81_FR_81404 81 FR 81182 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule Effective November 3, 2016

81 FR 81182 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule Effective November 3, 2016

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 222 (November 17, 2016)

Page Range81182-81184
FR Document2016-27602

Federal Register, Volume 81 Issue 222 (Thursday, November 17, 2016)
[Federal Register Volume 81, Number 222 (Thursday, November 17, 2016)]
[Notices]
[Pages 81182-81184]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-27602]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79291; File No. SR-NYSEArca-2016-144]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Options Fee Schedule Effective November 3, 2016

November 10, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on November 3, 2016, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule 
(``Fee Schedule''). The Exchange proposes to implement the fee change 
effective November 3, 2016. 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 effective 
November 3, 2016. Specifically, the Exchange proposes to (i) modify the 
qualification for Tier 6 of Customer and Professional Customer Monthly 
Posting Credit Tiers and Qualifications in Penny Pilot Issues (the 
``Posting Tiers''); and (ii) modify one aspect of the Customer and 
Professional Customer Incentive Program.
    Currently, to qualify for Tier 6 of the Posting Tiers, OTP Holders 
and OTP Firms (``OTPs'') must execute at least 0.50% of Total Industry 
Customer equity and ETF option ADV (``TCADV'') from Customer and 
Professional Customer posted orders in all issues (``the options 
component''), plus executed ADV of 0.70% of U.S. equity market share 
posted and executed on NYSE Arca Equity Market (``the equity 
component''). OTPs that achieve Tier 6 are eligible to receive a $0.48 
credit applied to posted electronic Customer and Professional Customer 
executions in Penny Pilot Issues.
    In addition, the Customer and Professional Customer Incentive 
Program (``the Incentive Program''), which provides OTPs six 
alternatives to earn additional posting credits ranging from $0.01 to 
$0.05, currently affords OTPs the ability to earn an additional $0.03 
credit on Customer and Professional Customer Posting Credits by meeting 
the same 0.70% minimum qualification of the equity component as set 
forth in Tier 6.
    The Exchange is proposing to modify Tier 6 of the Posting Tiers by 
reducing the options component from 0.50% TCADV to 0.35% TCADV, while 
increasing the threshold of the equity component from 0.70% to 0.80% of 
U.S.

[[Page 81183]]

equity market share posted and executed on NYSE Arca Equity Market.
    In addition, to maintain parity with the Incentive Program that 
likewise offers a credit when an OTP meets the same 0.70% minimum 
qualification of the equity component as set forth in current Tier 6, 
the Exchange similarly proposes to increase this qualification basis. 
Specifically, the Exchange proposes to increase the equity threshold 
alternative from 0.70% to 0.80% of U.S. equity market share posted and 
executed on NYSE Arca Equity Market qualification in order for OTPs to 
qualify to earn an additional $0.03 credit.
    The Exchange believes that the proposal to modify Tier 6 of the 
Posting Tiers by reducing the option component, while increasing the 
equity component would encourage greater participation on both the 
options and equity exchanges. The Exchange likewise believes that the 
proposed change to the Incentive Program would operate to maintain 
parity with the similar, alternative incentives offered by the Exchange 
and would also encourage participation in the NYSE Arca Equity Market.
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 to modifications to the 
qualifications for Tier 6 of the Posting Tiers, and the similar 
adjustment to the Incentive Program, are reasonable, equitable, and not 
unfairly discriminatory because the changes are designed to attract 
additional Customer and Professional Customer electronic equity and ETF 
option volume to the Exchange, which would benefit all participants by 
offering greater price discovery, increased transparency, and an 
increased opportunity to trade on the Exchange. The Exchange believes 
that adjusting the methods for achieving the credits available on the 
Exchange (i.e., by reducing the qualification basis for the options 
component, while increasing the qualification basis for the equity 
component) is reasonable, equitable and not unfairly discriminatory 
because it would encourage more OTPs to direct both options and equity 
volume to the Exchange in an effort to qualify for the credits.
    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 
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 would impair the ability of any market participants 
or competing order execution venues to maintain their competitive 
standing in the financial markets.
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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. Because competitors are free to modify their own fees and 
credits in response, and because market participants may readily adjust 
their order routing practices, the degree to which fee changes in this 
market may impose any burden on competition is extremely limited. For 
the reasons described above, the Exchange believes that the proposed 
rule change reflects this competitive environment.

