Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE Amex Options Fee Schedule, 8107-8109 [2016-03129]
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Federal Register / Vol. 81, No. 31 / Wednesday, February 17, 2016 / Notices
SECURITIES AND EXCHANGE
COMMISSION
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
[Release No. 34–77106; File No. SR–
NYSEMKT–2016–18]
The Exchange proposes to modify the
NYSE Amex Options Fee Schedule
(‘‘Fee Schedule’’). The Exchange
proposes to implement the fee change
effective February 1, 2016. The
proposed 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.
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change Modifying the NYSE Amex
Options Fee Schedule
February 10, 2016.
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 February
1, 2016, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) 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.
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.
ACE Program—standard options
Tier
1 ......
2 ......
3 ......
0.00% to 0.60% ................................
> 0.60% to 0.80% or ≥ 0.35% over
October 2015 volumes.
> 0.80% to 1.25% .............................
4 ......
> 1.25% to 1.75% .............................
5 ......
> 1.75% ............................................
asabaliauskas on DSK5VPTVN1PROD with NOTICES
The proposed amendments to the
ACE Program are designed to enhance
the rebates, which the Exchange
believes would attract more volume and
liquidity to the Exchange to the benefit
of Exchange participants through
increased opportunities to trade as well
as enhancing price discovery.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Fee Schedule, sections I.E. (Amex Customer
Engagement (‘‘ACE’’) Program—Standard Options)
and I.G. (CUBE Auction Fees & Credits), available
here, https://www.nyse.com/publicdocs/nyse/
markets/amex-options/NYSE_Amex_Options_Fee_
Schedule.pdf.
2 17
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19:05 Feb 16, 2016
Jkt 238001
OR
N/A ....................................................
N/A ....................................................
1.50% to 2.50% of which 20% or
greater of 1.50% must be Customer.
> 2.50% to 3.50% of which 20% or
greater of 2.50% must be Customer.
> 3.50% of which 20% or greater of
3.5% must be Customer.
Proposed Changes to CUBE Pricing
Section I.G. of the Fee Schedule sets
forth the rates for per contract fees and
credits for executions associated with a
CUBE Auction. The Exchange is
proposing to reduce rates for RFR
Response fees and Initiating Credits and
Rebates. Specifically, the Exchange
proposes to reduce RFR Response fees
4 The volume thresholds are based on an NYSE
Amex Options Market Makers’ [sic] volume
transacted Electronically as a percentage of total
industry Customer equity and ETF options volumes
as reported by the Options Clearing Corporation
(the ‘‘OCC’’). Total industry Customer equity and
ETF option volume is comprised of those equity
and ETF contracts that clear in the Customer
PO 00000
Frm 00074
Fmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
sections I. E. and G. of the Fee
Schedule 3 to adjust fees and credits
payable, effective on February 1, 2016.
Proposed Changes to ACE Program
Section I.E. of the Fee Schedule
describes the Exchange’s ACE Program,
which features five tiers expressed as a
percentage of total industry Customer
equity and Exchange Traded Fund
(‘‘ETF’’) option average daily volume 4
and provides two alternative methods
through which Order Flow Providers
may receive per contract credits for
Electronic Customer volume that the
OFP, as agent, submits to the Exchange.
The Exchange proposes to modify the
ACE Program by increasing certain of
the credits available for Tiers 2, 3 and
4 as illustrated in the table below, with
proposed additions appearing in italics
and proposed deletions appearing in
brackets:
*
*
*
*
*
Credits payable on customer volume only
Total Electronic ADV (of which 20%
or greater of the minimum qualifying
volume for each Tier must be Customer) as a % of Industry Customer
Equity and ETF Options ADV
Customer electronic ADV as a % of
industry customer
equity and ETF options ADV
8107
Sfmt 4703
Customer
volume
credits
1 Year
enhanced
customer
volume
credits
3 Year
enhanced
customer
volume
credits
$0.00
[($0.14)]
($0.16)
[($0.14)]
($0.17)
$0.00
[($0.15)]
($0.16)
[($0.16)]
($0.18)
$0.00
($0.16)
[($0.18)]
($0.19)
[($0.17)]
($0.18)
($0.19)
($0.21)
($0.19)
($0.21)
($0.23)
for Non-Customers to $0.12, down from
$0.60 for symbols in the Penny Pilot and
down from $0.95 for symbols not in the
Penny Pilot. The Exchange also
proposes to reduce Initiating Participant
credits and rebates to $0.05 down from
$0.35 for symbols in the Penny Pilot,
$0.70 for symbols not in the Penny Pilot
and down from $0.12 for the ACE
Initiating Participant Rebate.
