82 FR 18326 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 73 (April 18, 2017)
Federal Register Volume 82, Issue 73 (April 18, 2017)
| Page Range | 18326-18328 | |
| FR Document | 2017-07753 |
[Federal Register Volume 82, Number 73 (Tuesday, April 18, 2017)] [Notices] [Pages 18326-18328] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-07753] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80441; File No. SR-NYSEARCA-2017-35] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule April 12, 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 April 3, 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- 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 Exchange proposes to implement the fee change effective April 3, 2017. 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 effective April 3, 2017. Specifically, the Exchange proposes to adjust certain fees and to modify certain incentives and qualifications by broadening the base of order flow and trading activity to make the different qualifications more achievable to a variety of market participants. Currently, the Exchange charges all participants a fee for orders that are executed by taking liquidity from the disseminated market (``Take Liquidity Fee,'' or ``Take Fee''), and offers credits (or reduced fees) for executions resulting from posting trading interest that is included in the disseminated market (``Post Liquidity'' credit). For non-Customers, the Exchange currently charges a per contract Take Fee of $1.08 for executions in non-Penny pilot issues.\4\ The Exchange proposes to increase this Take Fee to $1.10 per contract, which is within the range of fees charged by competing option exchanges.\5\ --------------------------------------------------------------------------- \4\ The Exchange notes that for purposes of this fee filing, ``non-Customers'' include: Lead Market Makers, NYSE Arca Market Makers, Firm and Broker Dealers and Professional Customers. \5\ See e.g., NASDAQ Options Market--Fees and Rebates, available here, http://www.nasdaqtrader.com/Micro.aspx?id=optionsPricing and Bats BZX Options Exchange Fee Schedule, available here, https://www.bats.com/us/options/membership/fee_schedule/bzx/. --------------------------------------------------------------------------- The Exchange also currently provides a Post Liquidity per contract credit of $0.28 to Lead Market Makers (``LMMs'') and NYSE Arca Market Makers for executions in Penny Pilot Issues. The Exchange proposes to increase the Post Liquidity credit for LMMs to $0.32 per contract. The Exchange also proposes that the $0.04 per contract increase in the Post Liquidity credit would also be available to LMMs that are eligible to receive any other posting credits for executions in Penny Pilot Issues--namely eligible volume per the ``Market Maker Monthly Posting Credit Tiers and Qualifications for Executions in Penny Pilot Issues and SPY'' (the ``MM Posting Tiers''). For instance, if an LMM qualifies for the Super Tier in the MM Posting Tiers, the LMM would receive a total per contract credit for executions in Penny Pilot issues in their LMM appointment of $0.37, plus the $0.04 [[Page 18327]] Post Liquidity credit, for a combined per contract credit of $0.41. The Exchange also proposes to offer a $0.02 per contract Take Liquidity Discount for executions in Non-Penny Pilot Issues for non- Customers that achieve at least 0.65% of Total Industry Customer equity and ETF option ADV (``TCADV'') from non-Customer liquidity removing orders in all issues. The proposed discount is similar to the existing discount that is available for executions in Penny Issues and includes transaction volume from the OTP Holder's or OTP Firm's affiliates or its Appointed OFP or Appointed MM. The Exchange also provides various incentives to OTP Holders and OTP Firms (``OTPs'') to achieve enhanced posted liquidity credits, some of which are based on achieving certain percentages of NYSE Arca Equity daily activity, also known as ``cross-asset pricing.'' The Exchange proposes to replace one of the alternative qualifications for the Super Tier II in the MM Posting Tiers with a new cross-asset pricing credit by achieving a level of options activity and achieving a level of NYSE Arca Equity activity.\6\ --------------------------------------------------------------------------- \6\ The Exchange proposes to eliminate the current Super Tier II qualification basis that requires an OTP to achieve at least 1.60% of Total Industry Customer equity and ETF option ADV from Customer and Professional Customer orders in all issues, with at least 1.20% of Total Industry Customer equity and ETF option ADV from Customer and Professional Customer Posted Orders in all issues. --------------------------------------------------------------------------- Specifically, as proposed, an OTP would qualify for Super Tier II if the OTP achieves at least 0.20% of ICADV from Market Maker posted orders in all issues, plus ETP Holder and Market Maker posted volume in Tape B Securities (``Tape B Adding ADV'') that is at least 1.50% of US Tape B consolidated average daily volume (``CADV'') for the billing month executed on NYSE Arca Equity Market. The credit applicable to Super Tier II would remain the same (i.e., $0.42 per contract).