81 FR 4350 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Modifying the NYSE Amex Options Fee Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 16 (January 26, 2016)

Page Range		4350-4352
FR Document		2016-01391
Federal Register, Volume 81 Issue 16 (Tuesday, January 26, 2016)
[Federal Register Volume 81, Number 16 (Tuesday, January 26, 2016)]
[Notices]
[Pages 4350-4352]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-01391]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76935; File No. SR-NYSEMKT-2016-09]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Modifying the NYSE Amex 
Options Fee Schedule

January 20, 2016.
    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 January 13, 2016, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to modify the NYSE Amex Options Fee Schedule 
(``Fee Schedule''). The Exchange proposes to implement the fee change 
effective January 13, 2016.\3\ The proposed 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.
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    \3\ The Exchange originally filed this proposed rule change on 
January 04, 2016 under File No. SR-NYSEMKT-2016-01. The Exchange 
subsequently withdrew that filing on January 13, 2016 and filed this 
proposed rule change.
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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 Sections I. A., C. and E of 
the Fee Schedule to adjust fees and credits payable, effective on 
January 13, 2016.
    Section I.A. of the Fee Schedule sets forth the rates for Standard 
Option transactions. The Exchange is proposing to increase rates per 
contract for Electronic transactions. Specifically, the Exchange 
proposes to increase rates for Electronic transactions in issues in the 
Penny Pilot program from $0.44 to $0.50 for Broker Dealers, 
Professional Customers and Non-NYSE Amex Options Market Makers; from 
$0.34 to $0.42 for Firms; and $0.23 to $0.25 for DOMMs, e-Specialists, 
NYSE Amex Options Market Makers and Specialists. These rates are 
competitive with rates being charged on other exchanges for Electronic 
executions in Penny Pilot issues.\4\
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    \4\ For example, Miami Securities International Exchange, LLC 
(``MIAX'') charges $0.45 to firms and $0.47 to non-MIAX market 
makers, broker dealers and public customers other than priority 
customers for execution in Penny Pilot issues (see MIAX fee 
schedule, available here, https://www.miaxoptions.com/content/fees); 
and NASDAQ OMX PHLX LLC (``PHLX'') charges $0.48 to professional 
customers, broker dealers and firms for execution in Penny Pilot 
issues (see PHLX fee schedule, available here, http://www.nasdaqtrader.com/Micro.aspx?id=PHLXPricing). In addition, NYSE 
Arca, Inc. (``NYSE Arca''), NASDAQ Options Market LLC (``NOM'') and 
BATS BZX Exchange (``BATS'') all charge a $0.50 take fee for 
removing liquidity in Penny Pilot issues. See NYSE Arca fee 
schedule, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf; NOM fee 
schedule, available here, http://www.nasdaqtrader.com/Micro.aspx?id=OptionsPricing; and BATS fee schedule, available here, 
http://www.batsoptions.com/support/fee_schedule/.
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    The Exchange also proposes to increase rates per contract for 
Electronic transactions in issues that are not part of the Penny Pilot 
program from $0.58 to $0.75 for Broker Dealers, Firms, Professional 
Customers and Non-NYSE Amex Options Market Makers; and $0.23 to $0.25 
for DOMMs, e-Specialists, NYSE Amex Options Market Makers and 
Specialists. These rates are competitive with rates being charged on 
other exchanges for Electronic executions in non-Penny Pilot issues.\5\
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    \5\ For example, MIAX charges $0.29 to MIAX market makers and 
$0.75 to non-MIAX market makers, firms, broker dealers and public 
customers other than priority customers for executions in non-Penny 
Pilot issues (see id., MIAX fee schedule); PHLX charges $0.25 to 
specialists and market makers and $0.75 to professional customers, 
broker dealers and firms per execution in Non-Penny issues (see id., 
PHLX fee schedule); and CBOE charges $0.75 to broker dealers, non-
CBOE market makers and professionals per execution in non-Penny 
Pilot issues (see The Chicago Board Options Exchange, Inc. 
(``CBOE'') fee schedule, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf). In addition, the BOX Options Exchange, LLC 
(``BOX'') assesses fees greater than $1.00 to non-Customers for 
executions against Public Customer interest in non-Penny Pilot 
issues and NYSE Arca charges a $0.99 take fee to lead market makers, 
market makers, firms and broker dealers for executions in non-Penny 
Pilot issues. See NYSE Arca fee schedule, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf; and BOX fee schedule, available 
here, http://boxexchange.com/assets/BOX_Fee_Schedule.pdf.
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    Section I.C. of the Fee Schedule currently provides a discount to 
NYSE Amex Options Market Maker transaction fees based on a sliding 
volume scale (the ``Sliding Scale'' [sic].\6\ Specifically, an NYSE 
Amex Options Market Maker that has monthly volume on the Exchange of 
0.10% or less of total

