83 FR 47232 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 181 (September 18, 2018)
Federal Register Volume 83, Issue 181 (September 18, 2018)
| Page Range | 47232-47234 | |
| FR Document | 2018-20194 |
[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)] [Notices] [Pages 47232-47234] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-20194] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84099; File No. SR-NYSEARCA-2018-64] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule September 12, 2018. 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 29, 2018, 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 modify the NYSE Arca Options Fee Schedule (``Fee Schedule''). The Exchange proposes to implement the fee change effective September 1, 2018. The proposed rule change is available on the Exchange's website at www.nyse.com, at the principal office of the Exchange, and at [[Page 47233]] 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, effective September 1, 2018, to modify the existing Floor Broker rebate for executed Qualified Contingent Cross (``QCC'') orders,\4\ and to adjust the Firm and Broker Dealer Monthly Fee Cap. --------------------------------------------------------------------------- \4\ The QCC permits an OTP Holder or OTP Firm to effect a qualified contingent trade (``QCT'') in a Regulation NMS stock and cross the options leg of the trade on the Exchange immediately upon entry and without order exposure if the order is for at least 1,000 contracts, is part of a QCT, is executed at a price at least equal to the national best bid or offer, as long as there are no Customer orders in the Exchange's Consolidated Book at the same price. --------------------------------------------------------------------------- Currently, the Exchange offers a Floor Brokers Rebate of $0.035 per contract side for QCC trades executed on behalf of non-Customers.\5\ The Exchange also offers a Firm and Broker Dealer Monthly Fee Cap (the ``Fee Cap'') which caps fees at $100,000 for Manual (Open Outcry) Executions and, for QCC transactions executed by a Floor Broker from the Floor of the Exchange, for Firm and Broker Dealer transactions cleared in the customer range.\6\ --------------------------------------------------------------------------- \5\ 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. \6\ The Fee Cap excludes fees for Strategy Executions, Royalty Fees and firm trades executed via a Joint Back Office agreement. See id. FIRM AND BROKER DEALER MONTHLY FEE CAP. The Exchange also offers a lesser cap on fees for those OTP Holders and OTP Firms that achieve certain Tiers of the Customer Penny Pilot Posting Credit Tiers. See id., FIRM AND BROKER DEALER MONTHLY FIRM CAP TIERS. --------------------------------------------------------------------------- The Exchange proposes to replace the existing Floor Broker Rebate with a two-tiered credit. As proposed, the first tier would provide a $0.07 per contract credit for ``Floor Brokers executing 300,000 or fewer contracts in a month,'' which tier would effectively replace the current $0.035 ``Floor Broker Rebate for Executed Orders--Per Contract Side.'' \7\ The Exchange proposes to introduce a second tier that would enable Floor Brokers to earn a higher credit--of $0.10--for executed QCC transactions in excess of 300,000 contracts.\8\ The proposed credits would be paid solely on the volume executed to achieve each tier and is not retroactive to the first contract.\9\ For example, if a Floor Broker executes 400,000 QCC contracts in a given month, the Floor Broker would receive the $0.07 per contract for the first 300,000 QCC transactions and $0.10 per contract for the remaining 100,000 contracts. As with the existing Floor Broker Rebate, Customer-to- Customer QCC trades would not qualify for any credit as such transactions net the Exchange no revenue. --------------------------------------------------------------------------- \7\ The Exchange also proposes to make a number of textual changes to the table regarding QCC transactions. Specifically, the Exchange proposes to revise the title of the table to reflect the shorthand ``QCC'' and that the table includes fees ``and credits''; to revise the column headings to ``Participant'' and ``Per Contract Fee or Credit''; to remove reference to ``per side'' with respect to QCC fees as fees/credits are based on participant type executing such contracts; and to remove the term ``Rebate'' as the Floor Brokers are actually given a credit against fees incurred. See proposed Fee Schedule, QUALIFIED CONTINGENT CROSS (``QCC'') TRANSACTION FEES AND CREDITS and Endnote 13. The Exchange believes these technical changes would add clarity and transparency to the Fee Schedule. \8\ See id. (including reference to Endnote 13 in proposed tier, consistent with the current schedule for QCCs). See Fee Schedule, Endnote 13 supra n. 