\7\ The Exchange believes that by providing the proposed alternative qualification basis for posted orders in Penny Pilot issues from Market Makers would encourage an increased level of activity in all issues, which in turn encourages tighter market spreads and increased liquidity, which benefits all market participants. --------------------------------------------------------------------------- \7\ At [sic] The Exchange is not proposing any substantive change to the alternative qualification basis for achieving Super Tier II, which requires at least 1.60% of Total Industry Customer equity and ETF option ADV from Market Maker orders in all issues, with at least 0.90% of Total Industry Customer equity and ETF option ADV from Market Maker Posted Orders in Penny Pilot and Non-Penny Pilot Issues. However, the Exchange proposes to replace reference in this tier to ``Penny Pilot and Non-Penny Pilot Issues'' to ``all Issues,'' which should add clarity, transparency and internal consistency to the Fee Schedule. --------------------------------------------------------------------------- Finally, the Exchange proposes to add clarification to Endnote 8, which describes transactions for qualifications for the various credits or discounts. The Exchange proposes to modify the Endnote such that the transactions for qualification referenced in Endnote 8 would be for various credits and discounts. Further, the Exchange proposes to add a clarifying sentence that ``references to Market Maker volumes and executions are inclusive of transactions in issues in the Market Maker's LMM appointment'' and an additional statement that ``references to LMM transactions apply solely to transactions in the LMM's appointment.'' 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. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that the proposed fee increase is reasonable, equitable, and not unfairly discriminatory because it applies to all non-Customer Take Liquidity transactions in non-Penny Pilot issues and is within the range of fees charged by competing option exchanges.\10\ --------------------------------------------------------------------------- \10\ See supra note 5. --------------------------------------------------------------------------- The Exchange also believes the proposed enhanced credit for posted liquidity for LMMs in Penny Pilot issues is reasonable, equitable, and not unfairly discriminatory because LMMs have heightened obligations for issues in their allocation that do not apply to other market participants. Moreover, LMMs must continue to meet their obligations despite market fluctuations and ebbs and flows in trading activity, while other market participants may rapidly add or drop interest in an issue. The Exchange believes the proposed Take Fee Discount and modification to Super Tier II of the MM Posting Tiers are reasonable, equitable, and not unfairly discriminatory because the changes would be available to all similarly-situated market participants on an equal and non-discriminatory basis. The Exchange believes the creation of a Take Fee discount in non-Penny Pilot Issues available to Lead Market Makers, Market Makers, Firms, Broker Dealers and Professional Customers is reasonable, equitable, and not unfairly discriminatory because it is applicable to all participants other than Customers, who pay a much lower Take Liquidity Fee. Modifications to the Market Maker Monthly Posting Credit Tiers and Qualifications for Penny Pilot Issues and SPY are equitable and not unfairly discriminatory because the changes to the Super Tier II for Market Makers and Lead Market Makers would apply to all Market Makers and Lead Market Makers on an equal and non-discriminatory basis. Further, they are not unfairly discriminatory because other non- Customer participants do not have the burden of Market Making obligations. In addition, the proposed changes are designed to incent 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 to the benefit of all market participants. Further, the proposed modifications are reasonable, equitable, and non-discriminatory because they would allow qualification through activity combined with activity of affiliates or Appointed OFP, including activity on the NYSE Arca Equity Market. Thus, the Exchange believes the proposed modifications are reasonable, equitable and not unfairly discriminatory because they