82 FR 14552 - 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 82, Issue 53 (March 21, 2017)

Page Range		14552-14555
FR Document		2017-05501

Federal Register, Volume 82 Issue 53 (Tuesday, March 21, 2017)

[Federal Register Volume 82, Number 53 (Tuesday, March 21, 2017)]
[Notices]
[Pages 14552-14555]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-05501]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80252; File No. SR-NYSEArca-2017-26]

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

March 15, 2017.
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 March 10, 2017, 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 Substance
of the Proposed Rule Change

The Exchange proposes to amend the NYSE Arca Options Fee Schedule
(``Fee Schedule''). The proposed rule change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
The purpose of this filing is to amend the Fee Schedule.
Specifically, the Exchange proposes to modify the criteria for
achieving various credits, including by broadening qualifying order
flow and trading activity, to make the credits more achievable to a
variety of market participants.
Currently, the Exchange provides a number of incentives for OTP
Holders and OTP Firms (collectively, ``OTPs'') designed to encourage
OTPs to direct additional order flow to the Exchange to achieve more
favorable pricing and higher credits. Among these incentives are
enhanced posted liquidity credits based on achieving certain
percentages of NYSE Arca Equity daily activity, also known as ``cross-
asset pricing.'' In addition, certain of the qualifications for
achieving these incentives are more tailored to specific activity
(i.e., posting in Penny Pilot issues only, or cross-asset pricing based
only on levels of Retail Orders on the NYSE Arca Equity Market). In an
effort to increase the opportunities for OTP Holders to achieve the
incentives offered, the Exchange proposes a number of modifications as
set forth below.
First, the Exchange proposes to modify the alternative
qualification to Tier 7 of the Customer and Professional Customer
Monthly Posting Credit Tiers and Qualifications for Executions in Penny
Pilot Issues (``Tier 7''). Currently, OTPs are eligible to achieve a
per contract credit of $0.50 associated with Tier 7 provided the OTP
has (i) at least 1.00% of Total Industry Customer equity and ETF option
average daily volume (``TCADV'') from Customer and Professional
Customer Posted Orders in all Issues; or (ii) at least 0.80% of TCADV
from Customer and Professional Customer Posted Orders in all Issues

[[Page 14553]]