5 (providing that the Floor Broker credit does not apply to QCC executions in which a Customer is on both sides of the QCC and capping the potential monthly credit at $375,000 per Floor Broker firm). \9\ See id., Endnote 13 (providing, in relevant part, ``[t]he Floor Broker credit is paid only on volume within the applicable tier and is not retroactive to the first contract traded''). --------------------------------------------------------------------------- The Exchange notes that the proposed credit for Floor Brokers is consistent with such credits offered for QCC volumes across the industry. Specifically, the Nasdaq OMX PHLX (``PHLX'') and Nasdaq ISE (``ISE'') pay volume-based rebates for QCC volume that range from $0.00 to $0.11 per contract.\10\ --------------------------------------------------------------------------- \10\ See PHLX Pricing Schedule, available here, http://www.nasdaqtrader.com/Micro.aspx?id=phlxpricing; and ISE Schedule of Fees, available here, http://ise.cchwallstreet.com/tools/PlatformViewer.asp?selectednode=chp_1_1_5&manual=%2Fcontents%2Fise%2Fise-fee%2F. --------------------------------------------------------------------------- The Exchange also proposes to adopt an incremental service fee of $0.01 per contract for Firm or Broker Dealer Manual transactions once an OTP Holder or OTP Firm has reached the applicable Fee Cap. The incremental service fee would not apply to the execution of a QCC order. The Exchange notes that this proposed fee is competitive as it is consistent with the incremental service fee that NYSE American imposes once firms have reached a similar monthly fee cap on that exchange.\11\ --------------------------------------------------------------------------- \11\ See NYSE American Options Fee Schedule, Section I.I., Firm Monthly Fee Cap, available here, https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf (providing that ``[o]nce a Firm has reached the Firm Monthly Fee Cap, an incremental service fee of $0.01 per contract for Firm Manual transactions will apply, except for the execution of a QCC order, in which case there is no incremental service fee''). The Exchange notes that the fee cap on NYSE American applies only to ``Firms,'' whereas the NYSE Arca Fee Cap applies to both Firms and Broker Dealers. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, in general, and furthers the objectives of Sections 6(b)(4) and (5) of the Act, 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. The Exchange believes that the proposed tiered Floor Broker credits for QCC volume rebates are reasonable, equitable and not unfairly discriminatory because the credits are designed to attract more QCC volume to the Exchange. To the extent that the credits attract additional order flow to the Exchange, all market participants should benefit. Market participants may engage Floor Brokers to entrust them with their QCC orders and, given the credit that a Floor Broker may receive, such market participants may negotiate the appropriate fee for such order flow. The Exchange also believes that the proposed credits are equitable and not unfairly discriminatory because they would apply to all Floor Brokers that execute QCC orders on the Exchange on an equal and non- discriminatory basis. Moreover, the Exchange notes that the proposed credits are consistent with credits offered by other options exchanges. Specifically, PHLX and ISE pay volume-based rebates for QCC volume that range from $0.00 to $0.11 per contract.\12\ The Exchange believes that the proposed textual changes to the Floor Broker credit (see supra n. 7) would add clarity, transparency and internal consistency to the Fee Schedule. --------------------------------------------------------------------------- \12\ See supra n. 10. --------------------------------------------------------------------------- The Exchange believes that adopting the proposed incremental service fee once a firm reaches the Fee Cap is [[Page 47234]] reasonable because it would allow the Exchange to recoup the costs incurred in providing certain services, including but not limited to trade matching and processing, post trade allocation, submission for clearing and customer service activities related to trading activity on the Exchange. In this regard, the Exchanges notes that the proposed fee is consistent with similarly such incremental fees charged on other options exchanges in connection with similar fee caps and is therefore competitive.\13\ Finally, the Exchange believes the proposal to adopt the service fee is equitable and not unfairly discriminatory because it would uniformly apply to all member firms engaged in manual proprietary trading that have reached the Fee Cap. --------------------------------------------------------------------------- \13\ See supra n. 11. --------------------------------------------------------------------------- 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 would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed change would allow Floor Brokers to better compete for QCC volumes as the credits are consistent with those paid to participants on other exchanges.