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

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

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

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

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2016-144 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-2016-144. 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

[[Page 81184]]

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-2016-144, and should be submitted on or before 
December 8, 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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Brent J. Fields,
Secretary.
[FR Doc. 2016-27602 Filed 11-16-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                    81182                     Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices

                                                    including whether an insulin pump is                    agency’s estimate of the burden of the                II. Self-Regulatory Organization’s
                                                    required, as well as the care and                       proposed collection of information,                   Statement of the Purpose of, and
                                                    maintenance of all required diabetes                    including the validity of the information             Statutory Basis for, the Proposed Rule
                                                    related monitors and equipment. This                    to be collected; and, ways to minimize                Change
                                                    form assists the Peace Corps in                         the burden of the collection of                         In its filing with the Commission, the
                                                    determining whether the Applicant will                  information on those who are to                       self-regulatory organization included
                                                    be in need of insulin storage while in                  respond, including through the use of                 statements concerning the purpose of,
                                                    service and, if so, will assist the Peace               automated collection techniques, when                 and basis for, the proposed rule change
                                                    Corps in determining an appropriate                     appropriate, and other forms of                       and discussed any comments it received
                                                    placement for the Applicant.                            information technology.                               on the proposed rule change. The text
                                                    • Prescription for Eyeglasses Form                        This notice is issued in Washington, DC,            of those statements may be examined at
                                                                                                            on November 8, 2016.                                  the places specified in Item IV below.
                                                      (a) Estimated number of Ap-     3,293/3,293.
                                                                                                            Monique Harris,                                       The Exchange has prepared summaries,
                                                         plicants/physicians.
                                                                                                                                                                  set forth in sections A, B, and C below,
                                                      (b) Frequency of response ...   one time.             FOIA/Privacy Act Specialist, Management.
                                                      (c) Estimated average bur-      60 minutes/15 min-                                                          of the most significant parts of such
                                                                                                            [FR Doc. 2016–27565 Filed 11–16–16; 8:45 am]
                                                         den per response.              utes.                                                                     statements.
                                                      (d) Estimated total reporting   3,293 hours/824       BILLING CODE 6051–01–P3
                                                         burden.                        hours.                                                                    A. Self-Regulatory Organization’s
                                                      (e) Estimated annual cost to    Indeterminate.                                                              Statement of the Purpose of, and
                                                         respondents.                                                                                             Statutory Basis for, the Proposed Rule
                                                                                                            SECURITIES AND EXCHANGE                               Change
                                                       General Description of Collection: The
                                                    Prescription for Eyeglasses is used with                COMMISSION                                            1. Purpose
                                                    Applicants who have reported on the                                                                              The purpose of this filing is to amend
                                                    Health History Form that they use                       [Release No. 34–79291; File No. SR–
                                                                                                                                                                  the Fee Schedule effective November 3,
                                                    corrective lenses or otherwise have                     NYSEArca–2016–144]
                                                                                                                                                                  2016. Specifically, the Exchange
                                                    uncorrected vision that is worse than                                                                         proposes to (i) modify the qualification
                                                    20/40. In these cases, Applicants are                   Self-Regulatory Organizations; NYSE
                                                                                                            Arca, Inc.; Notice of Filing and                      for Tier 6 of Customer and Professional
                                                    provided a Prescription for Eyeglasses                                                                        Customer Monthly Posting Credit Tiers
                                                    Form for their prescriber to indicate                   Immediate Effectiveness of Proposed
                                                                                                            Rule Change To Amend the NYSE Arca                    and Qualifications in Penny Pilot Issues
                                                    eyeglasses frame measurements, lens                                                                           (the ‘‘Posting Tiers’’); and (ii) modify
                                                    instructions, type of lens, gross vision                Options Fee Schedule Effective
                                                                                                            November 3, 2016                                      one aspect of the Customer and
                                                    and any special instructions. This form                                                                       Professional Customer Incentive
