82 FR 46580 - 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 192 (October 5, 2017)

[Federal Register Volume 82, Number 192 (Thursday, October 5, 2017)]
[Notices]
[Pages 46580-46581]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-21404]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81767; File No. SR-NYSEARCA-2017-114]


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

September 29, 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 September 26, 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 Exchange proposes to implement the fee change 
effective October 1, 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 
October 1, 2017. Specifically, the Exchange proposes to place a cap on 
an incentive for Floor Brokers to execute Qualified Contingent Cross 
(``QCC'') transactions.
    Currently, Floor Brokers earn a rebate for executed QCC orders of 
$0.035 per contract side.\4\ QCC executions in which a Customer or 
Professional Customer (collectively, ``Customer'') is on both sides of 
the QCC trade are not eligible for the Floor Broker rebate.\5\ The 
Exchange does not currently impose any monthly cap on the maximum to be 
paid under the QCC rebate program.
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    \4\ See Fee Schedule, QUALIFIED CONTINGENT CROSS TRANSACTION 
FEES, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf.
    \5\ See id., Endnote 14.
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    The Exchange proposes to limit the maximum Floor Broker rebate to 
$375,000 per month per Floor Broker firm.\6\ Although the proposal 
would limit the potential monthly rebate, the Exchange believes that 
OTP Holders acting as Floor Brokers would still be incented to achieve 
the highest rebate possible. The Exchange notes that other options 
exchanges have similar caps on rebates offers for QCC transactions.\7\
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    \6\ See proposed Fee Schedule, Endnote 13 (providing that 
``[t]he maximum Floor Broker Rebate paid shall not exceed $375,000 
per month per Floor Broker firm'').
    \7\ See NYSE American Options Fee Schedule, Section I.F., QCC 
Fees & Credits, n. 1, available here, https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf (providing that ``[t]he 
maximum Floor Broker credit paid shall not exceed $375,000 per month 
per Floor Broker firm''); Chicago Board Options Exchange (``CBOE'') 
fee schedule, QCC Rate Table, p. 5, available here, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf (providing that 
QCC credits ``will be capped at $350,000 per month'', per CBOE 
trading permit holder).
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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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    Specifically, the Exchange does not currently impose any monthly 
cap on the maximum to be paid to Floor Broker firms under the QCC 
rebate program. The Exchange believes the proposed cap is reasonable, 
equitable and not unfairly discriminatory because all OTP Holders would 
be uniformly capped at a potential rebate of $370,000 per month per 
Floor Broker firm. In addition, the proposal is reasonable, equitable 
and not unfairly discriminatory because it is consistent with similar 
caps on rebates pad [sic] for QCC transactions on other exchanges.\10\
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    \10\ See supra note 7.
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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. The proposed cap would not impose an unfair 
burden on competition because all OTP Holders would be uniformly capped 
at $375,000 per month per Floor Broker firm and because the proposal is 
consistent with similar caps on rebates pad [sic] for QCC transactions 
on other exchanges.\12\
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    \11\ 15 U.S.C. 78f(b)(8).
    \12\ See supra note 7.
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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.

[[Page 46581]]

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-NYSEArca-2017-114 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-2017-114. 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-2017-114, and 
should be submitted on or before October 26, 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. 2017-21404 Filed 10-4-17; 8:45 am]
 BILLING CODE 8011-01-P