80 FR 28717 - Self-Regulatory Organizations; NYSE MKT, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Modifying the NYSE Amex Options Fee Schedule Related to Fees and Credits Associated With the Customer Best Execution Auction

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 96 (May 19, 2015)

Page Range		28717-28719
FR Document		2015-12063
Federal Register, Volume 80 Issue 96 (Tuesday, May 19, 2015)
[Federal Register Volume 80, Number 96 (Tuesday, May 19, 2015)]
[Notices]
[Pages 28717-28719]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12063]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74956; File No. SR-NYSEMKT-2015-38]


Self-Regulatory Organizations; NYSE MKT, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Modifying the NYSE 
Amex Options Fee Schedule Related to Fees and Credits Associated With 
the Customer Best Execution Auction

May 13, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 1, 2015, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to modify the NYSE Amex Options Fee Schedule 
(``Fee Schedule'') related to fees and credits associated with the 
Customer Best Execution Auction (``CUBE Auction'' or ``Auction''). The 
Exchange proposes to implement the fee change effective May 1, 2015. 
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 amend Section I.G. of the Fee 
Schedule \3\ to modify existing CUBE fees and credits and to add a new 
rebate for CUBE participants who qualify for Tiers 2, 3, 4 or 5 of the 
Amex Customer Engagement (``ACE'') Program.\4\ The Exchange proposes to 
implement the fee change effective May 1, 2015.
---------------------------------------------------------------------------

    \3\ See Fee Schedule, Section I.G., available at, https://www.theice.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \4\ See id., Section I.E.
---------------------------------------------------------------------------

    The Exchange proposes to increase the fees associated with RFR 
Responses participating in the Auction by $0.05--from $0.55 to $0.60 
for Non-Customers in Penny Pilot issues; and from $0.90 to $0.95 for 
Non-Customers in non-Penny Pilot issues. In addition, the Exchange 
proposes to decrease the Initiating Participant Credit by $0.05 for 
Penny Pilot issues--from $0.40 to $0.35; and $0.10 for non-Penny Pilot 
issues--from $0.80 to $0.70. The Exchange also proposes to introduce a 
rebate for certain Initiating Participants that qualify for the ACE 
Program. Specifically, as proposed, those ATP Holders who qualify for 
Tiers 2, 3, 4 or 5 of the ACE Program would receive a $0.12 per 
contract rebate for up to 5,000 Customer contracts per CUBE Order 
executed in a CUBE Auction (the ``ACE Initiating Participant Rebate'' 
or ``Rebate''). The proposed Rebate is payable in addition to any other 
fees or credits accrued from the CUBE Auction (e.g., in addition to the 
Initiating Participant Credit for both Penny and non-Penny Pilot 
issues). Thus, as proposed, the maximum potential CUBE credit for Penny 
Pilot issues is $0.47 ($0.12 Rebate + $0.35 Initiating Participant 
Credit) and for non-Penny Pilot issues is $0.82 ($0.12 Rebate + $0.70 
Initiating Participant Credit). The ACE Initiating Participant Rebate 
is available regardless of whether the CUBE Order trades with the 
Contra Order or RFR Response(s), whereas the current Initiating 
Participant Credits are payable only for each CUBE Order contract that 
does not trade with the Contra Order.
    The proposed amendments to CUBE Auction pricing are designed to 
incentivize market participants that have committed a certain amount of 
volume to the Exchange to provide even more liquidity through CUBE 
Auctions. This additional volume and liquidity would benefit all 
Exchange participants through increased opportunities to trade as well 
as enhancing price discovery and price improvement.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\6\ 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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to CUBE Auction 
fees are reasonable, equitable and not

