Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Qualifications for Credits for Electronic Executions of Posted Customer Liquidity in Penny Pilot Issues and To Amend the Fees for Electronic Complex Order Executions, 35089-35091 [2012-14190]
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<![CDATA[
35089
Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Notices
solicit comments on the proposed rule
change from interested persons.
SECURITIES AND EXCHANGE
COMMISSION
June 6, 2012.
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 May 31,
2012, NYSE Arca, Inc. (the ‘‘Exchange’’
or ‘‘NYSE Arca’’) 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 self-regulatory organization. The
Commission is publishing this notice to
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
qualifications for credits for electronic
executions of posted Customer liquidity
in Penny Pilot issues and to amend the
fees for Electronic Complex Order
executions. The text of 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
[Release No. 34–67143; File No. SR–
NYSEArca–2012–52]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the
Qualifications for Credits for Electronic
Executions of Posted Customer
Liquidity in Penny Pilot Issues and To
Amend the Fees for Electronic
Complex Order Executions
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 Exchange proposes to amend the
qualifications for credits for electronic
executions of posted Customer liquidity
in Penny Pilot issues and to amend the
fees for Electronic Complex Order
executions. The Exchange proposes to
make the changes operative on June 1,
2012.
For executions prior to May 8, 2012,
OTP Holders and OTP Firms that
exceed the following thresholds of total
monthly electronic executions of
Customer posted liquidity receive the
corresponding credits for all electronic
executions of Customer posted liquidity
in Penny Pilot issues:3
CUSTOMER MONTHLY POSTING THRESHOLDS
Per contract
rate on all
posted liquidity
Monthly total contracts executed from posted liquidity
Threshold
Threshold
Threshold
Threshold
1
2
3
4
.................................................................................
.................................................................................
.................................................................................
.................................................................................
For executions beginning May 8,
2012, OTP Holders and OTP Firms that
Tier
Base ..........
Tier 1 .........
Tier 2 .........
Tier 3 .........
srobinson on DSK4SPTVN1PROD with NOTICES
Tier 4 .........
More
More
More
More
than
than
than
than
350,000 .....................................................................
800,000 .....................................................................
1,200,000 ..................................................................
3,500,000 ..................................................................
meet or exceed the qualifications below
receive the corresponding credit for all
electronic executions of Customer
posted liquidity in Penny Pilot issues:
Qualification basis (average electronic executions per day) **
........................................................
15,000 Customer Posted Contracts in Penny Pilot Issues.
25,000 Customer Posted Contracts in Penny Pilot Issues, or.
50,000 Customer Posted Contracts in Penny Pilot Issues.
65,000 Customer Posted Contracts in Penny Pilot Issues,
Plus 0.3% of U.S. Equity Market
Share Posted and Executed on
NYSE Arca Equity Market,* or.
¥$0.28
¥$0.36
¥$0.42
¥$0.43
Credit applied to
posted electronic
customer
executions in
penny pilot issues
........................................................
........................................................
........................................................
........................................................
($0.25)
(0.38)
75,000 Posted Contracts in Penny
Pilot Issues, any Account Type*.
........................................................
........................................................
(0.40)
........................................................
(0.43)
100,000 Posted Contracts in
Penny Pilot Issues, any Account
type,* or.
100,000 Customer Posted and Removing Contracts in Penny Pilot
Issues.
(0.44)
* Includes transaction volume from the OTP Holder’s or OTP Firm’s affiliates.
** For the month of May 2012, calculation of average electronic executions per day shall begin on May 8, 2012.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Mar<15>2010
22:42 Jun 11, 2012
3 As provided under NYSE Arca Options Rule
6.72, options on certain issues have been approved
to trade with a minimum price variation of $0.01
as part of a pilot program that is currently
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Fmt 4703
Sfmt 4703
scheduled to expire on June 30, 2012. The Exchange
will submit a separate rule filing to extend the
terms of the pilot.
E:\FR\FM\12JNN1.SGM
12JNN1
35090
Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Notices
The Exchange proposes to amend the
Fee Schedule as follows. First, the
Exchange proposes to eliminate the
transitional tiers for electronic
executions of posted Customer liquidity
in Penny Pilot issues that were
applicable through May 7, 2012 because
they will no longer apply as of June 1,
2012.