encourage more participants to qualify for the various incentives, including encouraging more participants to have affiliated or appointed order flow directed to the Exchange. The Exchange believes the proposed modification to Endnote 8 is reasonable, equitable and not unfairly discriminatory because the proposed change is intended to clarify that the calculations for qualifications for monthly posting would be determined for credits and discounts, rather than credits or discounts. Finally, the Exchange believes the proposed non-substantive change to the alternative qualification basis for achieving Super Tier II is reasonable, equitable, and not unfairly discriminatory because it would add clarity, transparency and internal consistency to the Fee Schedule.\11\ --------------------------------------------------------------------------- \11\ See supra note 7. --------------------------------------------------------------------------- For these reasons, the Exchange believes that the proposal is consistent with the Act. [[Page 18328]] B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act, 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 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. 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. The Exchange believes that the proposed enhanced credits for LMMs would not impose an unfair burden on competition because the LMMs have heightened obligations for issues in their allocation that do not apply to other market participants. 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. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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 CommentsUse 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-2017-35 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-2017-35. 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-2017-35, and should be submitted on or before May 9, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-07753 Filed 4-17-17; 8:45 am] BILLING CODE 8011-01-P
![18326 Federal Register / Vol. 82, No. 73 / Tuesday, April 18, 2017 / Notices
IV. Solicitation of Comments For the Commission, by the Division of of the most significant parts of such
Trading and Markets, pursuant to delegated statements.
Interested persons are invited to authority.10
submit written data, views, and Eduardo A. Aleman, A. Self-Regulatory Organization’s
arguments concerning the foregoing, Assistant Secretary.
Statement of the Purpose of, and the
including whether the proposal is Statutory Basis for, the Proposed Rule
[FR Doc. 2017–07754 Filed 4–17–17; 8:45 am]
consistent with the Act. Comments may Change
BILLING CODE 8011–01–P
be submitted by any of the following 1. Purpose
methods:
SECURITIES AND EXCHANGE The purpose of this filing is to amend
Electronic Comments COMMISSION the Fee Schedule effective April 3, 2017.
Specifically, the Exchange proposes to
• Use the Commission’s Internet [Release No. 34–80441; File No. SR– adjust certain fees and to modify certain
comment form (http://www.sec.gov/ NYSEARCA–2017–35] incentives and qualifications by
rules/sro.shtml); or broadening the base of order flow and
Self-Regulatory Organizations; NYSE
• Send an email to rule-comments@ Arca, Inc.; Notice of Filing and
trading activity to make the different
sec.gov. Please include File No. SR– qualifications more achievable to a
Immediate Effectiveness of Proposed
NASDAQ–2017–035 on the subject line. variety of market participants.
Rule Change Amending the NYSE Arca
Options Fee Schedule Currently, the Exchange charges all
Paper Comments
participants a fee for orders that are
• Send paper comments in triplicate April 12, 2017. executed by taking liquidity from the
to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) 1 of the disseminated market (‘‘Take Liquidity
Commission, 100 F Street NE., Securities Exchange Act of 1934 (the Fee,’’ or ‘‘Take Fee’’), and offers credits
Washington, DC 20549–1090. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 (or reduced fees) for executions
notice is hereby given that, on April 3, resulting from posting trading interest
All submissions should refer to File No. 2017, NYSE Arca, Inc. (the ‘‘Exchange’’ that is included in the disseminated
SR–NASDAQ–2017–035. This file or ‘‘NYSE Arca’’) filed with the market (‘‘Post Liquidity’’ credit). For
number should be included on the Securities and Exchange Commission non-Customers, the Exchange currently
subject line if email is used. To help the (the ‘‘Commission’’) the proposed rule charges a per contract Take Fee of $1.08
Commission process and review your change as described in Items I, II, and for executions in non-Penny pilot
comments more efficiently, please use III below, which Items have been issues.4 The Exchange proposes to
only one method. The Commission will prepared by the self-regulatory increase this Take Fee to $1.10 per