account type at OCC and does not include contracts
that clear in either the Firm or Market Maker
account type at OCC or contracts overlying a
security other than an equity or ETF security. See
OCC Monthly Statistics Reports, available here,
https://www.theocc.com/webapps/monthly-volumereports.
E:\FR\FM\17FEN1.SGM
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8108
Federal Register / Vol. 81, No. 31 / Wednesday, February 17, 2016 / Notices
The proposed changes are designed to
address concerns expressed to the
Exchange by Market Makers about
‘‘imposing oversized transaction fees on
market makers (MMs) when they
compete with the facilitation side to
pre-matched auction crosses,’’ including
the CUBE Auction.5 Specifically, the
Market Makers claim that this so-called
‘‘break-up fee’’ is ‘‘designed to hamper
traders (primarily MMs) from competing
on auction crosses.’’6 The Exchange
believes the proposed changes to CUBE
pricing, particularly the reduction in the
RFR Response Fee addresses the
concerns raised and, as a result, may
attract greater volume and liquidity to
the Exchange, which would improve its
overall competitiveness and strengthen
its market quality for all market
participants. The Exchange notes that
the proposed changes would also
provide the concerned Market Makers to
have a platform on which they can
provide proof of concept.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act,7 in general, and
furthers the objectives of sections 6(b)(4)
and (5) 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 believes that the
proposed amendments to the ACE
Program are reasonable, equitable and
not unfairly discriminatory because they
would enhance the incentives to Order
Flow Providers to transact Customer
orders on the Exchange, which would
benefit all market participants by
providing more trading opportunities
and tighter spreads, even to those
market participants that do not
participate in the ACE Program.
Additionally, the Exchange believes the
proposed changes to the ACE Program
are consistent with the Act because they
may attract greater volume and liquidity
5 See Letter from Gerald D. O’Connell, CRO,
Susquehanna International Group, LLP; John
Kinahan, CEO, Group One Trading, LP; Daniel
Overmyer, Head of Compliance, IMC Financial
Markets LLC; Edward Haravon, Chief Operating
Officer, SpotTrad1ng L.L.C.; Frank Bednarz,
President, CTC, L.L.C.; Kurt Eckert, Principal,
Wolverine Trading LLC; and Sebastiaan KoeHng,
CEO, Optiver US, LLC to Elizabeth M. Murphy,
Secretary, U.S. Securities and Exchange
Commission, dated October 13, 2014, available at,
https://www.sec.gov/comments/sr-nysemkt-2014–52/
nysemkt201452–1.pdf.
6 See id. at 1.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
19:05 Feb 16, 2016
Jkt 238001
to the Exchange, which would benefit
all market participants by providing
tighter quoting and better prices, all of
which perfects the mechanism for a free
and open market and national market
system.
In addition, the Exchange believes
that the proposed changes to CUBE
Auction fees are reasonable, equitable
and not unfairly discriminatory. First,
the proposed reductions to both the
Initiating Participant Credits (for all
issues) as well as the fees associated
with RFR Responses that participate in
the CUBE are reasonable, equitable and
non-discriminatory because they apply
equally to all ATP Holders that choose
to participate in the CUBE, and access
to the Exchange is offered on terms that
are not unfairly discriminatory.
The Exchange likewise believes the
proposed reduction of the ACE
Initiating Participant Credit is
reasonable, equitable and not unfairly
discriminatory for the following
reasons. First, the ACE Initiating
Participant Rebate is based on the
amount of business transacted on the
Exchange and is designed to attract
more volume and liquidity to the
Exchange generally, and to CUBE
Auctions specifically, which would
benefit all market participants
(including those that do not participate
in the ACE Program) through increased
opportunities to trade at potentially
improved prices as well as enhancing
price discovery. Furthermore, the
Exchange notes that the ACE Initiating
Participant Rebate is equitable and not
unfairly discriminatory because it
would continue to incentivize ATP
Holders to transact Customer orders on
the Exchange and an increase in
Customer order flow would bring
greater volume and liquidity to the
Exchange. Increased volume to the
Exchange benefits all market
participants by providing more trading
opportunities and tighter spreads, even
to those market participants that do not
participate in the ACE Program.
