[Federal Register Volume 76, Number 180 (Friday, September 16, 2011)]
[Notices]
[Pages 57793-57795]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23771]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65314; File No. SR-NYSEAmex-2011-69]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Its
Options Fee Schedule To Add Clarifying Language With Respect to
Marketing Charges Generally and Marketing Charges for Directed Orders,
and To Add New and Clarifying Language With Respect to Marketing
Charges for Electronic Complex Orders
September 12, 2011.
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 September 6, 2011, NYSE Amex LLC (the ``Exchange'' or
``NYSE Amex'') 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 its Options Fee Schedule (the
``Schedule'') to add clarifying language with respect to marketing
charges generally and marketing charges for Directed Orders, and to add
new and clarifying language with respect to marketing charges for
Electronic Complex Orders. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, on
the Commission's Web site at http://www.sec.gov, and http://www.nyse.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The current Schedule in footnote 11 describes the distribution of
the pool of monies for marketing charges for non-Directed Orders, but
does not include any language addressing the marketing charges for
Directed Orders or Electronic Complex Orders. Currently, the pool of
monies resulting from collection of marketing charges on electronic
Directed Orders is controlled by the NYSE Amex Options Market Maker to
which the order was directed.\4\ In addition, Electronic Complex Orders
are treated in the same manner as non-Directed Orders, and
consequently, the pool of monies resulting from collection of marketing
charges on such orders is controlled by a Specialist or e-
Specialist.\5\
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\4\ See, e.g., Securities Exchange Act Release No. 61849 (April
6, 2010), 75 FR 18556 (April 12, 2010) (SR-NYSEAmex-2010-30).
\5\ The Exchange recently reinstituted the standard marketing
charges for Electronic Complex Order executions that had been
temporarily waived in July 2010. See Securities Exchange Act Release
No. 64524 (May 19, 2011), 76 FR 30412 (May 25, 2011) (SR-NYSEAmex-
2011-30). The Exchange had been informed by several Order Flow
Providers that the absence of marketing charges for Customer
executions in the complex order book was hindering their ability to
route complex order flow to the Exchange, particularly since
competing exchanges do allow for the collection of marketing charges
on complex orders. Consequently, the Exchange recently resumed its
prior practice of treating Electronic Complex Orders in the same
manner as any other orders for the purpose of assessing payment for
order flow charges in order to remain competitive.
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[[Page 57794]]
After reviewing the current Schedule and the manner in which
marketing charges are handled for Electronic Complex Orders, the
Exchange has determined to add clarifying language to the Schedule with
respect to marketing charges generally and marketing charges for
Directed Orders, and to add new and clarifying language to it with
respect to marketing charges for Electronic Complex Orders.\6\ The
changes to the Schedule are described below.
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\6\ NYSE Amex is not proposing to change the amount of the
marketing charges as part of this rule change.
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First, the Exchange proposes to amend footnote 11 of its Schedule
to add a clarifying introductory statement that the footnote applies
only to marketing charges.
Second, the current text in footnote 11 relating to the collection
and distribution of marketing charges for non-Directed Orders would
remain unchanged. That text provides that the pool of monies resulting
from the collection of marketing charges on electronic non-Directed
Order flow is controlled by the Specialist or the e-Specialist with
superior volume performance over the previous quarter for distribution
by the Exchange at the direction of such Specialist or e-Specialist to
eligible payment accepting firms. In making this determination the
Exchange, on a class by class basis, evaluates Specialist and e-
Specialist performance based on the number of electronic contracts
executed at NYSE Amex per class. The Specialist/ e-Specialist with the
best volume performance controls the pool of marketing charges
collected on electronic non-Directed Order flow for these issues for
the following quarter.
Third, the Exchange proposes to add text thereafter stating its
existing policy that the pool of monies resulting from collection of
marketing charges on electronic Directed Order flow will be controlled
by the NYSE Amex Options Market Maker to which the order was directed,
and distributed by the Exchange at the direction of such NYSE Amex
Options Market Maker to payment accepting firms.
Fourth, the Exchange proposes to add new text to footnote 11
stating that an ATP Holder that submits an Electronic Complex Order to
the Exchange may designate an NYSE Amex Options Market Maker to receive
the marketing charge and the pool of monies resulting from the
collection of such marketing charges will be distributed by the
Exchange at the direction of such NYSE Amex Options Market Maker to
payment accepting firms. If an ATP Holder submits an Electronic Complex
Order to the Exchange without designating an NYSE Amex Options Market
Maker, the pool of monies resulting from the collection of such
marketing charges will be distributed in the same manner as non-
Directed Order flow, as is currently the practice (and as described
above).
Finally, the Exchange proposes technical changes to footnote 11 to
correct references to defined terms.
The Exchange is not proposing any change to NYSE Amex Options Rule
900.3NY(s), which sets forth the definition of Directed Order, NYSE
Amex Options Rule 964.1NY, which discusses the conditions NYSE Amex
Options Specialists and Market Makers must meet to receive Directed
Orders, or NYSE Amex Options Rule 980NY, which governs Electronic
Complex Order trading and provides that the Specialist Pool and
Directed Order Market Maker guaranteed participation afforded in NYSE
Amex Options Rule 964NY does not apply to executions against an
Electronic Complex Order. The proposed change would only affect the
distribution of the pool of monies resulting from marketing charges for
Electronic Complex Orders.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\7\ in general, and Section 6(b)(4) of the Act,\8\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. The Exchange believes
that the clarifying changes to the Schedule described above will
provide more transparency to the marketing charge practices on the
Exchange. The Exchange also believes that providing ATP Holders with
the option to submit Electronic Complex Orders to the Exchange and
designate an NYSE Amex Options Market Maker to direct the resulting
marketing charges will help to attract additional Electronic Complex
Orders to the Exchange, which will benefit all market participants. The
Exchange operates in a highly competitive market comprised of nine U.S.
options exchanges in which sophisticated and knowledgeable market
participants can readily send order flow to competing exchanges if they
deem fee levels at a particular exchange to be excessive or
discriminatory.
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\7\ 15 U.S.C. 78f(b). [sic]
\8\ 15 U.S.C. 78f(b)(4).
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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.
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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by the NYSE Amex.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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.
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 e-mail to [email protected]. Please include
File Number SR-NYSEAmex-2011-69 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2011-69. This
[[Page 57795]]
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (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 Web site
viewing and printing in the Commission's Public Reference Room on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEAmex-2011-69 and should be submitted on or before
October 7, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23771 Filed 9-15-11; 8:45 am]
BILLING CODE 8011-01-P