post all comments on the Commission’s organization. The Commission is contract, which is within the range of
Internet Web site (http://www.sec.gov/ publishing this notice to solicit fees charged by competing option
rules/sro.shtml.) Copies of the comments on the proposed rule change exchanges.5
submission, all subsequent from interested persons. The Exchange also currently provides
amendments, all written statements I. Self-Regulatory Organization’s a Post Liquidity per contract credit of
with respect to the proposed rule Statement of the Terms of Substance of $0.28 to Lead Market Makers (‘‘LMMs’’)
change that are filed with the the Proposed Rule Change and NYSE Arca Market Makers for
Commission, and all written executions in Penny Pilot Issues. The
The Exchange proposes to amend the Exchange proposes to increase the Post
communications relating to the NYSE Arca Options Fee Schedule (‘‘Fee
proposed rule change between the Liquidity credit for LMMs to $0.32 per
Schedule’’). The Exchange proposes to contract. The Exchange also proposes
Commission and any person, other than implement the fee change effective
those that may be withheld from the that the $0.04 per contract increase in
April 3, 2017. The proposed rule change the Post Liquidity credit would also be
public in accordance with the is available on the Exchange’s Web site available to LMMs that are eligible to
provisions of 5 U.S.C. 552, will be at www.nyse.com, at the principal office receive any other posting credits for
available for Web site viewing and of the Exchange, and at the executions in Penny Pilot Issues—
printing in the Commission’s Public Commission’s Public Reference Room. namely eligible volume per the ‘‘Market
Reference Room, 100 F Street NE., Maker Monthly Posting Credit Tiers and
II. Self-Regulatory Organization’s
Washington, DC 20549, on official Qualifications for Executions in Penny
Statement of the Purpose of, and
business days between the hours of Pilot Issues and SPY’’ (the ‘‘MM Posting
Statutory Basis for, the Proposed Rule
10:00 a.m. and 3:00 p.m. Copies of the Change Tiers’’). For instance, if an LMM
filing will also be available for qualifies for the Super Tier in the MM
inspection and copying at the principal In its filing with the Commission, the Posting Tiers, the LMM would receive a
office of the Exchange. All comments self-regulatory organization included total per contract credit for executions
received will be posted without change; statements concerning the purpose of, in Penny Pilot issues in their LMM
the Commission does not edit personal and basis for, the proposed rule change appointment of $0.37, plus the $0.04
identifying information from and discussed any comments it received
on the proposed rule change. The text
submissions. You should submit only 4 The Exchange notes that for purposes of this fee
of those statements may be examined at filing, ‘‘non-Customers’’ include: Lead Market
information that you wish to make
sradovich on DSK3GMQ082PROD with NOTICES
the places specified in Item IV below. Makers, NYSE Arca Market Makers, Firm and
available publicly. All submissions The Exchange has prepared summaries, Broker Dealers and Professional Customers.
should refer to File No. SR–NASDAQ– set forth in sections A, B, and C below, 5 See e.g., NASDAQ Options Market—Fees and
2017–035 and should be submitted on Rebates, available here, http://
or before May 9, 2017. 10 17
www.nasdaqtrader.com/
CFR 200.30–3(a)(12). Micro.aspx?id=optionsPricing and Bats BZX
1 15 U.S.C. 78s(b)(1). Options Exchange Fee Schedule, available here,
2 15 U.S.C. 78a.
https://www.bats.com/us/options/membership/fee_
3 17 CFR 240.19b–4. schedule/bzx/.
VerDate Sep<11>2014 16:55 Apr 17, 2017 Jkt 241001 PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 E:\FR\FM\18APN1.SGM 18APN1](https://thefederalregister.org/doc/82_FR_18399/page/1.svg)
![Federal Register / Vol. 82, No. 73 / Tuesday, April 18, 2017 / Notices 18327
Post Liquidity credit, for a combined per increased liquidity, which benefits all Penny Pilot Issues available to Lead
contract credit of $0.41. market participants. Market Makers, Market Makers, Firms,
The Exchange also proposes to offer a Finally, the Exchange proposes to add Broker Dealers and Professional
$0.02 per contract Take Liquidity clarification to Endnote 8, which Customers is reasonable, equitable, and
Discount for executions in Non-Penny describes transactions for qualifications not unfairly discriminatory because it is
Pilot Issues for non-Customers that for the various credits or discounts. The applicable to all participants other than
achieve at least 0.65% of Total Industry Exchange proposes to modify the Customers, who pay a much lower Take
Customer equity and ETF option ADV Endnote such that the transactions for Liquidity Fee.