Finally, the Exchange believes the
proposed changes are consistent with
the Act because to the extent the
modifications permit the Exchange to
continue to attract greater volume and
liquidity, the proposed change would
improve the Exchange’s overall
competitiveness and strengthen its
market quality for all market
participants.
For these reasons, the Exchange
believes that the proposal is consistent
with the Act.
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with section 6(b)(8) of
the Act,9 the Exchange does not believe
that the proposed rule change would
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
To the contrary, the proposed changes
to CUBE pricing are designed to address
concerns raised by Market Makers that
so-called ‘‘break-up fees’’ imposed in
price improvement auctions like CUBE
are anti-competitive. To that end, the
Exchange believes the proposed
amendments to CUBE Auction pricing
are pro-competitive as the fees and
credits are designed to incentivize
increases in volume and liquidity to the
Exchange, which would benefit all of
Exchange participants through
increased opportunities to trade as well
as enhancing price discovery.
Further, the Exchange believes the
proposed amendments to the ACE
Program are pro-competitive as the
proposed increased rebates may
encourage OFPs to direct Customer
order flow to the Exchange and any
resulting increase in volume and
liquidity to the Exchange would benefit
all of Exchange participants through
increased opportunities to trade as well
as enhancing price discovery.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues. In such an
environment, the Exchange must
continually review, and consider
adjusting, its fees and credits to remain
competitive with other exchanges. For
the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to section
19(b)(3)(A) 10 of the Act and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
9 15
U.S.C. 78f(b)(8).
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(2).
10 15
E:\FR\FM\17FEN1.SGM
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Federal Register / Vol. 81, No. 31 / Wednesday, February 17, 2016 / Notices
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under section 19(b)(2)(B) 12 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
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:
asabaliauskas on DSK5VPTVN1PROD with NOTICES
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–
NYSEMKT–2016–18 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2016–18. 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 the
12 15
U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
19:05 Feb 16, 2016
Jkt 238001
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–
NYSEMKT–2016–18, and should be
submitted on or before March 9, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
[FR Doc. 2016–03129 Filed 2–16–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77103; File No. SR–FINRA–
2015–029]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Designation
of a Longer Period for Commission
Action on Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change To Adopt
FINRA Rule 3210 (Accounts at Other
Broker-Dealers and Financial
Institutions), as Modified by Partial
Amendment No. 1, in the Consolidated
FINRA Rulebook
February 10, 2016.
On July 31, 2015, Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to adopt a new,
consolidated rule addressing accounts
opened or established by associated
persons of members at firms other than
the firm with which they are associated.
The proposed rule change was
published for comment in the Federal
Register on August 14, 2015.3 The
Commission received four comment
letters in response to the proposal.4 On
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Exchange Act Rel. No. 75655 (Aug. 10,
2015), 80 FR 48941 (Aug. 14, 2015). The comment
period closed on September 4, 2015.
4 See Letters from Eric Arnold and Clifford
Kirsch, Sutherland Asbill & Brennan LLP (for the
Committee of Annuity Insurers), dated September 4,
2015; Michael J. Hogan, President and Chief
Executive Officer, FOLIOfn Investments, Inc., dated
September 4, 2015; Joseph C. Peiffer, President,
1 15
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
8109
November 10, 2015, FINRA responded
to the comments and filed Partial
Amendment No. 1 to the existing
proposal.5 On November 12, 2015, the
Commission issued an order instituting
proceedings pursuant to Exchange Act
section 19(b)(2)(B) 6 to determine
whether to approve or disapprove the
proposed rule change, as modified by
Partial Amendment No. 1. The order
was published in the Federal Register
on November 18, 2015.7 The
Commission received one (1) comment
letter in response to the Order
Instituting Proceedings.8
Exchange Act section
19(b)(2)(B)(ii)(I) 9 provides that the
Commission shall approve or
disapprove a proposed rule change in
Proceedings within 180 days after the
Publication Date, or within a longer
period up to 240 days after the
Publication Date if: (1) The Commission
determines that a longer period is
appropriate and publishes the reasons
for so determining,10 or (2) the
applicable self-regulatory organization
consents to the extension.11 The 180th
day for this filing (File Number SR–
FINRA–2015–029) is February 10, 2016.
