81_FR_32082 81 FR 31984 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule

81 FR 31984 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 98 (May 20, 2016)

Page Range31984-31986
FR Document2016-11876

Federal Register, Volume 81 Issue 98 (Friday, May 20, 2016)
[Federal Register Volume 81, Number 98 (Friday, May 20, 2016)]
[Notices]
[Pages 31984-31986]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11876]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77835; File No. SR-NYSEARCA-2016-61]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Options Fee Schedule

May 16, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on May 2, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to amend the Fee Schedule in a number 
of different ways, effective May 2, 2016. Specifically, the Exchange 
proposes (i) to increase certain Take Liquidity Fees charged; (ii) to 
modify the Customer and Professional Customer Incentive Program; and 
(iii) to introduce a new qualification for Customer and Professional 
Customer Posting Credit Tiers in Non-Penny Pilot Issues, as described 
below.
Transaction Fees for Taking Liquidity
    The Exchange proposes to modify the fees paid by Market Makers, 
Lead Market Makers, Firms and Broker Dealers, and Professional 
Customers (collectively, ``Non-Customers'') for Taking Liquidity in 
non-Penny Pilot Issues (``Take Fees''). Specifically, the Exchange 
proposes to increase the Take Fee charged to Non-Customers from $0.99 
per contract to $1.08 per contract, which is within the range of fees 
charged by competing option exchanges.\4\
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    \4\ See, e.g., NASDAQ Options Market (``NOM'') price list, 
available here, http://www.nasdaqtrader.com/Micro.aspx?id=optionsPricing (charging non-customers a $1.10 per 
contract take liquidity fee in Non-Penny Pilot Issues).
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Customer and Professional Customer Incentive Program (the ``Incentive 
Program'')
    The Exchange is proposing to increase one of the credits available 
under the Incentive Program, which provides OTP Holders and OTP Firms 
(collectively, ``OTPs'') five alternatives to earn

[[Page 31985]]

additional posting credits ranging from $0.01 to $0.04.\5\ 
Specifically, the Exchange proposes to increase from $0.04 to $0.05 the 
additional post credit available to OTPs that achieve at least 1.00% 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, of which at least 0.25% of TCADV is from 
Customer and Professional Customer Posted Orders in non-Penny Pilot 
Issues. The Exchange believes this increased credit would provide 
additional incentive to direct Customer and Professional Customer order 
flow to the Exchange, which benefits all market participants through 
increased liquidity and enhanced price discovery.
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    \5\ The Exchange proposes to remove the word ``four'' from the 
italicized comment at the bottom of the Incentive Program table to 
make clear that there are currently five alternatives to earn the 
credit. See proposed Fee Schedule, Incentive Program (``OTP Holders 
and OTP Firms may earn one additional Credit from the alternatives 
listed above'').
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Customer and Professional Customer Posting Credit Tiers in Non-Penny 
Pilot Issues (the ``Posting Credit Tiers'')
    Finally, the Exchange also proposes to introduce a new tier to the 
Posting Credit Tiers, which consist of Tier A and Tier B and provide 
for specified credits if specified volume thresholds have been met.\6\ 
The Exchange is proposing to adopt a Tier C which would provide a $0.90 
per contract credit to OTPs that meet or exceed a qualification basis 
of at least 1.50% of TCADV from Customer and Professional Customer 
Posted Orders in all Issues, of which at least 0.40% of TCADV is from 
Customer and Professional Customer Posted Orders in non-Penny Pilot 
Issues. The Exchange believes proposed Tier C would provide additional 
incentive to direct Customer and Professional Customer order flow to 
the Exchange, which benefits all market participants through increased 
liquidity and enhanced price discovery.
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    \6\ The Exchange notes that there is a posting credit of $0.75 
associated with a Base Tier for which there is no volume 
requirement.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed Take Fees for Non-Customers 
are reasonable, equitable and not unfairly discriminatory because they 
are competitive with fees charged by other exchanges.\9\ In addition, 
the increased Take Fees are reasonable because the fees would generate 
revenue that would help to support the credits offered for posting 
liquidity, which credits are designed to attract (and compete for) 
order flow to the Exchange, which provides a greater opportunity for 
trading by all market participants. Moreover, the Exchange believes the 
proposed change does not unfairly discriminate because it applies 
equally to all Non-Customers who are removing liquidity.
---------------------------------------------------------------------------

