Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule To Modify the Fees Relating to Qualified Contingent Cross Orders, 71410-71411 [2011-29676]

Download as PDF 71410 Federal Register / Vol. 76, No. 222 / Thursday, November 17, 2011 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–29678 Filed 11–16–11; 8:45 am] 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 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65730; File No. SR– NYSEArca–2011–79] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule To Modify the Fees Relating to Qualified Contingent Cross Orders November 10, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on November 1, 2011, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 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’’) to modify the fees relating to Qualified Contingent Cross (‘‘QCC’’) orders. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and www.nyse.com. jlentini on DSK4TPTVN1PROD with NOTICES 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, 27 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 17:25 Nov 16, 2011 Jkt 226001 1. Purpose The purpose of the proposal is to modify the fees relating to QCC orders. Specifically, the Exchange intends to adopt a rebate of $.10 per contract for executed QCC orders. The rebate will be credited to the executing Floor Broker. The Exchange notes that the terms of a QCC order are negotiated and agreed to prior to being brought to an exchange for possible execution. In bringing a QCC order to the Exchange for execution, OTP Holders have two primary means of doing so. They can configure their systems to deliver the QCC order to the Exchange matching engines for validation and execution. Alternatively they can utilize the services of another OTP Holder acting as a Floor Broker. In turn, the Floor Broker who is in receipt of such an order can enter the order through an Exchangeprovided system 3 to be delivered to the Exchange matching engine for validation and potential execution. In light of the fact that the Exchange does not offer a front-end for order entry, unlike some of the competing exchanges,4 the Exchange believes it is necessary from a competitive standpoint to offer this rebate to the executing Floor Broker on a QCC order. The Exchange expects that the rebate offered to executing Floor Brokers will allow them to price their services at a level that will enable them to attract QCC order flow from participants who would otherwise utilize an existing front-end order entry mechanism offered by the Exchange’s competitors instead of incurring the cost in time and money to develop their own internal systems to be able to deliver QCC orders directly to the Exchange systems. To the extent that Floor Brokers are able to attract these QCC orders, they will gain important information that will allow them to solicit the parties to the QCC orders for 3 Floor Brokers are required by NYSE Arca Options Rule 6.67 to have systematized orders prior to representing them in open outcry. Using the same Electronic Order Capture System, Floor Brokers will be able to enter QCC orders for validation by the Exchange matching engines and potential execution. 4 The International Securities Exchange offers PRECISE TRADE as a means for users to enter orders and Chicago Board Options Exchange has a similar front-end order entry system called PULSE. Such systems do not require users to develop their own internal front-end order entry systems and may provide savings to users in terms of development time and costs. PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 participation in other trades, which will in turn benefit all other Exchange participants through the additional liquidity and price discovery that may occur as a result. The Exchange notes that at least two other exchanges offer a similar rebate.5 The proposed change will be operative on November 1, 2011. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) 6 of the Securities Exchange Act of 1934 (the ‘‘Act’’), in general, and Section 6(b)(4) 7 of the Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes the proposed $.10 per contract rebate for Floor Brokers who enter QCC orders that execute is reasonable because it will allow Floor Brokers the opportunity to compete for QCC orders that would otherwise be entered into front-end order entry systems of competing exchanges.8 The proposed rebate is comparable to that found on other exchanges 9 in that it is being offered to Floor Brokers as an inducement that may allow them to competitively price their services offered to all participants. To the extent that the rebate is successful in attracting additional order flow to the Exchange, all participants should benefit. As such, the Exchange believes that the rebate is appropriate and reasonable. The Exchange believes the proposal to adopt a $.10 per contract rebate is equitable and not unfairly discriminatory because it would uniformly apply to all QCC orders entered by a Floor Broker for validation by the system and potential execution. The rebate is not unfairly discriminatory to firms that enter QCC orders directly into the NYSE Arca System through electronic connection, because the fee for the QCC order is the same whether it is entered electronically or through a Floor Broker. In addition, under Commentary .01 to Arca Options Rule 6.90, only Floor Brokers may enter a QCC order from the Floor; therefore, 5 See Securities Exchange Act Release No. 65472 (October 3, 2011), 76 FR 62887 (October 11, 2011) (SR–NYSEAmex–2011–72) and NASDAQ OMX PHLX fee schedule dated September 12, 2011, page 21 (describing a Floor Broker Subsidy that can range as high as $.09 per contract), available at https://www.nasdaqtrader.com/content/ marketregulation/membership/phlx/feesched.pdf. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). 8 See supra note 4. 9 See supra note 5. E:\FR\FM\17NON1.SGM 17NON1 Federal Register / Vol. 76, No. 222 / Thursday, November 17, 2011 / Notices providing the rebate to Floor Brokers does not discriminate against other QCC orders entered into the NYSE Arca System from on the Floor. Any participant will be able to engage a rebate-receiving Floor Broker in a discussion surrounding the appropriate level of fees that they may be charged for entrusting the entry of the QCC order to the Floor Broker into the Exchange systems for validation and execution. The additional order flow attracted by this rebate should benefit all participants. The rebate is meant to assist Floor Brokers to recruit business on an agency basis from both OTP Holders and non-OTP Holder firms. The Floor Broker may use all or part of the rebate to offset the Floor Brokerage charges billed to the Firm. For this reason the Exchange believes the adoption of the proposed rebate is both equitable and not unfairly discriminatory. B. Self-Regulatory Organization’s Statement on Burden on Competition 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. 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. jlentini on DSK4TPTVN1PROD with NOTICES 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) 10 of the Act and subparagraph (f)(2) of Rule 19b–4 11 thereunder, because it establishes a due, fee, or other charge imposed by the NYSE Arca. 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. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@sec.gov. Please include File Number SR–NYSEArca–2011–79 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2011–79. 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 (https://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 a.m. and 3 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–2011–79 and should be submitted on or before December 8, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–29676 Filed 11–16–11; 8:45 am] BILLING CODE 8011–01–P 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(2). VerDate Mar<15>2010 17:25 Nov 16, 2011 12 17 Jkt 226001 PO 00000 CFR 200.30–3(a)(12). Frm 00105 Fmt 4703 Sfmt 4703 71411 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65728, File No. SR–BATS– 2011–035] Self-Regulatory Organizations; BATS Exchange, Inc.; Order Approving Proposed Rule Change, as Modified by Partial Amendment No. 1, To Amend and Restate the Amended and Restated Bylaws of BATS Global Markets, Inc. November 10, 2011. I. Introduction On September 7, 2011, BATS Exchange, Inc. (‘‘BATS’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to amend the Bylaws of the Exchange’s sole stockholder, BATS Global Markets, Inc. (‘‘Corporation’’), in connection with the Corporation’s anticipated initial public offering of shares of its Class A Common Stock (the ‘‘IPO’’). The proposed rule change was published for comment in the Federal Register on September 26, 2011.3 On November 3, 2011, the Exchange filed Partial Amendment No. 1 to the proposed rule change.4 The Commission received no comment letters regarding the proposal. This order approves the proposed rule change, as modified by Partial Amendment No. 1. II. Description of the Proposal On May 13, 2011, the Corporation filed a registration statement on Form S–1 with the Commission to register shares of Class A common stock and to disclose its intention to conduct an IPO offering those shares and to list those shares for trading on the Exchange. In connection with its IPO, the Exchange filed this proposed rule change to amend and restate the Corporation’s current Bylaws and adopt these changes as its Second Amended and Restated Bylaws (‘‘New Bylaws’’). The proposal would primarily amend and restate various provisions of the Bylaws in a manner that the Exchange believes 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 65353 (September 19, 2011), 76 FR 59472 (September 26, 2011) (‘‘Notice’’). 4 Partial Amendment No. 1 corrects an inconsistency between the Third Amended and Restated Certificate of Incorporation of the Corporation and the Corporation’s proposed amended bylaws concerning actions of stockholders without a meeting. This is a technical amendment and is not subject to notice and comment as it does not materially affect the substance of the rule filing. 2 17 E:\FR\FM\17NON1.SGM 17NON1

