[Federal Register Volume 76, Number 202 (Wednesday, October 19, 2011)]
[Notices]
[Pages 64983-64984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26991]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65549; File No. SR-NYSEAmex-2011-77]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Regarding
Amendments to the NYSE Amex Options Fee Schedule Relating to Electronic
Complex Orders
October 13, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 5, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE Amex'')
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 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\ 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 the NYSE Amex Options Fee Schedule
(``Fee Schedule'') with respect to Electronic Complex Order executions.
The proposed change will be operative on October 5, 2011. The text of
the proposed rule change is available at the Exchange, the Commission's
Public Reference Room, 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 Exchange proposes to amend the Fee Schedule with respect to
Electronic Complex Order \3\ executions and to make other technical
changes.
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\3\ Under NYSE Amex Option Rule 980NY, an ``Electronic Complex
Order'' is any Complex Order as defined in NYSE Amex Options Rule
900.3NY(e) or any Stock/option Order or Stock/Complex Order as
defined in NYSE Amex Options Rule 900.3NY(h) that is entered into
the NYSE Amex System.
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The current Fee Schedule sets forth a separate list of charges for
Electronic Complex Orders. Under the Fee Schedule, when an Electronic
Complex Order trades against another Electronic Complex Order, there is
a charge of $.05 per contract side, including where the same firm
represents both sides. Customers (excluding Professional Customers) are
not charged. If an Electronic Complex Order trades against an
individual order in the Consolidated Book, it is subject to standard
trade-related charges in the Fee Schedule. Under endnote 5 of the Fee
Schedule, Specialist, e-Specialist, and Market Maker (both Directed and
non-Directed) fees are aggregated and capped at $350,000 per month plus
an incremental service fee of $.01 per contract for all Specialist, e-
Specialist and Market Maker volume executed in excess of 3,500,000
contracts per month. Electronic Complex Order fees currently count
toward both the $350,000 cap and the 3,500,000 thresholds, but are not
themselves capped.
The Exchange proposes to eliminate the separate list of charges for
Electronic Complex Orders and instead impose the standard per contract
fees set forth in the Fee Schedule. Each market participant will pay
the applicable rate per contract set forth in the Fee Schedule, ranging
from $.10 to $.40, that applies for all other transactions; Customers
(excluding Professional Customers) will continue to trade for free.\4\
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\4\ The Exchange notes that a complex order executed as part of
a Qualified Contingent Cross (``QCC'') trade will never interact
with the Electronic Complex Order Book. As such, a complex order
executed as part of a QCC will be subject to the fees applicable to
QCCs. If a single leg order, complex order, or Strategy Trade is
marked QCC, it receives QCC billing treatment.
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The Exchange also proposes to amend endnote 5 with respect to the
fee caps. Under the amendment, Electronic Complex Order fees will be
subject to the $350,000 per month fee cap plus an incremental service
fee of $.05 per contract for all Specialist, e-Specialist and Market
Maker volume executed in excess of 3,500,000 contracts per month.\5\
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\5\ The Exchange further notes that, like all transactions
subject to the standard trade-related charges in the Fee Schedule,
Marketing Charges will continue to apply to Electronic Complex
Orders. The only transactions to which Marketing Charges do not
apply are expressly excluded in endnote 10 of the Fee Schedule.
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The proposed changes will be operative on October 5, 2011.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) \6\ of the Securities Exchange Act
of 1934 (the ``Act''), in general, and Section 6(b)(4) \7\ of the Act,
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.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that adopting the proposed amendments will
make its Fee Schedule simpler and easier for market participants to
understand. In addition, the Exchange believes that the proposed
Electronic Complex Orders
[[Page 64984]]
fees are fair and reasonable, equitably allocated, and not unfairly
discriminatory because they generally will be the same as the currently
applicable standard fee schedule, with the exception of transactions
that exceed the fee cap threshold for Specialists, e-Specialists, and
Market Makers (both Directed and non-Directed).\8\
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\8\ NYSE Amex notes that at least one other exchange generally
applies its standard transaction fees to Electronic Complex Orders
too. See Chicago Board Options Exchange, Incorporated Fees Schedule,
dated September 1, 2011, available at http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf.
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The Exchange also believes that with the proposed transition to the
standard fee schedule, it is reasonable and not unfairly discriminatory
to include Electronic Complex Orders in the fee cap for Specialists, e-
Specialists, and Market Makers. These market participants incur permit
fees and are obligated to provide liquidity; the Exchange believes that
it is appropriate to reduce their fees once they have provided the
threshold level of liquidity to the market. The Exchange believes that
the fee cap, along with the reduced fee, will encourage these dedicated
liquidity providers to continue to provide liquidity on a non-
discriminatory basis to all market participants.
The proposal to charge $.05 per contract for those transactions
that exceed the fee cap threshold also is reasonable, equitable and not
unfairly discriminatory because it is the same fee that such a
participant would pay today under the under the current Fee Schedule
for Electronic Complex Orders. In addition, the Exchange incurred costs
to build the Electronic Complex Order book and the marginally higher
fee ($.05 versus $.01) for transactions in excess of the fee cap will
assist the Exchange in recouping such costs from the market
participants that derive benefits from the Electronic Complex Order
book.
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 Exchange. 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.
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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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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 rule-comments@sec.gov. Please include
File Number SR-NYSEAmex-2011-77 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-2011-77. This
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, 100 F
Street, NW., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. The text of the proposed rule change is
available on the Commission's Web site at http://www.sec.gov. 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-2011-77 and should be submitted on or before
November 9, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Elizabeth M. Murphy,
Secretary.
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\11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2011-26991 Filed 10-18-11; 8:45 am]
BILLING CODE 8011-01-P