\14\ The Exchange also believes that the proposed service fee is likewise competitive as it would allow the Exchange to recoup certain costs incurred in providing services to member firms and is consistent with similar such fees charged by other exchanges that offer a similar monthly fee cap.\15\ --------------------------------------------------------------------------- \14\ See supra n. 10. \15\ See supra n. 11. --------------------------------------------------------------------------- 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) \16\ of the Act and subparagraph (f)(2) of Rule 19b-4 \17\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(3)(A). \17\ 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) \18\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \18\ 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-2018-64 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEARCA-2018-64. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEARCA-2018-64 and should be submitted on or before October 9, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2018-20194 Filed 9-17-18; 8:45 am] BILLING CODE 8011-01-P
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B. Self-Regulatory Organization’s subparagraph (f)(2) of Rule 19b–4 14 Washington, DC 20549, on official
Statement on Burden on Competition thereunder, because it establishes a due, business days between the hours of
In accordance with Section 6(b)(8) of fee, or other charge imposed by the 10:00 a.m. and 3:00 p.m. Copies of the
the Act,12 the Exchange believes that the Exchange. filing also will be available for
At any time within 60 days of the inspection and copying at the principal
proposed rule change would not impose
filing of such proposed rule change, the office of the Exchange. All comments
any burden on competition that is not
Commission summarily may received will be posted without change.
necessary or appropriate in furtherance
temporarily suspend such rule change if Persons submitting comments are
of the purposes of the Act. Debt
it appears to the Commission that such cautioned that we do not redact or edit
securities typically trade in a
action is necessary or appropriate in the personal identifying information from
decentralized OTC dealer market that is
public interest, for the protection of comment submissions. You should
less liquid and transparent than the
investors, or otherwise in furtherance of submit only information that you wish
equities markets. The Exchange believes
the purposes of the Act. If the to make available publicly. All
that the proposed change would
Commission takes such action, the submissions should refer to File No.
increase competition with these OTC
Commission shall institute proceedings SR–NYSE–2018–39, and should be
venues by creating additional incentives
under Section 19(b)(2)(B) 15 of the Act to submitted on or before October 9, 2018.
to engage in bonds transactions on the
determine whether the proposed rule For the Commission, by the Division of
Exchange and rewarding market
change should be approved or Trading and Markets, pursuant to delegated
participants for actively quoting and
disapproved. authority.16
providing liquidity in the only
Eduardo A. Aleman,
transparent bond market, which the IV. Solicitation of Comments
Exchange believes will enhance market Assistant Secretary.
Interested persons are invited to [FR Doc. 2018–20195 Filed 9–17–18; 8:45 am]
quality. submit written data, views, and
The Exchange notes that it operates in arguments concerning the foregoing,
BILLING CODE 8011–01–P
a highly competitive market in which including whether the proposed rule
market participants can readily favor change is consistent with the Act.
competing venues that are not SECURITIES AND EXCHANGE
Comments may be submitted by any of COMMISSION
transparent. In such an environment, the following methods:
the Exchange must continually review, [Release No. 34–84099; File No. SR–
and consider adjusting its fees and Electronic Comments NYSEARCA–2018–64]
rebates to remain competitive with other • Use the Commission’s internet
exchanges as well as with alternative comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE
trading systems and other venues that rules/sro.shtml); or Arca, Inc.; Notice of Filing and
are not required to comply with the • Send an email to rule-comments@ Immediate Effectiveness of Proposed
statutory standards applicable to sec.gov. Please include File No. SR– Rule Change To Modify the NYSE Arca
exchanges. Because competitors are free NYSE–2018–39 on the subject line. Options Fee Schedule
to modify their own fees and credits in September 12, 2018.