The Commission is extending this
180-day time period. The Commission
finds that it is appropriate to designate
a longer period within which to issue an
order approving or disapproving the
Public Investors Arbitration Bar Association, dated
September 3, 2015; and Kevin Zambrowicz,
Associate General Counsel & Managing Director,
and Stephen Vogt, Assistant Vice President &
Assistant General Counsel, Securities Industry and
Financial Markets Association, dated September 3,
2015. Comment letters are available at www.sec.gov.
5 See Letter from Patrice Gliniecki, Senior Vice
President and Deputy General Counsel, FINRA, to
the Commission, dated November 10, 2015.
FINRA’s letter and text of Partial Amendment No.
1 are available on FINRA’s Web site at https://
www.finra.org, at the principal office of FINRA, and
at the Commission’s Public Reference Room.
6 15 U.S.C. 78s(b)(2)(B) (if the Commission does
not approve or disapprove a proposed rule change
under Exchange Act section 19(b)(2)(A) (i.e., within
90 days of publication of notice of the filing of the
proposed rule change in the Federal Register (the
‘‘Publication Date’’)), the Commission shall institute
proceedings to determine whether to approve or
disapprove the proposed rule change
(‘‘Proceedings’’)).
7 See Exchange Act Release No. 76430 (Nov. 12,
2015), 80 FR 72118 (Nov. 18, 2015) (Order
Instituting Proceedings To Determine Whether To
Approve or Disapprove Proposed Rule Change to
Adopt FINRA Rule 3210 (Accounts at Other BrokerDealers and Financial Institutions), as Modified by
Partial Amendment No. 1) (‘‘Order Instituting
Proceedings’’). The comment period closed on
December 9, 2015.
8 See Letter from Laura Crosby-Brown, dated
November 13, 2015. Comment letters are available
at www.sec.gov.
9 15 U.S.C. 78s(b)(2)(B)(ii)(I).
10 Exchange Act section 19(b)(2)(B)(ii)(II)(aa), 15
U.S.C. 78s(b)(2)(B)(ii)(II)(aa).
11 Exchange Act section 19(b)(2)(B)(ii)(II)(bb), 15
U.S.C. 78s(b)(2)(B)(ii)(II)(bb).
E:\FR\FM\17FEN1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 31 (Wednesday, February 17, 2016)]
[Notices]
[Pages 8107-8109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03129]
[[Page 8107]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77106; File No. SR-NYSEMKT-2016-18]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Change Modifying the NYSE Amex
Options Fee Schedule
February 10, 2016.
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 February 1, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'')
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 modify the NYSE Amex Options Fee Schedule
(``Fee Schedule''). The Exchange proposes to implement the fee change
effective February 1, 2016. The proposed change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend sections I. E. and G. of the
Fee Schedule \3\ to adjust fees and credits payable, effective on
February 1, 2016.
---------------------------------------------------------------------------
\3\ See Fee Schedule, sections I.E. (Amex Customer Engagement
(``ACE'') Program--Standard Options) and I.G. (CUBE Auction Fees &
Credits), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
---------------------------------------------------------------------------
Proposed Changes to ACE Program
Section I.E. of the Fee Schedule describes the Exchange's ACE
Program, which features five tiers expressed as a percentage of total
industry Customer equity and Exchange Traded Fund (``ETF'') option
average daily volume \4\ and provides two alternative methods through
which Order Flow Providers may receive per contract credits for
Electronic Customer volume that the OFP, as agent, submits to the
Exchange.