[[Page 4351]]

industry Customer equity and exchange traded fund (``ETF'') options 
volume \7\ is charged a base rate of $0.23 and, these same market 
participants, upon reaching certain volume thresholds, or Tiers, 
receive a reduction of this per contract rate.\8\ The Exchange is 
proposing to raise these rates across all Tiers by $0.02, which is 
competitive with base rates charged to market makers on other 
exchanges.\9\ In addition, the Exchange is proposing to eliminate Tier 
7 because Market Makers were not availing themselves of this Tier. With 
this change, Tier 6 would be the highest achievable Tier available to 
Market Makers that achieved Electronic volume of greater than 1.75% 
total industry Customer equity and ETF in a given month. Finally, the 
Exchange is proposing to offer an alternative means for Market Makers 
to qualify for the reduced per contract rate charged at each Tier of 
the Sliding Scale which is currently available to Market Makers that 
execute posting volumes in excess of 0.85% of Industry Customer Equity 
and ETF Option Volume.\10\ The Exchange proposes to make the Sliding 
Scale rates available to those Market Makers participating in either of 
the Prepayment Programs offered by the Exchange.\11\
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    \6\ See Fee Schedule, Section I.C.(NYSE Amex Options Market 
Maker Sliding Scale--Electronic), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \7\ The volume thresholds are based on an NYSE Amex Options 
Market Makers' volume transacted Electronically as a percentage of 
total industry Customer equity and ETF options volumes as reported 
by the Options Clearing Corporation (the ``OCC''). Total industry 
Customer equity and ETF option volume is comprised of those equity 
and ETF contracts that clear in the Customer account type at OCC and 
does not include contracts that clear in either the Firm or Market 
Maker account type at OCC or contracts overlying a security other 
than an equity or ETF security. See OCC Monthly Statistics Reports, 
available here, http://www.theocc.com/webapps/monthly-volume-reports.
    \8\ In calculating an NYSE Amex Options Market Maker Electronic 
volumes, the Exchange excludes any volumes attributable to Mini 
Options, QCC trades, CUBE Auctions, and Strategy Execution Fee Caps, 
as these transactions are subject to separate pricing described in 
Fee Schedule Sections I.B., I.F., I.G., and I.J, respectively. See 
Fee Schedule, Section I.C, supra n. 6.
    \9\ See supra nn. 4, 5.
    \10\ See supra n. 8.
    \11\ The Commission notes that, consistent with this change, the 
Exchange proposes to add cross-references to Section I.C. in Section 
I.D. of the Fee Schedule. See Fee Schedule, Section I.D. (describing 
both the 1- and 3- year Prepayment Programs), see supra n. 6.
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    Section I.E. of the Fee Schedule describes the Exchange's ACE 
Program, which features five tiers expressed as a percentage of total 
industry Customer equity and ETF option average daily volume and 
provides two alternative methods through which Order Flow Providers may 
receive per contract credits for Electronic Customer volume that the 
OFP, as agent, submits to the Exchange. The Exchange is proposing two 
amendments to Tier 2 of the Program. First, the Exchange proposes to 
increase the base rebate (i.e., Customer Volume Credits not tied to 
either Prepayment Program) from $0.13 to $0.14. Second, the Exchange 
proposes to offer an additional method for which OFPs can qualify for 
Tier 2. Specifically, as proposed, an ATP Holder may qualify for Tier 2 
by increasing Customer Electronic ADV by 0.35% or more of Industry 
Customer Equity and ETF Options ADV from its volumes in October 2015. 
The Exchange's proposal is intended to incentivize OFPs to increase its 
[sic] Customer Electronic volumes even if they do not have the volumes 
equating to 0.60% Industry Customer Equity and ETF Options ADV (the 
current qualification basis to meet Tier 2).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\13\ 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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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes the proposed change to the transaction rates 
for Electronic transactions are reasonable, equitable and not unfairly 
discriminatory because the rates are competitive with fees charged by 
other exchanges and are designed to attract (and compete for) order 
flow to the Exchange, which provides a greater opportunity for trading 
by all market participants.\14\
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    \14\ See supra nn. 4, 5.
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    The Exchange believes the proposed change to the reduce [sic] rates 
per contract on the Sliding Scale are reasonable, equitable and not 
unfairly discriminatory because the rates are competitive with fees 
charged by other exchanges and are designed to attract (and compete 
for) order flow to the Exchange, which provides a greater opportunity 
for trading by all market participants.\15\ In addition, the Exchange 
believes that the proposal to make all Market Makers participating in 
one of the Exchange's Prepayment Programs eligible to avail themselves 
of the Sliding Scale is reasonable, equitable and not unfairly 
discriminatory because it may encourage additional market making firms 
to participate in one of these Programs, which could result in 
increased capital (and resulting liquidity) being committed to the 
Exchange to the benefit of all market participants. The proposed change 
would also incentivize Market Makers already enrolled in a Prepayment 
Program to increase posted liquidity on the Exchange, which would 
benefit all Exchange participants, including ATP Holders, through 
increased opportunities to trade as well as enhancing price discovery. 
The Exchange also believes that eliminating Tier 7 from the Sliding 
Scale is reasonable, equitable and not unfairly discriminatory because 
it removes an incentive that was never utilized, thereby adding clarity 
and transparency to the Fee Schedule.
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    \15\ See supra nn. 4, 5.
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    Finally, the Exchange believes that the proposed changes to the ACE 
Program are reasonable, equitable and not unfairly discriminatory 
because the credits offered are based on the amount of business 
transacted on the Exchange. The Exchange believes the proposal to 
enable ATP Holders to be eligible for Tier 2 based on an increase in 
volume over their October 2015 volume is reasonable, equitable and not 
unfairly discriminatory because it encourages ATP Holders to maintain 
increased volumes executed on the Exchange. Moreover, the proposed 
alternative basis for achieving Tier 2 would enable those ATP Holders 
that are otherwise ineligible for the ACE Program tiers (i.e., because 
of insufficient monthly volume) to qualify by increasing or ``stepping 
up'' their own volume executed on the Exchange. The Exchange notes that 
offering so-called ``step up'' pricing or tiers that use a particular 
month as a benchmark for incentives is not new or novel.\16\
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    \16\ See BATS fee schedule, available here, http://www.batsoptions.com/support/fee_schedule/ (offering a ``Customer 
Step-Up Volume Tier'' based on a member achieving ``Options Step-Up 
Add TCV'' as well as ``NBBO Setter Tiers.). See, e.g., Securities 
and Exchange Release No. 76411 (November 10, 2015), 80 FR 71892, 
71893 (November 17, 2015) (SR-BATS-2015-98) (among other changes, 
adopting a Step-Up Volume Tier, which BATS characterized as being 
``[s]imilar to other pricing where the Exchange seeks to incentivize 
growth by providing tiered pricing based on a Member's participation 
increase over time'').
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    In addition, the Exchange believes that the proposed amendments to 
the ACE Program are reasonable, equitable and not unfairly 
discriminatory because they would enhance the incentives to Order Flow 
Providers to transact Customer orders on the Exchange,