Agencies

[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71410-71411]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29676]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65730; File No. SR-NYSEArca-2011-79]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Options Fee Schedule To Modify the Fees Relating to Qualified 
Contingent Cross Orders

November 10, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on November 1, 2011, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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\ 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'') to modify the fees relating to Qualified Contingent 
Cross (``QCC'') orders. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
www.nyse.com.

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposal is to modify the fees relating to QCC 
orders. Specifically, the Exchange intends to adopt a rebate of $.10 
per contract for executed QCC orders. The rebate will be credited to 
the executing Floor Broker.
    The Exchange notes that the terms of a QCC order are negotiated and 
agreed to prior to being brought to an exchange for possible execution. 
In bringing a QCC order to the Exchange for execution, OTP Holders have 
two primary means of doing so. They can configure their systems to 
deliver the QCC order to the Exchange matching engines for validation 
and execution. Alternatively they can utilize the services of another 
OTP Holder acting as a Floor Broker. In turn, the Floor Broker who is 
in receipt of such an order can enter the order through an Exchange-
provided system \3\ to be delivered to the Exchange matching engine for 
validation and potential execution. In light of the fact that the 
Exchange does not offer a front-end for order entry, unlike some of the 
competing exchanges,\4\ the Exchange believes it is necessary from a 
competitive standpoint to offer this rebate to the executing Floor 
Broker on a QCC order. The Exchange expects that the rebate offered to 
executing Floor Brokers will allow them to price their services at a 
level that will enable them to attract QCC order flow from participants 
who would otherwise utilize an existing front-end order entry mechanism 
offered by the Exchange's competitors instead of incurring the cost in 
time and money to develop their own internal systems to be able to 
deliver QCC orders directly to the Exchange systems. To the extent that 
Floor Brokers are able to attract these QCC orders, they will gain 
important information that will allow them to solicit the parties to 
the QCC orders for participation in other trades, which will in turn 
benefit all other Exchange participants through the additional 
liquidity and price discovery that may occur as a result. The Exchange 
notes that at least two other exchanges offer a similar rebate.\5\
---------------------------------------------------------------------------

    \3\ Floor Brokers are required by NYSE Arca Options Rule 6.67 to 
have systematized orders prior to representing them in open outcry. 
Using the same Electronic Order Capture System, Floor Brokers will 
be able to enter QCC orders for validation by the Exchange matching 
engines and potential execution.
    \4\ The International Securities Exchange offers PRECISE TRADE 
as a means for users to enter orders and Chicago Board Options 
Exchange has a similar front-end order entry system called PULSE. 
Such systems do not require users to develop their own internal 
front-end order entry systems and may provide savings to users in 
terms of development time and costs.
    \5\ See Securities Exchange Act Release No. 65472 (October 3, 
2011), 76 FR 62887 (October 11, 2011) (SR-NYSEAmex-2011-72) and 
NASDAQ OMX PHLX fee schedule dated September 12, 2011, page 21 
(describing a Floor Broker Subsidy that can range as high as $.09 
per contract), available at https://www.nasdaqtrader.com/content/marketregulation/membership/phlx/feesched.pdf.
---------------------------------------------------------------------------

    The proposed change will be operative on November 1, 2011.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \6\ of the Securities Exchange Act 
of 1934 (the ``Act''), in general, and Section 6(b)(4) \7\ of the Act, 
in particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes the proposed $.10 per contract rebate for 
Floor Brokers who enter QCC orders that execute is reasonable because 
it will allow Floor Brokers the opportunity to compete for QCC orders 
that would otherwise be entered into front-end order entry systems of 
competing exchanges.\8\ The proposed rebate is comparable to that found 
on other exchanges \9\ in that it is being offered to Floor Brokers as 
an inducement that may allow them to competitively price their services 
offered to all participants. To the extent that the rebate is 
successful in attracting additional order flow to the Exchange, all 
participants should benefit. As such, the Exchange believes that the 
rebate is appropriate and reasonable.
---------------------------------------------------------------------------

    \8\ See supra note 4.
    \9\ See supra note 5.
---------------------------------------------------------------------------

    The Exchange believes the proposal to adopt a $.10 per contract 
rebate is equitable and not unfairly discriminatory because it would 
uniformly apply to all QCC orders entered by a Floor Broker for 
validation by the system and potential execution. The rebate is not 
unfairly discriminatory to firms that enter QCC orders directly into 
the NYSE Arca System through electronic connection, because the fee for 
the QCC order is the same whether it is entered electronically or 
through a Floor Broker. In addition, under Commentary .01 to Arca 
Options Rule 6.90, only Floor Brokers may enter a QCC order from the 
Floor; therefore,

[[Page 71411]]

providing the rebate to Floor Brokers does not discriminate against 
other QCC orders entered into the NYSE Arca System from on the Floor. 
Any participant will be able to engage a rebate-receiving Floor Broker 
in a discussion surrounding the appropriate level of fees that they may 
be charged for entrusting the entry of the QCC order to the Floor 
Broker into the Exchange systems for validation and execution. The 
additional order flow attracted by this rebate should benefit all 
participants. The rebate is meant to assist Floor Brokers to recruit 
business on an agency basis from both OTP Holders and non-OTP Holder 
firms. The Floor Broker may use all or part of the rebate to offset the 
Floor Brokerage charges billed to the Firm. For this reason the 
Exchange believes the adoption of the proposed rebate is both equitable 
and not unfairly discriminatory.

B. Self-Regulatory Organization's Statement on Burden on Competition

    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.

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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the NYSE Arca.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2011-79 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2011-79. 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 (https://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 
a.m. and 3 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-2011-79 and should 
be submitted on or before December 8, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-29676 Filed 11-16-11; 8:45 am]
BILLING CODE 8011-01-P
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