Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule To Allow Manual Orders Entered Into the Exchange's Electronic Order Capture System or Entered Into an Order Entry Device and Contemporaneously Recorded Into the EOC System To Qualify for the Manual Transaction Fee, 74723-74725 [2012-30290]
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Federal Register / Vol. 77, No. 242 / Monday, December 17, 2012 / Notices
planned to implement these changes
beginning on December 3, 2012; 4
however, CME has delayed the
implementation date and will notify its
Clearing Members of the new
implementation date in a subsequent
notice to its members.5
III. Discussion
Section 19(b)(2)(C) of the Act 6 directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization. Section
17A(b)(3)(F) of the Act 7 requires, among
other things, that the rules of a clearing
agency are designed to promote the
prompt and accurate clearance and
settlement of securities transactions
and, to the extent applicable, derivative
agreements, contracts, and transactions,
and to assure the safeguarding of
securities and funds which are in the
custody or control of the clearing agency
or for which it is responsible.
The Commission believes that these
changes are consistent with the
requirements of Section 17A(b)(3)(F) of
the Act 8 and the rules and regulations
thereunder applicable to CME. These
changes would use the current market
value, plus accrued interest, for
securities on deposit at CME, which will
better align CME’s practices with the
marketplace and expectations of its
participants. The changes will therefore
promote the prompt and accurate
clearance and settlement of securities
transactions and, to the extent
applicable, derivative agreements,
contracts, and transactions, and assure
the safeguarding of securities and funds
which are in the custody or control of
the clearing agency or for which it is
responsible.
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposal is
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the Act 9
and the rules and regulations
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,10 that the
4 See
supra note 3.
conversation among Tim Elliott,
Executive Director and Associate General Counsel,
CME; Gena Lai, Senior Special Counsel, SEC; Justin
Byrne, Attorney-Adviser, SEC; December 4, 2012.
6 15 U.S.C. 78s(b)(2)(C).
7 15 U.S.C. 78q–1(b)(3)(F).
8 15 U.S.C. 78q–1(b)(3)(F).
9 15 U.S.C. 78q–1.
10 15 U.S.C. 78s(b)(2).
proposed rule change (File No. SR–
CME–2012–42) be, and hereby is,
approved.11
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
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.
[FR Doc. 2012–30270 Filed 12–14–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68399; File No. SR–
NYSEARCA–2012–134]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE Arca
Options Fee Schedule To Allow Manual
Orders Entered Into the Exchange’s
Electronic Order Capture System or
Entered Into an Order Entry Device and
Contemporaneously Recorded Into the
EOC System To Qualify for the Manual
Transaction Fee
December 11, 2012.
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
November 29, 2012, 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 selfregulatory organization. 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 allow manual orders that
are entered into the Exchange’s
Electronic Order Capture (‘‘EOC’’)
System or entered into an order entry
device approved by the Exchange and
contemporaneously recorded into the
EOC System to qualify for the manual
transaction fee. The text of the proposed
rule change is available on the
Exchange’s Web site at www.nyse.com,
srobinson on DSK4SPTVN1PROD with
5 Telephone
VerDate Mar<15>2010
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74723
11 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
12 17 CFR 200.30–3(a)(12).
1 15 U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
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Frm 00091
Fmt 4703
Sfmt 4703
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
Fee Schedule to allow manual orders
that are entered into the Exchange’s
EOC System 4 or entered into an order
entry device approved by the Exchange
and contemporaneously recorded into
the EOC System to qualify for the
manual transaction fee. The Exchange
proposes to make the fee change
operative on December 1, 2012.