[[Page 28718]]

unfairly discriminatory. First, the proposal to increase the fees 
associated with RFR Responses that participate in the CUBE applies 
equally to all non-Customer ATP Holders that choose to participate in 
the CUBE, and access to the Exchange is offered on terms that are not 
unfairly discriminatory. In addition, the proposed RFR Response fees 
are within the range of fees charged to non-Customers on other 
exchanges for executions within similar electronic crossing mechanisms. 
For example, the BOX Options Exchange LLC (``BOX'') charges 
Professional Customers and Broker Dealers who respond to an auction 
with Improvement Orders $0.72 per contract in Penny issues and $1.12 
per contract in non-Penny issues, while charging BOX Market Makers who 
respond either $0.55 in Penny issues or $0.95 in non-Penny issues.\7\
---------------------------------------------------------------------------

    \7\ See BOX fee schedule, available at, http://boxexchange.com/assets/BOX_Fee_Schedule.pdf. The BOX fee schedule has several parts 
that must be taken collectively to arrive at the all-in cost of 
responding to an auction. For example, a Broker Dealer who responds 
to an auction with an Improvement Order will pay $0.72 per contract 
in Penny issues. The $0.72 fee represents the Improvement Order fee 
of $0.37 from Section I of the fee schedule, plus the $0.35 fee to 
add liquidity in Penny issues quoted with an MPV of $0.01 from 
Section II of the schedule.
---------------------------------------------------------------------------

    The Exchange believes that the proposal to reduce the current 
Initiating Participant Credits are reasonable, equitable and non-
discriminatory because they apply equally to all ATP Holders that 
choose to participate in the CUBE, and access to the Exchange is 
offered on terms that are not unfairly discriminatory. Finally, the 
proposed CUBE Auction credits for Penny and non-Penny issues to be paid 
to Initiating Participants for each CUBE Order contract that does not 
trade with the Contra Order are within the range of rebates paid on 
other exchanges for executions within similar electronic crossing 
mechanisms. For example, the International Securities Exchange, LLC 
(``ISE'') pays a Price Improvement Mechanism (``PIM'') Break-up Rebate 
of $0.35 per contract in Select Symbols (i.e., Penny Pilot issues) and 
$0.80 per contract in Non-Select Symbols (i.e., non-Penny Pilot issues) 
for contracts submitted to a PIM that do not trade with their contra 
order.\8\
---------------------------------------------------------------------------

    \8\ See ISE fee schedule, available at, http://www.ise.com/assets/documents/OptionsExchange/legal/fee/ISE_fee_schedule.pdf.
---------------------------------------------------------------------------

    Similarly, the proposed changes to CUBE Auction credits are 
reasonable, equitable and not unfairly discriminatory. Specifically, 
the ACE Initiating Participant Rebate is based on the amount of 
business transacted on the Exchange and is designed to attract more 
volume and liquidity to the Exchange generally, and to CUBE Auctions 
specifically, which will benefit all market participants (including 
those that do not participate in the ACE Program) through increased 
opportunities to trade at potentially improved prices as well as 
enhancing price discovery. Furthermore, the proposed Rebate is 
reasonably designed and not unfairly discriminatory because it [sic] 
available regardless of the parties that trade with the CUBE Order 
(i.e., whether the CUBE Order trades with the Contra Order or 
otherwise).
    In addition, the proposal to offer an additional incentive to 
participate in the CUBE Auction to those ATP Holders that have achieved 
certain monthly volume thresholds is also not new or novel. For 
example, the MIAX Options Exchange (``MIAX'') offers an additional per 
contract rebate on certain agency orders executed in its electronic 
auction mechanism (``PRIME''), which provides for a maximum credit of 
$0.12 per contract, based on a member achieving certain monthly volume 
thresholds.\9\ In addition, the proposal to cap the Rebate at 5,000 
Customer contracts per CUBE Order is likewise consistent with the 
practice of other exchanges. For example, the Chicago Board of Options 
Exchange (``CBOE'') caps the number of contracts submitted to its price 
improvement auction that are eligible for additional volume rebates at 
1,000 contracts.\10\ The Exchange notes that although the proposed 
Rebate applies solely to Customer orders, it is nonetheless equitable 
and not unfairly discriminatory because it would enhance the incentives 
to ATP Holders to transact Customer orders on the Exchange and an 
increase in Customer order flow would bring greater volume and 
liquidity to the Exchange. Increased volume to the Exchange benefits 
all market participants by providing more trading opportunities and 
tighter spreads, even to those market participants that do not 
participate in the ACE Program.
---------------------------------------------------------------------------