Plus executed ADV of Retail Orders of 0.10% ADV of U.S. Equity Market
Share Posted and Executed on NYSE Arca Equity Market. The latter
criteria is the cross-asset pricing portion, which the Exchange
proposes to modify by eliminating the restriction that executed ADV be
Retail Orders such that all Posted Orders executed on the NYSE Arca
Equity Market would be included. To account for this expansion, the
Exchange also proposes to raise the qualification level to ADV of at
least 0.30% ADV of U.S. Equity Market Share.\4\ The per contract credit
associated with Tier 7 remains unchanged.
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\4\ See proposed Fee Schedule, Customer and Professional
Customer Posting Credit Tiers In Penny Pilot Issues, Tier 7.
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Second, the Exchange proposes to revise one of the alternative
additional credits available under the Customer and Professional
Customer Incentive Program. Currently, an OTP that has at least 1.00%
of TCADV from Customer and Professional Customer posted orders in both
Penny and non-Penny Pilot issues (the ``threshold qualification''), of
which at least 0.25% of TCADV is from Customer and Professional
Customer posted orders in non-Penny Pilot issues (the ``non-Penny
qualification''), will receive an additional $0.05 posting credit on
Customer and Professional Customer volume. The Exchange proposes to
make the incentive more achievable by lowering the threshold
qualification to at least 0.80% of TCADV, and likewise reducing the
non-Penny qualification to at least 0.20% of TCADV. To account for the
reduced thresholds, the Exchange proposes to reduce the additional per
contract credit from $0.05 to $0.03.
Third, the Exchange proposes to revise Tier C and to add new Tier D
to the Customer and Professional Customer Posting Credit Tiers in non-
Penny Pilot Issues. Currently, to achieve the per contract credit that
is available under Tier C, an OTP must have at least 1.50% of TCADV
from Customer and Professional Customer Posted Orders in all Issues
(the ``Tier C threshold qualification''), of which at least 0.30% of
TCADV is from Customer and Professional Customer Posted Orders in non-
Penny Pilot Issues (the ``non-Penny threshold qualification''). The
Exchange proposes to reduce the qualifications for this Tier such that
the Tier C threshold qualification would be at least 0.80% of TCADV,
and the non-Penny threshold qualification would be reduced to at least
0.10% of TCADV. The Exchange also proposes to increase the credit
available under Tier C from $0.90 to $0.95, applicable per contract on
Customer and Professional Customer Posted Orders in non-Penny Pilot
issues. The Exchange also proposes to add an additional tier, Tier D.
As proposed, to achieve proposed Tier D, OTPs must have at least 0.80%
of TCADV from Customer and Professional Customer Posted Orders in all
issues, with an executed ADV of at least 0.30% of U.S. Equity Market
Share Posted and Executed on NYSE Arca Equity Market.\5\ OTPs that
qualify for proposed Tier D would be eligible for a credit of $1.02,
applicable per contract on Customer and Professional Posted Orders in
non-Penny Pilot issues.
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\5\ Endnote 8 to the Fee Schedule sets forth additional detail
regarding meeting the volume requirements of proposed Tier D. See
Fee Schedule, Endnote 8 (``The calculations for qualifications for
monthly posting credits only include electronic executions,
excluding Mini options contracts. Customer equity and ETF option ADV
does not include Electronic Complex Order Executions or Mini options
contracts executions. QCC orders are neither posted nor taken; thus
QCC transactions are not included in the calculation of posted or
taken execution volumes. Orders routed to another market for
execution are not included in the calculation of taking volume.
Total Industry Customer equity and ETF option ADV includes OCC
calculated Customer volume of all types, including Complex Order
Transactions, QCC transactions, and mini options transactions, in
equity and ETF options. An affiliate of an OTP Holder or OTP Firm is
as defined in NYSE Arca Rule 1.1(a). For purposes of calculating the
executed Average Daily Volume (``ADV'') of Retail Orders of U.S.
Equity Market Share on the NYSE Arca Equity Market, a Retail Order
must qualify for the Retail Order Tier set forth in the Schedule of
Fees and Charges for NYSE Arca Equities, Inc.'').
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Fourth, the Exchange proposes to modify the Super Tier in the
Market Maker Monthly Posting Credit Tiers and Qualifications for
Execution in Penny Pilot Issues and SPY. Currently, to qualify for the
Super Tier, an OTP must have (i) at least 0.55% of TCADV from Market
Maker Posted Orders in All Issues, or (ii) at least 1.60% of TCADV from
all orders in Penny Pilot Issues, all account types, with at least
0.80% of TCADV from Posted Orders in Penny Pilot Issues (the
``alternate threshold''). The Exchange proposes to expand the
qualifying orders to be included in the alternate threshold to include
all issues --both Penny Pilot and non-Penny Pilot issues. The credits
associated with the Super Tier would remain unchanged. The Exchange
likewise proposes to modify the Market Maker Incentive for non-Penny
Pilot Issues, which mirrors the current qualifications for the Super
Tier, to likewise apply to posted orders in all issues.\6\
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\6\ The Exchange introduced the Market Maker Incentive for non-
Penny Pilot Issues in February 2017 ``based on the Super Tier
qualification levels.'' See Securities Exchange Act Release No.
80029 (February 13, 2017), 82 FR 11085, 11086 (February 17, 2017)
(SR-NYSEArca-2017-12). Thus, the Exchange believes it is appropriate
to modify this Incentive to remain consistent with the amended Super
Tier.
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Finally, the Exchange proposes to modify the Take Fee Discount for
Professional Customer, Market Maker, Firm, and Broker Dealer Liquidity
Removing Orders (the ``Take Fee Discount''). Currently, to qualify for
the Take Discount, an OTP must have (i) at least 1.00% of TCADV from
Customer and Professional Customer Posted Orders in all Issues; or (ii)
at least 2.00% of TCADV from Professional Customer, Market Maker, Firm,
and Broker Dealer Liquidity Removing Orders in all Issues. The Take Fee
Discount currently applies to both non-Penny and Penny Pilot Issues.
The Exchange proposes to eliminate the $0.05 per contract discount
applicable to non-Penny Pilot issues. The Exchange also proposes to add
a new Take Fee Discount, applicable to Penny Pilot Issues, which is
available to OTPs that have at least 0.80% of TCADV from Customer and
Professional Customer Posted Orders in all issues, with an executed ADV
of at least 0.30% of U.S. Equity Market Share Posted and Executed on
NYSE Arca Equity Market.\7\ OTPs that qualify for this proposed Take
Fee Discount would receive a per contract discount of $0.04 on
Professional Customer, Market Maker, Firm, and Broker Dealer orders
that take liquidity. If an OTP is eligible for more than one discount,
the Exchange will apply the most favorable discount.
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\7\ Endnote 8 to the Fee Schedule sets forth additional detail
regarding meeting the volume requirements of the proposed Take Fee
Discount. See supra note 5.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\9\ 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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes the adjustments to qualifications for
enhanced posting liquidity credits, including expanding the qualifying
order flow and trading activity, are reasonable, equitable and not
unfairly discriminatory as they are designed to attract increased
Customer (and Professional Customer) business on the Exchange and are
achievable in various