    \9\ See supra n. 4.
---------------------------------------------------------------------------

    The Exchange also believes that the proposed increased additional 
credit under the Incentive Program as well as the addition of proposed 
Tier C to the Posting Credit Tiers are reasonable, equitable, and not 
unfairly discriminatory because the incentives would be available to 
all OTPs that execute posted electronic Customer and Professional 
Customer orders on the Exchange on an equal and non-discriminatory 
basis, in particular because they provide alternative means of 
achieving the same [sic] credit. The Exchange believes that providing 
methods for achieving the credits based on posted electronic 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 modifications would 
provide additional incentives to direct Customer and Professional 
Customer order flow to the Exchange, which benefits all market 
participants through increased liquidity and enhanced price discovery.
    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,\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. Instead, the Exchange believes that the 
proposed changes would continue to encourage competition, including 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 additional credit under 
the Incentive Program as well as the addition of proposed Tier C to the 
Posting Credit Tiers would be available to all similarly situated OTP 
Holders and OTP Firms that post electronic Customer and Professional 
Customer executions on the Exchange equally and, as such, the proposed 
change would not impose a disparate burden on competition either among 
or between classes of market participants and may, in fact, encourage 
competition.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    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) \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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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

[[Page 31986]]

the purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings under Section 19(b)(2)(B) \13\ 
of the Act to determine whether the proposed rule change should be 
approved or disapproved.
---------------------------------------------------------------------------

    \13\ 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-2016-61 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-2016-61. 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 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-2016-61 and should 
be submitted on or before June 10, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11876 Filed 5-19-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  31984                            Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices

                                                  Act of 1934 (‘‘Act’’) (15 U.S.C. 78a et                 collection of information; (c) ways to                Exchange’s Web site at www.nyse.com,
                                                  seq.). The Commission plans to submit                   enhance the quality, utility, and clarity             at the principal office of the Exchange,
                                                  this existing collection of information to              of the information to be collected; and               and at the Commission’s Public
                                                  the Office of Management and Budget                     (d) ways to minimize the burden of the                Reference Room.
                                                  (‘‘OMB’’) for extension and approval.                   collection of information on
                                                     Rule 19b–5 provides a temporary                                                                            II. Self-Regulatory Organization’s
                                                                                                          respondents, including through the use
                                                  exemption from the rule-filing                                                                                Statement of the Purpose of, and
                                                                                                          of automated collection techniques or
                                                  requirements of Section 19(b) of the Act                                                                      Statutory Basis for, the Proposed Rule
                                                                                                          other forms of information technology.
                                                  (15 U.S.C. 78s(b)) to self-regulatory                                                                         Change
                                                                                                          Consideration will be given to
                                                  organizations (‘‘SROs’’) wishing to                     comments and suggestions submitted in                    In its filing with the Commission, the
                                                  establish and operate pilot trading                     writing within 60 days of this                        self-regulatory organization included
                                                  systems. Rule 19b–5 permits an SRO to                   publication.                                          statements concerning the purpose of,
                                                  develop a pilot trading system and to                     An agency may not conduct or                        and basis for, the proposed rule change
                                                  begin operation of such system shortly                  sponsor, and a person is not required to              and discussed any comments it received
                                                  after submitting an initial report on                   respond to, a collection of information               on the proposed rule change. The text
                                                  Form PILOT to the Commission. During                    under the PRA unless it displays a                    of those statements may be examined at
                                                  operation of any such pilot trading                     currently valid OMB control number.                   the places specified in Item IV below.
                                                  system, the SRO must submit quarterly                     Please direct your written comments                 The Exchange has prepared summaries,
                                                  reports of the system’s operation to the                to: Pamela Dyson, Director/Chief                      set forth in sections A, B, and C below,
                                                  Commission, as well as timely                           Information Officer, Securities and                   of the most significant parts of such
                                                  amendments describing any material                      Exchange Commission, c/o Remi Pavlik-                 statements.
                                                  changes to the system. Within two years                 Simon, 100 F Street NE., Washington,
                                                                                                                                                                A. Self-Regulatory Organization’s
                                                  of operating such pilot trading system                  DC 20549 or send an email to: PRA_
                                                                                                                                                                Statement of the Purpose of, and
                                                  under the exemption afforded by Rule                    Mailbox@sec.gov.
                                                                                                                                                                Statutory Basis for, the Proposed Rule
                                                  19b–5, the SRO must submit a rule                         Dated: May 16, 2016.                                Change
                                                  filing pursuant to Section 19(b)(2) of the              Robert W Errett,
                                                  Act (15 U.S.C. 78s(b)(2)) to obtain                                                                           1. Purpose
                                                                                                          Deputy Secretary.
                                                  permanent approval of the pilot trading                                                                          The purpose of this filing is to amend
                                                                                                          [FR Doc. 2016–11871 Filed 5–19–16; 8:45 am]
                                                  system from the Commission.                                                                                   the Fee Schedule in a number of
                                                                                                          BILLING CODE 8011–01–P
                                                     The collection of information is                                                                           different ways, effective May 2, 2016.
                                                  designed to allow the Commission to                                                                           Specifically, the Exchange proposes (i)
                                                  maintain an accurate record of all new                                                                        to increase certain Take Liquidity Fees
                                                                                                          SECURITIES AND EXCHANGE
                                                  pilot trading systems operated by SROs                                                                        charged; (ii) to modify the Customer and
                                                                                                          COMMISSION
                                                  and to determine whether an SRO has                                                                           Professional Customer Incentive
                                                  properly availed itself of the exemption                [Release No. 34–77835; File No. SR–                   Program; and (iii) to introduce a new
                                                  afforded by Rule 19b–5, is operating a                  NYSEARCA–2016–61]
                                                                                                                                                                qualification for Customer and
                                                  pilot trading system in compliance with                                                                       Professional Customer Posting Credit
                                                  the Act, and is carrying out its statutory              Self-Regulatory Organizations; NYSE
                                                                                                          Arca, Inc.; Notice of Filing and                      Tiers in Non-Penny Pilot Issues, as
                                                  oversight obligations under the Act.                                                                          described below.
                                                     The respondents to the collection of                 Immediate Effectiveness of Proposed
                                                  information are national securities                     Rule Change To Amend the NYSE Arca                    Transaction Fees for Taking Liquidity
                                                  exchanges and national securities                       Options Fee Schedule
                                                                                                                                                                   The Exchange proposes to modify the
                                                  associations.                                           May 16, 2016.                                         fees paid by Market Makers, Lead
                                                     While there are 20 national securities                  Pursuant to Section 19(b)(1) 1 of the              Market Makers, Firms and Broker
                                                  exchanges and national securities                       Securities Exchange Act of 1934                       Dealers, and Professional Customers
                                                  associations that may avail themselves                  (‘‘Act’’) 2 and Rule 19b–4 thereunder,3               (collectively, ‘‘Non-Customers’’) for
                                                  of the exemption under Rule 19b–5 and                   notice is hereby given that, on May 2,                Taking Liquidity in non-Penny Pilot
                                                  the use of Form PILOT, it is estimated                  2016, NYSE Arca, Inc. (the ‘‘Exchange’’               Issues (‘‘Take Fees’’). Specifically, the
                                                  that approximately three respondents                    or ‘‘NYSE Arca’’) filed with the                      Exchange proposes to increase the Take
                                                  will file a total of 3 initial reports, 12              Securities and Exchange Commission                    Fee charged to Non-Customers from
                                                  quarterly reports, and 6 amendments on                  (‘‘Commission’’) the proposed rule                    $0.99 per contract to $1.08 per contract,
                                                  Form PILOT per year, with an estimated                  change as described in Items I, II, and               which is within the range of fees
                                                  total annual response burden of 126                     III below, which Items have been                      charged by competing option
                                                  hours and an estimated total annual cost                prepared by the self-regulatory                       exchanges.4
                                                  burden of $10,047. At an average hourly                 organization. The Commission is
                                                  cost of $272.33, the estimated aggregate                                                                      Customer and Professional Customer
                                                                                                          publishing this notice to solicit                     Incentive Program (the ‘‘Incentive
                                                  related internal cost of compliance with                comments on the proposed rule change
                                                  respect to Rule 19b–5 for all                                                                                 Program’’)
                                                                                                          from interested persons.
                                                  respondents is $34,314 per year (126                                                                             The Exchange is proposing to increase
                                                  burden hours multiplied by $272.33/                     I. Self-Regulatory Organization’s                     one of the credits available under the
                                                  hour = $34,314).                                        Statement of the Terms of Substance of                Incentive Program, which provides OTP
                                                     Written comments are invited on (a)                  the Proposed Rule Change                              Holders and OTP Firms (collectively,
mstockstill on DSK3G9T082PROD with NOTICES