In December 2011, the Exchange
amended endnote 5 of the Fee Schedule
to reflect that a manual order that
executes in part against an electronic
order or quote resting on the
Consolidated Book prior to executing
against interest in the trading crowd
would be assessed the applicable
manual transaction fee for the entire
order.5 However, if a manual order
executes completely against an
electronic order or quote, and therefore
does not execute against interest in the
trading crowd, then the order would be
charged the applicable electronic
transaction fee. The Exchange also
specified that in order to be eligible for
the manual transaction fee, all orders
must be entered into the Exchange’s
EOC System. Therefore, currently, Floor
Brokers that enter orders into an order
entry device rather than only into the
4 The EOC System is the Exchange’s electronic
audit trail and order tracking system that provides
an accurate time-sequenced record of all orders and
transactions on the Exchange. EOC records the
receipt of an order and documents the life of the
order through the process of execution, partial
execution, or cancellation. See NYSE Arca Options
Rule 6.1(b)(39).
5 See Securities Exchange Act Release No. 65922
(December 9, 2011), 76 FR 78066 (December 15,
2011) (SR–NYSEArca–2011–91).
E:\FR\FM\17DEN1.SGM
17DEN1
srobinson on DSK4SPTVN1PROD with
74724
Federal Register / Vol. 77, No. 242 / Monday, December 17, 2012 / Notices
EOC System are not eligible to take
advantage of the lower transaction fees
for manual orders, even though orders
entered into such devices are recorded
in the EOC System. For example, a Floor
Broker manual order in a Non Penny
Pilot Issue is currently charged a
standard execution fee of $0.25 per
contract. However, if such Floor Broker
manual order is entered in an order
entry device in order to interact with
orders in the Consolidated Book, then
the Floor Broker is charged the
electronic execution rate of $0.85 per
contract for taking liquidity. The
Exchange proposes to make explicit in
endnote 5 that, in order to be eligible for
the manual transaction fee, all orders
must be entered into the Exchange’s
EOC System. In addition, the Exchange
proposes to expand such eligibility
requirement to include manual orders
entered into an order entry device
approved by the Exchange and
contemporaneously recorded in the
Exchange’s EOC System. The approved
order entry devices would provide an
audit trail and order tracking system for
executed orders which would allow
such orders to be matched upon
recordation into the EOC System. The
approved order entry devices would be
announced via Regulatory Bulletin.
Currently, electronic orders and
quotes resting on the Consolidated Book
have priority over equal-priced bids or
offers in the trading crowd.6 In this
regard, a Floor Broker, after negotiating
a price with the trading crowd, may be
required to trade against resting interest
on the Consolidated Book (‘‘clear the
Book’’) before trading against interest in
the trading crowd. Pursuant to NYSE
Arca Rule 6.67, Options Trading Permit
(‘‘OTP’’) Holders and OTP Firms use the
EOC for the systematization and manual
execution of orders executed by open
outcry.
To avoid Trade-Throughs, which are
prohibited by NYSE Arca Rule 6.94,
Floor Brokers often direct their support
staff to enter orders into an order entry
device while they are executing an order
in the trading crowd in order to clear
the Consolidated Book and away
markets. Floor Brokers are not required
to use an order entry device; however,
the Exchange recognizes that Floor
Brokers use order entry devices to
accommodate their business decisions
regarding best practices because such
devices capture unique order
information and OTP identification and
are able to pass such information to the
Exchange for recordation into the EOC
System. The Exchange believes that
Floor Brokers that enter orders on order
entry devices and contemporaneously
record such orders into the EOC System
achieve the same execution goals for
manual orders as those entered only
through the EOC System, and therefore,
should be subject to the same manual
pricing structure.
The Exchange notes that the proposed
changes are not otherwise intended to
address any other issues and the
Exchange is not aware of any problems
that OTP Holders and OTP Firms would
have in complying with the proposed
change.