---------------------------------------------------------------------------
\4\ The volume thresholds are based on an NYSE Amex Options
Market Makers' [sic] volume transacted Electronically as a
percentage of total industry Customer equity and ETF options volumes
as reported by the Options Clearing Corporation (the ``OCC''). Total
industry Customer equity and ETF option volume is comprised of those
equity and ETF contracts that clear in the Customer account type at
OCC and does not include contracts that clear in either the Firm or
Market Maker account type at OCC or contracts overlying a security
other than an equity or ETF security. See OCC Monthly Statistics
Reports, available here, https://www.theocc.com/webapps/monthly-volume-reports.
---------------------------------------------------------------------------
The Exchange proposes to modify the ACE Program by increasing
certain of the credits available for Tiers 2, 3 and 4 as illustrated in
the table below, with proposed additions appearing in italics and
proposed deletions appearing in brackets:
* * * * *
----------------------------------------------------------------------------------------------------------------
ACE Program--standard options Credits payable on customer volume only
-----------------------------------------------------------------------------------------------------
Total Electronic
ADV (of which 20%
or greater of the
Customer electronic minimum qualifying 1 Year 3 Year
Tier ADV as a % of volume for each Customer enhanced enhanced
industry customer Tier must be volume customer customer
equity and ETF Customer) as a % credits volume volume
options ADV of Industry credits credits
Customer Equity
and ETF Options
ADV
----------------------------------------------------------------------------------------------------------------
1......... 0.00% to 0.60%..... OR......... N/A............... $0.00 $0.00 $0.00
2......... > 0.60% to 0.80% or ........... N/A............... [($0.14)] [($0.15)] ($0.16)
>= 0.35% over ($0.16) ($0.16)
October 2015
volumes.
3......... > 0.80% to 1.25%... ........... 1.50% to 2.50% of [($0.14)] [($0.16)] [($0.18)]
which 20% or ($0.17) ($0.18) ($0.19)
greater of 1.50%
must be Customer.
4......... > 1.25% to 1.75%... ........... > 2.50% to 3.50% [($0.17)] ($0.19) ($0.21)
of which 20% or ($0.18)
greater of 2.50%
must be Customer.
5......... > 1.75%............ > 3.50% of which ($0.19) ($0.21) ($0.23)
20% or greater of
3.5% must be
Customer.
----------------------------------------------------------------------------------------------------------------
The proposed amendments to the ACE Program are designed to enhance
the rebates, which the Exchange believes would attract more volume and
liquidity to the Exchange to the benefit of Exchange participants
through increased opportunities to trade as well as enhancing price
discovery.
Proposed Changes to CUBE Pricing
Section I.G. of the Fee Schedule sets forth the rates for per
contract fees and credits for executions associated with a CUBE
Auction. The Exchange is proposing to reduce rates for RFR Response
fees and Initiating Credits and Rebates. Specifically, the Exchange
proposes to reduce RFR Response fees for Non-Customers to $0.12, down
from $0.60 for symbols in the Penny Pilot and down from $0.95 for
symbols not in the Penny Pilot. The Exchange also proposes to reduce
Initiating Participant credits and rebates to $0.05 down from $0.35 for
symbols in the Penny Pilot, $0.70 for symbols not in the Penny Pilot
and down from $0.12 for the ACE Initiating Participant Rebate.
[[Page 8108]]
The proposed changes are designed to address concerns expressed to
the Exchange by Market Makers about ``imposing oversized transaction
fees on market makers (MMs) when they compete with the facilitation
side to pre-matched auction crosses,'' including the CUBE Auction.\5\
Specifically, the Market Makers claim that this so-called ``break-up
fee'' is ``designed to hamper traders (primarily MMs) from competing on
auction crosses.''\6\ The Exchange believes the proposed changes to
CUBE pricing, particularly the reduction in the RFR Response Fee
addresses the concerns raised and, as a result, may attract greater
volume and liquidity to the Exchange, which would improve its overall
competitiveness and strengthen its market quality for all market
participants. The Exchange notes that the proposed changes would also
provide the concerned Market Makers to have a platform on which they
can provide proof of concept.