                                                    is used in order to enable the Peace                                                                          Program.
                                                                                                            November 10, 2016.
                                                    Corps to obtain replacement eyeglasses
                                                                                                                                                                     Currently, to qualify for Tier 6 of the
                                                    for a Volunteer during service.                            Pursuant to Section 19(b)(1) 1 of the
                                                                                                                                                                  Posting Tiers, OTP Holders and OTP
                                                                                                            Securities Exchange Act of 1934 (the
                                                    • Required Peace Corps Immunizations Form                                                                     Firms (‘‘OTPs’’) must execute at least
                                                                                                            ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                                                                                                                                                  0.50% of Total Industry Customer
                                                                                                            notice is hereby given that, on
                                                      (a) Estimated number of Ap-     5,600.                                                                      equity and ETF option ADV (‘‘TCADV’’)
                                                         plicants/physicians.                               November 3, 2016, NYSE Arca, Inc. (the
                                                                                                                                                                  from Customer and Professional
                                                      (b) Frequency of response ...   one time.             ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with             Customer posted orders in all issues
                                                      (c) Estimated average bur-      60 minutes.           the Securities and Exchange
                                                         den per response.                                                                                        (‘‘the options component’’), plus
                                                      (d) Estimated total reporting   5,600 hours.          Commission (the ‘‘Commission’’) the                   executed ADV of 0.70% of U.S. equity
                                                         burden.                                            proposed rule change as described in                  market share posted and executed on
                                                      (e) Estimated annual cost to    Indeterminate.        Items I, II, and III below, which Items
                                                         respondents.                                                                                             NYSE Arca Equity Market (‘‘the equity
                                                                                                            have been prepared by the self-                       component’’). OTPs that achieve Tier 6
                                                      General Description of Collection: The                regulatory organization. The                          are eligible to receive a $0.48 credit
                                                    Required Peace Corps Immunizations                      Commission is publishing this notice to               applied to posted electronic Customer
                                                    Form is used to informed Applicants of                  solicit comments on the proposed rule                 and Professional Customer executions
                                                    the specific vaccines and/or                            change from interested persons.                       in Penny Pilot Issues.
                                                    documented proof of immunity required                   I. Self-Regulatory Organization’s                        In addition, the Customer and
                                                    for medical clearance for the specific                  Statement of the Terms of the Substance               Professional Customer Incentive
                                                    country of service. The form advises the                of the Proposed Rule Change                           Program (‘‘the Incentive Program’’),
                                                    Applicant that all other Center for                                                                           which provides OTPs six alternatives to
                                                    Disease Control (CDC) recommended                         The Exchange proposes to amend the                  earn additional posting credits ranging
                                                    vaccinations will be administered after                 NYSE Arca Options Fee Schedule (‘‘Fee                 from $0.01 to $0.05, currently affords
                                                    arrival in-country. This form assists the               Schedule’’). The Exchange proposes to                 OTPs the ability to earn an additional
                                                    Peace Corps with establishing a baseline                implement the fee change effective                    $0.03 credit on Customer and
                                                    of the Applicants immunization history                  November 3, 2016. The proposed rule                   Professional Customer Posting Credits
                                                    and prepare for any additional vaccines                 change is available on the Exchange’s                 by meeting the same 0.70% minimum
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    recommended for country of service.                     Web site at www.nyse.com, at the                      qualification of the equity component as
                                                      Request for Comment: Peace Corps                      principal office of the Exchange, and at              set forth in Tier 6.
                                                    invites comments on whether the                         the Commission’s Public Reference                        The Exchange is proposing to modify
                                                    proposed collections of information are                 Room.                                                 Tier 6 of the Posting Tiers by reducing
                                                    necessary for proper performance of the                                                                       the options component from 0.50%
                                                    functions of the Peace Corps, including                   1 15 U.S.C. 78s(b)(1).                              TCADV to 0.35% TCADV, while
                                                    whether the information will have                         2 15 U.S.C. 78a.                                    increasing the threshold of the equity
                                                    practical use; the accuracy of the                        3 17 CFR 240.19b–4.                                 component from 0.70% to 0.80% of U.S.