(‘‘TCADV’’) from non-Customer qualification referenced in Endnote 8
Modifications to the Market Maker
liquidity removing orders in all issues. would be for various credits and
The proposed discount is similar to the Monthly Posting Credit Tiers and
discounts. Further, the Exchange
existing discount that is available for Qualifications for Penny Pilot Issues
proposes to add a clarifying sentence
executions in Penny Issues and includes and SPY are equitable and not unfairly
that ‘‘references to Market Maker
transaction volume from the OTP discriminatory because the changes to
volumes and executions are inclusive of
Holder’s or OTP Firm’s affiliates or its the Super Tier II for Market Makers and
transactions in issues in the Market
Appointed OFP or Appointed MM. Maker’s LMM appointment’’ and an Lead Market Makers would apply to all
The Exchange also provides various additional statement that ‘‘references to Market Makers and Lead Market Makers
incentives to OTP Holders and OTP LMM transactions apply solely to on an equal and non-discriminatory
Firms (‘‘OTPs’’) to achieve enhanced transactions in the LMM’s basis. Further, they are not unfairly
posted liquidity credits, some of which appointment.’’ discriminatory because other non-
are based on achieving certain Customer participants do not have the
percentages of NYSE Arca Equity daily 2. Statutory Basis burden of Market Making obligations.
activity, also known as ‘‘cross-asset The Exchange believes that the In addition, the proposed changes are
pricing.’’ The Exchange proposes to proposed rule change is consistent with designed to incent market participants
replace one of the alternative Section 6(b) of the Act,8 in general, and to increase the orders sent directly to
qualifications for the Super Tier II in the furthers the objectives of Sections the Exchange and therefore provide
MM Posting Tiers with a new cross- 6(b)(4) and (5) of the Act,9 in particular, liquidity that supports the quality of
asset pricing credit by achieving a level because it provides for the equitable price discovery and promotes market
of options activity and achieving a level allocation of reasonable dues, fees, and transparency to the benefit of all market
of NYSE Arca Equity activity.6 other charges among its members, participants. Further, the proposed
Specifically, as proposed, an OTP issuers and other persons using its modifications are reasonable, equitable,
would qualify for Super Tier II if the facilities and does not unfairly and non-discriminatory because they
OTP achieves at least 0.20% of ICADV discriminate between customers, would allow qualification through
from Market Maker posted orders in all issuers, brokers or dealers. activity combined with activity of
issues, plus ETP Holder and Market The Exchange believes that the affiliates or Appointed OFP, including
Maker posted volume in Tape B proposed fee increase is reasonable, activity on the NYSE Arca Equity
Securities (‘‘Tape B Adding ADV’’) that equitable, and not unfairly Market. Thus, the Exchange believes the
is at least 1.50% of US Tape B discriminatory because it applies to all
consolidated average daily volume proposed modifications are reasonable,
non-Customer Take Liquidity equitable and not unfairly
(‘‘CADV’’) for the billing month transactions in non-Penny Pilot issues
executed on NYSE Arca Equity Market. discriminatory because they encourage
and is within the range of fees charged more participants to qualify for the
The credit applicable to Super Tier II by competing option exchanges.10
would remain the same (i.e., $0.42 per various incentives, including
The Exchange also believes the
contract).7 The Exchange believes that encouraging more participants to have
proposed enhanced credit for posted
by providing the proposed alternative affiliated or appointed order flow
liquidity for LMMs in Penny Pilot issues
qualification basis for posted orders in directed to the Exchange.