[[Page 4352]]

which would benefit all market participants by providing more trading 
opportunities and tighter spreads, even to those market participants 
that do not participate in the ACE Program. Additionally, the Exchange 
believes the proposed changes to the ACE Program are consistent with 
the Act because they may attract greater volume and liquidity to the 
Exchange, which would benefit all market participants by providing 
tighter quoting and better prices, all of which perfects the mechanism 
for a free and open market and national market system.
    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,\17\ 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 acknowledges that the proposed 
changes relating to transaction charges and/or credits, including the 
Sliding Scale and ACE Program, may increase both intermarket and 
intramarket competition by incenting participants to direct their 
orders to the Exchange, which will enhance the quality of quoting and 
may increase the volume of contracts traded on the Exchange. To the 
extent this purpose is achieved, the Exchange believes the proposed 
amendments are pro-competitive and any resulting increase in volume and 
liquidity to the Exchange would benefit all of Exchange participants 
through increased opportunities to trade as well as enhancing price 
discovery.
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    \17\ 15 U.S.C. 78f(b)(8).
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues. In 
such an environment, the Exchange must continually review, and consider 
adjusting, its fees and credits to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed rule change reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \18\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \19\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEMKT-2016-09 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-2016-09. 
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-
NYSEMKT-2016-09, and should be submitted on or before February 16, 
2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-01391 Filed 1-25-16; 8:45 am]
BILLING CODE 8011-01-P
4350 Federal Register / Vol. 81, No. 16 / Tuesday, January 26, 2016 / Notices