                                                  whether the proposed collection of                         The Exchange proposes to amend the                 ‘‘OTPs’’) five alternatives to earn
                                                  information is necessary for the proper                 NYSE Arca Options Fee Schedule. The
                                                  performance of the functions of the                     proposed rule change is available on the                4 See, e.g., NASDAQ Options Market (‘‘NOM’’)

                                                  Commission, including whether the                                                                             price list, available here, http://
                                                                                                                                                                www.nasdaqtrader.com/
                                                  information shall have practical utility;                 1 15 U.S.C. 78s(b)(1).                              Micro.aspx?id=optionsPricing (charging non-
                                                  (b) the accuracy of the Commission’s                      2 15 U.S.C. 78a.                                    customers a $1.10 per contract take liquidity fee in
                                                  estimates of the burden of the proposed                   3 17 CFR 240.19b–4.                                 Non-Penny Pilot Issues).



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                                                                                    Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices                                            31985

                                                  additional posting credits ranging from                  facilities and does not unfairly                       Instead, the Exchange believes that the
                                                  $0.01 to $0.04.5 Specifically, the                       discriminate between customers,                        proposed changes would continue to
                                                  Exchange proposes to increase from                       issuers, brokers or dealers.                           encourage competition, including by
                                                  $0.04 to $0.05 the additional post credit                   The Exchange believes that the                      attracting additional liquidity to the
                                                  available to OTPs that achieve at least                  proposed Take Fees for Non-Customers                   Exchange, which would continue to
                                                  1.00% of Total Industry Customer                         are reasonable, equitable and not                      make the Exchange a more competitive
                                                  equity and ETF option ADV (‘‘TCADV’’)                    unfairly discriminatory because they are               venue for, among other things, order
                                                  from Customer and Professional                           competitive with fees charged by other                 execution and price discovery. The
                                                  Customer Posted Orders in both Penny                     exchanges.9 In addition, the increased                 Exchange does not believe that the
                                                  Pilot and non-Penny Pilot Issues, of                     Take Fees are reasonable because the                   proposed change will impair the ability
                                                  which at least 0.25% of TCADV is from                    fees would generate revenue that would                 of any market participants or competing
                                                  Customer and Professional Customer                       help to support the credits offered for                order execution venues to maintain
                                                  Posted Orders in non-Penny Pilot                         posting liquidity, which credits are                   their competitive standing in the
                                                  Issues. The Exchange believes this                       designed to attract (and compete for)                  financial markets. Further, the
                                                  increased credit would provide                           order flow to the Exchange, which                      additional credit under the Incentive
                                                  additional incentive to direct Customer                  provides a greater opportunity for                     Program as well as the addition of
                                                  and Professional Customer order flow to                  trading by all market participants.                    proposed Tier C to the Posting Credit
                                                  the Exchange, which benefits all market                  Moreover, the Exchange believes the                    Tiers would be available to all similarly
                                                  participants through increased liquidity                 proposed change does not unfairly                      situated OTP Holders and OTP Firms
                                                  and enhanced price discovery.                            discriminate because it applies equally                that post electronic Customer and
                                                                                                           to all Non-Customers who are removing                  Professional Customer executions on the
                                                  Customer and Professional Customer                       liquidity.
                                                  Posting Credit Tiers in Non-Penny Pilot                                                                         Exchange equally and, as such, the
                                                                                                              The Exchange also believes that the                 proposed change would not impose a
                                                  Issues (the ‘‘Posting Credit Tiers’’)                    proposed increased additional credit                   disparate burden on competition either
                                                     Finally, the Exchange also proposes to                under the Incentive Program as well as                 among or between classes of market
                                                  introduce a new tier to the Posting                      the addition of proposed Tier C to the                 participants and may, in fact, encourage
                                                  Credit Tiers, which consist of Tier A                    Posting Credit Tiers are reasonable,                   competition.
                                                  and Tier B and provide for specified                     equitable, and not unfairly                               The Exchange notes that it operates in
                                                  credits if specified volume thresholds                   discriminatory because the incentives                  a highly competitive market in which
                                                  have been met.6 The Exchange is                          would be available to all OTPs that                    market participants can readily favor
                                                  proposing to adopt a Tier C which                        execute posted electronic Customer and                 competing venues. In such an
