82 FR 14779 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE Amex Options Fee Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 54 (March 22, 2017)

Page Range		14779-14781
FR Document		2017-05607
Federal Register, Volume 82 Issue 54 (Wednesday, March 22, 2017)
[Federal Register Volume 82, Number 54 (Wednesday, March 22, 2017)]
[Notices]
[Pages 14779-14781]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-05607]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80262; File No. SR-NYSEMKT-2017-15]


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

March 16, 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 9, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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 modify the NYSE Amex Options Fee Schedule 
(``Fee Schedule''). The Exchange proposes to implement the fee change 
effective March 9, 2017. The proposed change is available on the 
Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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 modify the Fee Schedule to:
    (i) Provide Order Flow Providers (each an ``OFP'') that achieve 
certain tiers of the Amex Customer Enhancement (``ACE'') Program the 
opportunity to receive an additional credit for Customer Complex 
Orders; and
    (ii) establish a surcharge on any Electronic non-Customer Complex 
Order that executes against a Customer Complex Order.
    The ACE Program features five tiers, expressed as a percentage of 
total industry Customer equity and Exchange Traded Fund option average 
daily volume (``TCADV'') \4\ and provides two alternative methods for 
OFPs to receive per contract credits for Electronic Customer volume 
that the OFP, as agent, submits to the Exchange.\5\ Currently, the 
Exchange incents OFPs to achieve Tier 2 of the ACE Program by offering 
an $0.18 per contract credit on Electronic Customer volume or a 
slightly higher credit of $0.19 per contract on Customer Complex 
Orders.\6\
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    \4\ The volume thresholds are based on an OFP's Customer volume 
transacted Electronically as a percentage of total industry TCADV as 
reported by the Options Clearing Corporation (the ``OCC''). See OCC 
Monthly Statistics Reports, available here, http://www.theocc.com/webapps/monthly-volume-reports.
    \5\ See Fee Schedule, Section I. E. (Amex Customer Engagement 
(``ACE'') Program--Standard Options), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \6\ See id. at n.1. The Exchange proposes to correct a 
typographical error by capitalizing the defined term Electronic as 
it is used in note 1 to Section I.E. See proposed Fee Schedule, 
Section I. E., n. 1.
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    The Exchange proposes to offer OFPs that achieve Tier 4 or 5 of the 
ACE Program a credit of $0.25 per contract, per leg for Electronic 
executions of

[[Page 14780]]