Paper Comments
response, and because market Pursuant to Section 19(b)(1) 1 of the
participants may readily adjust their • Send paper comments in triplicate
Securities Exchange Act of 1934 (the
order routing practices, the Exchange to Secretary, Securities and Exchange
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
believes that the degree to which fee Commission, 100 F Street NE,
notice is hereby given that, on August
changes in this market may impose any Washington, DC 20549–1090.
29, 2018, NYSE Arca, Inc. (the
burden on competition is extremely All submissions should refer to File No. ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
limited. As a result of all of these SR–NYSE–2018–39. This file number the Securities and Exchange
considerations, the Exchange does not should be included on the subject line Commission (the ‘‘Commission’’) the
believe that the proposed change will if email is used. To help the proposed rule change as described in
impair the ability of member Commission process and review your Items I, II, and III below, which Items
organizations or competing order comments more efficiently, please use have been prepared by the self-
execution venues to maintain their only one method. The Commission will regulatory organization. The
competitive standing in the financial post all comments on the Commission’s Commission is publishing this notice to
markets. internet website (http://www.sec.gov/ solicit comments on the proposed rule
rules/sro.shtml). Copies of the change from interested persons.
C. Self-Regulatory Organization’s
submission, all subsequent
Statement on Comments on the I. Self-Regulatory Organization’s
amendments, all written statements
Proposed Rule Change Received From Statement of the Terms of Substance of
with respect to the proposed rule
Members, Participants, or Others the Proposed Rule Change
change that are filed with the
No written comments were solicited Commission, and all written The Exchange proposes to modify the
or received with respect to the proposed communications relating to the NYSE Arca Options Fee Schedule (‘‘Fee
rule change. proposed rule change between the Schedule’’). The Exchange proposes to
III. Date of Effectiveness of the Commission and any person, other than implement the fee change effective
Proposed Rule Change and Timing for those that may be withheld from the September 1, 2018. The proposed rule
public in accordance with the change is available on the Exchange’s
daltland on DSKBBV9HB2PROD with NOTICES
Commission Action
provisions of 5 U.S.C. 552, will be website at www.nyse.com, at the
The foregoing rule change is effective available for website viewing and principal office of the Exchange, and at
upon filing pursuant to Section printing in the Commission’s Public
19(b)(3)(A) 13 of the Act and Reference Room, 100 F Street NE, 16 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
12 15 U.S.C. 78f(b)(8). 14 17 CFR 240.19b–4(f)(2). 2 15 U.S.C. 78a.
13 15 U.S.C. 78s(b)(3)(A). 15 15 U.S.C. 78s(b)(2)(B). 3 17 CFR 240.19b–4.
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the Commission’s Public Reference 300,000 or fewer contracts in a month,’’ notes that this proposed fee is
Room. which tier would effectively replace the competitive as it is consistent with the
current $0.035 ‘‘Floor Broker Rebate for incremental service fee that NYSE
II. Self-Regulatory Organization’s
Executed Orders—Per Contract Side.’’ 7 American imposes once firms have
Statement of the Purpose of, and
The Exchange proposes to introduce a reached a similar monthly fee cap on
Statutory Basis for, the Proposed Rule
second tier that would enable Floor that exchange.11
Change
Brokers to earn a higher credit—of
In its filing with the Commission, the $0.10—for executed QCC transactions in 2. Statutory Basis
self-regulatory organization included excess of 300,000 contracts.8 The The Exchange believes that the
statements concerning the purpose of, proposed credits would be paid solely proposed rule change is consistent with
and basis for, the proposed rule change on the volume executed to achieve each Section 6(b) of the Act, in general, and
and discussed any comments it received tier and is not retroactive to the first furthers the objectives of Sections
on the proposed rule change. The text contract.9 For example, if a Floor Broker 6(b)(4) and (5) of the Act, in particular,
of those statements may be examined at executes 400,000 QCC contracts in a because it provides for the equitable
the places specified in Item IV below. given month, the Floor Broker would allocation of reasonable dues, fees, and
The Exchange has prepared summaries, receive the $0.07 per contract for the other charges among its members,
set forth in sections A, B, and C below, first 300,000 QCC transactions and issuers and other persons using its
of the most significant parts of such $0.10 per contract for the remaining facilities and does not unfairly
statements. 100,000 contracts. As with the existing discriminate between customers,