is reasonable, equitable, and not
Penny Pilot issues from Market Makers unfairly discriminatory because LMMs The Exchange believes the proposed
would encourage an increased level of have heightened obligations for issues modification to Endnote 8 is reasonable,
activity in all issues, which in turn in their allocation that do not apply to equitable and not unfairly
encourages tighter market spreads and other market participants. Moreover, discriminatory because the proposed
LMMs must continue to meet their change is intended to clarify that the
6 The Exchange proposes to eliminate the current
obligations despite market fluctuations calculations for qualifications for
Super Tier II qualification basis that requires an monthly posting would be determined
OTP to achieve at least 1.60% of Total Industry
and ebbs and flows in trading activity,
Customer equity and ETF option ADV from while other market participants may for credits and discounts, rather than
Customer and Professional Customer orders in all rapidly add or drop interest in an issue. credits or discounts.
issues, with at least 1.20% of Total Industry The Exchange believes the proposed
Customer equity and ETF option ADV from Finally, the Exchange believes the
Customer and Professional Customer Posted Orders
Take Fee Discount and modification to proposed non-substantive change to the
in all issues. Super Tier II of the MM Posting Tiers alternative qualification basis for
7 At [sic] The Exchange is not proposing any are reasonable, equitable, and not achieving Super Tier II is reasonable,
substantive change to the alternative qualification unfairly discriminatory because the equitable, and not unfairly
basis for achieving Super Tier II, which requires at changes would be available to all
least 1.60% of Total Industry Customer equity and discriminatory because it would add
sradovich on DSK3GMQ082PROD with NOTICES
ETF option ADV from Market Maker orders in all similarly-situated market participants clarity, transparency and internal
issues, with at least 0.90% of Total Industry on an equal and non-discriminatory consistency to the Fee Schedule.11
Customer equity and ETF option ADV from Market basis. The Exchange believes the
Maker Posted Orders in Penny Pilot and Non-Penny creation of a Take Fee discount in non- For these reasons, the Exchange
Pilot Issues. However, the Exchange proposes to believes that the proposal is consistent
replace reference in this tier to ‘‘Penny Pilot and with the Act.
8 15 U.S.C. 78f(b).
Non-Penny Pilot Issues’’ to ‘‘all Issues,’’ which
9 15 U.S.C. 78f(b)(4) and (5).
should add clarity, transparency and internal
consistency to the Fee Schedule. 10 See supra note 5. 11 See supra note 7.
VerDate Sep<11>2014 16:55 Apr 17, 2017 Jkt 241001 PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 E:\FR\FM\18APN1.SGM 18APN1](https://thefederalregister.org/doc/82_FR_18399/page/2.svg)
![18328 Federal Register / Vol. 82, No. 73 / Tuesday, April 18, 2017 / Notices
B. Self-Regulatory Organization’s fee, or other charge imposed by the filing also will be available for
Statement on Burden on Competition Exchange. inspection and copying at the principal
At any time within 60 days of the office of the Exchange. All comments
In accordance with Section 6(b)(8) of
filing of such proposed rule change, the received will be posted without change;
the Act, the Exchange does not believe
Commission summarily may the Commission does not edit personal
that the proposed rule change will
temporarily suspend such rule change if identifying information from
impose any burden on competition that
it appears to the Commission that such submissions. You should submit only
is not necessary or appropriate in
action is necessary or appropriate in the information that you wish to make
furtherance of the purposes of the Act.
public interest, for the protection of available publicly. All submissions
Instead, the Exchange believes that the investors, or otherwise in furtherance of
proposed changes would encourage should refer to File Number SR–
the purposes of the Act. If the NYSEArca–2017–35, and should be
competition, including by attracting Commission takes such action, the
additional liquidity to the Exchange, submitted on or before May 9, 2017.
Commission shall institute proceedings
which would continue to make the For the Commission, by the Division of
under Section 19(b)(2)(B) 14 of the Act to Trading and Markets, pursuant to delegated
Exchange a more competitive venue for, determine whether the proposed rule
among other things, order execution and authority.15
change should be approved or Eduardo A. Aleman,
price discovery. The Exchange does not disapproved.
believe that the proposed change would Assistant Secretary.