Customer Complex Orders, provided the OFP executes more than 0.50% of 
TCADV in initiating CUBE Orders in a calendar month (the ``Credit''). 
The Credit would be paid regardless of whether the Complex Order trades 
against interest in the Complex Order Book or ``legs out'' and trades 
with individual orders and quotes in the Consolidated Book. An OFP that 
achieves Tier 4 or 5 would remain eligible to receive the applicable 
per contract credit on Electronic Customer volume, which range from 
$0.20-$0.24, but would be eligible to receive the slightly higher per 
contract credit of $0.25 for its Complex Customer volume provided the 
OFP meets the criteria for the Credit. For example, an OFP that 
achieved Tier 4 and also met the criteria for the Credit would receive 
at least $0.20 per contract for non-Complex Electronic Customer volume 
and $0.25 per contract for Electronic Complex Customer volume.
    The Exchange also proposes to establish a $0.05 surcharge on any 
Electronic Non-Customer Complex Order that executes against a Customer 
Complex Order (the ``Surcharge).\7\ The Surcharge would apply to all 
such Complex executions, including Complex Orders executed in the 
Exchange's single-sided Complex Order Auction (``COA''). The CUBE 
Auction is not available for Complex Orders and therefore the proposed 
Surcharge would not apply to executions in a CUBE Auction.\8\ The 
Exchange notes that the proposed Surcharge is consistent with charges 
imposed by other options exchanges.\9\
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    \7\ See proposed Fee Schedule, at Section I. A., n.6. Per the 
Fee Schedule, a ``Customer'' is an individual or organization that 
is not a Broker-Dealer, per Rule 900.2NY(18); and is not a 
Professional Customer; and a ``Non-Customer'' is anyone who is not a 
Customer. See Fee Schedule, ``Key Terms and Definitions,'' supra 
note 5. Thus, Non-Customer includes Specialists, e-Specialists, 
Directed Order Market Makers, Firms, Broker Dealers, and 
Professional Customers. The Exchange notes that Firm Facilitation 
trades are not electronic and are therefore not subject to the 
proposed surcharge.
    \8\ See Rule 971.1NY (Electronic Cross Transactions) for a 
description of the CUBE Auction, which is an electronic crossing 
mechanism for single-leg orders with a price improvement auction.
    \9\ See Miami Securities International Exchange, LLC (``MIAX'') 
fee schedule, available here, https://www.miaxoptions.com/sites/default/files/page-files/MIAX_Options_Fee_Schedule_03012017B.pdf 
(imposing a $0.10 on certain complex orders). See also The Chicago 
Board Options Exchange, Inc. (``CBOE'') fee schedule, available 
here, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf, 
at n. 35 (same).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\11\ 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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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed Credit on Complex Orders is 
reasonable, equitable, and not unfairly discriminatory, as it provides 
OFPs with an additional incentive to achieve the highest two tiers of 
the ACE Program--Tier 4 or 5. The Exchange believes that incentivizing 
OFPs to route orders to the Exchange would attract more volume and 
liquidity to the Exchange, which benefits all market participants by 
providing more trading opportunities and tighter spreads, even to those 
market participants that do not participate in the ACE Program.
    The Exchange believes that the proposed Surcharge is reasonable, 
equitable, and not unfairly discriminatory, as it applies to all Non-
Customer orders. Applying the Surcharge to all market participant 
orders except Customer orders is equitable and not unfairly 
discriminatory because Customer order flow enhances liquidity on the 
Exchange for the benefit of all market participants. Specifically, 
Customer liquidity benefits all market participants by providing more 
trading opportunities, which attracts Market Makers. An increase in the 
activity of Specialists and Market Makers in turn facilitates tighter 
spreads, which may cause an additional corresponding increase in order 
flow from other market participants.
    In addition, the proposed surcharge is reasonable, equitable, and 
not unfairly discriminatory as it is consistent with fees charged by 
other options exchanges.\12\
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    \12\ See supra note 9.
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    Specifically, MIAX imposes a $0.10 ``Per Contract Surcharge for 
Removing Liquidity Against A Resting Priority Customer Complex Order on 
the Strategy Book'' for all option classes), which may result in an 
overall per contract fee of $0.60.\13\ Similarly, CBOE imposes a $0.10 
``Complex Surcharge'' on certain ``noncustomer complex order executions 
that remove liquidity,'' but caps at $0.50 per contract ``auction 
responses in COA.'' \14\ The Exchange notes that the proposed Surcharge 
of $0.05 per contract is $0.05 less than--or half the amount of--the 
surcharges imposed on both MIAX and CBOE, and is therefore competitive. 
In addition, the Exchange believes that the proposed surcharge is not 
new or novel as it incorporates aspects of the (higher) surcharges that 
are already imposed on MIAX and CBOE.
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    \13\ See MIAX fee schedule, supra note 9 (providing for a 
potential total per contract fee of $0.60 for Market Makers, which 
includes a ``Complex Per Contract Fee for Penny Classes,'' a per 
contract ``Marketing Fee,'' and a $0.10 ``Per Contract Surcharge for 
Removing Liquidity Against a Resting Priority Customer Complex Order 
on the Strategy Book for Penny and Non-Penny Classes''). The 
Exchange believes that MIAX does not subject transactions in COA to 
any fee cap.
    \14\ See CBOE fee schedule, supra note 8 (regarding the Complex 
Surcharge, providing that ``[a]uction responses in COA and AIM for 
noncustomer complex orders in Penny classes will be subject to a cap 
of $0.50 per contract, which includes the applicable transaction 
fee, Complex Surcharge and Marketing Fee (if applicable)).''
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    Further, the proposed change to capitalize the defined term 
Electronic, would add clarity and internal consistency to the Fee 
Schedule by correcting a typographical error.
    Finally, the Exchange believes the proposed changes are consistent 
with the Act because, to the extent the modifications permit the 
Exchange to continue to attract greater volume and liquidity, the 
proposed changes would improve the Exchange's overall competitiveness 
and strengthen its market quality for all market participants.
    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,\15\ the Exchange 
does not believe that the proposed rule change would impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act. The Exchange believes the proposed Credit is 
pro-competitive as it would incent OFPs to direct Complex Order flow to 
the Exchange, and thus provide additional liquidity that enhances the 
overall market quality and increases the volume of contracts traded on 
the Exchange. The proposed Surcharge would not impose an unfair burden 
on competition as it is consistent with fees charged by other 
exchanges.\16\ To the extent that the proposed changes make NYSE Amex a 
more attractive marketplace for market participants at other exchanges, 
such market