[[Page 14554]]

ways. An increase in Customer (and Professional Customer) orders
executed on the Exchange benefits all participants by offering greater
price discovery, increased transparency, and an increased opportunity
to trade on the Exchange. The Exchange also believes that the proposed
credits are reasonable because they are within a range of similar
credits available on other option exchanges.\10\ Additionally,
attracting posted Customer and Professional Customer order flow is
desirable because it encourages liquidity to be present on the
Exchange. The proposed changes are also non-discriminatory because they
apply to all similarly-situated OTP Holders, and provide for various
incentives that are achievable through different means and different
sources of business.
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\10\ See e.g., NASDAQ Options Market--Fees and Rebates,
available here, http://www.nasdaqtrader.com/Micro.aspx?id=optionsPricing.
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Specifically, the proposed addition of Tier D and the new Take Fee
Discount are designed to incentivize market participants to increase
the orders sent directly to the Exchange and therefore provide
liquidity that supports the quality of price discovery and promotes
market transparency. The Exchange believes the proposed change is
equitable because it would be available to all similarly situated
market participants on an equal basis. Further, the Exchange believes
that the proposed Discount is reasonable, equitable, and not unfairly
discriminatory because the incentives would be available to all non-
Customers on an equal and non-discriminatory basis. The modified
incentives are also non-discriminatory because they allow qualification
through activity combined with activity of affiliates or Appointed OFP,
including activity on the NYSE Arca Equity Market. The Exchange
believes the modifications are equitable and not unfairly
discriminatory because the changes encourage more participants to
qualify for the various incentives, including encouraging more
participants to have affiliated or appointed order flow directed to the
Exchange.
For these reasons, the Exchange believes that the proposal is
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

In accordance with Section 6(b)(8) of the Act,\11\ the Exchange
does not believe that the proposed rule change will impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of the Act. Instead, the Exchange believes that the
proposed changes would continue to encourage competition, including by
attracting additional liquidity to the Exchange, which would continue
to make the Exchange a more competitive venue for, among other things,
order execution and price discovery. The Exchange does not believe that
the proposed change will impair the ability of any market participants
or competing order execution venues to maintain their competitive
standing in the financial markets. Further, the incentive would be
available to all similarly situated participants, and, as such, the
proposed change would not impose a disparate burden on competition
either among or between classes of market participants and may, in
fact, encourage competition.
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\11\ 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) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4\13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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)\14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 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 rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2017-26 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-2017-26. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2017-26, and should
be submitted on or before April 11, 2017.
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\15\ 17 CFR 200.30-3(a)(12).

[[Page 14555]]

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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05501 Filed 3-20-17; 8:45 am]
BILLING CODE 8011-01-P

