTNT> <FTNT> <SU>7</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>8</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. While it is not possible to know a firm's reason for shifting order flow, the Exchange believes that one such reason is because of fee changes at any of the registered exchanges or non-exchange venues to which a firm routes order flow. The competition for Retail Orders is even more stark, particularly as it relates to exchange versus off-exchange venues. The Exchange thus needs to compete in the first instance with non-exchange venues for Retail Order flow, and with the 16 other exchange venues for that Retail Order flow that is not directed off-exchange. Accordingly, competitive forces compel the Exchange to use exchange transaction fees and credits, particularly as they relate to competing for Retail Order flow, because market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. To respond to this competitive environment, the Exchange has established a number of Retail Tiers that are designed to provide an incentive for ETP Holders to route Retail Orders to the Exchange by providing higher credits for adding liquidity correlated to an ETP Holder's higher trading volume in Retail Orders on the Exchange. Currently, under four of these five tiers, ETP Holders also do not pay a fee when such Retail Orders have a time-in-force of Day that remove liquidity from the Exchange. <HD SOURCE="HD3">Proposed Rule Change</HD> <HD SOURCE="HD3">Retail Tier 5</HD> The proposed rule change is designed to be available to all ETP Holders on the Exchange and is intended to provide ETP Holders an opportunity to receive enhanced rebates by quoting and trading more on the Exchange. As noted above, the Exchange currently provides tiered credits for Retail Orders that provide liquidity on the Exchange. Specifically, Section VI. Tier Rates—Round Lots and Odd Lots (Per Share Price $1.00 or Above), provides a credit of $0.0038 per share for Adding under Retail Tier 1, a credit of $0.0037 per share for Adding under Retail Tier 2, a credit of $0.0036 per share for Adding under Retail Tier 3, a credit of $0.0034 per share for Adding under Retail Tier 4, and a credit of $0.0035 per share for Adding under Retail Step-Up Tier. <SU>9</SU> <FTREF/> The Retail Tiers are designed to encourage ETP Holders that provide displayed liquidity in Retail Orders on the Exchange to increase that order flow, which would benefit all ETP Holders by providing greater execution opportunities on the Exchange. In order to provide an incentive for ETP Holders to direct providing displayed Retail Order flow to the Exchange, the credits increase in the various tiers based on increased levels of volume directed to the Exchange. <FTNT> <SU>9</SU>   <E T="03">See</E> Fee Schedule, Retail Tiers table under Section VI. Tier Rates—Round Lots and Odd Lots (Per Share Price $1.00 or Above). As discussed below, this proposed rule change also proposes to eliminate the current Retail Step-Up Tier and the pricing established in footnote (e) in the Retail Tiers pricing table. </FTNT> With this proposed rule change, the Exchange proposes to adopt a new pricing tier, Retail Tier 5, which would provide a credit of $0.0035 per share to ETP Holders that execute an ADV of Retail Orders with a time-in-force of Day that add or remove liquidity during the billing month that is equal to at least 0.15% of CADV. Under proposed Retail Tier 5, ETP Holders could alternatively qualify for the proposed credit if the ETP Holder executes an ADV of Retail Orders with a time-in-force of Day that add or remove liquidity during the billing month that is equal to at least 0.075% of CADV, combined with Customer and Professional Customer Posting Volume by an OTP Holder or OTP Firm affiliated with the ETP Holder that is equal to at least 0.40% of TCADV in all options classes. As with current Retail Tier 1, Retail Tier 2, Retail Tier 3 and Retail Step-Up Tier, ETP Hold ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 43k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━