[[Page 14781]]

participants are welcome to become NYSE Amex Options ATP Holders.
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    \15\ 15 U.S.C. 78f(b)(8).
    \16\ See supra notes 9, 13, 14.
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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) \17\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \18\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 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) \19\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \19\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEMKT-2017-15 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEMKT-2017-15. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2017-15, and should 
be submitted on or before April 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05607 Filed 3-21-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 54 / Wednesday, March 22, 2017 / Notices 14779

For the Commission, by the Division of to Section 19(b)(2) of the Act,5 II. Self-Regulatory Organization’s
Trading and Markets, pursuant to delegated designates May 9, 2017, as the date by Statement of the Purpose of, and
authority.6 which the Commission shall either Statutory Basis for, the Proposed Rule
Eduardo A. Aleman, approve or disapprove, or institute Change
Assistant Secretary. proceedings to determine whether to In its filing with the Commission, the
[FR Doc. 2017–05609 Filed 3–21–17; 8:45 am] disapprove, the proposed rule change self-regulatory organization included
BILLING CODE 8011–01–P (File No. SR–IEX–2017–03). statements concerning the purpose of,
For the Commission, by the Division of and basis for, the proposed rule change
Trading and Markets, pursuant to delegated and discussed any comments it received
SECURITIES AND EXCHANGE on the proposed rule change. The text
COMMISSION authority.6
of those statements may be examined at
Eduardo A. Aleman,
[Release No. 34–80257; File No. SR–IEX– the places specified in Item IV below.
Assistant Secretary. The Exchange has prepared summaries,
2017–03]
[FR Doc. 2017–05604 Filed 3–21–17; 8:45 am] set forth in sections A, B, and C below,
Self-Regulatory Organizations; BILLING CODE 8011–01–P of the most significant parts of such
Investors Exchange LLC; Notice of statements.
Designation of a Longer Period for
A. Self-Regulatory Organization’s
Commission Action on Proposed Rule SECURITIES AND EXCHANGE
Statement of the Purpose of, and the
Change To Amend IEX Rule 16.135 To COMMISSION
Statutory Basis for, the Proposed Rule
Adopt Generic Listing Standards for
Change
Managed Fund Shares [Release No. 34–80262; File No. SR–
NYSEMKT–2017–15] 1. Purpose
March 16, 2017.
On January 19, 2017, Investors The purpose of this filing is to modify
Self-Regulatory Organizations; NYSE the Fee Schedule to:
Exchange LLC (‘‘IEX’’) filed with the
MKT LLC; Notice of Filing and (i) Provide Order Flow Providers
Securities and Exchange Commission
Immediate Effectiveness of Proposed (each an ‘‘OFP’’) that achieve certain
(‘‘Commission’’), pursuant to Section
Change Modifying the NYSE Amex tiers of the Amex Customer
19(b)(1) of the Securities Exchange Act
Options Fee Schedule Enhancement (‘‘ACE’’) Program the
of 1934 (‘‘Act’’) 1 and Rule 19b–4
opportunity to receive an additional
thereunder,2 a proposed rule change to March 16, 2017. credit for Customer Complex Orders;
amend IEX Rule 16.135 to adopt generic and
listing standards for Managed Fund Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the (ii) establish a surcharge on any
Shares. The proposed rule change was Electronic non-Customer Complex
published for comment in the Federal ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March 9, Order that executes against a Customer
Register on February 8, 2017.3 The Complex Order.
Commission has received no comments 2017, NYSE MKT LLC (the ‘‘Exchange’’ The ACE Program features five tiers,
on the proposal. or ‘‘NYSE MKT’’) filed with the expressed as a percentage of total
Section 19(b)(2) of the Act 4 provides Securities and Exchange Commission industry Customer equity and Exchange
that within 45 days of the publication of (the ‘‘Commission’’) the proposed rule Traded Fund option average daily
notice of the filing of a proposed rule change as described in Items I, II, and volume (‘‘TCADV’’) 4 and provides two
change, or within such longer period up III below, which Items have been alternative methods for OFPs to receive
to 90 days as the Commission may prepared by the self-regulatory per contract credits for Electronic
designate if it finds such longer period organization. The Commission is Customer volume that the OFP, as agent,
to be appropriate and publishes its publishing this notice to solicit submits to the Exchange.5 Currently, the
reasons for so finding, or as to which the comments on the proposed rule change Exchange incents OFPs to achieve Tier
self-regulatory organization consents, from interested persons. 2 of the ACE Program by offering an
the Commission shall either approve the $0.18 per contract credit on Electronic
proposed rule change, disapprove the I. Self-Regulatory Organization’s
Customer volume or a slightly higher
proposed rule change, or institute Statement of the Terms of Substance of credit of $0.19 per contract on Customer
proceedings to determine whether the the Proposed Rule Change Complex Orders.6
proposed rule change should be The Exchange proposes to offer OFPs
disapproved. The 45th day after The Exchange proposes to modify the
that achieve Tier 4 or 5 of the ACE
publication of the notice for this NYSE Amex Options Fee Schedule
Program a credit of $0.25 per contract,
proposed rule change is March 25, 2017. (‘‘Fee Schedule’’). The Exchange
per leg for Electronic executions of
The Commission is extending this 45- proposes to implement the fee change
day time period. effective March 9, 2017. The proposed 4 The volume thresholds are based on an OFP’s