                                                  would provide a $0.90 per contract                       Professional Customer orders on the                    environment, the Exchange must
                                                  credit to OTPs that meet or exceed a                     Exchange on an equal and non-                          continually review, and consider
                                                  qualification basis of at least 1.50% of                 discriminatory basis, in particular                    adjusting, its fees and credits to remain
                                                  TCADV from Customer and Professional                     because they provide alternative means                 competitive with other exchanges. For
                                                  Customer Posted Orders in all Issues, of                 of achieving the same [sic] credit. The                the reasons described above, the
                                                  which at least 0.40% of TCADV is from                    Exchange believes that providing                       Exchange believes that the proposed
                                                  Customer and Professional Customer                       methods for achieving the credits based                rule change reflects this competitive
                                                  Posted Orders in non-Penny Pilot                         on posted electronic Customer and                      environment.
                                                  Issues. The Exchange believes proposed                   Professional Customer Executions in
                                                  Tier C would provide additional                          both Penny Pilot and non-Penny Pilot                   C. Self-Regulatory Organization’s
                                                  incentive to direct Customer and                         issues is equitable and not unfairly                   Statement on Comments on the
                                                  Professional Customer order flow to the                  discriminatory because it would                        Proposed Rule Change Received From
                                                  Exchange, which benefits all market                      continue to result in more OTPs                        Members, Participants, or Others
                                                  participants through increased liquidity                 qualifying for the credits and therefore                 No written comments were solicited
                                                  and enhanced price discovery.                            reducing their overall transaction costs               or received with respect to the proposed
                                                  2. Statutory Basis                                       on the Exchange. Moreover, the                         rule change.
                                                                                                           Exchange believes the proposed
                                                     The Exchange believes that the                                                                               III. Date of Effectiveness of the
                                                                                                           modifications would provide additional
                                                  proposed rule change is consistent with                                                                         Proposed Rule Change and Timing for
                                                                                                           incentives to direct Customer and
                                                  Section 6(b) of the Act,7 in general, and                                                                       Commission Action
                                                                                                           Professional Customer order flow to the
                                                  furthers the objectives of Sections                      Exchange, which benefits all market                       The foregoing rule change is effective
                                                  6(b)(4) and (5) of the Act,8 in particular,              participants through increased liquidity               upon filing pursuant to Section
                                                  because it provides for the equitable                    and enhanced price discovery.                          19(b)(3)(A) 11 of the Act and
                                                  allocation of reasonable dues, fees, and                    For these reasons, the Exchange                     subparagraph (f)(2) of Rule 19b–412
                                                  other charges among its members,                         believes that the proposal is consistent               thereunder, because it establishes a due,
                                                  issuers and other persons using its                      with the Act.                                          fee, or other charge imposed by the
                                                                                                                                                                  Exchange.
                                                     5 The Exchange proposes to remove the word            B. Self-Regulatory Organization’s                         At any time within 60 days of the
                                                  ‘‘four’’ from the italicized comment at the bottom       Statement on Burden on Competition                     filing of such proposed rule change, the
                                                  of the Incentive Program table to make clear that
                                                  there are currently five alternatives to earn the           In accordance with Section 6(b)(8) of               Commission summarily may
mstockstill on DSK3G9T082PROD with NOTICES




                                                  credit. See proposed Fee Schedule, Incentive             the Act,10 the Exchange does not believe               temporarily suspend such rule change if
                                                  Program (‘‘OTP Holders and OTP Firms may earn            that the proposed rule change will                     it appears to the Commission that such
                                                  one additional Credit from the alternatives listed       impose any burden on competition that                  action is necessary or appropriate in the
                                                  above’’).
                                                     6 The Exchange notes that there is a posting credit
                                                                                                           is not necessary or appropriate in                     public interest, for the protection of
                                                  of $0.75 associated with a Base Tier for which there     furtherance of the purposes of the Act.                investors, or otherwise in furtherance of
                                                  is no volume requirement.
                                                     7 15 U.S.C. 78f(b).                                    9 See   supra n. 4.                                     11 15   U.S.C. 78s(b)(3)(A).
                                                     8 15 U.S.C. 78f(b)(4) and (5).                         10 15   U.S.C. 78f(b)(8).                               12 17   CFR 240.19b–4(f)(2).