(CIK No. 1335104), a void Delaware the proposed rule change as described being charged on other exchanges for
corporation located in Boca Raton, in Items I, II, and III below, which Items Electronic executions in Penny Pilot
Florida with a class of securities have been prepared by the Exchange. issues.4
registered with the Commission The Commission is publishing this The Exchange also proposes to
pursuant to Exchange Act Section 12(g) notice to solicit comments on the increase rates per contract for Electronic
because it is delinquent in its periodic proposed rule change from interested transactions in issues that are not part
filings with the Commission, having not persons. of the Penny Pilot program from $0.58
filed any periodic reports since it filed to $0.75 for Broker Dealers, Firms,
I. Self-Regulatory Organization’s Professional Customers and Non-NYSE
a Form 10–Q for the period ended
Statement of the Terms of Substance of Amex Options Market Makers; and
September 30, 2011. On February 19,
the Proposed Rule Change $0.23 to $0.25 for DOMMs, e-
2015, Corporation Finance sent a
delinquency letter to VCRTQ requesting The Exchange proposes to modify the Specialists, NYSE Amex Options Market
compliance with its periodic filing NYSE Amex Options Fee Schedule Makers and Specialists. These rates are
requirements but VCRTQ did not (‘‘Fee Schedule’’). The Exchange competitive with rates being charged on
receive the delinquency letter due to its proposes to implement the fee change other exchanges for Electronic
failure to maintain a valid address on effective January 13, 2016.3 The executions in non-Penny Pilot issues.5
file with the Commission as required by proposed change is available on the Section I.C. of the Fee Schedule
Commission rules (Rule 301 of Exchange’s Web site at www.nyse.com, currently provides a discount to NYSE
Regulation S–T, 17 CFR Section 232.301 at the principal office of the Exchange, Amex Options Market Maker
and Section 5.4 of EDGAR Filer and at the Commission’s Public transaction fees based on a sliding
Manual). As of January 13, 2016, the Reference Room. volume scale (the ‘‘Sliding Scale’’ [sic].6
common stock of VCRTQ was quoted on Specifically, an NYSE Amex Options
II. Self-Regulatory Organization’s Market Maker that has monthly volume
OTC Link, had seven market makers, Statement of the Purpose of, and
and was eligible for the ‘‘piggyback’’ on the Exchange of 0.10% or less of total
Statutory Basis for, the Proposed Rule
exception of Exchange Act Rule 15c2– Change 4 For example, Miami Securities International
11(f)(3). Exchange, LLC (‘‘MIAX’’) charges $0.45 to firms and
The Commission is of the opinion that In its filing with the Commission, the
$0.47 to non-MIAX market makers, broker dealers
the public interest and the protection of self-regulatory organization included and public customers other than priority customers
investors require a suspension of trading statements concerning the purpose of, for execution in Penny Pilot issues (see MIAX fee
in the securities of the above-listed and basis for, the proposed rule change schedule, available here, https://www.miaxoptions.
and discussed any comments it received com/content/fees); and NASDAQ OMX PHLX LLC
companies. Therefore, it is ordered, (‘‘PHLX’’) charges $0.48 to professional customers,
pursuant to Section 12(k) of the on the proposed rule change. The text broker dealers and firms for execution in Penny
Securities Exchange Act of 1934, that of those statements may be examined at Pilot issues (see PHLX fee schedule, available here,
trading in the securities of the above- the places specified in Item IV below. http://www.nasdaqtrader.com/Micro.aspx?id=PHLX
The Exchange has prepared summaries, Pricing). In addition, NYSE Arca, Inc. (‘‘NYSE
listed companies is suspended for the Arca’’), NASDAQ Options Market LLC (‘‘NOM’’)
period from 9:30 a.m. EST on January set forth in sections A, B, and C below, and BATS BZX Exchange (‘‘BATS’’) all charge a
22, 2016, through 11:59 p.m. EST on of the most significant parts of such $0.50 take fee for removing liquidity in Penny Pilot
February 4, 2016. statements. issues. See NYSE Arca fee schedule, available here,
https://www.nyse.com/publicdocs/nyse/markets/
By the Commission. A. Self-Regulatory Organization’s arca-options/NYSE_Arca_Options_Fee_
Statement of the Purpose of, and the Schedule.pdf; NOM fee schedule, available here,
Jill M. Peterson,
http://www.nasdaqtrader.com/Micro.aspx?id=
Assistant Secretary. Statutory Basis for, the Proposed Rule OptionsPricing; and BATS fee schedule, available
[FR Doc. 2016–01613 Filed 1–22–16; 11:15 am]
Change here, http://www.batsoptions.com/support/fee_
schedule/.
BILLING CODE 8011–01–P 1. Purpose 5 For example, MIAX charges $0.29 to MIAX

