[Federal Register Volume 78, Number 25 (Wednesday, February 6, 2013)]
[Notices]
[Pages 8642-8644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02555]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68776; File No. SR-NYSEArca-2013-05]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Options Fee Schedule To Change the Monthly Cost for Option Trading
Permits
January 31, 2013.
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 January 22, 2013, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend the NYSE Arca Options Fee Schedule
(``Fee Schedule'') to change the monthly cost for Option Trading
Permits (``OTPs''). The text of the proposed rule change is available
on the Exchange's Web site at www.nyse.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
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 its Fee Schedule to change the
monthly cost for OTPs. The Exchange proposes to make the change
operative on February 1, 2013.
The Exchange requires that a Market Maker have an OTP in order to
operate on the Exchange. For electronic Market Making, a Market Maker
must have four OTPs in order to submit electronic quotations in every
class on the Exchange. These four Market Maker OTPs also permit the
firm to have at least one trader on the Floor of the Exchange as a
Floor-based open outcry Market Maker. However, the manner in which
those OTPs are assigned to individual traders may reduce the
permissible number of issues in which electronic quotes are assigned.
For instance, two associated Market Makers may assign OTP 1, 2, and 3
to trader A, while the fourth is assigned to trader B. Trader A may now
only stream quotes electronically in 750 issues, while trader B may
submit quotes electronically in 100 issues. To retain the appointment
in more than 750 issues, all four OTPs must be in the same name, and to
have an additional individual Market Maker on the Floor, a fifth OTP
must be acquired.
To remain competitive in fixed fees among exchanges with trading
floors, the Exchange is proposing to reduce the cost of additional
Market Maker OTPs beyond the minimum of four that are required to
submit electronic quotations
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in all issues listed on the Exchange. Accordingly, while the existing
fee of $4,000 per OTP per month would continue to apply to a Market
Maker firm that has between one and four Market Maker OTPs, the
Exchange proposes that the monthly OTP fee for Market Maker firms with
more than four OTPs be reduced from $2,000 per month to $1,000 per
month for each additional Market Maker OTP. As described above, each
additional Market Maker OTP would permit a Market Maker firm, which
already has the ability to make electronic markets in every class on
the Exchange, to have an additional trader on the Floor of the Exchange
as an open outcry Market Maker.
The proposed changes are not otherwise intended to address any
other problem, and the Exchange is not aware of any significant problem
that the affected market participants would have in complying with the
proposed changes.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\4\ in general, and Section 6(b)(4) of the
Act,\5\ 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 proposed rule change is reasonable because it will
result in cost savings for members with more than four Market Marker
OTPs. Lowering the cost for Market Maker firms to acquire additional
OTPs related to their Market Maker activity may allow them to price
their services at a level that will enable them to attract higher
levels of volume to the Exchange, which will enhance liquidity and
price discovery on the Exchange to the benefit of investors. The
Exchange believes that the proposal constitutes an equitable allocation
of fees, as all similarly situated member organizations will be subject
to the same reduced fee structure and access to the Exchange's market
is offered on fair and non-discriminatory terms. In addition, for the
reasons stated above, the proposed changes are not designed to permit
unfair discrimination between members because all members will be
charged the same fee amount for each additional Market Maker OTP beyond
the initial four OTPs.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting, its fees and credits to remain
competitive with other exchanges. For the reasons described above, the
Exchange believes that the proposed rule change reflects this
competitive environment.
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. The proposed rule change
will reduce each additional Market Maker OTP to $1,000 from $2,000,
resulting in a cost savings to members who already have more than four
Market Marker OTPs. In addition, the proposal will reduce a potential
cost-based barrier for firms that do not have more than four Market
Maker OTPs as their costs for any additional Market Maker OTPs will be
reduced by one-half. As a result, the Exchange does not believe that
the proposed rule change will place an unreasonable burden on current
or prospective members because fees for additional Market Maker OTPs
beyond four will be uniformly reduced across all members (current and
prospective) and apply in a non-discriminatory manner.
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) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge
imposed by NYSE Arca.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \8\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\8\ 15 U.S.C. 78s(b)(2)(B).
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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 email to [email protected]. Please include
File Number SR-NYSEArca-2013-05 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-NYSEArca-2013-05. This
file number should be included on the subject line if email 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 NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 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-NYSEArca-2013-05, and should
be
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submitted on or before February 27, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02555 Filed 2-5-13; 8:45 am]
BILLING CODE 8011-01-P