14552 Federal Register / Vol. 82, No. 53 / Tuesday, March 21, 2017 / Notices

• Send an email to rule- approving the proposed rule change, as II. Self-Regulatory Organization’s
comments@sec.gov. Please include File modified by Amendment No. 3, on an Statement of the Purpose of, and
Number SR–NYSEArca–2016–96 on the accelerated basis, pursuant to Section Statutory Basis for, the Proposed Rule
subject line. 19(b)(2) of the Act.37 Change
Paper Comments VI. Conclusion In its filing with the Commission, the
self-regulatory organization included
• Send paper comments in triplicate
It is therefore ordered, pursuant to statements concerning the purpose of,
to Secretary, Securities and Exchange
Section 19(b)(2) of the Act,38 that the and basis for, the proposed rule change
Commission, 100 F Street NE.,
proposed rule change (SR–NYSEArca– and discussed any comments it received
Washington, DC 20549–1090.
2016–96), as modified by Amendment on the proposed rule change. The text
All submissions should refer to File No. 3, be, and it hereby is, approved on of those statements may be examined at
Number SR–NYSEArca–2016–96. This an accelerated basis. the places specified in Item IV below.
file number should be included on the The Exchange has prepared summaries,
subject line if email is used. To help the For the Commission, by the Division of
set forth in sections A, B, and C below,
Commission process and review your Trading and Markets, pursuant to delegated
authority.39
of the most significant parts of such
comments more efficiently, please use statements.
only one method. The Commission will Eduardo A. Aleman,
post all comments on the Commission’s Assistant Secretary. A. Self-Regulatory Organization’s
Internet Web site (http://www.sec.gov/ [FR Doc. 2017–05503 Filed 3–20–17; 8:45 am]
Statement of the Purpose of, and the
rules/sro.shtml). Copies of the Statutory Basis for, the Proposed Rule
BILLING CODE 8011–01–P
submission, all subsequent Change
amendments, all written statements 1. Purpose
with respect to the proposed rule SECURITIES AND EXCHANGE
change that are filed with the The purpose of this filing is to amend
COMMISSION the Fee Schedule. Specifically, the
Commission, and all written
communications relating to the Exchange proposes to modify the
proposed rule change between the [Release No. 34–80252; File No. SR– criteria for achieving various credits,
Commission and any person, other than NYSEArca–2017–26] including by broadening qualifying
those that may be withheld from the order flow and trading activity, to make
Self-Regulatory Organizations; NYSE the credits more achievable to a variety
public in accordance with the
provisions of 5 U.S.C. 552, will be Arca, Inc.; Notice of Filing and of market participants.
available for Web site viewing and Immediate Effectiveness of Proposed Currently, the Exchange provides a
printing in the Commission’s Public Rule Change To Amend the NYSE Arca number of incentives for OTP Holders
Reference Room, 100 F Street NE., Options Fee Schedule and OTP Firms (collectively, ‘‘OTPs’’)
Washington, DC 20549, on official designed to encourage OTPs to direct
March 15, 2017. additional order flow to the Exchange to
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such Pursuant to Section 19(b)(1) 1 of the achieve more favorable pricing and
filing will also be available for Securities Exchange Act of 1934 (the higher credits. Among these incentives
inspection and copying at the principal ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 are enhanced posted liquidity credits
office of the Exchange. All comments notice is hereby given that, on March based on achieving certain percentages
received will be posted without change; 10, 2017, NYSE Arca, Inc. (the of NYSE Arca Equity daily activity, also
the Commission does not edit personal ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with known as ‘‘cross-asset pricing.’’ In
identifying information from the Securities and Exchange addition, certain of the qualifications for
submissions. You should submit only Commission (the ‘‘Commission’’) the achieving these incentives are more
information that you wish to make proposed rule change as described in tailored to specific activity (i.e., posting
available publicly. All submissions Items I, II, and III below, which Items in Penny Pilot issues only, or cross-asset
should refer to File Number SR– have been prepared by the self- pricing based only on levels of Retail
NYSEArca–2016–96 and should be regulatory organization. The Orders on the NYSE Arca Equity
submitted on or before April 11, 2017. Commission is publishing this notice to Market). In an effort to increase the
solicit comments on the proposed rule opportunities for OTP Holders to
V. Accelerated Approval of the change from interested persons. achieve the incentives offered, the
Proposed Rule Change, as Modified by Exchange proposes a number of
Amendment No. 3 I. Self-Regulatory Organization’s modifications as set forth below.
The Commission finds good cause to Statement of the Terms of Substance of First, the Exchange proposes to
approve the proposed rule change, as the Proposed Rule Change modify the alternative qualification to
modified by Amendment No. 3, prior to The Exchange proposes to amend the Tier 7 of the Customer and Professional
the thirtieth day after the date of NYSE Arca Options Fee Schedule (‘‘Fee Customer Monthly Posting Credit Tiers
publication of Amendment No. 3 in the Schedule’’). The proposed rule change and Qualifications for Executions in
Federal Register. The modifications and is available on the Exchange’s Web site Penny Pilot Issues (‘‘Tier 7’’). Currently,
additional information in Amendment at www.nyse.com, at the principal office OTPs are eligible to achieve a per
No. 3, such as clarifications regarding of the Exchange, and at the contract credit of $0.50 associated with
how the various limits on the Trust’s Tier 7 provided the OTP has (i) at least
mstockstill on DSK3G9T082PROD with NOTICES

