[Federal Register Volume 78, Number 216 (Thursday, November 7, 2013)]
[Notices]
[Pages 66980-66982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26664]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70799; File No. SR-NYSEMKT-2013-87]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Regarding Elimination of the Cancellation Fee From
the NYSE Amex Options Fee Schedule
November 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 October 29, 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 and II
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 eliminate the Cancellation Fee from the
NYSE Amex Options Fee Schedule (``Fee Schedule''). The Exchange
proposes to implement the fee change effective November 1, 2013. 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,
[[Page 66981]]
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 eliminate the Cancellation Fee from the
Fee Schedule. The Exchange proposes to implement the fee change
effective November 1, 2013.
The Exchange added the Cancellation Fee to the Fee Schedule in
March 2009.\4\ The Exchange assesses a Cancellation Fee of $1.50 on an
executing clearing member for each cancelled public customer order for
both Mini and standard option contracts (origin code ``C'') in excess
of the number of public customer orders for both Mini and standard
option contracts that the executing clearing member executes in a month
for itself or for a correspondent firm. All public customer orders for
both Mini and standard option contracts from the same executing
clearing member for itself or for such correspondent firm executed in
the same series on the same side of the market at the same price within
a 300-second period are aggregated and counted as one executed order
for purposes of the Cancellation Fee. If an executing clearing member
cancels fewer than 500 public customer orders for both Mini and
standard option contracts in a month for itself or for a correspondent
firm, then the Cancellation Fee does not apply. The Cancellation Fee
also does not apply to cancelled orders, for both Mini and standard
option contracts, that improve the Exchange's prevailing best bid and
offer (``BBO'') at the time the orders are received, or to Professional
Customer orders. The Cancellation Fee was adopted to encourage the
efficient use of the Exchange's system capacity; the Exchange noted
that excessive order cancelling had the residual effect of exhausting
system resources, bandwidth, and capacity.\5\
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\4\ See Securities Exchange Act Release No. 59658 (March 31,
2009), 74 FR 15569 (April 6, 2009) (SR-NYSEAmex-2009-01).
\5\ Id. at 15570.
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In 2011, the Exchange adopted Excessive Bandwidth Utilization
Fees,\6\ which have reduced the need to continue to charge the
Cancellation Fee. The Excessive Bandwidth Utilization Fees have two
components, the Order to Trade Ratio Fee and the Messages to Contracts
Traded Ratio Fee. The Order to Trade Ratio Fee assesses a charge of
$5,000 to $35,000 per month on an ATP Holder entering a large number of
orders that do not subsequently execute if the ATP Holder fails to
achieve a certain execution ratio. The Messages to Contracts Traded
Ratio Fee is $0.01 per 1,000 messages in excess of 1.5 billion messages
in a calendar month if the ATP Holder does not execute at least one
contract for every 1,500-5,000 messages entered, as determined by the
Exchange. Both fees target excessive activity by requiring a certain
level of executed orders to avoid incurring the fees.
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\6\ See Securities Exchange Act Release No. 64655 (June 13,
2011), 76 FR 35495 (June 17, 2011) (SR-NYSEAmex-2011-37).
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ATP Holders that become subject to more than one of the three fees
(Cancellation, Order to Trade Ratio, and/or Messages to Contracts
Traded Ratio) in any one month are only charged the highest of the
three fees.\7\ As such, the Exchange believes that it can eliminate the
Cancellation Fee but continue to discourage inefficient activity by
continuing to charge the Excessive Bandwidth Utilization Fees. The
Exchange believes that the Excessive Bandwidth Utilization Fees will
adequately incent ATP Holders to utilize the Exchange's system capacity
in a rational manner.
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\7\ See endnote 12 to the Fee Schedule, available at https://globalderivatives.nyx.com/sites/globalderivatives.nyx.com/files/nyse_amex_options_fee_schedule_10_1_13.pdf.
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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 6(b)(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. The Exchange believes
that eliminating the Cancellation Fee is reasonable because the
Exchange will continue to have Excessive Bandwidth Utilization Fees
that will discourage inefficient use of the Exchange's system capacity.
The Exchange believes that the proposed change is also equitable and
not unfairly discriminatory. The Cancellation Fee only applies to
public customer orders while the Excessive Bandwidth Utilization Fees
are applicable to all of an ATP Holder's activity. The Exchange
believes that retaining a fee that discourages excessive cancellations
and encourages efficient use of the Exchange's system capacity
irrespective of account type (Customer, Professional Customer, Firm,
etc.) will result in more equitable treatment of market participants.
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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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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. The proposed change is not intended to address
a competitive issue but rather is intended to encourage efficient use
of the Exchange's system capacity. Because competitors are free to
modify their own fees and credits in response, and because market
participants may readily adjust their trading practices, the Exchange
believes that the degree to which fee or credit changes in this market
may impose any burden on competition is extremely limited. As a result
of all of these considerations, the Exchange does not believe that the
proposed change will impair the ability of ATP Holders or competing
order execution venues to maintain their competitive standing in the
financial markets.
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\10\ 15 U.S.C. 78f(b)(8).
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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) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 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
[[Page 66982]]
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 email to [email protected]. Please include
File Number SR-NYSEMKT-2013-87 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-2013-87. 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 at 100 F Street NE.,
Washington, DC 20549-1090 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-
NYSEMKT-2013-87, and should be submitted on or before November 29,
2013.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-26664 Filed 11-6-13; 8:45 am]
BILLING CODE 8011-01-P