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                                                                                 Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices                                              81183

                                                    equity market share posted and                             equitable and not unfairly                               subparagraph (f)(2) of Rule 19b–4 8
                                                    executed on NYSE Arca Equity Market.                       discriminatory because it would                          thereunder, because it establishes a due,
                                                       In addition, to maintain parity with                    encourage more OTPs to direct both                       fee, or other charge imposed by the
                                                    the Incentive Program that likewise                        options and equity volume to the                         Exchange.
                                                    offers a credit when an OTP meets the                      Exchange in an effort to qualify for the                    At any time within 60 days of the
                                                    same 0.70% minimum qualification of                        credits.                                                 filing of such proposed rule change, the
                                                    the equity component as set forth in                         For these reasons, the Exchange                        Commission summarily may
                                                    current Tier 6, the Exchange similarly                     believes that the proposal is consistent                 temporarily suspend such rule change if
                                                    proposes to increase this qualification                    with the Act.                                            it appears to the Commission that such
                                                    basis. Specifically, the Exchange                                                                                   action is necessary or appropriate in the
                                                    proposes to increase the equity                            B. Self-Regulatory Organization’s
                                                                                                                                                                        public interest, for the protection of
                                                    threshold alternative from 0.70% to                        Statement on Burden on Competition
                                                                                                                                                                        investors, or otherwise in furtherance of
                                                    0.80% of U.S. equity market share                             In accordance with Section 6(b)(8) of                 the purposes of the Act. If the
                                                    posted and executed on NYSE Arca                           the Act,6 the Exchange does not believe                  Commission takes such action, the
                                                    Equity Market qualification in order for                   that the proposed rule change will                       Commission shall institute proceedings
                                                    OTPs to qualify to earn an additional                      impose any burden on competition that                    under Section 19(b)(2)(B) 9 of the Act to
                                                    $0.03 credit.                                              is not necessary or appropriate in                       determine whether the proposed rule
                                                       The Exchange believes that the                          furtherance of the purposes of the Act.                  change should be approved or
                                                    proposal to modify Tier 6 of the Posting                   Instead, the Exchange believes that the                  disapproved.
                                                    Tiers by reducing the option                               proposed changes would continue to
                                                    component, while increasing the equity                     encourage competition, including by                      IV. Solicitation of Comments
                                                    component would encourage greater                          attracting additional liquidity to the                     Interested persons are invited to
                                                    participation on both the options and                      Exchange, which would continue to                        submit written data, views, and
                                                    equity exchanges. The Exchange                             make the Exchange a more competitive                     arguments concerning the foregoing,
                                                    likewise believes that the proposed                        venue for, among other things, order                     including whether the proposed rule
                                                    change to the Incentive Program would                      execution and price discovery. The                       change is consistent with the Act.
                                                    operate to maintain parity with the                        Exchange does not believe that the                       Comments may be submitted by any of
                                                    similar, alternative incentives offered by                 proposed change would impair the                         the following methods:
                                                    the Exchange and would also encourage                      ability of any market participants or
                                                    participation in the NYSE Arca Equity                                                                               Electronic Comments
                                                                                                               competing order execution venues to
                                                    Market.                                                    maintain their competitive standing in                      • Use the Commission’s Internet
                                                                                                               the financial markets.                                   comment form (http://www.sec.gov/
                                                    2. Statutory Basis                                                                                                  rules/sro.shtml); or
                                                                                                                  The Exchange notes that it operates in
                                                       The Exchange believes that the                          a highly competitive market in which                        • Send an email to rule-comments@