Commission’s Public Reference Room.
permitted holdings would be calculated 1.00% of Total Industry Customer
and expansion of the information 37 15
equity and ETF option average daily
U.S.C. 78s(b)(2).
provided regarding the Trust’s Disclosed 38 15 U.S.C. 78s(b)(2).
volume (‘‘TCADV’’) from Customer and
Portfolio, assisted the Commission in 39 17 CFR 200.30–3(a)(12). Professional Customer Posted Orders in
finding that the proposal is consistent 1 15 U.S.C. 78s(b)(1). all Issues; or (ii) at least 0.80% of
with the Act. Accordingly, the 2 15 U.S.C. 78a. TCADV from Customer and Professional
Commission finds good cause for 3 17 CFR 240.19b–4. Customer Posted Orders in all Issues

VerDate Sep<11>2014 16:47 Mar 20, 2017 Jkt 241001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\21MRN1.SGM 21MRN1

14554 Federal Register / Vol. 82, No. 53 / Tuesday, March 21, 2017 / Notices

ways. An increase in Customer (and furtherance of the purposes of the Act. determine whether the proposed rule
Professional Customer) orders executed Instead, the Exchange believes that the change should be approved or
on the Exchange benefits all participants proposed changes would continue to disapproved.
by offering greater price discovery, encourage competition, including by
IV. Solicitation of Comments
increased transparency, and an attracting additional liquidity to the
increased opportunity to trade on the Exchange, which would continue to Interested persons are invited to
Exchange. The Exchange also believes make the Exchange a more competitive submit written data, views, and
that the proposed credits are reasonable venue for, among other things, order arguments concerning the foregoing,
because they are within a range of execution and price discovery. The including whether the proposed rule
similar credits available on other option Exchange does not believe that the change is consistent with the Act.
exchanges.10 Additionally, attracting proposed change will impair the ability Comments may be submitted by any of
posted Customer and Professional of any market participants or competing the following methods:
Customer order flow is desirable order execution venues to maintain
because it encourages liquidity to be their competitive standing in the Electronic Comments
present on the Exchange. The proposed financial markets. Further, the incentive • Use the Commission’s Internet
changes are also non-discriminatory would be available to all similarly comment form (http://www.sec.gov/
because they apply to all similarly- situated participants, and, as such, the rules/sro.shtml); or
situated OTP Holders, and provide for proposed change would not impose a
various incentives that are achievable • Send an email to rule-comments@
disparate burden on competition either
through different means and different sec.gov. Please include File Number SR–
among or between classes of market
sources of business. NYSEArca–2017–26 on the subject line.
participants and may, in fact, encourage
Specifically, the proposed addition of competition. Paper Comments
Tier D and the new Take Fee Discount The Exchange notes that it operates in
are designed to incentivize market a highly competitive market in which • Send paper comments in triplicate
participants to increase the orders sent market participants can readily favor to Secretary, Securities and Exchange
directly to the Exchange and therefore competing venues. In such an Commission, 100 F Street NE.,
provide liquidity that supports the environment, the Exchange must Washington, DC 20549–1090.
quality of price discovery and promotes continually review, and consider All submissions should refer to File
market transparency. The Exchange adjusting, its fees and credits to remain Number SR–NYSEArca–2017–26. This
believes the proposed change is competitive with other exchanges. For file number should be included on the
equitable because it would be available the reasons described above, the subject line if email is used. To help the
to all similarly situated market Exchange believes that the proposed Commission process and review your
participants on an equal basis. Further, rule change reflects this competitive comments more efficiently, please use
the Exchange believes that the proposed environment. only one method. The Commission will
Discount is reasonable, equitable, and
C. Self-Regulatory Organization’s post all comments on the Commission’s
not unfairly discriminatory because the
Statement on Comments on the Internet Web site (http://www.sec.gov/
incentives would be available to all non-
Proposed Rule Change Received From rules/sro.shtml). Copies of the
Customers on an equal and non-
Members, Participants, or Others submission, all subsequent
discriminatory basis. The modified
incentives are also non-discriminatory amendments, all written statements
No written comments were solicited with respect to the proposed rule
because they allow qualification or received with respect to the proposed
through activity combined with activity change that are filed with the
rule change. Commission, and all written
of affiliates or Appointed OFP,
including activity on the NYSE Arca III. Date of Effectiveness of the communications relating to the
Equity Market. The Exchange believes Proposed Rule Change and Timing for proposed rule change between the
the modifications are equitable and not Commission Action Commission and any person, other than
unfairly discriminatory because the The foregoing rule change is effective those that may be withheld from the
changes encourage more participants to upon filing pursuant to Section public in accordance with the
qualify for the various incentives, 19(b)(3)(A) 12 of the Act and provisions of 5 U.S.C. 552, will be
including encouraging more subparagraph (f)(2) of Rule 19b–413 available for Web site viewing and
participants to have affiliated or thereunder, because it establishes a due, printing in the Commission’s Public
appointed order flow directed to the fee, or other charge imposed by the Reference Room, 100 F Street NE.,
Exchange. Exchange. Washington, DC 20549, on official
For these reasons, the Exchange At any time within 60 days of the business days between the hours of
believes that the proposal is consistent filing of such proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the
with the Act. Commission summarily may filing also will be available for
temporarily suspend such rule change if inspection and copying at the principal
B. Self-Regulatory Organization’s office of the Exchange. All comments
Statement on Burden on Competition it appears to the Commission that such
action is necessary or appropriate in the received will be posted without change;
In accordance with Section 6(b)(8) of public interest, for the protection of the Commission does not edit personal
the Act,11 the Exchange does not believe investors, or otherwise in furtherance of identifying information from
that the proposed rule change will submissions. You should submit only
mstockstill on DSK3G9T082PROD with NOTICES

