[Federal Register Volume 81, Number 119 (Tuesday, June 21, 2016)]
[Notices]
[Pages 40379-40381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14557]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-78076; File No. SR-NYSEARCA-2016-86]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Options Fee Schedule
June 15, 2016.
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 6, 2016, 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 Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE Arca Options Fee Schedule.
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 amend the Fee Schedule to
introduce a new alternative for qualifying for the Customer and
Professional Customer Incentive Program, as described below. The
Exchange proposes to implement the fee change effective June 6, 2016.
The Exchange is proposing to introduce a new tier to the Incentive
Program, which provides OTP Holders and OTP Firms (collectively,
``OTPs'') several alternatives to earn additional posting credits
ranging from $0.01 to $0.05. Specifically, the Exchange proposes to add
a new alternative that would enable OTPs to earn a $0.03 credit if they
achieve at least 1.50% of Total Industry Customer equity and ETF option
ADV (``TCADV'') from Customer and Professional Customer Posted Orders
in both Penny Pilot and non-Penny Pilot Issues, Plus Executed ADV of
0.10% of U.S. Equity Market Share Posted and Executed on NYSE Arca
Equity Market. The Exchange believes this new credit would provide
additional incentive to direct Customer and Professional Customer order
flow to the Exchange, which benefits all market
[[Page 40380]]
participants through increased liquidity and enhanced price discovery.
Moreover, the Exchange believes that the proposed new alternative to
qualify for the Customer Incentive Program is reasonable because it is
designed to continue to bring additional posted order flow to NYSE Arca
Equities, so as to provide additional opportunities for all ETP Holders
to trade on NYSE Arca Equities.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\4\ in general, and furthers the
objectives of sections 6(b)(4) and (5) of the Act,\5\ 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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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange also believes that the proposed new alternative to the
Incentive Program is reasonable, equitable, and not unfairly
discriminatory because the incentive would be available to all OTPs
that execute posted Customer and Professional Customer orders on the
Exchange on an equal and non-discriminatory basis, in particular
because it provides alternative means of achieving a posting credit.
The Exchange believes that providing methods for achieving the credits
based on posted Customer and Professional Customer Executions in both
Penny Pilot and non-Penny Pilot issues is equitable and not unfairly
discriminatory because it would continue to result in more OTPs
qualifying for the credits and therefore reducing their overall
transaction costs on the Exchange. Moreover, the Exchange believes the
proposed modification would provide an additional incentive for OTPs to
direct Customer and Professional Customer order flow to the Exchange,
which benefits all market participants through increased liquidity and
enhanced price discovery.
Furthermore, the Exchange also believes that the proposed
modification that relates to executed ADV of 0.10% of U.S. Equity
Market Share Posted and Executed on NYSE Arca Equity Market is
equitable and not unfairly discriminatory because it is designed to
bring additional order flow to NYSE Arca Equities, which increases
liquidity on NYSE Arca Equities to the benefit of its market
participants.
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. Instead, the Exchange believes that the proposed
change would continue to encourage competition by attracting additional
liquidity to the Exchange, which would continue to make the Exchange a
more competitive venue for, among other things, order execution and
price discovery. The Exchange does not believe that the proposed change
will impair the ability of any market participants or competing order
execution venues to maintain their competitive standing in the
financial markets. Further, the proposed alternative credit under the
Incentive Program would provide OTP Holders and OTP Firms an additional
means of achieving a credit and, likewise, may allow those OTP Holders
and OTP Firms that, to date, have been unable to achieve a credit under
the Incentive Program to achieve the proposed credit.
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\6\ 15 U.S.C. 78f(b)(8).
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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 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) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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) \9\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\9\ 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-2016-86 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-2016-86. 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
[[Page 40381]]
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-NYSEARCA-2016-86 and should
be submitted on or before July 12, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-14557 Filed 6-20-16; 8:45 am]
BILLING CODE 8011-01-P