A. Self-Regulatory Organization’s Floor Broker Rebate, Customer-to- issuers, brokers or dealers.
Statement of the Purpose of, and the Customer QCC trades would not qualify The Exchange believes that the
Statutory Basis for, the Proposed Rule for any credit as such transactions net proposed tiered Floor Broker credits for
Change the Exchange no revenue. QCC volume rebates are reasonable,
The Exchange notes that the proposed equitable and not unfairly
1. Purpose credit for Floor Brokers is consistent discriminatory because the credits are
The purpose of this filing is to modify with such credits offered for QCC designed to attract more QCC volume to
the Fee Schedule, effective September 1, volumes across the industry. the Exchange. To the extent that the
2018, to modify the existing Floor Specifically, the Nasdaq OMX PHLX credits attract additional order flow to
Broker rebate for executed Qualified (‘‘PHLX’’) and Nasdaq ISE (‘‘ISE’’) pay the Exchange, all market participants
Contingent Cross (‘‘QCC’’) orders,4 and volume-based rebates for QCC volume should benefit. Market participants may
to adjust the Firm and Broker Dealer that range from $0.00 to $0.11 per engage Floor Brokers to entrust them
Monthly Fee Cap. contract.10 with their QCC orders and, given the
Currently, the Exchange offers a Floor The Exchange also proposes to adopt credit that a Floor Broker may receive,
Brokers Rebate of $0.035 per contract an incremental service fee of $0.01 per such market participants may negotiate
side for QCC trades executed on behalf contract for Firm or Broker Dealer the appropriate fee for such order flow.
of non-Customers.5 The Exchange also Manual transactions once an OTP The Exchange also believes that the
offers a Firm and Broker Dealer Monthly Holder or OTP Firm has reached the proposed credits are equitable and not
Fee Cap (the ‘‘Fee Cap’’) which caps fees applicable Fee Cap. The incremental unfairly discriminatory because they
at $100,000 for Manual (Open Outcry) service fee would not apply to the would apply to all Floor Brokers that
Executions and, for QCC transactions execution of a QCC order. The Exchange execute QCC orders on the Exchange on
executed by a Floor Broker from the an equal and non-discriminatory basis.
7 The Exchange also proposes to make a number
Floor of the Exchange, for Firm and Moreover, the Exchange notes that the
of textual changes to the table regarding QCC
Broker Dealer transactions cleared in the transactions. Specifically, the Exchange proposes to proposed credits are consistent with
customer range.6 revise the title of the table to reflect the shorthand credits offered by other options
The Exchange proposes to replace the ‘‘QCC’’ and that the table includes fees ‘‘and exchanges. Specifically, PHLX and ISE
existing Floor Broker Rebate with a two- credits’’; to revise the column headings to pay volume-based rebates for QCC
tiered credit. As proposed, the first tier ‘‘Participant’’ and ‘‘Per Contract Fee or Credit’’; to
remove reference to ‘‘per side’’ with respect to QCC volume that range from $0.00 to $0.11
would provide a $0.07 per contract fees as fees/credits are based on participant type per contract.12
credit for ‘‘Floor Brokers executing executing such contracts; and to remove the term The Exchange believes that the
‘‘Rebate’’ as the Floor Brokers are actually given a proposed textual changes to the Floor
4 The QCC permits an OTP Holder or OTP Firm credit against fees incurred. See proposed Fee
Schedule, QUALIFIED CONTINGENT CROSS Broker credit (see supra n. 7) would add
to effect a qualified contingent trade (‘‘QCT’’) in a
Regulation NMS stock and cross the options leg of (‘‘QCC’’) TRANSACTION FEES AND CREDITS and clarity, transparency and internal
the trade on the Exchange immediately upon entry Endnote 13. The Exchange believes these technical consistency to the Fee Schedule.
and without order exposure if the order is for at changes would add clarity and transparency to the The Exchange believes that adopting
least 1,000 contracts, is part of a QCT, is executed Fee Schedule.