The purpose of this filing is to amend market makers and $0.75 to non-MIAX market
makers, firms, broker dealers and public customers
SECURITIES AND EXCHANGE Sections I. A., C. and E of the Fee other than priority customers for executions in non-
COMMISSION Schedule to adjust fees and credits Penny Pilot issues (see id., MIAX fee schedule);
payable, effective on January 13, 2016. PHLX charges $0.25 to specialists and market
[Release No. 34–76935; File No. SR– Section I.A. of the Fee Schedule sets makers and $0.75 to professional customers, broker
NYSEMKT–2016–09] dealers and firms per execution in Non-Penny
forth the rates for Standard Option issues (see id., PHLX fee schedule); and CBOE
transactions. The Exchange is proposing charges $0.75 to broker dealers, non-CBOE market
Self-Regulatory Organizations; NYSE to increase rates per contract for makers and professionals per execution in non-
MKT LLC; Notice of Filing and Electronic transactions. Specifically, the Penny Pilot issues (see The Chicago Board Options
Immediate Effectiveness of Proposed Exchange proposes to increase rates for Exchange, Inc. (‘‘CBOE’’) fee schedule, http://www.
Rule Change Modifying the NYSE cboe.com/publish/feeschedule/CBOEFee
Electronic transactions in issues in the Schedule.pdf). In addition, the BOX Options
Amex Options Fee Schedule Penny Pilot program from $0.44 to $0.50 Exchange, LLC (‘‘BOX’’) assesses fees greater than
for Broker Dealers, Professional $1.00 to non-Customers for executions against
January 20, 2016.
Public Customer interest in non-Penny Pilot issues
Pursuant to Section 19(b)(1) of the Customers and Non-NYSE Amex and NYSE Arca charges a $0.99 take fee to lead
Securities Exchange Act of 1934 Options Market Makers; from $0.34 to market makers, market makers, firms and broker
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 $0.42 for Firms; and $0.23 to $0.25 for dealers for executions in non-Penny Pilot issues.
DOMMs, e-Specialists, NYSE Amex See NYSE Arca fee schedule, available here, https://
mstockstill on DSK4VPTVN1PROD with NOTICES

notice is hereby given that on January www.nyse.com/publicdocs/nyse/markets/arca-
13, 2016, NYSE MKT LLC (the Options Market Makers and Specialists. options/NYSE_Arca_Options_Fee_Schedule.pdf;
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with These rates are competitive with rates and BOX fee schedule, available here, http://box
the Securities and Exchange exchange.com/assets/BOX_Fee_Schedule.pdf.
3 The Exchange originally filed this proposed rule 6 See Fee Schedule, Section I.C.(NYSE Amex
Commission (‘‘SEC’’ or ‘‘Commission’’) change on January 04, 2016 under File No. SR– Options Market Maker Sliding Scale—Electronic),
NYSEMKT–2016–01. The Exchange subsequently available here, https://www.nyse.com/publicdocs/
1 15 U.S.C. 78s(b)(1). withdrew that filing on January 13, 2016 and filed nyse/markets/amex-options/NYSE_Amex_Options_
2 17 CFR 240.19b–4. this proposed rule change. Fee_Schedule.pdf.