                                                    proposed rule change is consistent with                    market participants can readily favor                    sec.gov. Please include File Number SR–
                                                    Section 6(b) of the Act,4 in general, and                  competing venues. In such an                             NYSEArca–2016–144 on the subject
                                                    furthers the objectives of Sections                        environment, the Exchange must                           line.
                                                    6(b)(4) and (5) of the Act,5 in particular,                continually review, and consider                         Paper Comments
                                                    because it provides for the equitable                      adjusting, its fees and credits to remain
                                                    allocation of reasonable dues, fees, and                                                                               • Send paper comments in triplicate
                                                                                                               competitive with other exchanges.
                                                    other charges among its members,                                                                                    to Secretary, Securities and Exchange
                                                                                                               Because competitors are free to modify
                                                    issuers and other persons using its                                                                                 Commission, 100 F Street NE.,
                                                                                                               their own fees and credits in response,
                                                    facilities and does not unfairly                                                                                    Washington, DC 20549–1090.
                                                                                                               and because market participants may
                                                    discriminate between customers,                            readily adjust their order routing                       All submissions should refer to File
                                                    issuers, brokers or dealers.                               practices, the degree to which fee                       Number SR–NYSEArca–2016–144. This
                                                       The Exchange believes that the                          changes in this market may impose any                    file number should be included on the
                                                    proposed to modifications to the                           burden on competition is extremely                       subject line if email is used. To help the
                                                    qualifications for Tier 6 of the Posting                   limited. For the reasons described                       Commission process and review your
                                                    Tiers, and the similar adjustment to the                   above, the Exchange believes that the                    comments more efficiently, please use
                                                    Incentive Program, are reasonable,                         proposed rule change reflects this                       only one method. The Commission will
                                                    equitable, and not unfairly                                competitive environment.                                 post all comments on the Commission’s
                                                    discriminatory because the changes are                                                                              Internet Web site (http://www.sec.gov/
                                                    designed to attract additional Customer                    C. Self-Regulatory Organization’s                        rules/sro.shtml). Copies of the
                                                    and Professional Customer electronic                       Statement on Comments on the                             submission, all subsequent
                                                    equity and ETF option volume to the                        Proposed Rule Change Received From                       amendments, all written statements
                                                    Exchange, which would benefit all                          Members, Participants, or Others                         with respect to the proposed rule
                                                    participants by offering greater price                       No written comments were solicited                     change that are filed with the
                                                    discovery, increased transparency, and                     or received with respect to the proposed                 Commission, and all written
                                                    an increased opportunity to trade on the                   rule change.                                             communications relating to the
                                                    Exchange. The Exchange believes that                                                                                proposed rule change between the
                                                                                                               III. Date of Effectiveness of the
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    adjusting the methods for achieving the                                                                             Commission and any person, other than
                                                    credits available on the Exchange (i.e.,                   Proposed Rule Change and Timing for                      those that may be withheld from the
                                                    by reducing the qualification basis for                    Commission Action                                        public in accordance with the
                                                    the options component, while                                  The foregoing rule change is effective                provisions of 5 U.S.C. 552, will be
                                                    increasing the qualification basis for the                 upon filing pursuant to Section                          available for Web site viewing and
                                                    equity component) is reasonable,                           19(b)(3)(A) 7 of the Act and                             printing in the Commission’s Public
                                                      4 15   U.S.C. 78f(b).                                      6 15   U.S.C. 78f(b)(8).                                 8 17   CFR 240.19b–4(f)(2).
                                                      5 15   U.S.C. 78f(b)(4) and (5).                           7 15   U.S.C. 78s(b)(3)(A).                              9 15   U.S.C. 78s(b)(2)(B).