8 See id. (including reference to Endnote 13 in
the proposed incremental service fee
at a price at least equal to the national best bid or
offer, as long as there are no Customer orders in the proposed tier, consistent with the current schedule once a firm reaches the Fee Cap is
Exchange’s Consolidated Book at the same price. for QCCs). See Fee Schedule, Endnote 13 supra n.
5 See Fee Schedule, QUALIFIED CONTINGENT 5 (providing that the Floor Broker credit does not 11 See NYSE American Options Fee Schedule,
CROSS TRANSACTION FEES, available apply to QCC executions in which a Customer is on Section I.I., Firm Monthly Fee Cap, available here,
here,https://www.nyse.com/publicdocs/nyse/ both sides of the QCC and capping the potential https://www.nyse.com/publicdocs/nyse/markets/
markets/arca-options/NYSE_Arca_Options_Fee_ monthly credit at $375,000 per Floor Broker firm). american-options/NYSE_American_Options_Fee_
Schedule.pdf. 9 See id., Endnote 13 (providing, in relevant part, Schedule.pdf (providing that ‘‘[o]nce a Firm has
daltland on DSKBBV9HB2PROD with NOTICES
6 The Fee Cap excludes fees for Strategy ‘‘[t]he Floor Broker credit is paid only on volume reached the Firm Monthly Fee Cap, an incremental
Executions, Royalty Fees and firm trades executed within the applicable tier and is not retroactive to service fee of $0.01 per contract for Firm Manual
via a Joint Back Office agreement. See id. FIRM the first contract traded’’). transactions will apply, except for the execution of
AND BROKER DEALER MONTHLY FEE CAP. The 10 See PHLX Pricing Schedule, available here, a QCC order, in which case there is no incremental
Exchange also offers a lesser cap on fees for those http://www.nasdaqtrader.com/Micro.aspx?id= service fee’’). The Exchange notes that the fee cap
OTP Holders and OTP Firms that achieve certain phlxpricing; and ISE Schedule of Fees, available on NYSE American applies only to ‘‘Firms,’’
Tiers of the Customer Penny Pilot Posting Credit here, http://ise.cchwallstreet.com/tools/ whereas the NYSE Arca Fee Cap applies to both
Tiers. See id., FIRM AND BROKER DEALER PlatformViewer.asp?selectednode=chp_1_1_ Firms and Broker Dealers.
MONTHLY FIRM CAP TIERS. 5&manual=%2Fcontents%2Fise%2Fise-fee%2F. 12 See supra n. 10.
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reasonable because it would allow the III. Date of Effectiveness of the proposed rule change between the
Exchange to recoup the costs incurred Proposed Rule Change and Timing for Commission and any person, other than
in providing certain services, including Commission Action those that may be withheld from the
but not limited to trade matching and The foregoing rule change is effective public in accordance with the
processing, post trade allocation, upon filing pursuant to Section provisions of 5 U.S.C. 552, will be
submission for clearing and customer 19(b)(3)(A) 16 of the Act and available for website viewing and
service activities related to trading subparagraph (f)(2) of Rule 19b–4 17 printing in the Commission’s Public
activity on the Exchange. In this regard, thereunder, because it establishes a due, Reference Room, 100 F Street NE,
the Exchanges notes that the proposed fee, or other charge imposed by the Washington, DC 20549 on official
fee is consistent with similarly such Exchange. business days between the hours of
incremental fees charged on other At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of the
options exchanges in connection with filing of such proposed rule change, the filing also will be available for
similar fee caps and is therefore Commission summarily may inspection and copying at the principal
competitive.13 Finally, the Exchange temporarily suspend such rule change if office of the Exchange. All comments
believes the proposal to adopt the it appears to the Commission that such received will be posted without change.