the purposes of the Act. If the
impose any burden on competition that Commission takes such action, the information that you wish to make
is not necessary or appropriate in Commission shall institute proceedings available publicly. All submissions
under Section 19(b)(2)(B)14 of the Act to should refer to File Number SR–
10 See e.g., NASDAQ Options Market—Fees and
NYSEArca–2017–26, and should be
Rebates, available here, http:// submitted on or before April 11, 2017.
12 15 U.S.C. 78s(b)(3)(A).
www.nasdaqtrader.com/
Micro.aspx?id=optionsPricing. 13 17 CFR 240.19b–4(f)(2).
11 15 U.S.C. 78f(b)(8). 14 15 U.S.C. 78s(b)(2)(B). 15 17 CFR 200.30–3(a)(12).

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Federal Register / Vol. 82, No. 53 / Tuesday, March 21, 2017 / Notices 14555

For the Commission, by the Division of II. Self-Regulatory Organization’s BVR
Trading and Markets, pursuant to delegated Statement of the Purpose of, and Next, the Exchange proposes to adjust
authority.15 Statutory Basis for, the Proposed Rule certain percentage thresholds within the
Eduardo A. Aleman, Change BVR. Under the BVR, the Exchange
Assistant Secretary. offers a tiered per contract rebate for all
In its filing with the Commission, the
[FR Doc. 2017–05501 Filed 3–20–17; 8:45 am]
Exchange included statements Public Customer PIP Orders and COPIP
BILLING CODE 8011–01–P Orders of 100 and under contracts that
concerning the purpose of and basis for
do not trade solely with their contra
the proposed rule change and discussed
order. Percentage thresholds are
any comments it received on the
SECURITIES AND EXCHANGE calculated on a monthly basis by
proposed rule change. The text of these totaling the Participant’s PIP and COPIP
COMMISSION
statements may be examined at the volume submitted to BOX, relative to
places specified in Item IV below. The the total national Customer volume in
[Release No. 34–80246; File No. SR–BOX– Exchange has prepared summaries, set
2017–09] multiply-listed options classes. The
forth in Sections A, B, and C below, of Exchange proposes to adjust the
Self-Regulatory Organizations; BOX the most significant aspects of such percentage thresholds in Tiers 3 and 4.
Options Exchange LLC; Notice of statements. Specifically, the Exchange proposes to
Filing and Immediate Effectiveness of A. Self-Regulatory Organization’s change Tier 3 from ‘‘0.340% to 0.799%’’
a Proposed Rule Change To Amend Statement of the Purpose of, and to ‘‘0.340% to 0.499%’’ and Tier 4 from
the Fee Schedule on the BOX Market Statutory Basis for, the Proposed Rule ‘‘0.800% and Above’’ to ‘‘0.500% and
LLC (‘‘BOX’’) Options Facility Change Above.’’ The Exchange notes that is it
not proposing any changes to the fees
March 15, 2017. 1. Purpose within the BVR. The quantity submitted
will continue to be calculated on a
Pursuant to Section 19(b)(1) of the The Exchange proposes to amend the monthly basis by totaling the
Securities Exchange Act of 1934 (the Fee Schedule for trading on BOX. Participant’s PIP and COPIP volume
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Specifically, the Exchange proposes to submitted to BOX, relative to the total
notice is hereby given that on March 7, revise certain qualification thresholds in national Customer volume in multiply-
2017, BOX Options Exchange LLC (the Sections I.B.1 of the BOX Fee Schedule, listed options classes.
‘‘Exchange’’) filed with the Securities Primary Improvement Order and I.B.2 of
and Exchange Commission the BOX Fee Schedule, the BOX Volume 2. Statutory Basis
(‘‘Commission’’) the proposed rule Rebate (‘‘BVR’’). The Exchange believes that the
change as described in Items I, II, and proposal is consistent with the