Second, for the Customer monthly
posting tier qualifications, the Exchange
proposes that each qualification
calculation also include an OTP
Holder’s or OTP Firm’s executions of
Electronic Complex Orders, including
those from the OTP Holder’s or OTP
Firm’s affiliates, for all issues and
regardless of account type.4 For
example, to qualify for Tier 2, an OTP
Holder or OTP Firm would be required
to either execute electronically (1) an
average daily volume (‘‘ADV’’) of 25,000
contracts from the combination of
(i) posted Customer orders in Penny
Pilot issues and (ii) Electronic Complex
Orders from all OTP Holders and Firms
and their affiliates, in all issues and
regardless of account type, or (2) an
ADV of 75,000 contracts from the
combination of (i) posted contracts in
Penny Pilot issues, regardless of account
type, and (ii) Electronic Complex Orders
from all OTP Holders and Firms and
their affiliates, in all issues and
regardless of account type. There would
be no change to the credit rates that
correspond to the tiers.
Finally, the Exchange proposes to
amend the rates for Electronic Complex
Order executions. Under NYSE Arca
Options Rule 6.91, an Electronic
Complex Order means any Complex
Order 5 or any Stock/Option Order 6 or
srobinson on DSK4SPTVN1PROD with NOTICES
4 Although
the Exchange will include these
Electronic Complex Orders in the calculation of the
Customer monthly posting tier qualifications,
executions of Electronic Complex Orders will not
receive a credit under this section of the Fee
Schedule.
5 Under NYSE Arca Options Rule 6.62(e), a
Complex Order is any order involving the
simultaneous purchase and/or sale of two or more
different option series in the same underlying
security, for the same account, in a ratio that is
equal to or greater than one-to-three (.333) and less
than or equal to three-to-one (3.00) and for the
purpose of executing a particular investment
strategy.
6 Under NYSE Arca Options Rule 6.62(h), a
Stock/Option Order is an order to buy or sell a
stated number of units of an underlying stock or a
security convertible into the underlying stock
(‘‘convertible security’’) coupled with the purchase
or sale of option contract(s) on the opposite side of
the market representing either (A) the same number
of units of the underlying stock or convertible
security, or (B) the number of units of the
underlying stock necessary to create a delta neutral
position, but in no case in a ratio greater than eight
option contracts per unit of trading of the
underlying stock or convertible security established
for that series by the Options Clearing Corporation.
VerDate Mar<15>2010
22:42 Jun 11, 2012
Jkt 226001
Stock/Complex Order 7 that is entered
into the NYSE Arca System. As
proposed, all Complex to Complex
Order executions would be 0.06 per
contract side, rather than the current
0.10 per contract side. Additionally, a
Complex to Complex Order for which
the same OTP Holder or OTP Firm
represents both sides will no longer be
free, but would instead be charged the
0.06 rate per contract side proposed
herein.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Securities Exchange
Act of 1934 (the ‘‘Act’’),8 in general, and
furthers the objectives of Section 6(b)(4)
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.
The Exchange believes that deleting
outdated text adds clarity to the Fee
Schedule and makes it easier to use.
The Exchange believes that charging
all Complex to Complex Order
executions $0.06 per contract side,
rather than the current $0.10 per
contract side, and eliminating the
special rate (i.e., no charge) for Complex
to Complex Orders when the same firm
represents both sides is reasonable,
equitable, and non-discriminatory
because the Exchange has determined
that the special rate has not led to
increased trading volumes and therefore
it would be more equitable to charge all
participants the same rate.
The Exchange further believes that
including Electronic Complex Orders in
the eligibility for Customer posting
credits in Penny Pilot issues is
reasonable, equitable, and not unfairly
discriminatory because it would incent
OTP Holders and OTP Firms to increase
the level of order flow sent to, and
7 Under NYSE Arca Options Rule 6.62(h), a
Stock/Complex Order is the purchase or sale of a
Complex Order coupled with an order to buy or sell
a stated number of units of an underlying stock or
a security convertible into the underlying stock
(‘‘convertible security’’) representing either: (A) The
same number of units of the underlying stock or
convertible security as are represented by the
options leg of the Complex Order with the least
number of Options contracts, or (B) the number of
units of the underlying stock necessary to create a
delta neutral position, but in no case in a ratio
greater than 8 options contracts per unit of trading
of the underlying stock or convertible security
established for that series by the Clearing
Corporation, as represented by the options leg of the
Complex Order with the least number of options
contracts.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4).