service fee is equitable and not unfairly action is necessary or appropriate in the Persons submitting comments are
discriminatory because it would public interest, for the protection of cautioned that we do not redact or edit
uniformly apply to all member firms investors, or otherwise in furtherance of personal identifying information from
engaged in manual proprietary trading the purposes of the Act. If the comment submissions. You should
that have reached the Fee Cap. Commission takes such action, the submit only information that you wish
Commission shall institute proceedings to make available publicly. All
B. Self-Regulatory Organization’s under Section 19(b)(2)(B) 18 of the Act to submissions should refer to File
Statement on Burden on Competition determine whether the proposed rule Number SR–NYSEARCA–2018–64 and
In accordance with Section 6(b)(8) of change should be approved or should be submitted on or before
the Act, the Exchange does not believe disapproved. October 9, 2018.
that the proposed rule change would IV. Solicitation of Comments For the Commission, by the Division of
impose any burden on competition that Trading and Markets, pursuant to delegated
Interested persons are invited to authority.19
is not necessary or appropriate in
submit written data, views, and Eduardo A. Aleman,
furtherance of the purposes of the Act.
arguments concerning the foregoing,
The Exchange believes that the Assistant Secretary.
including whether the proposed rule
proposed change would allow Floor [FR Doc. 2018–20194 Filed 9–17–18; 8:45 am]
change is consistent with the Act.
Brokers to better compete for QCC Comments may be submitted by any of BILLING CODE 8011–01–P
volumes as the credits are consistent the following methods:
with those paid to participants on other
exchanges.14 The Exchange also Electronic Comments
DEPARTMENT OF STATE
believes that the proposed service fee is • Use the Commission’s internet
likewise competitive as it would allow comment form (http://www.sec.gov/ [Delegation of Authority No. 460]
the Exchange to recoup certain costs rules/sro.shtml); or
incurred in providing services to • Send an email to rule-comments@ Delegation of Authority Payment of
member firms and is consistent with sec.gov. Please include File Number SR– Rewards
similar such fees charged by other NYSEARCA–2018–64 on the subject
line. By virtue of the authority vested in
exchanges that offer a similar monthly the Secretary of State by the laws of the
fee cap.15 Paper Comments United States, including 22 U.S.C.
The Exchange notes that it operates in • Send paper comments in triplicate 265l(a) and 22 U.S.C. 2708(e), I hereby
a highly competitive market in which to Brent J. Fields, Secretary, Securities delegate to the Assistant Secretary for
market participants can readily favor and Exchange Commission, 100 F Street Diplomatic Security, to the extent
competing venues. In such an NE, Washington, DC 20549–1090. authorized by law, authority to approve
environment, the Exchange must All submissions should refer to File the payment of rewards of $100,000 or
continually review, and consider Number SR–NYSEARCA–2018–64. This less as recommended by the relevant
adjusting, its fees and credits to remain file number should be included on the Interagency Rewards Committee.
competitive with other exchanges. For subject line if email is used. To help the Approval of such rewards will be in
the reasons described above, the Commission process and review your accordance with 22 U.S.C. 2708 and
Exchange believes that the proposed comments more efficiently, please use Volume 12 of the Foreign Affairs
rule change reflects this competitive only one method. The Commission will Manual Subchapter 228.
environment. post all comments on the Commission’s Any authorities covered by this
internet website (http://www.sec.gov/ delegation may also be exercised by the
C. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the Secretary, the Deputy Secretary, and the
Statement on Comments on the
submission, all subsequent Under Secretary for Management.
Proposed Rule Change Received From
amendments, all written statements Nothing in this delegation of authority
Members, Participants, or Others
with respect to the proposed rule shall be deemed to supersede any
daltland on DSKBBV9HB2PROD with NOTICES
No written comments were solicited change that are filed with the existing delegation of authority, which
or received with respect to the proposed Commission, and all written shall remain in full force and effect
rule change. communications relating to the during and after this delegation.
This memorandum shall be published
13 See supra n. 11. 16 15 U.S.C. 78s(b)(3)(A). in the Federal Register.
14 See supra n. 10. 17 17 CFR 240.19b–4(f)(2).
15 See supra n. 11. 18 15 U.S.C. 78s(b)(2)(B). 19 17 CFR 200.30–3(a)(12).
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Document Created: 2018-09-18 01:18:59
Document Modified: 2018-09-18 01:18:59
| 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 | 83 FR 47232 |
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