Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Modifying the NYSE Amex Options Fee Schedule, 24674-24676 [2016-09594]
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24674
Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Notices
All submissions should refer to File
Number SR–NASDAQ–2016–055. 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–NASDAQ–2016–055 and
should be submitted on or before May
17, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.42
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–09597 Filed 4–25–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77658; File No. SR–
NYSEMKT–2016–45]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Modifying the NYSE
Amex Options Fee Schedule
April 20, 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 April 11,
2016, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) 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.
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 April 11, 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
ACE Program—Standard options
Tier
mstockstill on DSK4VPTVN1PROD with NOTICES
1 .....................
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 4 to adjust fees and credits
payable, effective on April 11, 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 5
and provides two alternative methods
through which Order Flow Providers
(each an ‘‘OFP’’) 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 through
5 as illustrated in the table below, with
proposed additions appearing
underscored and proposed deletions
appearing in brackets:
Credits payable on customer volume only
Customer electronic ADV as
a % of industry customer equity and ETF options ADV
OR
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
0.00% to 0.60% ....................
...................
N/A ........................................
42 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Fee Schedule, Sections I. E. (Amex
Customer Engagement (‘‘ACE’’) Program—Standard
Options) and G. (CUBE Auction Fees & Credits),
available here, https://www.nyse.com/publicdocs/
1 15
2 15
VerDate Sep<11>2014
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.
22:08 Apr 25, 2016
Jkt 238001
nyse/markets/amex-options/NYSE_Amex_Options_
Fee_Schedule.pdf.
5 The volume thresholds are based on an NYSE
Amex Options Market Makers’ 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
PO 00000
Frm 00121
Fmt 4703
Sfmt 4703
Customer
volume credits
$0.00
1 Year
enhanced
customer volume credits
$0.00
3 Year
enhanced
customer volume credits
$0.00
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.
E:\FR\FM\26APN1.SGM
26APN1
24675
Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Notices
ACE Program—Standard options
Tier
Credits payable on customer volume only
OR
Customer electronic ADV as
a % of industry customer equity and ETF options ADV
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
...................
N/A ........................................
3 .....................
> 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% .................................
...................
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.
2 .....................
*
*
*
*
*
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
mstockstill on DSK4VPTVN1PROD with NOTICES
Customer
volume credits
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 adjust rates for RFR
Response fees and Initiating Credits and
Rebates. Specifically, the Exchange
proposes to adjust RFR Response fees
for Non-Customers to $0.70 for symbols
in the Penny Pilot, from $0.12; and to
adjust RFR Response fees for NonCustomers for symbols not in the Penny
Pilot to $1.05, from $0.12. The Exchange
also proposes to adjust the Initiating
Participant credits and rebates to $0.35
for symbols in the Penny Pilot, $0.70 for
symbols not in the Penny Pilot, an
increase from the $0.05 Initiating
Participant credit in all names. The
Exchange also proposes to increase the
ACE Initiating Participant Rebate from
$0.05 to $0.18.
The proposed changes are designed to
increase incentives for submission of
CUBE Orders, which should maximize
price improvement opportunities for
Customers. In addition, the Exchange
notes that prior changes to CUBE
Pricing (effective in February 2016),
designed to address concerns raised
about auction fee structures revealed
that fee adjustments to incent Market
Maker participation did not lead to
greater volume and liquidity in CUBE
Auctions, and did not encourage Market
VerDate Sep<11>2014
22:08 Apr 25, 2016
Jkt 238001
Maker RFR Responses to such
Auctions.6
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
6 See Securities Exchange Act Release No. 77106
(February 10, 2016), 81 FR 8107, 8108 (February 17,
2016) (SR–MKT–2016–18) (the ‘‘February CUBE
Changes’’) (noting that the changes to CUBE pricing,
particularly the reduction in the RFR Response Fee,
were designed to address concerns raised by Market
Makers that auction pricing, including the CUBE,
hindered competition by Market Makers, and
providing that ‘‘the proposed changes would also
provide the concerned Market Makers to have a
platform on which they can provide proof of
concept.’’) The Exchange notes that the CUBE fees
and credits in place prior to the February CUBE
Changes are consistent with the adjustments
proposed herein.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4) and (5).
PO 00000
Frm 00122
Fmt 4703
Sfmt 4703
1 Year
enhanced
customer volume credits
3 Year
enhanced
customer volume credits
[(0.16]
(0.18)
[(0.16)]
(0.18)
[(0.16)]
(0.18)
[(0.17)]
(0.19)
[(0.18)]
(0.20)
[(0.19)]
(0.21)
[(0.18)]
(0.20)
[(0.19)]
(0.21)
[(0.21)]
(0.22)
[(0.19)]
(0.22)
[(0.21)]
(0.23)
[(0.23)]
(0.24)
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.
The Exchange believes that the
proposed changes to CUBE Auction fees
are reasonable, equitable and not
unfairly discriminatory. Specifically,
the proposed increases to both the
Initiating Participant Credits (for both
Penny Pilot and Non-Penny Pilot) as
well as the fees associated with RFR
Responses that participate in the CUBE
are reasonable, equitable and nondiscriminatory 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 believes the proposed
changes to CUBE are reasonable, as they
are similar to fee and credit structures
previously applied to the CUBE
Auction 9 and to fees charged for similar
auction mechanisms on other markets,
such as BOX Options Exchange LLC
(‘‘BOX’’), which charges a total fee of
$1.05 for a Market Maker response to a
PIP auction in a non-Penny Pilot
issue.10
The Exchange likewise believes the
proposed increase 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
9 See
supra n. 6.
BOX Fee Schedule, available here, https://
boxexchange.com/assets/BOX_Fee_Schedule.pdf.
10 See
E:\FR\FM\26APN1.SGM
26APN1
24676
Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
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 incent 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,11 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.
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 Exchange participants
through increased opportunities to trade
as well as enhancing price discovery.
Further, the Exchange believes the
proposed amendments to CUBE Auction
pricing are pro-competitive as the fees
and credits are designed to incent
increases in the number of CUBE
Auctions brought to the Exchange,
which would benefit all 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) 12 of the Act and
subparagraph (f)(2) of Rule 19b–4 13
thereunder, because it establishes a due,
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) 14 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:
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–2016–45 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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–09594 Filed 4–25–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77660; File No. SR–BOX–
2016–19]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Extend
the Pilot Program for the Listing and
Trading of Options Settling to the
RealVolTM SPY Index (‘‘Index’’)
April 20, 2016.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b-4 thereunder,2
U.S.C. 78f(b)(8).
VerDate Sep<11>2014
22:08 Apr 25, 2016
Jkt 238001
12 15
15 17
13 17
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
14 15 U.S.C. 78s(b)(2)(B).
All submissions should refer to File
Number SR–NYSEMKT–2016–45. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2016–45, and should be
submitted on or before May 17, 2016.
1 15
PO 00000
Frm 00123
Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
E:\FR\FM\26APN1.SGM
26APN1
]]>Agencies
[Federal Register Volume 81, Number 80 (Tuesday, April 26, 2016)]
[Notices]
[Pages 24674-24676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09594]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77658; File No. SR-NYSEMKT-2016-45]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Modifying the NYSE Amex
Options Fee Schedule
April 20, 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 April 11, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') 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 modify the NYSE Amex Options Fee Schedule
(``Fee Schedule''). The Exchange proposes to implement the fee change
effective April 11, 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 \4\ to adjust fees and credits payable, effective on April
11, 2016.
---------------------------------------------------------------------------
\4\ See Fee Schedule, Sections I. E. (Amex Customer Engagement
(``ACE'') Program--Standard Options) and 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 \5\ and provides two alternative methods through
which Order Flow Providers (each an ``OFP'') may receive per contract
credits for Electronic Customer volume that the OFP, as agent, submits
to the Exchange.
---------------------------------------------------------------------------
\5\ The volume thresholds are based on an NYSE Amex Options
Market Makers' 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 through 5 as illustrated
in the table below, with proposed additions appearing underscored and
proposed deletions appearing in brackets:
--------------------------------------------------------------------------------------------------------------------------------------------------------
ACE Program--Standard options Credits payable on customer volume only
--------------------------------------------------------------------------------------------------------------------
Total electronic ADV
(of which 20% or
Customer electronic greater of the
Tier ADV as a % of minimum qualifying 1 Year 3 Year
industry customer OR volume for each tier Customer enhanced enhanced
equity and ETF must be customer) as volume credits customer customer
options ADV a % of industry volume credits volume credits
customer equity and
ETF options ADV
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 0.00% to 0.60%....... ..................... N/A.................. $0.00 $0.00 $0.00
[[Page 24675]]
2.................................. > 0.60% to 0.80% or ..................... N/A.................. [(0.16] [(0.16)] [(0.16)]
>= 0.35% over (0.18) (0.18) (0.18)
October 2015 volumes.
3.................................. > 0.80% to 1.25%..... ..................... 1.50% to 2.50% of [(0.17)] [(0.18)] [(0.19)]
which 20% or greater (0.19) (0.20) (0.21)
of 1.50% must be
Customer.
4.................................. > 1.25 to 1.75%...... ..................... > 2.50% to 3.50% of [(0.18)] [(0.19)] [(0.21)]
which 20% or greater (0.20) (0.21) (0.22)
of 2.50% must be
Customer.
5.................................. > 1.75%.............. ..................... > 3.50% of which 20% [(0.19)] [(0.21)] [(0.23)]
or greater of 3.5% (0.22) (0.23) (0.24)
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 adjust rates for RFR Response
fees and Initiating Credits and Rebates. Specifically, the Exchange
proposes to adjust RFR Response fees for Non-Customers to $0.70 for
symbols in the Penny Pilot, from $0.12; and to adjust RFR Response fees
for Non-Customers for symbols not in the Penny Pilot to $1.05, from
$0.12. The Exchange also proposes to adjust the Initiating Participant
credits and rebates to $0.35 for symbols in the Penny Pilot, $0.70 for
symbols not in the Penny Pilot, an increase from the $0.05 Initiating
Participant credit in all names. The Exchange also proposes to increase
the ACE Initiating Participant Rebate from $0.05 to $0.18.
The proposed changes are designed to increase incentives for
submission of CUBE Orders, which should maximize price improvement
opportunities for Customers. In addition, the Exchange notes that prior
changes to CUBE Pricing (effective in February 2016), designed to
address concerns raised about auction fee structures revealed that fee
adjustments to incent Market Maker participation did not lead to
greater volume and liquidity in CUBE Auctions, and did not encourage
Market Maker RFR Responses to such Auctions.\6\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 77106 (February 10,
2016), 81 FR 8107, 8108 (February 17, 2016) (SR-MKT-2016-18) (the
``February CUBE Changes'') (noting that the changes to CUBE pricing,
particularly the reduction in the RFR Response Fee, were designed to
address concerns raised by Market Makers that auction pricing,
including the CUBE, hindered competition by Market Makers, and
providing that ``the proposed changes would also provide the
concerned Market Makers to have a platform on which they can provide
proof of concept.'') The Exchange notes that the CUBE fees and
credits in place prior to the February CUBE Changes are consistent
with the adjustments proposed herein.
---------------------------------------------------------------------------
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.
The Exchange believes that the proposed changes to CUBE Auction
fees are reasonable, equitable and not unfairly discriminatory.
Specifically, the proposed increases to both the Initiating Participant
Credits (for both Penny Pilot and Non-Penny Pilot) 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 believes the proposed changes to CUBE are reasonable,
as they are similar to fee and credit structures previously applied to
the CUBE Auction \9\ and to fees charged for similar auction mechanisms
on other markets, such as BOX Options Exchange LLC (``BOX''), which
charges a total fee of $1.05 for a Market Maker response to a PIP
auction in a non-Penny Pilot issue.\10\
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\9\ See supra n. 6.
\10\ See BOX Fee Schedule, available here, https://boxexchange.com/assets/BOX_Fee_Schedule.pdf.
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The Exchange likewise believes the proposed increase 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
[[Page 24676]]
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 incent 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,\11\ 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. 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 Exchange participants through increased
opportunities to trade as well as enhancing price discovery. Further,
the Exchange believes the proposed amendments to CUBE Auction pricing
are pro-competitive as the fees and credits are designed to incent
increases in the number of CUBE Auctions brought to the Exchange, which
would benefit all Exchange participants through increased opportunities
to trade as well as enhancing price discovery.
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\11\ 15 U.S.C. 78f(b)(8).
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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) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 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-2016-45 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-NYSEMKT-2016-45. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEMKT-2016-45, and should
be submitted on or before May 17, 2016.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-09594 Filed 4-25-16; 8:45 am]
BILLING CODE 8011-01-P