    \9\ See MIAX fee schedule, Priority Customer Rebate Program, 
available at, http://www.miaxoptions.com/content/fees (providing a 
$0.10 per contract rebate for all Priority Customer orders executed 
in the PRIME Auction and providing that any Member or applicable 
affiliate that qualifies for MIAX's Priority Customer Rebate Program 
volume tiers 3, 4, or 5 will be credited an additional $0.02 per 
contract for each Priority Customer order executed in the PRIME 
Auction as a PRIME Agency Order over a threshold of 1,500,000 
contracts in a month, subject to certain enumerated exceptions).
    \10\ See CBOE fee schedule, Volume Incentive Program (``VIP''), 
available at, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf (providing that VIP credits on orders executed 
electronically in Automated Improvement Mechanism will be capped at 
1,000 contracts per order for simple executions and 1,000 contracts 
per leg for complex executions).
---------------------------------------------------------------------------

    Additionally, the Exchange believes the proposed changes are 
consistent with the Act because they may attract greater volume and 
liquidity to the Exchange, which would improve its overall 
competitiveness and strengthen its market quality for all 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,\11\ 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 amendments 
to CUBE Auction pricing are pro-competitive as the fees are to 
incentivize increases in volume and liquidity to the Exchange, which 
would benefit all of Exchange participants through increased 
opportunities to trade as well as enhancing price discovery. The 
Exchange also believes that the proposed ACE Initiating Participant 
Rebate would enhance the competiveness of the Exchange relative to 
other exchanges that offer similar rebates tied to volume 
incentives.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)(8).
    \12\ See supra n. 9, 10.
---------------------------------------------------------------------------

    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) \13\ of the Act and subparagraph (f)(2) of Rule 
19b-4\14\

[[Page 28719]]

thereunder, because it establishes a due, fee, or other charge imposed 
by the Exchange.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2015-38 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-2015-38. 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-NYSEMKT-2015-
38, and should be submitted on or before June 9, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12063 Filed 5-18-15; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 96 / Tuesday, May 19, 2015 / Notices 28717