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’’),7 in general, and
furthers the objectives of Section 6(b)(4)
of the Act,8 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 also believes that the
proposed rule change is consistent with
Section 6(b)(5) of the Act,9 in particular,
because it is designed to remove
impediments to, and perfect the
mechanisms of, a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes that
incorporating the manual transaction fee
eligibility requirement into the Fee
Schedule and expanding the
requirement to include manual orders
entered into an order entry device
approved by the Exchange and
contemporaneously recorded in the
Exchange’s EOC System is reasonable
because the Fee Schedule would more
clearly describe the types of manual
orders that qualify for the manual
transaction fee. In addition, the
Exchange believes that expanding the
requirement to include manual orders
entered into order entry devices and
recorded in the EOC System is
reasonable because Floor Brokers that
use order entry devices are executing
trading interest in the Consolidated
Book on an efficient basis and should be
able to benefit from the reduced manual
transaction fee. The Exchange believes
that the proposed rule change is
equitable and not unfairly
discriminatory because Floor Brokers
that enter orders through order entry
devices achieve the same execution
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
NYSE Arca Options Rule 6.75(a) and (b).
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Jkt 229001
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,
7 15
8 15
6 See
goals as orders entered only through the
EOC System, and, therefore, should be
subject to the same fee structure.
Furthermore, any order entered through
an order entry device would have an
audit trail and order tracking, and
would be recorded into the EOC System.
In addition, Floor Brokers use order
entry devices to avoid Trade-Throughs
on the Exchange, which thereby benefits
the Exchange and all market
participants, and therefore, it is
equitable and not unfairly
discriminatory to extend the manual
transaction fee to Floor Brokers that use
such devices to enter manual orders.
By clarifying the eligibility
requirement for the manual transaction
fee, the proposed rule change eliminates
confusion, thereby removing an
impediment to and perfecting the
mechanism of a free and open market
system. The clarification of this
eligibility requirement will also make it
easier for the Exchange to administer
the manual transaction fee and ensure
that it is appropriately assessed when it
is applicable.
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. For
the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
PO 00000
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10 15
11 17
Sfmt 4703
E:\FR\FM\17DEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
17DEN1
Federal Register / Vol. 77, No. 242 / Monday, December 17, 2012 / Notices
74725
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–2012–134, and should be
submitted on or before January 7, 2013.
Percent
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
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–2012–134 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–2012–134.
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 20549–1090, 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 NYSE’s
principal office and on its Internet Web
site at www.nyse.com. All comments
received will be posted without change;
the Commission does not edit personal
VerDate Mar<15>2010
16:21 Dec 14, 2012
Jkt 229001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–30290 Filed 12–14–12; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
Non-Profit Organizations With
Credit Available Elsewhere .....
Non-Profit Organizations Without
Credit Available Elsewhere .....
For Economic Injury:
Non-Profit Organizations Without
Credit Available Elsewhere .....
3.125
3.000
3.000
The number assigned to this disaster
for physical damage is 134048 and for
economic injury is 134058.
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
James E. Rivera,
Associate Administrator for Disaster
Assistance.
[Disaster Declaration #13404 and #13405]
[FR Doc. 2012–30149 Filed 12–14–12; 8:45 am]
New Hampshire Disaster #NH–00024
BILLING CODE 8025–01–M
U.S. Small Business
Administration.
ACTION: Notice.
DEPARTMENT OF STATE
AGENCY:
[Public Notice 8121]
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of New Hampshire (FEMA–
4095–DR), dated 11/28/2012.
Incident: Hurricane Sandy.
Incident Period: 10/26/2012 through
11/08/2012.
Effective Date: 11/28/2012.
Physical Loan Application Deadline
Date: 01/28/2013.
Economic Injury (EIDL) Loan
Application Deadline Date: 08/28/2013.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
11/28/2012, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Belknap, Carroll,
Coos, Grafton, Sullivan.
The Interest Rates are:
SUMMARY:
Percent
For Physical Damage:
12 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00093
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Sfmt 4703
60-Day Notice of Proposed Information
Collection: Statement of Exigent/
Special Family Circumstances for
Issuance of a U.S. Passport to a Minor
Under Age 16
Notice of request for public
comment.
ACTION:
The Department of State is
seeking Office of Management and
Budget (OMB) approval for the
information collection described below.
