[Federal Register Volume 79, Number 113 (Thursday, June 12, 2014)]
[Notices]
[Pages 33790-33791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13694]
[[Page 33790]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72343; File No. SR-NYSEMKT-2014-50]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending the NYSE Amex
Options Fee Schedule
June 6, 2014.
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 June 2, 2014, 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend the NYSE Amex Options Fee Schedule
(``Fee Schedule''). The proposed changes will be operative on June 2,
2014. 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 the Fee Schedule as described below.
The proposed changes will be operative on June 2, 2014.
The Exchange proposes to modify the existing tier, specifically
Tier 1B, where Order Flow Providers (``OFPs'') can qualify to earn a
rebate under the OFP Electronic ADV Tiers. The Exchange is reducing the
volume requirement under existing Tier 1B from .75% of Total Industry
Customer equity and ETF option ADV to .45% of Total Industry Customer
equity and ETF option ADV. No other changes are being proposed by the
Exchange at this time.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) \4\ of the Act, in general, and
Section 6(b)(4) and (5) \5\ 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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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposal to modify the existing
criteria used by OFPs to qualify and earn a rebate under Tier 1B of the
OFP Customer Electronic ADV is reasonable, equitable and not unfairly
discriminatory for the following reasons.
First, the Exchange is making it easier for all OFPs to potentially
earn a rebate on certain of their electronic volumes under the newly
proposed criteria under Tier 1B by reducing the percentage of Total
Industry Customer equity and ETF options ADV from .75% to .45%. By
making the threshold lower, it should be easier for more OFPs to
qualify for the rebate and in doing so will lower their overall cost of
doing business on the Exchange, which may, in turn, lead to cost
reductions for the clients of OFPs. The Exchange believes that offering
OFPs a $0.06 per contract rebate under the terms and conditions
proposed in Tier 1B is also reasonable as the rebate is designed to
attract additional Customer volumes along with Non-NYSE Amex Options
Market Maker, Firm, Professional Customer and Broker Dealer volumes to
the Exchange, which benefits all other participants by increasing the
opportunities to trade, enhancing transparency and price discovery.
Requiring a certain level and type of activity before qualifying for a
rebate on a different type of activity is also not new or novel.
Specifically, two other exchanges currently require participants to
commit to a certain level and type of activity before qualifying for a
rebate on other activity.\6\ The Exchange also believes that excluding
certain volumes from being eligible for the rebate, specifically QCC
volumes, electronic Customer Complex volumes, Strategy Executions and
orders routed away in conjunction with the Options Order Protection and
Locked/Crossed Market Plan referenced in Rule 991NY, is also reasonable
as these volumes are already eligible for either reduced rates, rebates
or capped fees and offering additional discounts on these volumes is
not desirable as to do so may lead to increased costs for other
participants. Further, the Exchange notes that excluding such volumes
is consistent with the existing fee schedule.\7\ As the proposed
revision to the qualifying threshold under Tier 1B of the OFP
Electronic ADV Tiers and the associated rebates will be available to
all participants who route electronic Customer business, the Exchange
believes the proposal is also equitable and not unfairly
discriminatory.
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\6\ See Chicago Board Options Exchange, Inc. (``CBOE'') Fee
Schedule, available here, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf and the CBOE Proprietary Products Sliding Scale
which offers Clearing Trading Permit Holders reduced rates in CBOE
Proprietary Products (SPX, VIX, etc.) if the Clearing Trading Permit
Holder achieves certain ADV thresholds in multiply-listed options.
See also NASDAQ OMX PHLX Fee Schedule, available here, http://www.nasdaqtrader.com/Micro.aspx?id=PHLXPricing and the ``Customer
Rebate Program'' and Tier 3 where, ``The Exchange will pay a $0.02
per contract rebate in addition to the applicable Tier 2 and 3
rebate to a Specialist or Market Maker or its member or member
organization affiliate under Common Ownership provided the
Specialist or Market Maker has reached the Monthly Market Maker Cap,
as defined in Section II.''
\7\ See Securities and Exchange Commission Release No. 68036
(October 12, 2012) [sic], 77 FR 63900 (October 17, 2012) (SR-
NYSEMKT-2012-50) (establishing OFP Rebates with exclusions for
volume attributable to QCC orders, electronic Customer Complex
volumes, Strategy Executions and orders routed away in conjunction
with the Options Order Protection and Locked/Crossed Market Plan
referenced in Rule 991NY).
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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
[[Page 33791]]
changes will enhance the competiveness of the Exchange relative to
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. 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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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) \10\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\10\ 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-2014-50 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2014-50. 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-NYSEMKT-2014-50, and should
be submitted on or before July 3, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13694 Filed 6-11-14; 8:45 am]
BILLING CODE 8011-01-P