[Federal Register Volume 79, Number 220 (Friday, November 14, 2014)]
[Notices]
[Pages 68321-68323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-26945]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73557; File No. SR-NYSEArca-2014-131]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule
Relating to Qualified Contingent Cross (``QCC'') Transactions Fees,
Effective November 1, 2014
November 7, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 31, 2014, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission (the
``Commission'') a
[[Page 68322]]
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the Exchange. 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\ 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 Arca Options Fee Schedule
relating to Qualified Contingent Cross transaction fees, effective
November 1, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to modify the Exchange's fees for QCC
transactions. The Exchange proposes to implement the fee changes on
November 1, 2014.
Currently, the Exchange charges $0.10 per contract side for QCC
transactions, regardless of whether a Customer is part of the
transaction. The Exchange proposes to adopt a differentiated fee
schedule and to instead charge $0.00 per contract side for Customers
and $0.20 per contract side for non-Customers.
As is the case today, the Exchange would continue to offer a Floor
Broker rebate of $0.035 per contract side for executed QCC orders, but
proposes to introduce one exception: there would be no Floor Broker
rebate for executions of QCC orders where there are Customers on both
sides of the transaction. For example, a QCC transaction where a
Customer buying 1,000 ABC Dec 40 Calls trades with a different Customer
selling 1,000 ABC Dec 40 Calls would be ineligible for the Floor Broker
rebate. However, a QCC transaction with a Customer on only one side,
executed by a Floor Broker, would continue to receive the rebate.
The Exchange believes that restructuring the QCC fees as proposed
would allow OTP Holders and OTP Firms to compete on a more equal
footing with other exchanges offering similar QCC fees.
The Exchange is also proposing a non-substantive, formatting change
to the section of the fee schedule that applies to QCC transactions.
The Exchange is proposing to re-format the ``QUALIFIED CONTINGENT CROSS
TRANSACTION FEES'' section of the Fee Schedule as a table with distinct
rows and columns to make the Fee Schedule easier for participants to
navigate.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\3\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\4\ 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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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed rates are reasonable,
equitable and not unfairly discriminatory as they are consistent with
those charged by other markets.\5\ The Exchange believes that proposed
rates are likewise not unreasonable, inequitable or unfairly
discriminatory because the same fee would be charged to all non-
Customers alike. It is also not unreasonable, inequitable or unfairly
discriminatory to impose no charge on Customers for QCC transactions
because this change would enable non-Customers to better compete for
(and, thus, to better attract) Customer business.
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\5\ See e.g., NASDAQ OMX LLC [sic] Pricing Schedule, available
here, http://www.nasdaqtrader.com/Micro.aspx?id=PHLXPricing.
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In addition, the Exchange believes that it is not unreasonable,
inequitable or unreasonably discriminatory to exempt from the Floor
Broker rebate those QCC transactions where there are Customers on both
sides of the transaction. A rebate is the refunding of a portion of an
assessed fee; however, when there are Customers on both sides of a QCC
transaction, the Exchange is not assessing any fees. Accordingly, the
Exchange believes that not offering a rebate for QCC transactions on
which a fee that [sic] was never assessed in the first instance, cannot
be viewed as unreasonable, inequitable or unreasonably discriminatory.
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,\6\ 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 the proposed fee change is
reasonably designed to be fair and equitable, and therefore, will not
unduly burden any particular group of market participants trading on
the Exchange vis-[agrave]-vis another group. The Exchange believes the
proposed change to offer QCC transactions to Customers free of charge
may enhance the competitive position of Non-Customers and allow OTP
Holders and OTP Firms to compete more effectively for Customer QCC
orders. In addition, the Exchange believes that the proposed changes
will enhance the competiveness of the Exchange relative to other
exchanges which offer comparable differentiated fees for QCC
transactions.\7\
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\6\ 15 U.S.C. 78f(b)(8).
\7\ See supra n. 5.
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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 fee 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
[[Page 68323]]
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-NYSEArca-2014-131 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-NYSEArca-2014-131. 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 offices 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-2014-
131, and should be submitted on or before December 5, 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. 2014-26945 Filed 11-13-14; 8:45 am]
BILLING CODE 8011-01-P