In accordance with the Paperwork
Reduction Act of 1995, we are
requesting comments on this collection
from all interested individuals and
organizations. The purpose of this
notice is to allow 60 days for public
comment preceding submission of the
collection to OMB.
DATES: The Department will accept
comments from the public up to
February 15, 2013.
ADDRESSES: You may submit comments
by any of the following methods:
• Web: Persons with access to the
Internet may use the Federal Docket
Management System (FDMS) to
comment on this notice by going to
www.Regulations.gov. You can search
for the document by entering ‘‘Public
Notice ####’’ in the Search bar. If
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• Fax: (202) 663–2410.
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Forms Officer, U.S. Department of State,
SUMMARY:
E:\FR\FM\17DEN1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 242 (Monday, December 17, 2012)]
[Notices]
[Pages 74723-74725]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-30290]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68399; File No. SR-NYSEARCA-2012-134]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Options Fee Schedule To Allow Manual Orders Entered Into the
Exchange's Electronic Order Capture System or Entered Into an Order
Entry Device and Contemporaneously Recorded Into the EOC System To
Qualify for the Manual Transaction Fee
December 11, 2012.
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 November 29, 2012, 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 amend the NYSE Arca Options Fee Schedule
(``Fee Schedule'') to allow manual orders that are entered into the
Exchange's Electronic Order Capture (``EOC'') System or entered into an
order entry device approved by the Exchange and contemporaneously
recorded into the EOC System to qualify for the manual transaction fee.
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule to allow manual
orders that are entered into the Exchange's EOC System \4\ or entered
into an order entry device approved by the Exchange and
contemporaneously recorded into the EOC System to qualify for the
manual transaction fee. The Exchange proposes to make the fee change
operative on December 1, 2012.
---------------------------------------------------------------------------
\4\ The EOC System is the Exchange's electronic audit trail and
order tracking system that provides an accurate time-sequenced
record of all orders and transactions on the Exchange. EOC records
the receipt of an order and documents the life of the order through
the process of execution, partial execution, or cancellation. See
NYSE Arca Options Rule 6.1(b)(39).
---------------------------------------------------------------------------
In December 2011, the Exchange amended endnote 5 of the Fee
Schedule to reflect that a manual order that executes in part against
an electronic order or quote resting on the Consolidated Book prior to
executing against interest in the trading crowd would be assessed the
applicable manual transaction fee for the entire order.\5\ However, if
a manual order executes completely against an electronic order or
quote, and therefore does not execute against interest in the trading
crowd, then the order would be charged the applicable electronic
transaction fee. The Exchange also specified that in order to be
eligible for the manual transaction fee, all orders must be entered
into the Exchange's EOC System. Therefore, currently, Floor Brokers
that enter orders into an order entry device rather than only into the
[[Page 74724]]
EOC System are not eligible to take advantage of the lower transaction
fees for manual orders, even though orders entered into such devices
are recorded in the EOC System. For example, a Floor Broker manual
order in a Non Penny Pilot Issue is currently charged a standard
execution fee of $0.25 per contract. However, if such Floor Broker
manual order is entered in an order entry device in order to interact
with orders in the Consolidated Book, then the Floor Broker is charged
the electronic execution rate of $0.85 per contract for taking
liquidity. The Exchange proposes to make explicit in endnote 5 that, in
order to be eligible for the manual transaction fee, all orders must be
entered into the Exchange's EOC System. In addition, the Exchange
proposes to expand such eligibility requirement to include manual
orders entered into an order entry device approved by the Exchange and
contemporaneously recorded in the Exchange's EOC System. The approved
order entry devices would provide an audit trail and order tracking
system for executed orders which would allow such orders to be matched
upon recordation into the EOC System. The approved order entry devices
would be announced via Regulatory Bulletin.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 65922 (December 9,
2011), 76 FR 78066 (December 15, 2011) (SR-NYSEArca-2011-91).