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                                                  31986                               Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices

                                                  the purposes of the Act. If the                            should refer to File Number SR–                       II. Self-Regulatory Organization’s
                                                  Commission takes such action, the                          NYSEARCA–2016–61 and should be                        Statement of the Purpose of, and
                                                  Commission shall institute proceedings                     submitted on or before June 10, 2016.                 Statutory Basis for, the Proposed Rule
                                                  under Section 19(b)(2)(B) 13 of the Act to                                                                       Change
                                                                                                               For the Commission, by the Division of
                                                  determine whether the proposed rule                                                                                 In its filing with the Commission, the
                                                                                                             Trading and Markets, pursuant to delegated
                                                  change should be approved or                                                                                     Exchange included statements
                                                                                                             authority.14
                                                  disapproved.                                                                                                     concerning the purpose of, and basis for,
                                                                                                             Robert W. Errett,
                                                  IV. Solicitation of Comments                                                                                     the proposed rule change and discussed
                                                                                                             Deputy Secretary.
                                                                                                                                                                   any comments it received on the
                                                    Interested persons are invited to                        [FR Doc. 2016–11876 Filed 5–19–16; 8:45 am]
                                                                                                                                                                   proposed rule change. The text of these
                                                  submit written data, views and                             BILLING CODE 8011–01–P                                statements may be examined at the
                                                  arguments concerning the foregoing,
                                                                                                                                                                   places specified in Item IV below. The
                                                  including whether the proposed rule
                                                                                                                                                                   self-regulatory organization has
                                                  change is consistent with the Act.                         SECURITIES AND EXCHANGE                               prepared summaries, set forth in
                                                  Comments may be submitted by any of                        COMMISSION                                            Sections A, B and C below, of the most
                                                  the following methods:
                                                                                                                                                                   significant aspects of such statements.
                                                  Electronic Comments                                        [Release No. 34–77841; File No. SR–
                                                                                                                                                                   A. Self-Regulatory Organization’s
                                                     • Use the Commission’s Internet                         ISEMercury–2016–11]
                                                                                                                                                                   Statement of the Purpose of, and
                                                  comment form (http://www.sec.gov/                                                                                Statutory Basis for, the Proposed Rule
                                                  rules/sro.shtml); or                                       Self-Regulatory Organizations; ISE
                                                                                                                                                                   Change
                                                     • Send an email to rule-comments@                       Mercury, LLC; Notice of Filing and
                                                  sec.gov. Please include File Number SR–                    Immediate Effectiveness of Proposed                   1. Purpose
                                                  NYSEARCA–2016–61 on the subject                            Rule Change To Amend the Schedule                        Mercury proposes to amend its
                                                  line.                                                      of Fees                                               Schedule of Fees to add the definitions
                                                  Paper Comments                                                                                                   of Mercury Appointed Market Maker
                                                                                                             May 16, 2016.
                                                                                                                                                                   and Mercury Appointed Order Flow
                                                     • Send paper comments in triplicate                        Pursuant to Section 19(b)(1) of the                Provider effective May 2, 2016, which
                                                  to Secretary, Securities and Exchange                      Securities Exchange Act of 1934 (the                  would increase opportunities for
                                                  Commission, 100 F Street NE.,                              ‘‘Act’’),1 and Rule 19b–4 thereunder,2                members to qualify for the Exchange’s
                                                  Washington, DC 20549–1090.                                 notice is hereby given that on May 2,                 MVP.3
                                                  All submissions should refer to File                       2016, ISE Mercury, LLC (the                              Specifically, the Exchange proposes to
                                                  Number SR–NYSEARCA–2016–61. This                           ‘‘Exchange’’ or ‘‘Mercury’’) filed with               allow a Mercury Appointed Order Flow
                                                  file number should be included on the                      the Securities and Exchange                           Provider (‘‘MOFP’’) 4 to designate a
                                                  subject line if email is used. To help the                 Commission (‘‘Commission’’) the                       Mercury Appointed Market Maker
                                                  Commission process and review your                         proposed rule change, as described in                 (‘‘MAMM’’) 5 for purposes of Section I,
                                                  comments more efficiently, please use                                                                            Table 4 of the Fee Schedule.6 MOFPs
                                                                                                             Items I, II, and III below, which Items
                                                  only one method. The Commission will                                                                             and MAMMs would effectuate the
                                                                                                             have been prepared by the self-
                                                  post all comments on the Commission’s                                                                            designation by each sending an email to
                                                  Internet Web site (http://www.sec.gov/                     regulatory organization. The
                                                                                                                                                                   the Exchange by the 5th day of the
                                                  rules/sro.shtml). Copies of the                            Commission is publishing this notice to
                                                                                                                                                                   month with their designations.7 The
                                                  submission, all subsequent                                 solicit comments on the proposed rule
                                                                                                                                                                   Exchange would view the
                                                  amendments, all written statements                         change from interested persons.                       corresponding emails as acceptance of
                                                  with respect to the proposed rule                          I. Self-Regulatory Organization’s                     such an appointment and would only
                                                  change that are filed with the                             Statement of the Terms of Substance of                recognize one such designation for each
                                                  Commission, and all written                                the Proposed Rule Change                              party once every 6 months, which
                                                  communications relating to the                                                                                   designation would remain in effect until
                                                  proposed rule change between the                              Mercury proposes to amend its                      the Exchange receives an email from
                                                  Commission and any person, other than                      Schedule of Fees proposes to amend its                either party indicating that the
                                                  those that may be withheld from the                        Schedule of Fees [sic] to add the                     appointment has been terminated.8 The
                                                  public in accordance with the                              definitions of ‘‘Mercury Appointed                    proposed new concepts would be
                                                  provisions of 5 U.S.C. 552, will be                        Market Maker’’ and ‘‘Mercury                          applicable to, and included in, Section
                                                  available for Web site viewing and                         Appointed Order Flow Provider’’
                                                  printing in the Commission’s Public                        effective May 2, 2016, which would                       3 The MVP tiers are determined by a member’s