The Commission finds it appropriate change is available on the Exchange’s Customer volume transacted Electronically as a
to designate a longer period within Web site at www.nyse.com, at the percentage of total industry TCADV as reported by
the Options Clearing Corporation (the ‘‘OCC’’). See
which to take action on the proposed principal office of the Exchange, and at OCC Monthly Statistics Reports, available here,
rule change so that it has sufficient time the Commission’s Public Reference http://www.theocc.com/webapps/monthly-volume-
asabaliauskas on DSK3SPTVN1PROD with NOTICES

to consider this proposed rule change. Room. reports.
5 See Fee Schedule, Section I. E. (Amex Customer
Accordingly, the Commission, pursuant
Engagement (‘‘ACE’’) Program—Standard Options),
6 17
available here, https://www.nyse.com/publicdocs/
CFR 200.30–3(a)(31). 5 Id. nyse/markets/amex-options/NYSE_Amex_Options_
1 15 U.S.C. 78s(b)(1).
6 17 Fee_Schedule.pdf.
2 17 CFR 240.19b–4. CFR 200.30–3(a)(31).
6 See id. at n.1. The Exchange proposes to correct
1 15 U.S.C. 78s(b)(1).
3 See Securities Exchange Act Release No. 79940
a typographical error by capitalizing the defined
2 15 U.S.C. 78a.
(February 2, 2017), 82 FR 9858. term Electronic as it is used in note 1 to Section
4 15 U.S.C. 78s(b)(2). 3 17 CFR 240.19b–4. I.E. See proposed Fee Schedule, Section I. E., n. 1.

VerDate Sep<11>2014 18:14 Mar 21, 2017 Jkt 241001 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 E:\FR\FM\22MRN1.SGM 22MRN1
Document Created: 2017-03-22 03:58:46
Document Modified: 2017-03-22 03:58:46
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 14779