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                                                    81184                     Federal Register / Vol. 81, No. 222 / Thursday, November 17, 2016 / Notices

                                                    Reference Room, 100 F Street NE.,                       Amendment No. 1’’).4 The Commission                       Under the proposals,9 if the adjusted
                                                    Washington, DC 20549 on official                        received one comment letter on                            price of the Post-Only Order would lock
                                                    business days between the hours of                      Nasdaq’s proposed rule change 5 and a                     or cross a non-displayed price on the
                                                    10:00 a.m. and 3:00 p.m. Copies of such                 response letter from Nasdaq.6 The                         respective Exchange’s Book, the Post-
                                                    filing also will be available for                       Commission is approving the                               Only order would be posted in the same
                                                    inspection and copying at the principal                 Exchanges’ proposals, as modified by                      manner as a Price to Comply Order.10
                                                    office of the Exchange. All comments                    their corresponding Amendment No. 1.                      However, the Post Only Order would
                                                    received will be posted without change;                                                                           execute:
                                                    the Commission does not edit personal                   II. Description of the Proposed Rule                        • On Nasdaq if (i) it is priced below
                                                    identifying information from                            Changes                                                   $1.00 and the value of price
                                                    submissions. You should submit only                       The Exchanges are proposing to                          improvement associated with executing
                                                    information that you wish to make                       amend the behavior of Post-Only Orders                    against an Order on the Nasdaq Book (as
                                                    available publicly. All submissions                     when they interact with resting Non-                      measured against the original limit price
                                                    should refer to File Number SR–                         Displayed Orders, and the behavior of                     of the Order) equals or exceeds the sum
                                                    NYSEArca–2016–144, and should be                        Orders with Midpoint Pegging in a                         of fees changed for such execution and
                                                    submitted on or before December 8,                      crossed market. The Exchanges’                            the value of any rebate that would be
                                                    2016.                                                   proposals are substantively identical in                  provided if the Order posted to the
                                                      For the Commission, by the Division of                many respects. Therefore, the                             Nasdaq Book and subsequently
                                                    Trading and Markets, pursuant to delegated              description below describes the                           provided liquidity, or (ii) it is priced at
                                                    authority.10                                            proposals jointly but notes material                      $1.00 or more and the value of price
                                                    Brent J. Fields,                                        differences where applicable.7                            improvement associated with executing
                                                    Secretary.                                                Currently, BX and Nasdaq Rules                          against an Order on the Nasdaq Book (as
                                                    [FR Doc. 2016–27602 Filed 11–16–16; 8:45 am]            4702(b)(4)(A) provide that, if the                        measured against the original limit price
                                                    BILLING CODE 8011–01–P
                                                                                                            adjusted price 8 of a Post-Only Order                     of the Order) equals or exceeds $0.01
                                                                                                            would lock or cross an Order on the                       per share; 11 and
                                                                                                            respective Exchange’s Book, the Post-                       • on BX, if (i) it is priced at $1.00 or
                                                    SECURITIES AND EXCHANGE                                 Only Order would be repriced, ranked,                     more,12 or (ii) it is priced below $1.00
                                                    COMMISSION                                              and displayed at one minimum price                        and the value of price improvement
                                                                                                            increment below the current best-priced                   associated with executing against an
                                                    [Release No. 34–79290; File Nos. SR–BX–                                                                           Order on the Exchange Book (as
                                                    2016–046; SR–NASDAQ–2016–111]
                                                                                                            Order to sell on the respective
                                                                                                            Exchange’s Book (for bids) or above the                   measured against the original limit price
                                                    Self-Regulatory Organizations;                          current best-priced Order to buy on the                   of the Order) equals or exceeds the sum
                                                    NASDAQ BX, Inc.; The Nasdaq Stock                       respective Exchange’s Book (for offers).                  of fees charged for such execution and
                                                    Market LLC; Order Approving                                                                                       the value of any rebate that would be
                                                    Proposed Rule Changes, as Modified                         4 In their respective Amendment No. 1, BX and          provided if the Order posted to the
                                                    by Amendments No. 1, Relating to                        Nasdaq modified the discussion of their respective        Exchange Book and subsequently
                                                    Post-Only Orders and Orders With
                                                                                                            proposal to reflect that, pursuant to proposed BX         provided liquidity.13
                                                                                                            and Nasdaq Rules 4702(b)(4)(A), if the adjusted             Currently, BX and Nasdaq Rules
                                                    Midpoint Pegging                                        price of a Post-Only Order would lock or cross a
                                                                                                            non-displayed price on the respective Exchange’s          4702(b)(4)(A) also provide that, if the
                                                    November 10, 2016.                                      Book, the Post-Only Order would be posted in the          Post-Only Order would not lock or cross
                                                                                                            same manner as a Price to Comply Order. BX                a Protected Quotation but would lock or
                                                    I. Introduction                                         Amendment No. 1 is available at: https://                 cross an Order on the respective
                                                       On September 13, 2016, NASDAQ BX,                    www.sec.gov/comments/sr-bx-2016-046/bx2016046-
                                                                                                            1.pdf and Nasdaq Amendment No. 1 is available at:         Exchange’s Book, the Post Only Order
                                                    Inc. (‘‘BX’’) and The Nasdaq Stock                      https://www.sec.gov/comments/sr-nasdaq-2016-
                                                    Market LLC (‘‘Nasdaq’’) (individually,                  111/nasdaq2016111-1.pdf. Because these                      9 The Exchanges are also proposing conforming