PO 00000
Frm 00158
Fmt 4703
Sfmt 4703
liquidity added on, the Exchange,
thereby potentially improving the
quality and efficiency of order
interaction and executions on the
Exchange. The inclusion of Complex
trades will also encourage more
complex orders to be sent to the
Exchange, thereby increasing trade
opportunities for all participants. The
Exchange further believes that the tiers,
as amended, are reasonable, equitable
and not unfairly discriminatory because
they are set at levels that would be more
achievable for OTP Holders and OTP
Firms. Overall, the Exchange believes
that this will result in more OTP
Holders and OTP Firms qualifying for
the tiers, receiving the credits, and
therefore reducing their overall
transaction costs on the Exchange. The
Exchange further believes that the
proposed change is reasonable,
equitable and not unfairly
discriminatory because the tiers, and the
corresponding credits, will apply
uniformly to all OTP Holders and OTP
Firms.
Finally, 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. The
Exchange believes that the proposed
rule change reflects this competitive
environment because it would broaden
the conditions under which OTP
Holders and OTP Firms may qualify for
the tiers and because it would result in
an increase in the corresponding credit
rates.
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
10 15
E:\FR\FM\12JNN1.SGM
U.S.C. 78s(b)(3)(A).
12JNN1
Federal Register / Vol. 77, No. 113 / Tuesday, June 12, 2012 / Notices
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:
srobinson on DSK4SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2012–52 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–2012–52. 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
10:00 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–
NYSEArca–2012–52 and should be
submitted on or before July 3, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14190 Filed 6–11–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67124; File No. SR–CBOE–
2012–052]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Amend the CBOE
Stock Exchange Fees Schedule
June 5, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b-4 thereunder,2
notice is hereby given that on May 31,
2012, the Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) 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 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
CBOE Stock Exchange (‘‘CBSX’’) Fees
Schedule. The text of the proposed rule
change is available on the Exchange’s
Web site (https://www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission Public Reference
Room.
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
11 17
CFR 240.19b–4(f)(2).
VerDate Mar<15>2010
22:42 Jun 11, 2012
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PO 00000
Frm 00159
Fmt 4703
Sfmt 4703
35091
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
Exchange 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 these
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 aspects 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 Exchange proposes to amend the
CBSX Fees Schedule with regards to
connectivity fees. CBSX recently moved
its trading systems over to the Equinix
NY4 facility (‘‘NY4’’). In addition to 1
Gigabit Ethernet (‘‘1 Gbps’’) network
access, NY4 has capacity to
accommodate 10 Gigabit Ethernet (‘‘10
Gbps’’) network access. The Exchange
would like to make such a connection
available to CBSX market participants.
However, the equipment and
infrastructure necessary to provide the
10 Gbps connection is more expensive
than that necessary to provide a 1 Gbps
connection. As such, the Exchange
proposes to adopt a $1,000 per month
fee for access to a 10 Gbps Network
Access Port ($2,000 for Sponsored
Users), and to clarify on the Fees
Schedule that the connection currently
being provided for $250 per month
($500 for Sponsored Users) is for a 1
Gbps connection to a Network Access
Port. CBSX market participants will be
able to elect to connect to CBSX’s
trading system via either a 1 Gbps or 10
Gbps Network Access port. Regardless
of which is chosen, the Network Access
Port fee will be assessed for each port
that provides direct access to CBSX’s
trading system. The Exchange currently
charges a different rate for regular access
and Sponsored User access, and merely
proposes to increase the rates in equal
proportion.
The proposed change is to take effect
on June 1, 2012.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
E:\FR\FM\12JNN1.SGM
12JNN1
]]>Agencies
[Federal Register Volume 77, Number 113 (Tuesday, June 12, 2012)]
[Notices]
[Pages 35089-35091]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14190]
[[Page 35089]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67143; File No. SR-NYSEArca-2012-52]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the
Qualifications for Credits for Electronic Executions of Posted Customer
Liquidity in Penny Pilot Issues and To Amend the Fees for Electronic
Complex Order Executions
June 6, 2012.
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 May 31, 2012, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'')
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 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\ 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 qualifications for credits for
electronic executions of posted Customer liquidity in Penny Pilot
issues and to amend the fees for Electronic Complex Order executions.