Modification are intended to go into 2015, NYSE MKT LLC (the ‘‘Exchange’’ in Penny Pilot issues; and from $0.90 to
effect on June 1, 2015. Notice at 1. The or ‘‘NYSE MKT’’) filed with the $0.95 for Non-Customers in non-Penny
Postal Service asserts that the Securities and Exchange Commission Pilot issues. In addition, the Exchange
Modification will not impair the ability (‘‘SEC’’ or ‘‘Commission’’) the proposed proposes to decrease the Initiating
of the contract to comply with 39 U.S.C. rule change as described in Items I, II, Participant Credit by $0.05 for Penny
3633. Id. Attachment 2. and III below, which Items have been Pilot issues—from $0.40 to $0.35; and
prepared by the Exchange. The $0.10 for non-Penny Pilot issues—from
II. Notice of Filings $0.80 to $0.70. The Exchange also
Commission is publishing this notice to
The Commission invites comments on solicit comments on the proposed rule proposes to introduce a rebate for
whether the changes presented in the change from interested persons. certain Initiating Participants that
Postal Service’s Notice are consistent qualify for the ACE Program.
with the policies of 39 U.S.C. 3632, I. Self-Regulatory Organization’s Specifically, as proposed, those ATP
3633, or 3642, 39 CFR 3015.5, and 39 Statement of the Terms of Substance of Holders who qualify for Tiers 2, 3, 4 or
CFR part 3020, subpart B. Comments are the Proposed Rule Change 5 of the ACE Program would receive a
due no later than May 20, 2015. The The Exchange proposes to modify the $0.12 per contract rebate for up to 5,000
public portions of these filings can be NYSE Amex Options Fee Schedule Customer contracts per CUBE Order
accessed via the Commission’s Web site (‘‘Fee Schedule’’) related to fees and executed in a CUBE Auction (the ‘‘ACE
(http://www.prc.gov). credits associated with the Customer Initiating Participant Rebate’’ or
The Commission appoints James F. Best Execution Auction (‘‘CUBE ‘‘Rebate’’). The proposed Rebate is
Callow to represent the interests of the Auction’’ or ‘‘Auction’’). The Exchange payable in addition to any other fees or
general public (Public Representative) proposes to implement the fee change credits accrued from the CUBE Auction
in this docket. effective May 1, 2015. The text of the (e.g., in addition to the Initiating
proposed rule change is available on the Participant Credit for both Penny and
III. Ordering Paragraphs Exchange’s Web site at www.nyse.com, non-Penny Pilot issues). Thus, as
It is ordered: at the principal office of the Exchange, proposed, the maximum potential CUBE
1. The Commission reopens Docket and at the Commission’s Public credit for Penny Pilot issues is $0.47
No. CP2014–78 for consideration of Reference Room. ($0.12 Rebate + $0.35 Initiating
matters raised by the Postal Service’s Participant Credit) and for non-Penny
Notice. II. Self-Regulatory Organization’s Pilot issues is $0.82 ($0.12 Rebate +
2. Pursuant to 39 U.S.C. 505, the Statement of the Purpose of, and $0.70 Initiating Participant Credit). The
Commission appoints James F. Callow Statutory Basis for, the Proposed Rule ACE Initiating Participant Rebate is
to serve as an officer of the Commission Change available regardless of whether the
(Public Representative) to represent the In its filing with the Commission, the CUBE Order trades with the Contra
interests of the general public in this self-regulatory organization included Order or RFR Response(s), whereas the
proceeding. statements concerning the purpose of, current Initiating Participant Credits are
3. Comments are due no later than and basis for, the proposed rule change payable only for each CUBE Order
May 20, 2015. and discussed any comments it received contract that does not trade with the
4. The Secretary shall arrange for on the proposed rule change. The text Contra Order.
publication of this order in the Federal of those statements may be examined at The proposed amendments to CUBE
Register. the places specified in Item IV below. Auction pricing are designed to
By the Commission. The Exchange has prepared summaries, incentivize market participants that
set forth in sections A, B, and C below, have committed a certain amount of
Shoshana M. Grove,
of the most significant parts of such volume to the Exchange to provide even
Secretary. more liquidity through CUBE Auctions.
statements.
[FR Doc. 2015–11990 Filed 5–18–15; 8:45 am] This additional volume and liquidity
A. Self-Regulatory Organization’s
BILLING CODE 7710–FW–P would benefit all Exchange participants
Statement of the Purpose of, and the
through increased opportunities to trade
Statutory Basis for, the Proposed Rule
as well as enhancing price discovery
SECURITIES AND EXCHANGE Change
and price improvement.
COMMISSION 1. Purpose 2. Statutory Basis
[Release No. 34–74956; File No. SR– The purpose of this filing is to amend The Exchange believes that the
NYSEMKT–2015–38] Section I.G. of the Fee Schedule 3 to proposed rule change is consistent with
modify existing CUBE fees and credits Section 6(b) of the Act,5 in general, and
Self-Regulatory Organizations; NYSE and to add a new rebate for CUBE
MKT, LLC; Notice of Filing and furthers the objectives of Sections
participants who qualify for Tiers 2, 3, 6(b)(4) and (5) of the Act,6 in particular,
Immediate Effectiveness of Proposed 4 or 5 of the Amex Customer
Rule Change Modifying the NYSE because it provides for the equitable
Engagement (‘‘ACE’’) Program.4 The allocation of reasonable dues, fees, and
Amex Options Fee Schedule Related to Exchange proposes to implement the fee
Fees and Credits Associated With the other charges among its members,
change effective May 1, 2015. issuers and other persons using its
Customer Best Execution Auction The Exchange proposes to increase
facilities and does not unfairly
May 13, 2015. the fees associated with RFR Responses
discriminate between customers,
participating in the Auction by $0.05—
tkelley on DSK3SPTVN1PROD with NOTICES