III below, which Items have been Primary Improvement Order requirements of Section 6(b) of the Act,
prepared by the Exchange. The Under the tiered fee schedule for in general, and Section 6(b)(4) and
Exchange filed the proposed rule change Primary Improvement Orders, the 6(b)(5)of the Act,5 in particular, in that
pursuant to Section 19(b)(3)(A)(ii) of the Exchange assesses a per contract it provides for the equitable allocation
Act,3 and Rule 19b–4(f)(2) thereunder,4 execution fee to all Primary of reasonable dues, fees, and other
which renders the proposal effective Improvement Order executions where charges among BOX Participants and
upon filing with the Commission. The the corresponding PIP or COPIP Order other persons using its facilities and
Commission is publishing this notice to is from the account of a Public does not unfairly discriminate between
solicit comments on the proposed rule Customer. Percentage thresholds are customers, issuers, brokers or dealers.
change from interested persons. calculated on a monthly basis by BOX believes it is reasonable,
totaling the Initiating Participant’s equitable and not unfairly
I. Self-Regulatory Organization’s discriminatory to adjust the monthly
Statement of the Terms of the Substance Primary Improvement Order volume
Percentage Thresholds of National
submitted to BOX, relative to the total
of the Proposed Rule Change Customer Volume in Multiply-Listed
national Customer volume in multiply-
Options Classes. The volume thresholds
The Exchange is filing with the listed options classes. The Exchange
with their tiered fees and rebates are
Securities and Exchange Commission proposes to delete current Tier 4 in its
meant to incentivize Participants to
(‘‘Commission’’) a proposed rule change entirety and renumber the tiers direct order flow to the Exchange to
to amend the Fee Schedule on the BOX accordingly. The Exchange also obtain the benefit of the lower fee or
Market LLC (‘‘BOX’’) options facility. proposes to adjust the percentage higher rebate, which in turn benefits all
While changes to the fee schedule threshold in proposed Tier 4. market participants by increasing
pursuant to this proposal will be Specifically, the Exchange proposes to liquidity on the Exchange.
effective upon filing, the changes will change proposed Tier 4 from ‘‘0.800% The Exchange believes the proposed
become operative on March 8, 2017. The and Above’’ to ‘‘0.500% and Above.’’ amendments to the Primary
text of the proposed rule change is The Exchange notes that it is not Improvement Order percentage
available from the principal office of the proposing any changes to the fees thresholds are reasonable, equitable and
Exchange, at the Commission’s Public within the Primary Improvement Order not unfairly discriminatory. The
fee structure and the quantity submitted
mstockstill on DSK3G9T082PROD with NOTICES

Reference Room and also on the proposed changes to the thresholds are
Exchange’s Internet Web site at http:// will continue to be calculated on a equitable and not unfairly
boxexchange.com. monthly basis by totaling the Initiating discriminatory as they are available to
Participant’s Primary Improvement all BOX Participants that initiate
1 15 U.S.C. 78s(b)(1).
Order volume submitted to BOX, Auction Transactions, and Participants
2 17 CFR 240.19b–4. relative to the total national Customer may choose whether or not to take
3 15 U.S.C. 78s(b)(3)(A)(ii). volume in multiply-listed options
4 17 CFR 240.19b–4(f)(2). classes. 5 15 U.S.C. 78f(b)(4) and (5).

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Document Created: 2017-03-21 01:09:57
Document Modified: 2017-03-21 01:09:57

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 14552