VerDate Sep<11>2014 21:57 Jan 25, 2016 Jkt 238001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 E:\FR\FM\26JAN1.SGM 26JAN1
Federal Register / Vol. 81, No. 16 / Tuesday, January 26, 2016 / Notices 4351

industry Customer equity and exchange Exchange. The Exchange is proposing discriminatory because it may
traded fund (‘‘ETF’’) options volume 7 is two amendments to Tier 2 of the encourage additional market making
charged a base rate of $0.23 and, these Program. First, the Exchange proposes firms to participate in one of these
same market participants, upon to increase the base rebate (i.e., Programs, which could result in
reaching certain volume thresholds, or Customer Volume Credits not tied to increased capital (and resulting
Tiers, receive a reduction of this per either Prepayment Program) from $0.13 liquidity) being committed to the
contract rate.8 The Exchange is to $0.14. Second, the Exchange proposes Exchange to the benefit of all market
proposing to raise these rates across all to offer an additional method for which participants. The proposed change
Tiers by $0.02, which is competitive OFPs can qualify for Tier 2. Specifically, would also incentivize Market Makers
with base rates charged to market as proposed, an ATP Holder may qualify already enrolled in a Prepayment
makers on other exchanges.9 In for Tier 2 by increasing Customer Program to increase posted liquidity on
addition, the Exchange is proposing to Electronic ADV by 0.35% or more of the Exchange, which would benefit all
eliminate Tier 7 because Market Makers Industry Customer Equity and ETF Exchange participants, including ATP
were not availing themselves of this Options ADV from its volumes in Holders, through increased
Tier. With this change, Tier 6 would be October 2015. The Exchange’s proposal opportunities to trade as well as
the highest achievable Tier available to is intended to incentivize OFPs to enhancing price discovery. The
Market Makers that achieved Electronic increase its [sic] Customer Electronic Exchange also believes that eliminating
volume of greater than 1.75% total volumes even if they do not have the Tier 7 from the Sliding Scale is
industry Customer equity and ETF in a volumes equating to 0.60% Industry reasonable, equitable and not unfairly
given month. Finally, the Exchange is Customer Equity and ETF Options ADV discriminatory because it removes an
proposing to offer an alternative means (the current qualification basis to meet incentive that was never utilized,
for Market Makers to qualify for the Tier 2). thereby adding clarity and transparency
reduced per contract rate charged at to the Fee Schedule.
each Tier of the Sliding Scale which is 2. Statutory Basis
Finally, the Exchange believes that
currently available to Market Makers The Exchange believes that the the proposed changes to the ACE
that execute posting volumes in excess proposed rule change is consistent with Program are reasonable, equitable and
of 0.85% of Industry Customer Equity Section 6(b) of the Act,12 in general, and not unfairly discriminatory because the
and ETF Option Volume.10 The furthers the objectives of Sections credits offered are based on the amount
Exchange proposes to make the Sliding 6(b)(4) and (5) of the Act,13 in particular, of business transacted on the Exchange.
Scale rates available to those Market because it provides for the equitable The Exchange believes the proposal to
Makers participating in either of the allocation of reasonable dues, fees, and enable ATP Holders to be eligible for
Prepayment Programs offered by the other charges among its members, Tier 2 based on an increase in volume
Exchange.11 issuers and other persons using its over their October 2015 volume is
Section I.E. of the Fee Schedule facilities and does not unfairly reasonable, equitable and not unfairly
describes the Exchange’s ACE Program, discriminate between customers, discriminatory because it encourages
which features five tiers expressed as a issuers, brokers or dealers. ATP Holders to maintain increased
percentage of total industry Customer The Exchange believes the proposed volumes executed on the Exchange.
equity and ETF option average daily change to the transaction rates for Moreover, the proposed alternative basis
volume and provides two alternative Electronic transactions are reasonable, for achieving Tier 2 would enable those
methods through which Order Flow equitable and not unfairly ATP Holders that are otherwise
Providers may receive per contract discriminatory because the rates are ineligible for the ACE Program tiers (i.e.,
credits for Electronic Customer volume competitive with fees charged by other because of insufficient monthly volume)
that the OFP, as agent, submits to the exchanges and are designed to attract to qualify by increasing or ‘‘stepping
(and compete for) order flow to the up’’ their own volume executed on the
7 The volume thresholds are based on an NYSE Exchange, which provides a greater Exchange. The Exchange notes that
Amex Options Market Makers’ volume transacted opportunity for trading by all market
Electronically as a percentage of total industry offering so-called ‘‘step up’’ pricing or
Customer equity and ETF options volumes as
participants.14 tiers that use a particular month as a
reported by the Options Clearing Corporation (the The Exchange believes the proposed benchmark for incentives is not new or
‘‘OCC’’). Total industry Customer equity and ETF change to the reduce [sic] rates per novel.16
option volume is comprised of those equity and contract on the Sliding Scale are
ETF contracts that clear in the Customer account In addition, the Exchange believes
type at OCC and does not include contracts that
reasonable, equitable and not unfairly that the proposed amendments to the
clear in either the Firm or Market Maker account discriminatory because the rates are ACE Program are reasonable, equitable
type at OCC or contracts overlying a security other competitive with fees charged by other and not unfairly discriminatory because
than an equity or ETF security. See OCC Monthly exchanges and are designed to attract
Statistics Reports, available here, http://www. they would enhance the incentives to
theocc.com/webapps/monthly-volume-reports.
(and compete for) order flow to the Order Flow Providers to transact
8 In calculating an NYSE Amex Options Market Exchange, which provides a greater Customer orders on the Exchange,
Maker Electronic volumes, the Exchange excludes opportunity for trading by all market
any volumes attributable to Mini Options, QCC participants.15 In addition, the 16 See BATS fee schedule, available here,
trades, CUBE Auctions, and Strategy Execution Fee Exchange believes that the proposal to http://www.batsoptions.com/support/fee_schedule/
Caps, as these transactions are subject to separate
pricing described in Fee Schedule Sections I.B., I.F., make all Market Makers participating in (offering a ‘‘Customer Step-Up Volume Tier’’ based
on a member achieving ‘‘Options Step-Up Add
I.G., and I.J, respectively. See Fee Schedule, Section one of the Exchange’s Prepayment TCV’’ as well as ‘‘NBBO Setter Tiers.). See, e.g.,
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I.C, supra n. 6. Programs eligible to avail themselves of Securities and Exchange Release No. 76411
9 See supra nn. 4, 5.
the Sliding Scale is reasonable, (November 10, 2015), 80 FR 71892, 71893
10 See supra n. 8.
equitable and not unfairly (November 17, 2015) (SR–BATS–2015–98) (among
11 The Commission notes that, consistent with other changes, adopting a Step-Up Volume Tier,
this change, the Exchange proposes to add cross- 12 15
which BATS characterized as being ‘‘[s]imilar to
references to Section I.C. in Section I.D. of the Fee U.S.C. 78f(b). other pricing where the Exchange seeks to
13 15 U.S.C. 78f(b)(4) and (5).
Schedule. See Fee Schedule, Section I.D. incentivize growth by providing tiered pricing
14 See supra nn. 4, 5.
(describing both the 1- and 3- year Prepayment based on a Member’s participation increase over
Programs), see supra n. 6. 15 See supra nn. 4, 5. time’’).

