81 FR 53184 - 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 155 (August 11, 2016)

[Federal Register Volume 81, Number 155 (Thursday, August 11, 2016)]
[Notices]
[Pages 53184-53186]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-19055]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78485; File No. SR-NYSEArca-2016-115]


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

August 5, 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 August 1, 2016, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') 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 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,

[[Page 53185]]

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 effective 
August 1, 2016. Specifically, the Exchange proposes to modify the 
qualification for Tier C of Customer and Professional Customer Posting 
Credit Tiers in Non-Penny Pilot Issues (the ``Posting Credit Tiers''), 
as described below.
    The Customer Posting Credit Tiers consists of a Base Tier and Tiers 
A, B and C, which provide for specified credits if specified volume 
thresholds have been met.\3\ Currently, Tier C of the Posting Credit 
Tiers provides a $0.90 per contract credit to OTP Holders and OTP Firms 
(collectively, ``OTPs'') that meet or exceed a qualification basis of 
at least 1.50% of Total Industry Customer equity and ETF option ADV 
(``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.
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    \3\ 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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    The Exchange is proposing to modify the qualification for Tier C by 
maintaining the requirement of at least 1.50% of TCADV from Customer 
and Professional Customer Posted Orders in all Issues, but reducing the 
portion of TCADV from Customer and Professional Customer Posted Orders 
in non-Penny Pilot Issues from 0.40% to 0.30%. The Exchange believes 
that reducing the required portion of posted orders in non-Penny Pilot 
issues while maintaining the overall volume threshold to qualify for 
Tier C would make the Tier (and related credit) more achievable given 
that the vast majority of options issues traded on the Exchange are in 
Penny Pilot Issues. The Exchange believes that the modification to make 
Tier C more achievable would provide additional incentive to OTPs to 
direct Customer (and Professional Customer) order flow to the Exchange, 
which benefits all market participants through increased liquidity and 
enhanced price discovery.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\5\ in particular, 
because it provides for the equitable allocation of reasonable dues, 
fees, and other charges among its members, issuers and other persons 
using its facilities and does not unfairly discriminate between 
customers, issuers, brokers or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed modification to Tier C is 
reasonable, equitable, and not unfairly discriminatory because it 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. The Exchange believes that modifying Tier C to 
reduce the portion of posted orders in non-Penny Pilot issues required 
to qualify for the Tier is equitable and not unfairly discriminatory 
because the change would enable more OTPs to qualify for the credit, 
which in turn, could reduce OTPs overall transaction costs on the 
Exchange. Moreover, the Exchange believes the proposed modifications 
would provide additional incentives to OTPs 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,\6\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, the Exchange believes that the proposed 
change, which would make Tier C more achievable, 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. In addition, the proposed change to Tier C would be 
available to all similarly situated OTPs and should therefore encourage 
competition without undue burden.
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    \6\ 15 U.S.C. 78f(b)(8).
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues. In 
such an environment, the Exchange must continually review, and consider 
adjusting, its fees and credits to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed rule change reflects this competitive environment

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

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

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \9\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

[[Page 53186]]

     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2016-115 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2016-115. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal 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-2016-115, and 
should be submitted on or before September 1, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2016-19055 Filed 8-10-16; 8:45 am]
 BILLING CODE 8011-01-P