Pursuant to Section 19(b)(1) of the issuers, brokers or dealers.
Securities Exchange Act of 1934 from $0.55 to $0.60 for Non-Customers The Exchange believes that the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 3 See Fee Schedule, Section I.G., available at,
proposed changes to CUBE Auction fees
notice is hereby given that on May 1, https://www.theice.com/publicdocs/nyse/markets/ are reasonable, equitable and not
amex-options/NYSE_Amex_Options_Fee_
1 15 U.S.C. 78s(b)(1). Schedule.pdf. 5 15 U.S.C. 78f(b).
2 17 CFR 240.19b–4. 4 See id., Section I.E. 6 15 U.S.C. 78f(b)(4) and (5).

VerDate Sep<11>2014 16:53 May 18, 2015 Jkt 235001 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1
28718 Federal Register / Vol. 80, No. 96 / Tuesday, May 19, 2015 / Notices

unfairly discriminatory. First, the more volume and liquidity to the participants that do not participate in
proposal to increase the fees associated Exchange generally, and to CUBE the ACE Program.
with RFR Responses that participate in Auctions specifically, which will Additionally, the Exchange believes
the CUBE applies equally to all non- benefit all market participants the proposed changes are consistent
Customer ATP Holders that choose to (including those that do not participate with the Act because they may attract
participate in the CUBE, and access to in the ACE Program) through increased greater volume and liquidity to the
the Exchange is offered on terms that are opportunities to trade at potentially Exchange, which would improve its
not unfairly discriminatory. In addition, improved prices as well as enhancing overall competitiveness and strengthen
the proposed RFR Response fees are price discovery. Furthermore, the its market quality for all market
within the range of fees charged to non- proposed Rebate is reasonably designed participants.
Customers on other exchanges for and not unfairly discriminatory because For these reasons, the Exchange
executions within similar electronic it [sic] available regardless of the parties believes that the proposal is consistent
crossing mechanisms. For example, the that trade with the CUBE Order (i.e., with the Act.
BOX Options Exchange LLC (‘‘BOX’’) whether the CUBE Order trades with the
Contra Order or otherwise). B. Self-Regulatory Organization’s
charges Professional Customers and Statement on Burden on Competition
Broker Dealers who respond to an In addition, the proposal to offer an
auction with Improvement Orders $0.72 additional incentive to participate in the In accordance with Section 6(b)(8) of
per contract in Penny issues and $1.12 CUBE Auction to those ATP Holders the Act,11 the Exchange does not believe
per contract in non-Penny issues, while that have achieved certain monthly that the proposed rule change will
charging BOX Market Makers who volume thresholds is also not new or impose any burden on competition that
respond either $0.55 in Penny issues or novel. For example, the MIAX Options is not necessary or appropriate in
$0.95 in non-Penny issues.7 Exchange (‘‘MIAX’’) offers an additional furtherance of the purposes of the Act.
The Exchange believes that the per contract rebate on certain agency The Exchange believes the proposed
proposal to reduce the current Initiating orders executed in its electronic auction amendments to CUBE Auction pricing
Participant Credits are reasonable, mechanism (‘‘PRIME’’), which provides are pro-competitive as the fees are to
equitable and non-discriminatory for a maximum credit of $0.12 per incentivize increases in volume and
because they apply equally to all ATP contract, based on a member achieving liquidity to the Exchange, which would
Holders that choose to participate in the certain monthly volume thresholds.9 In benefit all of Exchange participants
CUBE, and access to the Exchange is addition, the proposal to cap the Rebate through increased opportunities to trade
offered on terms that are not unfairly at 5,000 Customer contracts per CUBE as well as enhancing price discovery.
discriminatory. Finally, the proposed Order is likewise consistent with the The Exchange also believes that the
CUBE Auction credits for Penny and practice of other exchanges. For proposed ACE Initiating Participant
non-Penny issues to be paid to Initiating example, the Chicago Board of Options Rebate would enhance the
