82 FR 39921 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE American Options Fee Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 161 (August 22, 2017)

[Federal Register Volume 82, Number 161 (Tuesday, August 22, 2017)]
[Notices]
[Pages 39921-39923]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17684]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81408; File No. SR-NYSEAMER-2017-04]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
the NYSE American Options Fee Schedule

August 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 August 1, 2017, NYSE American LLC (the ``Exchange'' or 
``NYSE American'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to modify the NYSE American Options Fee 
Schedule (``Fee Schedule''). The Exchange proposes to implement the fee 
change effective August 1, 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,

[[Page 39922]]

set forth in sections A, B, and C below, of the most significant parts 
of such statements.

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

1. Purpose
    The purpose of this filing is to amend the Fee Schedule effective 
August 1, 2017. Specifically, the Exchange proposes to modify the fees 
for Firm Electronic transactions in Penny Pilot issues, and to offer an 
incentive for ATP Holders to electronically transact business of 
Broker-Dealers, Firms, Non-NYSE American Market Makers, and 
Professional Customers (``Non Customer/Non Market Maker Interest'') on 
the Exchange.
    Currently, the Exchange charges $0.42 per contract for Electronic 
executions in Penny Pilot issues that clear in the Firm range. The 
Exchange proposes to modify that fee to $0.47, which is similar to 
transaction charges fees paid on other exchanges.\4\ The Exchange does 
not propose to alter the per contract fee of $0.75 for Electronic 
executions in Non-Penny Pilot issues that clear in the Firm range.
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    \4\ See, e.g., MIAX Options Exchange (``MIAX'') fee schedule, 
available here, https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Options_Fee_Schedule_06302017.pdf (charging 
$0.47 per contract for electronic executions in Penny Pilot Issues 
that clear in the Firm range); NASDAQ PHLX LLC (``PHLX'') Pricing 
Schedule, available here, http://www.nasdaqtrader.com/Micro.aspx?id=phlxpricing (charging $0.48 per contract for 
electronic executions in Penny Pilot Issues that clear in the Firm 
range).
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    Additionally, the Exchange proposes to offer reduced fees to 
encourage ATP Holders to transact additional Non Customer/Non Market 
Maker Interest on the Exchange.\5\ Specifically, the Exchange proposes 
to charge a reduced per contract rate on Electronic executions of $0.36 
per contract for Penny Pilot Issues, and $0.60 per contract for Non-
Penny Pilot Issues, to ATP Holders that transact at least 0.05% of 
TCADV above that ATP Holder's 2nd Quarter 2017 Non-Customer, Non-Market 
Maker Interest.\6\ However, the Exchange would exclude from this TCADV 
calculation Electronic executions in the following: CUBE, QCC, Strategy 
Executions, and any ``Routed Volume,'' i.e., any volume attributable to 
orders routed to another exchange in connection with the Options Order 
Protection and Locked/Crossed Market Plan referenced in Rule 991NY. The 
Exchange notes that this proposed rate is comparable to pricing 
incentives offered on other options exchanges, including MIAX.\7\
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    \5\ See proposed note 8 to Section I.A. (Options Transactions 
and Credits, Rates for Options transactions) of the Fee Schedule. 
The Exchange notes that executions via the BOLD Mechanism would be 
included in the TCADV calculation.
    \6\ Currently, the Exchange charges ATP Holders transacting Non-
Customer/Non-Market Maker Interest (excluding Firms) a per contract 
rate of $0.50 per contract for Penny Pilot Issues, and $0.75 per 
contract for Non-Penny Pilot Issues. The Exchange does not propose 
to alter these base rates.
    \7\ See supra note 4, MIAX fee schedule, Section (1)(a)(iv) 
(providing a per contract credit for certain orders executed on the 
exchange, provided the Member achieves certain ``Professional'' 
volume increase percentage thresholds in the month relative to a 
baseline period, which credits result in a per-contract rates [sic] 
similar to the Exchange's proposal). MIAX similarly excludes from 
this calculation certain volumes, including executions in price 
improvement auctions, QCCs, as well as Routed Volume. The following 
are considered ``Professional'' interest on MIAX: Public Customers, 
that are not Priority Customers; non-MIAX Options Market Makers; 
non-Member Broker-Dealers; or Firms.
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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 proposed increased fee for Firm 
Electronic transactions in Penny Pilot Issues is reasonable as it is 
competitive with rates changes by other options exchanges for Firm 
transactions.\10\
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    \10\ See supra note 4.
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    The Exchange believes that the proposed reduced fees for Non-
Customer/Non-Market Maker Interest executed on the Exchange are fair, 
equitable and not unreasonably discriminatory. The Exchange believes 
the proposed reduced rates are reasonably designed to encourage ATP 
Holders that transact Non-Customer/Non-Market Maker Interest to direct 
this order flow to the Exchange. To the extent this goal is achieved, 
the Exchange would improve its overall competitiveness and strengthen 
its market quality for all market participants. The proposed rates are 
fair and equitable and not unreasonably discriminatory because they 
apply equally to all ATP Holders that transact Non-Customer/Non-Market 
Maker Interest. In addition, the proposed changes are equitable and not 
unfairly discriminatory because, while only Non-Customer/Non-Market 
Maker Interest qualifies for the reduced fees, any increase in this 
type of order flow would attract greater volume and liquidity of all 
account type [sic] to the Exchange, which benefit all market 
participants by providing more trading opportunities and tighter 
spreads.
    Finally, the Exchange believes that the proposed reduced rates are 
not unfairly discriminatory to Market Makers or Customers. The Exchange 
offers separate incentives to Market Makers, which incentives take into 
account the distinct obligations of Market Makers) [sic]. Further, the 
Exchange does not impose any fee on Electronic executions of Customer 
interest.
    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 would impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act. The proposed fee increase for Electronic 
executions in Penny Pilot Issues that clear in the Firm range are 
competitive with rates charged by other options exchanges, and 
therefore do not impose any undue burden on competition.\12\ In 
addition, the Exchange believes that the proposed reduced rates for 
Non-Customer/Non-Market Maker Interest executed on the Exchange rule 
change would increase both intermarket and intramarket competition by 
incenting ATP Holders to direct this type of interest to the Exchange, 
which would enhance the quality of the Exchange's markets and increase 
the volume of contracts traded here. To the extent that this purpose is 
achieved, all the Exchange's market participants would benefit from the 
improved market liquidity. Enhanced market quality and increased 
transaction volume that results from the anticipated increase in order 
flow directed to the Exchange will benefit all market participants and 
improve competition on the Exchange. The proposed changes are intended 
to promote competition and better improve the Exchange's competitive 
position and make the Exchange a more attractive marketplace in order 
to encourage market participants to bring increased volume to the 
Exchange. To the extent that the proposed changes make the Exchange a 
more attractive marketplace

[[Page 39923]]

for market participants at other exchanges, such market participants 
are welcome to become ATP Holders.
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    \11\ 15 U.S.C. 78f(b)(8).
    \12\ See supra note 4.
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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) \13\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \14\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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)\15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 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-NYSEAMER-2017-04 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-NYSEAMER-2017-04. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEAMER-2017-04, and should 
be submitted on or before September 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17684 Filed 8-21-17; 8:45 am]
 BILLING CODE 8011-01-P