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\5\ See Letter from Gerald D. O'Connell, CRO, Susquehanna
International Group, LLP; John Kinahan, CEO, Group One Trading, LP;
Daniel Overmyer, Head of Compliance, IMC Financial Markets LLC;
Edward Haravon, Chief Operating Officer, SpotTrad1ng L.L.C.; Frank
Bednarz, President, CTC, L.L.C.; Kurt Eckert, Principal, Wolverine
Trading LLC; and Sebastiaan KoeHng, CEO, Optiver US, LLC to
Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, dated October 13, 2014, available at, https://www.sec.gov/comments/sr-nysemkt-2014-52/nysemkt201452-1.pdf.
\6\ See id. at 1.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\7\ in general, and furthers the
objectives of sections 6(b)(4) and (5) 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.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed amendments to the ACE
Program are reasonable, equitable and not unfairly discriminatory
because they would enhance the incentives to Order Flow Providers to
transact Customer orders on the Exchange, which would benefit all
market participants by providing more trading opportunities and tighter
spreads, even to those market participants that do not participate in
the ACE Program. Additionally, the Exchange believes the proposed
changes to the ACE Program are consistent with the Act because they may
attract greater volume and liquidity to the Exchange, which would
benefit all market participants by providing tighter quoting and better
prices, all of which perfects the mechanism for a free and open market
and national market system.
In addition, the Exchange believes that the proposed changes to
CUBE Auction fees are reasonable, equitable and not unfairly
discriminatory. First, the proposed reductions to both the Initiating
Participant Credits (for all issues) as well as the fees associated
with RFR Responses that participate in the CUBE are reasonable,
equitable and non-discriminatory because they apply equally to all ATP
Holders that choose to participate in the CUBE, and access to the
Exchange is offered on terms that are not unfairly discriminatory.
The Exchange likewise believes the proposed reduction of the ACE
Initiating Participant Credit is reasonable, equitable and not unfairly
discriminatory for the following reasons. First, the ACE Initiating
Participant Rebate is based on the amount of business transacted on the
Exchange and is designed to attract more volume and liquidity to the
Exchange generally, and to CUBE Auctions specifically, which would
benefit all market participants (including those that do not
participate in the ACE Program) through increased opportunities to
trade at potentially improved prices as well as enhancing price
discovery. Furthermore, the Exchange notes that the ACE Initiating
Participant Rebate is equitable and not unfairly discriminatory because
it would continue to incentivize ATP Holders to transact Customer
orders on the Exchange and an increase in Customer order flow would
bring greater volume and liquidity to the Exchange. Increased volume to
the Exchange benefits all market participants by providing more trading
opportunities and tighter spreads, even to those market participants
that do not participate in the ACE Program.
Finally, the Exchange believes the proposed changes are consistent
with the Act because to the extent the modifications permit the
Exchange to continue to attract greater volume and liquidity, the
proposed change would improve the Exchange's overall competitiveness
and strengthen its market quality for all market participants.
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with section 6(b)(8) of the Act,\9\ the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. To the contrary, the proposed changes to CUBE
pricing are designed to address concerns raised by Market Makers that
so-called ``break-up fees'' imposed in price improvement auctions like
CUBE are anti-competitive. To that end, the Exchange believes the
proposed amendments to CUBE Auction pricing are pro-competitive as the
fees and credits are designed to incentivize increases in volume and
liquidity to the Exchange, which would benefit all of Exchange
participants through increased opportunities to trade as well as
enhancing price discovery.
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\9\ 15 U.S.C. 78f(b)(8).
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Further, the Exchange believes the proposed amendments to the ACE
Program are pro-competitive as the proposed increased rebates may
encourage OFPs to direct Customer order flow to the Exchange and any
resulting increase in volume and liquidity to the Exchange would
benefit all of Exchange participants through increased opportunities to
trade as well as enhancing price discovery.
The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues. In
such an environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. For the reasons described above, the Exchange believes that
the proposed rule change reflects this competitive environment.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due,
[[Page 8109]]
fee, or other charge imposed by the Exchange.
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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. If the Commission
takes such action, the Commission shall institute proceedings under
section 19(b)(2)(B) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2016-18 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2016-18. 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 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-NYSEMKT-2016-18, and should
be submitted on or before March 9, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Brent J. Fields,
Secretary.
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\13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-03129 Filed 2-16-16; 8:45 am]
BILLING CODE 8011-01-P