Participants for each CUBE Order Exchange (‘‘CBOE’’) caps the number of competiveness of the Exchange relative
contract that does not trade with the contracts submitted to its price to other exchanges that offer similar
Contra Order are within the range of improvement auction that are eligible rebates tied to volume incentives.12
rebates paid on other exchanges for for additional volume rebates at 1,000 The Exchange notes that it operates in
executions within similar electronic contracts.10 The Exchange notes that a highly competitive market in which
crossing mechanisms. For example, the although the proposed Rebate applies market participants can readily favor
solely to Customer orders, it is competing venues. In such an
International Securities Exchange, LLC
nonetheless equitable and not unfairly environment, the Exchange must
(‘‘ISE’’) pays a Price Improvement
discriminatory because it would continually review, and consider
Mechanism (‘‘PIM’’) Break-up Rebate of
enhance the incentives to ATP Holders adjusting, its fees and credits to remain
$0.35 per contract in Select Symbols
to transact Customer orders on the competitive with other exchanges. For
(i.e., Penny Pilot issues) and $0.80 per
Exchange and an increase in Customer the reasons described above, the
contract in Non-Select Symbols (i.e.,
order flow would bring greater volume Exchange believes that the proposed
non-Penny Pilot issues) for contracts
and liquidity to the Exchange. Increased rule change reflects this competitive
submitted to a PIM that do not trade
volume to the Exchange benefits all environment.
with their contra order.8
market participants by providing more
Similarly, the proposed changes to trading opportunities and tighter C. Self-Regulatory Organization’s
CUBE Auction credits are reasonable, spreads, even to those market Statement on Comments on the
equitable and not unfairly Proposed Rule Change Received From
discriminatory. Specifically, the ACE 9 See MIAX fee schedule, Priority Customer Members, Participants, or Others
Initiating Participant Rebate is based on Rebate Program, available at, http://
the amount of business transacted on www.miaxoptions.com/content/fees (providing a No written comments were solicited
the Exchange and is designed to attract $0.10 per contract rebate for all Priority Customer or received with respect to the proposed
orders executed in the PRIME Auction and rule change.
providing that any Member or applicable affiliate
7 See BOX fee schedule, available at, http://
that qualifies for MIAX’s Priority Customer Rebate III. Date of Effectiveness of the
boxexchange.com/assets/BOX_Fee_Schedule.pdf. Program volume tiers 3, 4, or 5 will be credited an
The BOX fee schedule has several parts that must additional $0.02 per contract for each Priority
Proposed Rule Change and Timing for
be taken collectively to arrive at the all-in cost of Customer order executed in the PRIME Auction as Commission Action
responding to an auction. For example, a Broker a PRIME Agency Order over a threshold of
Dealer who responds to an auction with an 1,500,000 contracts in a month, subject to certain
The foregoing rule change is effective
Improvement Order will pay $0.72 per contract in enumerated exceptions). upon filing pursuant to Section
tkelley on DSK3SPTVN1PROD with NOTICES

Penny issues. The $0.72 fee represents the 10 See CBOE fee schedule, Volume Incentive 19(b)(3)(A) 13 of the Act and
Improvement Order fee of $0.37 from Section I of Program (‘‘VIP’’), available at, http:// subparagraph (f)(2) of Rule 19b–414
the fee schedule, plus the $0.35 fee to add liquidity www.cboe.com/publish/feeschedule/
in Penny issues quoted with an MPV of $0.01 from CBOEFeeSchedule.pdf (providing that VIP credits 11 15 U.S.C. 78f(b)(8).
Section II of the schedule. on orders executed electronically in Automated
8 See ISE fee schedule, available at, http:// 12 See supra n. 9, 10.
Improvement Mechanism will be capped at 1,000
13 15 U.S.C. 78s(b)(3)(A).
www.ise.com/assets/documents/OptionsExchange/ contracts per order for simple executions and 1,000
legal/fee/ISE_fee_schedule.pdf. contracts per leg for complex executions). 14 17 CFR 240.19b–4(f)(2).

VerDate Sep<11>2014 16:53 May 18, 2015 Jkt 235001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1
Document Created: 2015-12-15 15:29:57
Document Modified: 2015-12-15 15:29:57
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 28717