[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Notices]
[Pages 63261-63263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24767]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70703; File No. SR-NYSEArca-2013-102]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Arca Options Fee Schedule Relating to Market Maker and Lead Market
Maker Transaction Credits
October 17, 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 October 7, 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 conform references to certain Market Maker and
Lead Market Maker (``LMM'') transaction credits to the transaction
credits implemented in a recent fee change. The Exchange proposes to
implement the fee change immediately. 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.
[[Page 63262]]
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 to conform
references to certain Market Maker and LMM transaction credits to the
transaction credits implemented in a recent fee change. The Exchange
proposes to implement the fee change immediately.
The Exchange recently amended the Fee Schedule to reduce the credit
for the base Market Maker monthly posting credit tier for Penny Pilot
issues, including SPY, from $0.32 to $0.28.\4\ This base tier credit
applies to posted electronic executions in Penny Pilot issues for
Market Makers that do not qualify for the Market Maker Select Tier
credit of $0.32 or the Market Maker Super Tier credit of $0.37. The
base tier credit is duplicative of the standard credit for posted
electronic Market Maker executions in Penny Pilot issues that is
specified in the standard transaction fee and credit table in the Fee
Schedule (i.e., the table that specifies the fees and credits that
apply if a separate table or section of the Fee Schedule is not
applicable). In other words, a Market Maker that does not qualify for
the Select Tier or the Super Tier credit is effectively subject to the
standard transaction fee and credit table in the Fee Schedule. The
legacy $0.32 Market Maker credit still appears within the standard fee
and credit table. The Exchange therefore proposes to similarly reduce
the standard Market Maker credit within the standard transaction fee
and credit table from $0.32 to $0.28 for posted electronic Market Maker
executions in Penny Pilot issues.\5\ Without this change the Fee
Schedule would reflect two different credits applicable to the same
posted electronic Market Maker executions in Penny Pilot issues.
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\4\ See Securities Exchange Act Release No. 70504 (September 25,
2013), 78 FR 60358 (October 1, 2013) (SR-NYSEArca-2013-93).
\5\ The fee change established pursuant to SR-NYSEArca-2013-93
became effective on October 1, 2013. The Exchange will therefore
apply the $0.28 credit to all posted electronic Market Maker
executions in Penny Pilot issues that do not qualify for the Select
Tier or the Super Tier credit beginning on October 1, 2013.
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The standard LMM credit within the standard transaction fee and
credit table for posted electronic executions in Penny Pilot issues
currently is also $0.32. The Exchange proposes to similarly reduce this
credit from $0.32 to $0.28.\6\ This reduction would maintain equal
standard credits for LMMs and Market Makers for posted electronic
executions in Penny Pilot issues, which was the case prior to the
recent fee change that reduced the credit for the base Market Maker
monthly posting credit tier for Penny Pilot issues, including SPY, from
$0.32 to $0.28.\7\
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\6\ This aspect of the proposed change will become effective
immediately upon filing, at which point the Exchange will apply the
$0.28 credit to posted electronic LMM executions in Penny Pilot
issues. The Exchange will apply the current $0.32 credit to posted
electronic LMM executions in Penny Pilot issues prior to such date
of effectiveness.
\7\ See supra, note 4.
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The Exchange notes that the proposed change is not otherwise
intended to address any other issues, and the Exchange is not aware of
any problems that OTP Holders and OTP Firms, including Market Makers
and LMMs, would have in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\9\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed change is reasonable
because without it the Fee Schedule would reflect two different credits
applicable to the same posted electronic Market Maker executions in
Penny Pilot issues. The proposed change is also reasonable because it
would maintain equal standard credits for LMMs and Market Makers for
posted electronic executions in Penny Pilot issues.
The Exchange believes that the proposed change is equitable and not
unfairly discriminatory because it would apply to all Market Makers and
LMMs on an equal and non-discriminatory basis. The Exchange further
believes that the proposed change is equitable and not unfairly
discriminatory because it would reasonably ensure consistency and
conformity regarding duplicative references to the credits applicable
to posted electronic Market Maker executions in Penny Pilot issues
while also reasonably ensuring that Market Maker and LMM credits for
posted electronic executions in Penny Pilot issues are equal.
Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition. For these reasons, the Exchange
believes that the proposal is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\10\ 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. Instead, the Exchange believes that the
proposed change would eliminate any potential confusion for Market
Makers regarding the applicable credit for posted electronic executions
in Penny Pilot issues as a result of a recent fee change that amended
one reference to the applicable rate, but not a duplicative reference
in the Fee Schedule. Additionally, the proposed change would reasonably
ensure that LMMs receive a standard credit for posted electronic
executions in Penny Pilot issues that is equal to the standard credit
received by Market Makers, which was the case prior to the recent fee
change that reduced the credit for the base Market Maker monthly
posting credit tier for Penny Pilot issues, including SPY, from $0.32
to $0.28.\11\
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\10\ 15 U.S.C. 78f(b)(8).
\11\ See supra, note 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 if they deem fee levels at a particular venue to be
excessive. 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,
[[Page 63263]]
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-NYSEArca-2013-102 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-2013-102. 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-2013-102, and
should be submitted on or before November 13, 2013.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24767 Filed 10-22-13; 8:45 am]
BILLING CODE 8011-01-P