                                                    an ‘‘Exchange,’’ and together, the                      amendments are technical in nature and do not             changes throughout BX and Nasdaq Rules
                                                    ‘‘Exchanges’’) filed with the Securities                materially alter the substance of the proposed rule       4702(b)(4)(A) to reflect this change.
                                                                                                            changes, they are not subject to notice and                 10 According to BX and Nasdaq Rules
                                                    and Exchange Commission                                 comment.                                                  4702(b)(1)(A), if the entered limit price of a Price
                                                    (‘‘Commission’’), pursuant to Section                      5 See Letter from Joseph Saluzzi and Sal Arnuk,        to Comply Order would lock or cross a Protected
                                                    19(b)(1) of the Securities Exchange Act                 Partners, Themis Trading LLC, to Brent J. Fields,         Quotation and the Price to Comply Order could not
                                                    of 1934 (‘‘Act’’) 1 and Rule 19b–4                      Secretary, Commission, dated October 10, 2016             execute against an Order on the respective
                                                    thereunder,2 proposed rule changes                      (‘‘Themis Letter’’).                                      Exchange’s Book at a price equal to or better than
                                                                                                               6 See Letter from Jeffrey S. Davis, Vice President     the price of the Protected Quotation, the Price to
                                                    relating to Post-Only Orders and Orders                                                                           Comply Order will be displayed on the respective
                                                                                                            and Deputy General Counsel, The NASDAQ Stock
                                                    with Midpoint Pegging. The proposed                     Market LLC, to Brent J. Fields, Secretary,                Exchange’s Book at a price one minimum price
                                                    rule changes were published for                         Commission, dated November 8, 2016 (‘‘Response            increment lower than the current Best Offer (for a
                                                    comment in the Federal Register on                      Letter’’).                                                Price to Comply Order to buy) or higher than the
                                                                                                               7 For more details regarding the Exchanges’            current Best Bid (for a Price to Comply Order to
                                                    September 28, 2016.3 On October 5,                                                                                sell), but will also be ranked on the respective
                                                                                                            proposals, see Nasdaq Notice and BX Notice, supra
                                                    2016, Nasdaq filed Amendment No. 1 to                   note 3.                                                   Exchange’s Book with a non-displayed price equal
                                                    its proposed rule change (‘‘Nasdaq                         8 According to BX and Nasdaq Rules                     to the current Best Offer (for a Price to Comply
                                                    Amendment No. 1’’) and on November                      4702(b)(4)(A), if a Post-Only Order would lock or         Order to buy) or the current Best Bid (for a Price
                                                                                                                                                                      to Comply Order to sell).
                                                    3, 2016, BX filed Amendment No. 1 to
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                            cross a Protected Quotation, the price of the Order
                                                                                                                                                                        11 This behavior related to the execution of the
                                                    its proposed rule change (‘‘BX                          would first be adjusted. If the Order is Attributable,
                                                                                                            its adjusted price would be one minimum price             Post-Only Order is not changed by Nasdaq’s
                                                                                                            increment lower than the current Best Offer (for          proposal.
                                                      10 17  CFR 200.30–3(a)(12).                                                                                       12 On BX, unlike on Nasdaq, executions in
                                                                                                            bids) or higher than the current Best Bid (for offers).
                                                      1 15  U.S.C. 78s(b)(1).                                                                                         securities priced at or above $1 result in rebates for
                                                                                                            If the Order is not Attributable, its adjusted price
                                                       2 17 CFR 240.19b–4.                                  would be equal to the current Best Offer (for bids)       the accessor of liquidity and as such it is always
                                                       3 See Securities Exchange Act Release Nos. 78909     or the current Best Bid (for offers). However, the        in the best interest of the incoming Post-Only Order
                                                    (September 22, 2016), 81 FR 66708 (‘‘BX Notice’’)       Order would not post or execute until the Order,          to execute in securities at or above $1.
                                                    and 78908 (September 22, 2016), 81 FR 66702             as adjusted, is evaluated with respect to Orders on         13 This behavior related to the execution of the

                                                    (‘‘Nasdaq Notice’’).                                    the respective Exchange’s Book.                           Post-Only Order is not changed by BX’s proposal.



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Document Created: 2016-11-17 03:00:35
Document Modified: 2016-11-17 03:00:35
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 81182 

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