The text of 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the qualifications for credits for
electronic executions of posted Customer liquidity in Penny Pilot
issues and to amend the fees for Electronic Complex Order executions.
The Exchange proposes to make the changes operative on June 1, 2012.
For executions prior to May 8, 2012, OTP Holders and OTP Firms that
exceed the following thresholds of total monthly electronic executions
of Customer posted liquidity receive the corresponding credits for all
electronic executions of Customer posted liquidity in Penny Pilot
issues:\3\
---------------------------------------------------------------------------
\3\ As provided under NYSE Arca Options Rule 6.72, options on
certain issues have been approved to trade with a minimum price
variation of $0.01 as part of a pilot program that is currently
scheduled to expire on June 30, 2012. The Exchange will submit a
separate rule filing to extend the terms of the pilot.
Customer Monthly Posting Thresholds
------------------------------------------------------------------------
Monthly total Per contract
contracts executed rate on all
from posted posted
liquidity liquidity
------------------------------------------------------------------------
Threshold 1....................... More than 350,000... -$0.28
Threshold 2....................... More than 800,000... -$0.36
Threshold 3....................... More than 1,200,000. -$0.42
Threshold 4....................... More than 3,500,000. -$0.43
------------------------------------------------------------------------
For executions beginning May 8, 2012, OTP Holders and OTP Firms
that meet or exceed the qualifications below receive the corresponding
credit for all electronic executions of Customer posted liquidity in
Penny Pilot issues:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Tier Qualification basis (average electronic executions per day) ** Credit applied to
posted electronic
customer
executions in
penny pilot
issues
----------------------------------------------------------------------------------------------------------------
Base................. ...................... ...................... ...................... ($0.25)
Tier 1............... 15,000 Customer Posted ...................... ...................... (0.38)
Contracts in Penny
Pilot Issues.
Tier 2............... 25,000 Customer Posted 75,000 Posted ...................... (0.40)
Contracts in Penny Contracts in Penny
Pilot Issues, or. Pilot Issues, any
Account Type\*\.
Tier 3............... 50,000 Customer Posted ...................... ...................... (0.43)
Contracts in Penny
Pilot Issues.
Tier 4............... 65,000 Customer Posted 100,000 Posted 100,000 Customer (0.44)
Contracts in Penny Contracts in Penny Posted and Removing
Pilot Issues, Plus Pilot Issues, any Contracts in Penny
0.3% of U.S. Equity Account type,\*\ or. Pilot Issues.
Market Share Posted
and Executed on NYSE
Arca Equity
Market,\*\ or.
----------------------------------------------------------------------------------------------------------------
* Includes transaction volume from the OTP Holder's or OTP Firm's affiliates.
** For the month of May 2012, calculation of average electronic executions per day shall begin on May 8, 2012.
[[Page 35090]]
The Exchange proposes to amend the Fee Schedule as follows. First,
the Exchange proposes to eliminate the transitional tiers for
electronic executions of posted Customer liquidity in Penny Pilot
issues that were applicable through May 7, 2012 because they will no
longer apply as of June 1, 2012.
Second, for the Customer monthly posting tier qualifications, the
Exchange proposes that each qualification calculation also include an
OTP Holder's or OTP Firm's executions of Electronic Complex Orders,
including those from the OTP Holder's or OTP Firm's affiliates, for all
issues and regardless of account type.\4\ For example, to qualify for
Tier 2, an OTP Holder or OTP Firm would be required to either execute
electronically (1) an average daily volume (``ADV'') of 25,000
contracts from the combination of (i) posted Customer orders in Penny
Pilot issues and (ii) Electronic Complex Orders from all OTP Holders
and Firms and their affiliates, in all issues and regardless of account
type, or (2) an ADV of 75,000 contracts from the combination of (i)
posted contracts in Penny Pilot issues, regardless of account type, and
(ii) Electronic Complex Orders from all OTP Holders and Firms and their
affiliates, in all issues and regardless of account type. There would
be no change to the credit rates that correspond to the tiers.
---------------------------------------------------------------------------
\4\ Although the Exchange will include these Electronic Complex
Orders in the calculation of the Customer monthly posting tier
qualifications, executions of Electronic Complex Orders will not
receive a credit under this section of the Fee Schedule.