impair the ability of any market IV. Solicitation of Comments [FR Doc. 2017–07753 Filed 4–17–17; 8:45 am]
participants or competing order Interested persons are invited to BILLING CODE 8011–01–P
execution venues to maintain their submit written data, views, and
competitive standing in the financial arguments concerning the foregoing,
markets. Further, the incentive would including whether the proposed rule SECURITIES AND EXCHANGE
be available to all similarly-situated change is consistent with the Act. COMMISSION
participants, and, as such, the proposed Comments may be submitted by any of
change would not impose a disparate Sunshine Act Meeting
the following methods:
burden on competition either among or Notice is hereby given, pursuant to
between classes of market participants Electronic Comments
the provisions of the Government in the
and may, in fact, encourage • Use the Commission’s Internet Sunshine Act, Public Law 94–409, that
competition. comment form (http://www.sec.gov/ the Securities and Exchange
The Exchange believes that the rules/sro.shtml); or Commission will hold a closed meeting
proposed enhanced credits for LMMs • Send an email to rule-comments@ on Thursday, April 20, 2017 at 2 p.m.
would not impose an unfair burden on sec.gov. Please include File Number SR– Commissioners, Counsel to the
competition because the LMMs have NYSEArca–2017–35 on the subject line. Commissioners, the Secretary to the
heightened obligations for issues in Paper Comments Commission, and recording secretaries
their allocation that do not apply to will attend the closed meeting. Certain
other market participants. • Send paper comments in triplicate
staff members who have an interest in
The Exchange notes that it operates in to Secretary, Securities and Exchange
the matters also may be present.
a highly competitive market in which Commission, 100 F Street NE.,
The General Counsel of the
market participants can readily favor Washington, DC 20549–1090.
Commission, or her designee, has
competing venues. In such an All submissions should refer to File certified that, in her opinion, one or
environment, the Exchange must Number SR–NYSEArca–2017–35. This more of the exemptions set forth in 5
continually review, and consider file number should be included on the U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
adjusting, its fees and credits to remain subject line if email is used. To help the and 17 CFR 200.402(a)(3), (a)(5), (a)(7),
competitive with other exchanges. For Commission process and review your (a)(9)(ii) and (a)(10), permit
the reasons described above, the comments more efficiently, please use consideration of the scheduled matter at
Exchange believes that the proposed only one method. The Commission will the closed meeting.
rule change reflects this competitive post all comments on the Commission’s Acting Chairman Piwowar, as duty
environment. Internet Web site (http://www.sec.gov/ officer, voted to consider the items
rules/sro.shtml). Copies of the listed for the closed meeting in closed
C. Self-Regulatory Organization’s submission, all subsequent
Statement on Comments on the session.
amendments, all written statements The subject matter of the closed
Proposed Rule Change Received From with respect to the proposed rule
Members, Participants, or Others meeting will be:
change that are filed with the Institution and settlement of
No written comments were solicited Commission, and all written injunctive actions;
or received with respect to the proposed communications relating to the Institution and settlement of
rule change. proposed rule change between the administrative proceedings;
Commission and any person, other than Resolution of litigation claims;
III. Date of Effectiveness of the those that may be withheld from the
Proposed Rule Change and Timing for Litigation matters; and
public in accordance with the Other matters relating to enforcement
Commission Action provisions of 5 U.S.C. 552, will be proceedings.
The foregoing rule change is effective
sradovich on DSK3GMQ082PROD with NOTICES
available for Web site viewing and At times, changes in Commission
upon filing pursuant to Section printing in the Commission’s Public priorities require alterations in the
19(b)(3)(A) 12 of the Act and Reference Room, 100 F Street NE., scheduling of meeting items.
subparagraph (f)(2) of Rule 19b–4 13 Washington, DC 20549, on official For further information and to
thereunder, because it establishes a due, business days between the hours of ascertain what, if any, matters have been
10:00 a.m. and 3:00 p.m. Copies of the added, deleted or postponed; please
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(2). 14 15 U.S.C. 78s(b)(2)(B). 15 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 16:55 Apr 17, 2017 Jkt 241001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\18APN1.SGM 18APN1](https://thefederalregister.org/doc/82_FR_18399/page/3.svg)
Document Created: 2017-04-18 00:00:07
Document Modified: 2017-04-18 00:00:07
| 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 18326 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR