Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Modifying the Arca Options Deep Market Data Product, 8291-8294 [2016-03267]
Download as PDF
<![CDATA[
mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices
an easily accessible place a written copy
of the procedures described in the
preceding condition, and any
modifications to such procedures, and
will maintain and preserve for a period
of not less than six years from the end
of the fiscal year in which any purchase
in an Affiliated Underwriting occurred,
the first two years in an easily accessible
place, a written record of each purchase
of securities in Affiliated Underwritings
once an investment by a Fund of Funds
in the securities of the Self-Indexing
Fund exceeds the limit of section
12(d)(1)(A)(i) of the Act, setting forth
from whom the securities were
acquired, the identity of the
underwriting syndicate’s members, the
terms of the purchase, and the
information or materials upon which
the Board’s determinations were made.
9. Before investing in a Self-Indexing
Fund in excess of the limit in section
12(d)(1)(A), a Fund of Funds and the
Trust will execute a FOF Participation
Agreement stating without limitation
that their respective boards of directors
or trustees and their investment
advisers, or trustee and Sponsor, as
applicable, understand the terms and
conditions of the order, and agree to
fulfill their responsibilities under the
order. At the time of its investment in
Shares of a Self-Indexing Fund in excess
of the limit in section 12(d)(1)(A)(i), a
Fund of Funds will notify the SelfIndexing Fund of the investment. At
such time, the Fund of Funds will also
transmit to the Self-Indexing Fund a list
of the names of each Fund of Funds
Affiliate and Underwriting Affiliate. The
Fund of Funds will notify the SelfIndexing Fund of any changes to the list
of the names as soon as reasonably
practicable after a change occurs. The
Self-Indexing Fund and the Fund of
Funds will maintain and preserve a
copy of the order, the FOF Participation
Agreement, and the list with any
updated information for the duration of
the investment and for a period of not
less than six years thereafter, the first
two years in an easily accessible place.
10. Before approving any advisory
contract under section 15 of the Act, the
board of directors or trustees of each
Investing Management Company,
including a majority of the disinterested
directors or trustees, will find that the
advisory fees charged under such
contract are based on services provided
that will be in addition to, rather than
duplicative of, the services provided
under the advisory contract(s) of any
Self-Indexing Fund in which the
Investing Management Company may
invest. These findings and their basis
will be fully recorded in the minute
VerDate Sep<11>2014
19:03 Feb 17, 2016
Jkt 238001
books of the appropriate Investing
Management Company.
11. Any sales charges and/or service
fees charged with respect to shares of a
Fund of Funds will not exceed the
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
12. No Self-Indexing Fund will
acquire securities of an investment
company or company relying on section
3(c)(1) or 3(c)(7) of the Act in excess of
the limits contained in section
12(d)(1)(A) of the Act, except to the
extent the Self-Indexing Fund acquires
securities of another investment
company pursuant to exemptive relief
from the Commission permitting the
Self-Indexing Fund to acquire securities
of one or more investment companies
for short-term cash management
purposes.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–03301 Filed 2–17–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77111; File No. SR–
NYSEARCA–2016–29]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Modifying the Arca
Options Deep Market Data Product
February 11, 2016.
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 February
4, 2016, 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 and II 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify the
Arca Options Deep market data product.
The proposed rule change is available
on the Exchange’s Web site at
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
Frm 00119
Fmt 4703
8291
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 modify the
Arca Options Deep market data product.
The Exchange currently offers the
following real-time options market data
feeds: ‘‘Arca Options Top,’’ ‘‘Arca
Options Deep,’’ and ‘‘Arca Options
Complex’’ (the ‘‘Arca Options
Products’’). ‘‘Arca Options Top’’ is a
single market data product that
combines last sale data, best bids and
offers (‘‘BBO’’), order imbalance
information and series status and
underlying status messages (collectively
called security status messages). ‘‘Arca
Options Deep’’ is also a single market
data product that provides subscribers
NYSE Arca Options quotes and orders at
the first three price levels in each series
on a real-time basis. ‘‘Arca Options
Complex,’’ also a single market data
product, provides subscribers NYSE
Arca Options quote and trade
information (including orders/quotes,
requests for responses, and trades) for
the complex order book on a real-time
basis.4
The Exchange charges a single fee for
Arca Options Top and subscribers of
Arca Options Top receive all three data
feeds described above. The Exchange
charges a separate fee for Arca Options
Complex for subscribers that seek to
obtain this data feed on a standalone
basis.5
4 See
Rule 6.62(e), which defines complex orders.
Securities Exchange Act Release No. 68005
(Oct. 9, 2012), 77 FR 63362 (Oct. 16, 2012) (SR–
NYSEArca–2012–106) (establishing fees for certain
proprietary options market data products). See also
Securities Exchange Act Release Nos. 69523 (May
6, 2013), 78 FR 27452 (May 10, 2013) (SR–
NYSEArca–2013–41) (establishing a schedule of
5 See
Continued
Sfmt 4703
E:\FR\FM\18FEN1.SGM
18FEN1
8292
Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
The Exchange proposes to modify the
Arca Options Deep data feed. As
proposed, Arca Options Deep will also
include security status messages, the
same data that is currently provided as
part of Arca Options Top. The proposed
modification to the Arca Options Deep
data feed will allow subscribers who
currently obtain depth of market data to
also receive security status messages in
a single data feed. Currently, these
subscribers are required to process two
data feeds to get the depth of market
data and security status information.
Offering a data product that combines,
in one market data product, depth of
market data and security status
messages would provide greater
efficiencies and better sequencing for
vendors and subscribers that currently
choose to integrate the data after
receiving it from the Exchange. As with
Arca Options Top, Arca Options Deep
would provide depth of market and
series status information on a real-time
basis as reported to the Options Price
Reporting Authority (‘‘OPRA’’) and
disseminated on a consolidated basis
under the OPRA Plan.6
The Arca Options Products would
continue to be distributed in their
current format, to maintain the format of
the Arca Options Products with that of
other market data products offered by
the Exchange.
The Exchange does not propose to
make any changes to the fees. The single
fee charged for the Arca Options
NYSE Arca Options proprietary market data fees);
69554 (May 10, 2013), 78 FR 28917 (May 16, 2013)
(SR–NYSEArca–2013–47) (establishing non-display
usage fees and amending the professional end-user
fees); 71933 (April 11, 2014), 79 FR 21821 (April
17, 2014) (SR–NYSEArca–2014–34) (amending the
professional user fees); 73010 (Sept. 5, 2014), 79 FR
54307 (Sept. 11, 2014) (SR–NYSEArca–2014–94)
(amending fees for non-display use); 73588 (Nov.
13, 2014), 79 FR 68922 (Nov. 19, 2014) (SR–
NYSEArca–2014–129) (establishing fees for the
complex order book feed); and 76023 (September
29, 2015), 80 FR 60208 (October 5, 2015) (modifying
certain proprietary options data products).
6 The OPRA Plan is a national market system plan
approved by the Securities and Exchange
Commission (‘‘Commission’’) pursuant to Section
11A of the Securities Exchange Act of 1934 (the
‘‘Act’’) and Rule 608 thereunder (formerly Rule
11Aa3–2). See Securities Exchange Act Release No.
17638 (March 18, 1981), 22 S.E.C. Docket 484
(March 31, 1981). The full text of the OPRA Plan
is available at https://www.opradata.com. The OPRA
Plan provides for the collection and dissemination
of last sale and quotation information on options
that are traded on the participant exchanges.
Section 5.2(c) of the OPRA Plan also permits OPRA
Plan participants to disseminate unconsolidated
market information to certain of their members
under certain circumstances. The manner in which
the Exchange proposes to disseminate the products
would comply with Section 5.2(c) of the OPRA
Plan, pursuant to which the Exchange may not
disseminate the products ‘‘on any more timely basis
than the same information is furnished to the OPRA
System for inclusion in OPRA’s consolidated
dissemination of Options Information.’’
VerDate Sep<11>2014
19:03 Feb 17, 2016
Jkt 238001
Product that comprise [sic] the Arca
Options Top, Arca Options Deep and
Arca Options Complex would continue
to apply. The separate fee that now
applies to Arca Options Complex,
would likewise continue to apply to the
Arca Options Complex market data
product.7
Each of the Arca Options Products
would continue to be offered through
the Exchange’s Liquidity Center
Network (‘‘LCN’’), a local area network
in the Exchange’s Mahwah, New Jersey
data center that is available to users of
the Exchange’s co-location services. The
Exchange would also continue to offer
the products through the Exchange’s
Secure Financial Transaction
Infrastructure (‘‘SFTI’’) network,
through which all other users and
member organizations access the
Exchange’s trading and execution
systems and other proprietary market
data products.
The Exchange will announce the date
that the Arca Options Deep market data
product will begin to include security
status messages through a NYSE Market
Data Notice.
The proposed change is not intended
to address any issues other than those
described herein, and the Exchange is
not aware of any problems that vendors
or subscribers would have in complying
with the proposed change.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 8 of the Act,
in general, and furthers the objectives of
Section 6(b)(5) 9 of the Act, in particular,
in that it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
to remove impediments to and perfect
the mechanism of a free and open
market and a national market system
and, in general, to protect investors and
the public interest, and it is not
designed to permit unfair
discrimination among customers,
brokers, or dealers.
The Exchange also believes this
proposal is consistent with Section
6(b)(5) of the Act because it protects
investors and the public interest and
promotes just and equitable principles
of trade by providing investors with
improved options for receiving market
7 The Exchange has not attached an Exhibit 5
with this proposed rule change because the
Exchange is not proposing to make any fee changes
associated with the proposed modification to the
Arca Options Deep market data product.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00120
Fmt 4703
Sfmt 4703
data. The proposed rule changes would
benefit investors by facilitating their
prompt access to the additional realtime information contained in a
modified Arca Options Deep market
data product.
In particular, the Exchange believes
that combining depth of market data
with security status messages in the
Arca Options Deep product is
reasonable because it would provide
greater efficiencies for vendors and
subscribers that currently choose to
integrate the data after receiving it from
the Exchange. In addition, the change to
the Arca Options Deep product reflects
the interests and needs of subscribers
and vendors who will no longer have to
subscribe to multiple data feeds to
obtain the information they want. The
Exchange believes the proposed changes
are reasonable because they would
provide vendors and subscribers with
higher quality market data products.
In adopting Regulation NMS, the
Commission granted self-regulatory
organizations and broker-dealers
increased authority and flexibility to
offer new and unique market data to
consumers of such data. It was believed
that this authority would expand the
amount of data available to users and
consumers of such data and also spur
innovation and competition for the
provision of market data. The Exchange
believes that the options data product
changes proposed herein are precisely
the sort of market data product
evolutions that the Commission
envisioned when it adopted Regulation
NMS. The Commission concluded that
Regulation NMS—by lessening
regulation of the market in proprietary
data—would itself further the Act’s
goals of facilitating efficiency and
competition:
[E]fficiency is promoted when brokerdealers who do not need the data beyond the
prices, sizes, market center identifications of
the NBBO and consolidated last sale
information are not required to receive (and
pay for) such data. The Commission also
believes that efficiency is promoted when
broker-dealers may choose to receive (and
pay for) additional market data based on their
own internal analysis of the need for such
data.10
By removing ‘‘unnecessary regulatory
restrictions’’ on the ability of exchanges
to sell their own data, Regulation NMS
advanced the goals of the Act and the
principles reflected in its legislative
history.
The Exchange further notes that the
existence of alternatives to the
Exchange’s products, including real10 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005).
E:\FR\FM\18FEN1.SGM
18FEN1
Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices
time consolidated data, free delayed
consolidated data, and proprietary data
from other sources, ensures that the
Exchange is not unreasonably
discriminatory because vendors and
subscribers can elect these alternatives.
The proposed options data products
will help to protect a free and open
market by providing additional data to
the marketplace and give investors
greater choices. In addition, the
proposal would not permit unfair
discrimination because the products
will be available to all of the Exchange’s
customers and broker-dealers through
both the LCN and SFTI.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,11 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.
The market for proprietary data
products is currently competitive and
inherently contestable because there is
fierce competition for the inputs
necessary to the creation of proprietary
data. Numerous exchanges compete
with each other for listings, trades, and
market data itself, providing virtually
limitless opportunities for entrepreneurs
who wish to produce and distribute
their own market data. This proprietary
data is produced by each individual
exchange, as well as other entities (such
as internalizing broker-dealers and
various forms of alternative trading
systems, including dark pools and
electronic communication networks), in
a vigorously competitive market. It is
common for market participants to
further and exploit this competition by
sending their order flow and transaction
reports to multiple markets, rather than
providing them all to a single market.
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder.13 Because the
11 15
U.S.C. 78f(b)(8).
U.S.C. 78s(b)(3)(A)(iii).
13 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
12 15
VerDate Sep<11>2014
19:03 Feb 17, 2016
Jkt 238001
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4–(f)(6)(iii),15 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiver of the operative delay is
consistent with investor protection and
the public interest because the proposal
would allow the Exchange to offer
currently available market data in a
streamlined format that would enhance
the quality of market data available to
investors and would enable investors to
better monitor trading activity on the
Exchange. Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposal
operative upon filing.16
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) 17 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
16 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
17 15 U.S.C. 78s(b)(2)(B).
PO 00000
Frm 00121
Fmt 4703
Sfmt 4703
8293
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–2016–29 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEARCA–2016–29. 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–
NYSEARCA–2016–29 and should be
submitted on or before March 10, 2016.
E:\FR\FM\18FEN1.SGM
18FEN1
8294
Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–03267 Filed 2–17–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77112; File No. SR–OCC–
2015–02]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Setting Aside Action by Delegated
Authority, Approving Proposed Rule
Change Concerning the Options
Clearing Corporation’s Capital Plan
and Denying Motions
February 11, 2016.
I. Introduction
The Options Clearing Corporation
(‘‘OCC’’) is a clearing agency registered
with the Securities and Exchange
Commission (‘‘Commission’’) and is the
only clearing agency for standardized
U.S. options listed on U.S. national
securities exchanges. Today, listed
options are traded on twelve national
securities exchanges: five national
securities exchanges that are equal
owners of OCC (‘‘Stockholder
Exchanges’’) 1 and seven national
securities exchanges that have no
ownership stake in OCC (‘‘NonStockholder Exchanges’’).2 OCC also
serves other markets, including those
trading commodity futures, commodity
options, and security futures,3 the
securities lending market and the OTC
options market. In each of these
markets, OCC provides clearing
members 4 with central counterparty
18 17
CFR 200.30–3(a)(12).
Stockholder Exchanges are: Chicago Board
Options Exchange, Incorporated; International
Securities Exchange, LLC; NASDAQ OMX PHLX,
LLC; NYSE MKT LLC; and NYSE Arca, Inc. See
Exchange Act Release No. 74136 (January 26, 2015),
80 FR 5171 (January 30, 2015) (SR–OCC–2015–02)
(‘‘Notice’’).
2 Under OCC’s By-Laws, exchanges other than
Stockholder Exchanges may participate in OCC’s
services subject to meeting certain qualifications.
See OCC By-Laws, Article VIIB (Non-Equity
Exchanges).
3 OCC also is registered with the Commodity
Futures Trading Commission as a derivatives
clearing organization regulated to provide clearing
services for four futures exchanges.
4 OCC has over 100 members which include large
domestic and international broker-dealers and
futures commission merchants. See OCC’s 2014
Annual Report (available at: https://www.options
clearing.com/components/docs/about/annualreports/occ_2014_annual_report.pdf), and OCC’s
Web site, ‘‘What is OCC?’’ (available at: https://
www.optionsclearing.com/about/corporateinformation/what-is-occ.jsp).
mstockstill on DSK4VPTVN1PROD with NOTICES
1 The
VerDate Sep<11>2014
19:03 Feb 17, 2016
Jkt 238001
(‘‘CCP’’) clearing services and performs
critical functions in the clearance and
settlement process.5 OCC’s services
increase the efficiency and speed of
options trading and settlement as well
as reduce members’ operational
expenses and counterparty credit risk.
OCC’s role as the CCP for all listed
options contracts in the U.S. makes it an
integral part of the national system for
clearance and settlement, and its failure
or service disruption could have
cumulative negative effects on the U.S.
options and futures markets, financial
institutions, and the broader financial
system. As such, OCC was designated
by the Financial Stability Oversight
Council as a systemically important
financial market utility (‘‘SIFMU’’) in
2012.6
In the context of a number of
developments in the financial markets,
OCC’s Board of Directors (‘‘Board’’)
decided that OCC was significantly
undercapitalized, and, in response,
proposed and implemented an
expedited plan to substantially increase
OCC’s capitalization (the ‘‘Capital
Plan’’), and, given OCC’s critical
clearing functions and its systemic
importance, the Commission agrees that
having OCC increase its capitalization is
appropriate and in the public interest.7
Procedural Background
OCC filed the Capital Plan as an
advance notice, SR–OCC–2014–813,
5 For instance, OCC provides CCP services for
OTC options, and for two securities lending market
structures, OCC’s OTC Stock Loan Program and
AQS, an automated marketplace for securities
lending and borrowing operated by Automated
Equity Finance Markets, Inc. OCC currently
participates in cross-margin programs with the CME
and ICE and offers an internal cross-margin program
for products regulated by the SEC and CFTC. See
OCC’s Web site, OCC Fact Sheet (available at:
https://www.optionsclearing.com/components/docs/
about/occ-factsheet.pdf), ‘‘What is OCC?,’’
(available at: https://www.optionsclearing.com/
about/corporate-information/what-is-occ.jsp.) and
OCC’s Web site, ‘‘Cross Margin Programs’’
(available at: https://www.optionsclearing.com/
clearing/clearing-services/cross-margin.jsp.).
6 See Financial Stability Oversight Council
(‘‘FSOC’’) 2012 Annual Report, Appendix A,
(available at https://www.treasury.gov/initiatives/
fsoc/Documents/2012%20Appendix%20A%20
Designation%20of%20Systemically%20Important
%20Market%20Utilities.pdf).
7 According to OCC, as of December 31, 2013, at
the time it developed the Capital Plan, OCC had
total shareholders’ equity of about $25 million,
which represents approximately 6 weeks of
operating expenses. Based on internal operational
risk scenarios and loss modeling, OCC quantified its
operational risk at $226 million and pension risk at
$21 million. According to OCC, as of August 31,
2015, in the absence of the $150 million capital
contribution made pursuant to the Capital Plan,
OCC’s adjusted shareholder equity would be about
$149 million and OCC’s total capital resources
would be less than $150 million. See Notice at
5172–73; OCC’s Written Statement in Support of
Affirming March 6, 2015 Order Approving Capital
Plan (October 7, 2015) (‘‘OCC Support Statement’’).
PO 00000
Frm 00122
Fmt 4703
Sfmt 4703
under Section 806(e)(1) of the Payment,
Clearing, and Settlement Supervision
Act of 2010 (‘‘Payment, Clearing and
Settlement Supervision Act’’) 8 on
December 29, 2014. OCC filed the
proposed rule change implementing the
Capital Plan, SR–OCC–2015–02, with
the Commission pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 9 and
Rule 19b–4 thereunder 10 on January 14,
2015. The proposed rule change was
published for comment in the Federal
Register on January 30, 2015.11 The
Commission received seventeen
comment letters on OCC’s proposal from
twelve commenters, including OCC.12
8 12 U.S.C. 5465(e)(1). On February 26, 2015, the
Commission issued a notice of no objection to the
advance notice filing. See Exchange Act Release No.
74387 (February 26, 2015), 80 FR 12215 (March 6,
2015) (SR–OCC–2014–813).
9 15 U.S.C. 78s(b)(1).
10 17 CFR 240.19b–4.
11 See Notice.
12 See Letter from Eric Swanson, General Counsel
& Secretary, BATS Global Markets, Inc. (‘‘BATS’’)
(February 19, 2015) (‘‘BATS Letter I’’); Letter from
Tony McCormick, Chief Executive Officer, BOX
Options Exchange, (‘‘BOX’’) (February 19, 2015)
(‘‘BOX Letter I’’); Letter from Howard L. Kramer on
behalf of Belvedere Trading, CTC Trading Group,
IMC Financial Markets, Integral Derivatives,
Susquehanna Investment Group, and Wolverine
Trading (February 20, 2015) (‘‘MM Letter’’); Letter
from Ellen Greene, Managing Director, Financial
Services Operations, SIFMA (February 20, 2015)
(‘‘SIFMA Letter’’); Letter from James E. Brown,
General Counsel, OCC (February 23, 2015)
(responding to BATS Letter and BOX Letter) (‘‘OCC
Letter I’’); Letter from James E. Brown, General
Counsel, OCC (February 23, 2015) (responding to
MM Letter) (‘‘OCC Letter II’’); Letter from Barbara
J. Comly, Executive Vice President, General Counsel
& Corporate Secretary, Miami International
Securities Exchange, LLC, (‘‘MIAX’’) (February 24,
2015) (‘‘MIAX Letter I’’); Letter from James E.
Brown, General Counsel, OCC (February 24, 2015)
(responding to SIFMA Letter) (‘‘OCC Letter III’’);
Letter from John A. McCarthy, General Counsel,
KCG Holdings, Inc., (‘‘KCG’’) (February 26, 2015)
(‘‘KCG Letter I’’); Letter from Eric Swanson, General
Counsel and Secretary, BATS (February 27, 2015)
(‘‘BATS Letter II’’); Letter from John A. McCarthy,
General Counsel, KCG (February 27, 2015) (‘‘KCG
Letter II’’); Letter from Richard J. McDonald, Chief
Regulatory Counsel, Susquehanna International
Group, LLP, (‘‘SIG’’) (February 27, 2015) (‘‘SIG
Letter I’’); Letter from Barbara J. Comly, Executive
Vice President, General Counsel & Corporate
Secretary, MIAX (March 1, 2015) (‘‘MIAX Letter
II’’); Letter from James E. Brown, General Counsel,
OCC (March 2, 2015) (‘‘OCC Letter IV’’); Letter from
Eric Swanson, General Counsel and Secretary,
BATS (March 3, 2015) (‘‘BATS Letter III’’); and
Letter from Tony McCormick, Chief Executive
Officer, BOX (March 3, 2015) (‘‘BOX Letter II’’);
Letter from Brian Sopinsky, General Counsel, SIG
(March 4, 2015) (‘‘SIG Letter II’’). Since the proposal
was filed as both an advance notice and proposed
rule change, the Commission considered all
comments received on the proposal, regardless of
whether the comments were submitted to the
proposed rule change or advance notice file. See
comments on the advance notice (File No. SR–
OCC–2014–813), https://www.sec.gov/comments/srocc-2014-813/occ2014813.shtml and comments on
the proposed rule change (File No. SR–OCC–2015–
02), https://www.sec.gov/comments/sr-occ-2015-02/
occ201502.shtml. In its evaluation of the proposed
E:\FR\FM\18FEN1.SGM
18FEN1
]]>Agencies
[Federal Register Volume 81, Number 32 (Thursday, February 18, 2016)]
[Notices]
[Pages 8291-8294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03267]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77111; File No. SR-NYSEARCA-2016-29]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Modifying the Arca
Options Deep Market Data Product
February 11, 2016.
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 February 4, 2016, 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 and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify the Arca Options Deep market data
product. 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 modify the Arca Options Deep market data
product.
The Exchange currently offers the following real-time options
market data feeds: ``Arca Options Top,'' ``Arca Options Deep,'' and
``Arca Options Complex'' (the ``Arca Options Products''). ``Arca
Options Top'' is a single market data product that combines last sale
data, best bids and offers (``BBO''), order imbalance information and
series status and underlying status messages (collectively called
security status messages). ``Arca Options Deep'' is also a single
market data product that provides subscribers NYSE Arca Options quotes
and orders at the first three price levels in each series on a real-
time basis. ``Arca Options Complex,'' also a single market data
product, provides subscribers NYSE Arca Options quote and trade
information (including orders/quotes, requests for responses, and
trades) for the complex order book on a real-time basis.\4\
---------------------------------------------------------------------------
\4\ See Rule 6.62(e), which defines complex orders.
---------------------------------------------------------------------------
The Exchange charges a single fee for Arca Options Top and
subscribers of Arca Options Top receive all three data feeds described
above. The Exchange charges a separate fee for Arca Options Complex for
subscribers that seek to obtain this data feed on a standalone
basis.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 68005 (Oct. 9,
2012), 77 FR 63362 (Oct. 16, 2012) (SR-NYSEArca-2012-106)
(establishing fees for certain proprietary options market data
products). See also Securities Exchange Act Release Nos. 69523 (May
6, 2013), 78 FR 27452 (May 10, 2013) (SR-NYSEArca-2013-41)
(establishing a schedule of NYSE Arca Options proprietary market
data fees); 69554 (May 10, 2013), 78 FR 28917 (May 16, 2013) (SR-
NYSEArca-2013-47) (establishing non-display usage fees and amending
the professional end-user fees); 71933 (April 11, 2014), 79 FR 21821
(April 17, 2014) (SR-NYSEArca-2014-34) (amending the professional
user fees); 73010 (Sept. 5, 2014), 79 FR 54307 (Sept. 11, 2014) (SR-
NYSEArca-2014-94) (amending fees for non-display use); 73588 (Nov.
13, 2014), 79 FR 68922 (Nov. 19, 2014) (SR-NYSEArca-2014-129)
(establishing fees for the complex order book feed); and 76023
(September 29, 2015), 80 FR 60208 (October 5, 2015) (modifying
certain proprietary options data products).
---------------------------------------------------------------------------
[[Page 8292]]
The Exchange proposes to modify the Arca Options Deep data feed. As
proposed, Arca Options Deep will also include security status messages,
the same data that is currently provided as part of Arca Options Top.
The proposed modification to the Arca Options Deep data feed will allow
subscribers who currently obtain depth of market data to also receive
security status messages in a single data feed. Currently, these
subscribers are required to process two data feeds to get the depth of
market data and security status information. Offering a data product
that combines, in one market data product, depth of market data and
security status messages would provide greater efficiencies and better
sequencing for vendors and subscribers that currently choose to
integrate the data after receiving it from the Exchange. As with Arca
Options Top, Arca Options Deep would provide depth of market and series
status information on a real-time basis as reported to the Options
Price Reporting Authority (``OPRA'') and disseminated on a consolidated
basis under the OPRA Plan.\6\
---------------------------------------------------------------------------
\6\ The OPRA Plan is a national market system plan approved by
the Securities and Exchange Commission (``Commission'') pursuant to
Section 11A of the Securities Exchange Act of 1934 (the ``Act'') and
Rule 608 thereunder (formerly Rule 11Aa3-2). See Securities Exchange
Act Release No. 17638 (March 18, 1981), 22 S.E.C. Docket 484 (March
31, 1981). The full text of the OPRA Plan is available at https://www.opradata.com. The OPRA Plan provides for the collection and
dissemination of last sale and quotation information on options that
are traded on the participant exchanges. Section 5.2(c) of the OPRA
Plan also permits OPRA Plan participants to disseminate
unconsolidated market information to certain of their members under
certain circumstances. The manner in which the Exchange proposes to
disseminate the products would comply with Section 5.2(c) of the
OPRA Plan, pursuant to which the Exchange may not disseminate the
products ``on any more timely basis than the same information is
furnished to the OPRA System for inclusion in OPRA's consolidated
dissemination of Options Information.''
---------------------------------------------------------------------------
The Arca Options Products would continue to be distributed in their
current format, to maintain the format of the Arca Options Products
with that of other market data products offered by the Exchange.
The Exchange does not propose to make any changes to the fees. The
single fee charged for the Arca Options Product that comprise [sic] the
Arca Options Top, Arca Options Deep and Arca Options Complex would
continue to apply. The separate fee that now applies to Arca Options
Complex, would likewise continue to apply to the Arca Options Complex
market data product.\7\
---------------------------------------------------------------------------
\7\ The Exchange has not attached an Exhibit 5 with this
proposed rule change because the Exchange is not proposing to make
any fee changes associated with the proposed modification to the
Arca Options Deep market data product.
---------------------------------------------------------------------------
Each of the Arca Options Products would continue to be offered
through the Exchange's Liquidity Center Network (``LCN''), a local area
network in the Exchange's Mahwah, New Jersey data center that is
available to users of the Exchange's co-location services. The Exchange
would also continue to offer the products through the Exchange's Secure
Financial Transaction Infrastructure (``SFTI'') network, through which
all other users and member organizations access the Exchange's trading
and execution systems and other proprietary market data products.
The Exchange will announce the date that the Arca Options Deep
market data product will begin to include security status messages
through a NYSE Market Data Notice.
The proposed change is not intended to address any issues other
than those described herein, and the Exchange is not aware of any
problems that vendors or subscribers would have in complying with the
proposed change.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \8\ of the
Act, in general, and furthers the objectives of Section 6(b)(5) \9\ of
the Act, in particular, in that it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest, and it is not designed to permit unfair discrimination
among customers, brokers, or dealers.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange also believes this proposal is consistent with Section
6(b)(5) of the Act because it protects investors and the public
interest and promotes just and equitable principles of trade by
providing investors with improved options for receiving market data.
The proposed rule changes would benefit investors by facilitating their
prompt access to the additional real-time information contained in a
modified Arca Options Deep market data product.
In particular, the Exchange believes that combining depth of market
data with security status messages in the Arca Options Deep product is
reasonable because it would provide greater efficiencies for vendors
and subscribers that currently choose to integrate the data after
receiving it from the Exchange. In addition, the change to the Arca
Options Deep product reflects the interests and needs of subscribers
and vendors who will no longer have to subscribe to multiple data feeds
to obtain the information they want. The Exchange believes the proposed
changes are reasonable because they would provide vendors and
subscribers with higher quality market data products.
In adopting Regulation NMS, the Commission granted self-regulatory
organizations and broker-dealers increased authority and flexibility to
offer new and unique market data to consumers of such data. It was
believed that this authority would expand the amount of data available
to users and consumers of such data and also spur innovation and
competition for the provision of market data. The Exchange believes
that the options data product changes proposed herein are precisely the
sort of market data product evolutions that the Commission envisioned
when it adopted Regulation NMS. The Commission concluded that
Regulation NMS--by lessening regulation of the market in proprietary
data--would itself further the Act's goals of facilitating efficiency
and competition:
[E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\10\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history.
The Exchange further notes that the existence of alternatives to
the Exchange's products, including real-
[[Page 8293]]
time consolidated data, free delayed consolidated data, and proprietary
data from other sources, ensures that the Exchange is not unreasonably
discriminatory because vendors and subscribers can elect these
alternatives.
The proposed options data products will help to protect a free and
open market by providing additional data to the marketplace and give
investors greater choices. In addition, the proposal would not permit
unfair discrimination because the products will be available to all of
the Exchange's customers and broker-dealers through both the LCN and
SFTI.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\11\ 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. The market for proprietary data products is
currently competitive and inherently contestable because there is
fierce competition for the inputs necessary to the creation of
proprietary data. Numerous exchanges compete with each other for
listings, trades, and market data itself, providing virtually limitless
opportunities for entrepreneurs who wish to produce and distribute
their own market data. This proprietary data is produced by each
individual exchange, as well as other entities (such as internalizing
broker-dealers and various forms of alternative trading systems,
including dark pools and electronic communication networks), in a
vigorously competitive market. It is common for market participants to
further and exploit this competition by sending their order flow and
transaction reports to multiple markets, rather than providing them all
to a single market.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4-(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission believes
that waiver of the operative delay is consistent with investor
protection and the public interest because the proposal would allow the
Exchange to offer currently available market data in a streamlined
format that would enhance the quality of market data available to
investors and would enable investors to better monitor trading activity
on the Exchange. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposal operative upon filing.\16\
---------------------------------------------------------------------------
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
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) \17\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic 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-2016-29 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEARCA-2016-29. 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-NYSEARCA-2016-29 and should
be submitted on or before March 10, 2016.
[[Page 8294]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Robert W. Errett,
Deputy Secretary.
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
[FR Doc. 2016-03267 Filed 2-17-16; 8:45 am]
BILLING CODE 8011-01-P