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4352 Federal Register / Vol. 81, No. 16 / Tuesday, January 26, 2016 / Notices

which would benefit all market III. Date of Effectiveness of the Commission and any person, other than
participants by providing more trading Proposed Rule Change and Timing for those that may be withheld from the
opportunities and tighter spreads, even Commission Action public in accordance with the
to those market participants that do not The foregoing rule change is effective provisions of 5 U.S.C. 552, will be
participate in the ACE Program. upon filing pursuant to Section available for Web site viewing and
Additionally, the Exchange believes the 19(b)(3)(A) 18 of the Act and printing in the Commission’s Public
proposed changes to the ACE Program subparagraph (f)(2) of Rule 19b–4 19 Reference Room, 100 F Street NE.,
are consistent with the Act because they thereunder, because it establishes a due, Washington, DC 20549 on official
may attract greater volume and liquidity fee, or other charge imposed by the business days between the hours of
to the Exchange, which would benefit Exchange. 10:00 a.m. and 3:00 p.m. Copies of the
all market participants by providing At any time within 60 days of the filing also will be available for
tighter quoting and better prices, all of filing of such proposed rule change, the inspection and copying at the principal
which perfects the mechanism for a free Commission summarily may office of the Exchange. All comments
and open market and national market temporarily suspend such rule change if received will be posted without change;
system. it appears to the Commission that such the Commission does not edit personal
For these reasons, the Exchange action is necessary or appropriate in the identifying information from
believes that the proposal is consistent public interest, for the protection of submissions. You should submit only
with the Act. investors, or otherwise in furtherance of information that you wish to make
the purposes of the Act. If the available publicly. All submissions
B. Self-Regulatory Organization’s should refer to File Number SR–
Commission takes such action, the
Statement on Burden on Competition NYSEMKT–2016–09, and should be
Commission shall institute proceedings
In accordance with Section 6(b)(8) of under Section 19(b)(2)(B) 20 of the Act to submitted on or before February 16,
the Act,17 the Exchange does not believe determine whether the proposed rule 2016.
that the proposed rule change will change should be approved or For the Commission, by the Division of
impose any burden on competition that disapproved. Trading and Markets, pursuant to delegated
is not necessary or appropriate in IV. Solicitation of Comments
authority.21
furtherance of the purposes of the Act. Brent J. Fields,
The Exchange acknowledges that the Interested persons are invited to Secretary.
proposed changes relating to transaction submit written data, views, and
[FR Doc. 2016–01391 Filed 1–25–16; 8:45 am]
charges and/or credits, including the arguments concerning the foregoing,
BILLING CODE 8011–01–P
Sliding Scale and ACE Program, may including whether the proposed rule
increase both intermarket and change is consistent with the Act.
intramarket competition by incenting Comments may be submitted by any of SECURITIES AND EXCHANGE
participants to direct their orders to the the following methods: COMMISSION
Exchange, which will enhance the Electronic Comments [SEC File No. 270–330, OMB Control No.
quality of quoting and may increase the
volume of contracts traded on the • Use the Commission’s Internet 3235–0645]
Exchange. To the extent this purpose is comment form (http://www.sec.gov/
rules/sro.shtml); or Submission for OMB Review;
achieved, the Exchange believes the
• Send an email to rule-comments@ Comment Request
proposed amendments are pro-
sec.gov. Please include File Number SR– Upon Written Request Copies Available
competitive and any resulting increase
NYSEMKT–2016–09 on the subject line. From: Securities and Exchange
in volume and liquidity to the Exchange
would benefit all of Exchange Paper Comments Commission, Office of FOIA Services,
participants through increased 100 F Street NE., Washington, DC
• Send paper comments in triplicate
opportunities to trade as well as 20549–2736.
to Secretary, Securities and Exchange
enhancing price discovery. Commission, 100 F Street NE., Extension:
The Exchange notes that it operates in Washington, DC 20549–1090. Interactive Data
a highly competitive market in which All submissions should refer to File Notice is hereby given that, pursuant
market participants can readily favor Number SR–NYSEMKT–2016–09. This to the Paperwork Reduction Act of 1995
competing venues. In such an file number should be included on the (44 U.S.C. 3501 et seq.), the Securities
environment, the Exchange must subject line if email is used. To help the and Exchange Commission
continually review, and consider Commission process and review your (‘‘Commission’’) has submitted to the
adjusting, its fees and credits to remain comments more efficiently, please use Office of Management and Budget this
competitive with other exchanges. For only one method. The Commission will request for extension of the previously
the reasons described above, the post all comments on the Commission’s approved collection of information
Exchange believes that the proposed Internet Web site (http://www.sec.gov/ discussed below.
rule change reflects this competitive rules/sro.shtml). Copies of the The ‘‘Interactive Data’’ collection of
environment. submission, all subsequent information requires issuers filing
C. Self-Regulatory Organization’s amendments, all written statements registration statements under the
Statement on Comments on the with respect to the proposed rule Securities Act of 1933 (15 U.S.C. 77a et
mstockstill on DSK4VPTVN1PROD with NOTICES

Proposed Rule Change Received From change that are filed with the seq.) and reports under the Securities
Members, Participants, or Others Commission, and all written Exchange Act of 1934 (15 U.S.C. 78a et
communications relating to the seq.) to submit specified financial
No written comments were solicited proposed rule change between the information to the Commission and post
or received with respect to the proposed it on their corporate Web sites, if any,
rule change. 18 15 U.S.C. 78s(b)(3)(A). in interactive data format using
19 17 CFR 240.19b–4(f)(2).
17 15 U.S.C. 78f(b)(8). 20 15 U.S.C. 78s(b)(2)(B). 21 17 CFR 200.30–3(a)(12).

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Document Created: 2018-02-02 12:38:00
Document Modified: 2018-02-02 12:38:00
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		81 FR 4350