                                                  Reference Room, 100 F Street NE.,                                                                                average daily volume of Priority Customer Regular
                                                                                                             increase opportunities for Market                     Orders, in Penny and Non-Penny Pilot Symbols
                                                  Washington, DC 20549, on official                          Makers to qualify for the Exchange’s                  traded on the Exchange.
                                                  business days between the hours of                         Member Volume Program (‘‘MVP’’). The                     4 A ‘‘MOFP’’ is an Electronic Access Member who
                                                  10:00 a.m. and 3:00 p.m. Copies of the                                                                           has been appointed by a Mercury Market Maker
                                                                                                             text of the proposed rule change is
                                                  filing also will be available for                                                                                pursuant to Section I, Table 4 of the ISE Mercury
                                                                                                             available on the Exchange’s Internet                  Fee Schedule.
                                                  inspection and copying at the principal
                                                  office of the Exchange. All comments                       Web site at http://www.ise.com, at the                   5 A ‘‘MAMM’’ is a Mercury Market Maker who

                                                                                                             principal office of the Exchange, and at              has been appointed by an Electronic Access
                                                  received will be posted without change;
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                                                                                   Member pursuant to Section I, Table 4 of the ISE
                                                  the Commission does not edit personal                      the Commission’s Public Reference                     Mercury Fee Schedule.
                                                  identifying information from                               Room.                                                    6 See proposed ISE Mercury Fee Schedule,

                                                  submissions. You should submit only                                                                              Preface.
                                                                                                                                                                      7 See proposed ISE Mercury Fee Schedule,
                                                  information that you wish to make                                                                                Section 1, Table 4. Members should direct their
                                                  available publicly. All submissions                          14 17 CFR 200.30–3(a)(12).                          emails designating a MAMM/MOFP to bizdev@
                                                                                                               1 15 U.S.C. 78s(b)(1).                              ise.com.
                                                    13 15   U.S.C. 78s(b)(2)(B).                               2 17 CFR 240.19b–4.                                    8 See id.




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Document Created: 2016-05-20 01:59:35
Document Modified: 2016-05-20 01:59:35
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 31984 

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