---------------------------------------------------------------------------
Finally, the Exchange proposes to amend the rates for Electronic
Complex Order executions. Under NYSE Arca Options Rule 6.91, an
Electronic Complex Order means any Complex Order \5\ or any Stock/
Option Order \6\ or Stock/Complex Order \7\ that is entered into the
NYSE Arca System. As proposed, all Complex to Complex Order executions
would be 0.06 per contract side, rather than the current 0.10 per
contract side. Additionally, a Complex to Complex Order for which the
same OTP Holder or OTP Firm represents both sides will no longer be
free, but would instead be charged the 0.06 rate per contract side
proposed herein.
---------------------------------------------------------------------------
\5\ Under NYSE Arca Options Rule 6.62(e), a Complex Order is any
order involving the simultaneous purchase and/or sale of two or more
different option series in the same underlying security, for the
same account, in a ratio that is equal to or greater than one-to-
three (.333) and less than or equal to three-to-one (3.00) and for
the purpose of executing a particular investment strategy.
\6\ Under NYSE Arca Options Rule 6.62(h), a Stock/Option Order
is an order to buy or sell a stated number of units of an underlying
stock or a security convertible into the underlying stock
(``convertible security'') coupled with the purchase or sale of
option contract(s) on the opposite side of the market representing
either (A) the same number of units of the underlying stock or
convertible security, or (B) the number of units of the underlying
stock necessary to create a delta neutral position, but in no case
in a ratio greater than eight option contracts per unit of trading
of the underlying stock or convertible security established for that
series by the Options Clearing Corporation.
\7\ Under NYSE Arca Options Rule 6.62(h), a Stock/Complex Order
is the purchase or sale of a Complex Order coupled with an order to
buy or sell a stated number of units of an underlying stock or a
security convertible into the underlying stock (``convertible
security'') representing either: (A) The same number of units of the
underlying stock or convertible security as are represented by the
options leg of the Complex Order with the least number of Options
contracts, or (B) the number of units of the underlying stock
necessary to create a delta neutral position, but in no case in a
ratio greater than 8 options contracts per unit of trading of the
underlying stock or convertible security established for that series
by the Clearing Corporation, as represented by the options leg of
the Complex Order with the least number of options contracts.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (the
``Act''),\8\ in general, and furthers the objectives of Section 6(b)(4)
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).
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The Exchange believes that deleting outdated text adds clarity to
the Fee Schedule and makes it easier to use.
The Exchange believes that charging all Complex to Complex Order
executions $0.06 per contract side, rather than the current $0.10 per
contract side, and eliminating the special rate (i.e., no charge) for
Complex to Complex Orders when the same firm represents both sides is
reasonable, equitable, and non-discriminatory because the Exchange has
determined that the special rate has not led to increased trading
volumes and therefore it would be more equitable to charge all
participants the same rate.
The Exchange further believes that including Electronic Complex
Orders in the eligibility for Customer posting credits in Penny Pilot
issues is reasonable, equitable, and not unfairly discriminatory
because it would incent OTP Holders and OTP Firms to increase the level
of order flow sent to, and liquidity added on, the Exchange, thereby
potentially improving the quality and efficiency of order interaction
and executions on the Exchange. The inclusion of Complex trades will
also encourage more complex orders to be sent to the Exchange, thereby
increasing trade opportunities for all participants. The Exchange
further believes that the tiers, as amended, are reasonable, equitable
and not unfairly discriminatory because they are set at levels that
would be more achievable for OTP Holders and OTP Firms. Overall, the
Exchange believes that this will result in more OTP Holders and OTP
Firms qualifying for the tiers, receiving the credits, and therefore
reducing their overall transaction costs on the Exchange. The Exchange
further believes that the proposed change is reasonable, equitable and
not unfairly discriminatory because the tiers, and the corresponding
credits, will apply uniformly to all OTP Holders and OTP Firms.
Finally, 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. The Exchange believes that the
proposed rule change reflects this competitive environment because it
would broaden the conditions under which OTP Holders and OTP Firms may
qualify for the tiers and because it would result in an increase in the
corresponding credit rates.
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
[[Page 35091]]
subparagraph (f)(2) of Rule 19b-4 \11\ thereunder, because it
establishes a due, fee, or other charge imposed by the NYSE Arca.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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.
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-2012-52 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-2012-52. 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
10:00 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-NYSEArca-2012-52 and should
be submitted on or before July 3, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14190 Filed 6-11-12; 8:45 am]
BILLING CODE 8011-01-P