---------------------------------------------------------------------------
Currently, electronic orders and quotes resting on the Consolidated
Book have priority over equal-priced bids or offers in the trading
crowd.\6\ In this regard, a Floor Broker, after negotiating a price
with the trading crowd, may be required to trade against resting
interest on the Consolidated Book (``clear the Book'') before trading
against interest in the trading crowd. Pursuant to NYSE Arca Rule 6.67,
Options Trading Permit (``OTP'') Holders and OTP Firms use the EOC for
the systematization and manual execution of orders executed by open
outcry.
---------------------------------------------------------------------------
\6\ See NYSE Arca Options Rule 6.75(a) and (b).
---------------------------------------------------------------------------
To avoid Trade-Throughs, which are prohibited by NYSE Arca Rule
6.94, Floor Brokers often direct their support staff to enter orders
into an order entry device while they are executing an order in the
trading crowd in order to clear the Consolidated Book and away markets.
Floor Brokers are not required to use an order entry device; however,
the Exchange recognizes that Floor Brokers use order entry devices to
accommodate their business decisions regarding best practices because
such devices capture unique order information and OTP identification
and are able to pass such information to the Exchange for recordation
into the EOC System. The Exchange believes that Floor Brokers that
enter orders on order entry devices and contemporaneously record such
orders into the EOC System achieve the same execution goals for manual
orders as those entered only through the EOC System, and therefore,
should be subject to the same manual pricing structure.
The Exchange notes that the proposed changes are not otherwise
intended to address any other issues and the Exchange is not aware of
any problems that OTP Holders and OTP Firms would have in complying
with the proposed change.
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''),\7\ in general, and furthers the objectives of Section 6(b)(4)
of the Act,\8\ 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 also believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act,\9\ in particular, because it is
designed to remove impediments to, and perfect the mechanisms of, a
free and open market and a national market system and, in general, to
protect investors and the public interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that incorporating the manual transaction fee
eligibility requirement into the Fee Schedule and expanding the
requirement to include manual orders entered into an order entry device
approved by the Exchange and contemporaneously recorded in the
Exchange's EOC System is reasonable because the Fee Schedule would more
clearly describe the types of manual orders that qualify for the manual
transaction fee. In addition, the Exchange believes that expanding the
requirement to include manual orders entered into order entry devices
and recorded in the EOC System is reasonable because Floor Brokers that
use order entry devices are executing trading interest in the
Consolidated Book on an efficient basis and should be able to benefit
from the reduced manual transaction fee. The Exchange believes that the
proposed rule change is equitable and not unfairly discriminatory
because Floor Brokers that enter orders through order entry devices
achieve the same execution goals as orders entered only through the EOC
System, and, therefore, should be subject to the same fee structure.
Furthermore, any order entered through an order entry device would have
an audit trail and order tracking, and would be recorded into the EOC
System. In addition, Floor Brokers use order entry devices to avoid
Trade-Throughs on the Exchange, which thereby benefits the Exchange and
all market participants, and therefore, it is equitable and not
unfairly discriminatory to extend the manual transaction fee to Floor
Brokers that use such devices to enter manual orders.
By clarifying the eligibility requirement for the manual
transaction fee, the proposed rule change eliminates confusion, thereby
removing an impediment to and perfecting the mechanism of a free and
open market system. The clarification of this eligibility requirement
will also make it easier for the Exchange to administer the manual
transaction fee and ensure that it is appropriately assessed when it is
applicable.
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. For the reasons described above, the
Exchange believes that the proposed rule change reflects this
competitive environment.
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,
[[Page 74725]]
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-2012-134 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-2012-134. 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 20549-1090, 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 NYSE's principal office and
on its Internet Web site at www.nyse.com. 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-2012-134, and should be
submitted on or before January 7, 2013.
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. 2012-30290 Filed 12-14-12; 8:45 am]
BILLING CODE 8011-01-P
