[Federal Register Volume 78, Number 88 (Tuesday, May 7, 2013)]
[Notices]
[Pages 26677-26679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10742]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69489; File No. SR-NYSEMKT-2013-39]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Amex
Options Fee Schedule To Modify the Existing Floor Broker Rebate for
Executed Qualified Contingent Cross Orders
May 1, 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 April 19, 2013, NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') 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 the NYSE Amex Options Fee Schedule
(``Fee Schedule'') to modify the existing Floor Broker rebate for
executed qualified contingent cross (``QCC'') orders. 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
[[Page 26678]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule to modify the
existing Floor Broker rebate for executed QCC orders.\4\ The proposed
change will be operative on May 1, 2013.
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\4\ The QCC permits an NYSE Amex ATP Holder to effect a
qualified contingent trade (``QCT'') in a Regulation NMS stock and
cross the options leg of the trade on the Exchange immediately upon
entry and without order exposure if the order is for at least 1,000
contracts, is part of a QCT, is executed at a price at least equal
to the national best bid or offer, as long as there are no Customer
orders in the Exchange's Consolidated Book at the same price.
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Specifically, the Exchange proposes to adopt a tiered rebate based
on Floor Broker executed QCC volume in a given month. The existing
rebate is $.07 per contract,\5\ and this rebate will continue to be
paid to Floor Brokers that execute monthly QCC volumes up to and
including 300,000 contracts. The Exchange is proposing to adopt a
higher per contract rebate of $.10 per contract to be paid to Floor
Brokers for any QCC volume in excess of 300,000 contracts in a given
month. The rebate paid per contract will include all eligible volume
within each tier at the applicable rate. The rebate is per contract and
not retroactive to the first contract. Thus, if a Floor Broker has
400,000 contracts in QCC volume, he or she will earn a rebate of $.07
for the first 300,000 contracts and $.10 for the remaining 100,000
contracts. As with the existing rebate, Customer to Customer QCC trades
will not qualify for any rebate as such a transaction nets the Exchange
no revenue.\6\
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\5\ See Securities Act Release No. 66376 (February 10, 2012), 77
FR 9293 (February 16, 2012) (SR-NYSEAmex-2012-05).
\6\ See Securities Act Release No. 65943 (December 13, 2011), 76
FR 78704 (December 19, 2011) (SR-NYSEAmex-2011-95).
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The Exchange notes that the proposed rebate falls within the range
of rebates paid for QCC volumes across the industry. Specifically, the
Exchange notes that the International Securities Exchange (``ISE'')
pays a volume-based rebate for QCC and Solicitation volumes that ranges
from $.00 to $.11 per contract.\7\ NASDAQ OMX PHLX (``PHLX'') also pays
a volume-based rebate for QCC volume that ranges from $.00 to $.11 per
contract.\8\
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\7\ See ISE fee schedule, available at http://www.ise.com/assets/documents/OptionsExchange/legal/fee/fee_schedule.pdf.
\8\ See PHLX fee schedule, available at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLXTools/PlatformViewer.asp?selectednode=chp_1_4&manual=%2Fnasdaqomxphlx%2Fphlx%2Fphlx-rulesbrd%2F.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) \9\ of the Act, in general, and
Section 6(b)(4) and (5) \10\ 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 and does not unfairly discriminate between customers,
issuers, brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed tiered rebates are
reasonable because they are within the range of tiered volume rebates
on other exchanges.\11\ To the extent that the rebate is successful in
attracting additional order flow to the Exchange, all market
participants should benefit. Any participant will be able to engage a
rebate-receiving Floor Broker in a discussion surrounding the
appropriate level of fees that they may be charged for entrusting the
QCC order to the Floor Broker. Moreover, the Exchange believes that the
proposed rebates are equitable and not unfairly discriminatory because
they will apply to all Floor Brokers that execute QCC orders on
Exchange on an equal and non-discriminatory basis.
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\11\ See supra notes 7-8.
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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. The Exchange believes that
the proposed change will allow Floor Brokers to better compete for QCC
volumes as the rebates are more in line with those paid to participants
on other exchanges. The Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive and/or rebates to be insufficient. 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.
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) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 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-NYSEMKT-2013-39 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-NYSEMKT-2013-39. This
file number should be included on the subject line if email is used. To
help the
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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 the 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-NYSEMKT-2013-39 and should
be submitted on or before May 28, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-10742 Filed 5-6-13; 8:45 am]
BILLING CODE 8011-01-P