Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE Amex Options Fee Schedule, 92923-92925 [2016-30564]

Download as PDF 92923 Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices 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–BOX–2016–57. 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–BOX– 2016–57, and should be submitted on or before January 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.39 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–30562 Filed 12–19–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79559; File No. SR– NYSEMKT–2016–115] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE Amex Options Fee Schedule December 14, 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 December 1, 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 selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the NYSE Amex Options Fee Schedule (‘‘Fee Schedule’’). The Exchange proposes to implement the fee change effective December 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 E-SPECIALIST, 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 Section III. C. of the Fee Schedule to adjust the monthly Rights Fees assessed on Specialists, e-Specialists, Directed Order Market Markers (each a ‘‘DOMM), and to provide alternative means to qualify for a discount on the Rights Fees. The Exchange proposes to implement these changes effective on December 1, 2016. Currently, the Exchange charges a Rights Fee on each issue in the allocation of an e-Specialist, DOMM, and Specialist.4 The monthly Rights Fee ranges from $75 to $1,500 and is based on the Average National Daily Customer Contracts (‘‘CADV’’) per issue. With one exception, the more active an issue, the higher the Rights Fee assessed. The exception is that the Exchange currently charges a higher rate for the lowestvolume issues (i.e., less than 201 CADV) to offset the Exchange’s revenue with the cost of listing and maintaining these low-volume issues. Proposed Modification to the Rights Fees The Exchange proposes to align the Rights Fees with the economic benefit of being the e-Specialist, DOMM, or Specialist in a given issue, based on trading activity in an issue. The Exchange therefore proposes that some rates would decrease (for lower-volume issues) and others would increase (for higher-volume issues). Using the same CADV levels currently in place, the Exchange proposes to amend the Rights Fees as follows: DOMM, AND SPECIALIST RIGHTS FEE mstockstill on DSK3G9T082PROD with NOTICES Average national daily customer contracts per issue Current fee 0 to 200 .................................................................................................................................................................... 201 to 2,000 ............................................................................................................................................................. 2,001 to 5,000 .......................................................................................................................................................... 5,001 to 15,000 ........................................................................................................................................................ 15,001 to 100,000 .................................................................................................................................................... Over 100,000 ........................................................................................................................................................... 39 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. Fee Schedule, Section III. C. (e-Specialist, DOMM and Specialist Monthly Rights Fees) (describing how the Rights Fee is assessed and 4 See 1 15 VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 PO 00000 Frm 00154 Fmt 4703 Sfmt 4703 $250 75 200 375 750 1,500 Proposed fee $50 60 150 375 1,250 2,000 setting forth the current rates), available here, https://www.nyse.com/publicdocs/nyse/markets/ amex-options/NYSE_Amex_Options_Fee_ Schedule.pdf. E:\FR\FM\20DEN1.SGM 20DEN1 92924 Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices As shown in the chart above, the Exchange proposes to significantly decrease the Rights Fee for the lowestvolume issues (i.e., between 0–200 contracts) to better account for the costs to each e-Specialist, DOMM, and Specialist, irrespective of costs and revenue to the Exchange associated with listing an issue. The Exchange also proposes to slightly decrease the Rights Fee for option issues trading between 201–2,000 CADV and trading between 2,001–5,000 CADV to better align with the cost to the Exchange associated with such issues. The Exchange believes the proposed reduction in the Rights Fee for issues trading under 5,001 CADV would create an incentive for Specialists and eSpecialists to request appointments in these lower-volume issues, which may result in increased liquidity to the benefit of market participants. Similarly, the Exchange believes the proposed reductions would encourage DOMMs to seek to transact more in these less active issues (i.e., to make order flow arrangements with Customers to direct orders in these issues to them), which in turn should increase volume on the Exchange. In addition, the Exchange proposes to increase the Rights Fees associated with the two most active CADV categories of issues to better reflect the economic benefits of being an e-Specialist, DOMM, or Specialist in more activelytraded issues (i.e., option issues trading more than 5,000 CADV). The Exchange believes the proposed modifications to the Rights Fees are appropriate as an eSpecialist, DOMM, or Specialist would have an opportunity to interact with fewer than 201 contracts per day to cover the proposed $50 per month Rights Fees and would have the opportunity to interact with more than 100,000 contracts per day to cover the proposed $2,000 per month Rights Fee. mstockstill on DSK3G9T082PROD with NOTICES Proposed Discounts to the Rights Fees The Exchange proposes two alternative methods for Specialists, eSpecialists, and DOMMs to qualify for a discount on the monthly Rights Fees. First, as proposed, any Specialist, eSpecialist, or DOMM that participates in the Prepayment Program (outlined in Section I.D. of the Fee Schedule) would be eligible for a 20% discount to their monthly Rights Fees. Alternatively, the Exchange proposes that any Specialist, e-Specialist, or DOMM that achieves one of the Tiers in the Amex Customer Engagement (‘‘ACE’’) Program (outlined in Section I.E. of the Fee Schedule) would be eligible for a discount on their Rights Fees, as set forth in the table below. VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 aligned with the economic benefit of being e-Specialist, DOMM, or Specialist Discount on in a given issue. For example, an eACE tier rights fees Specialist, DOMM, or Specialist would % have an opportunity to interact with 5 ................................... Base 0 fewer than 201 contracts per day to 1 ............................................ 0 cover the proposed $50 per month 2 ............................................ 0 Rights Fee and would have the 3 ............................................ 20 opportunity to interact with more than 4 ............................................ 30 100,000 contracts per day to cover the 5 ............................................ 40 proposed $2,000 per month Rights Fee. Further, e-Specialists, DOMMs, and In the event that an e-Specialist, Specialists trading issues with similar DOMM, or Specialist qualified for both activity levels would be subject to the discounts in a given month, only the same Rights Fees. larger discount would be applied. For The Exchange believes the proposed instance, a Specialist in one of the reduction in the Rights Fee for issues Prepayment Programs would be eligible trading under 5,001CADV is reasonable, to receive a 20% discount on the Rights equitable and not unfairly Fees every month or, if that same discriminatory because it would create Specialist also qualifies for ACE Tier 4, an incentive for Specialists and emaking it eligible for a 30% discount in Specialists to request appointments in a given month, the Specialist would these lower-volume issues, which may receive a 30% discount to the Rights result in increased liquidity to the Fees for that month in lieu of the 20% benefit of market participants. Similarly, discount. the Exchange believes the proposed reductions would encourage DOMMs to 2. Statutory Basis seek to transact more in these less active The Exchange believes that the proposed rule change is consistent with issues (i.e., to make order flow arrangements with Customers to direct Section 6(b) of the Act,6 in general, and orders in these issues to them), which furthers the objectives of Sections in turn should increase volume on the 7 in particular, 6(b)(4) and (5) of the Act, Exchange. because it provides for the equitable The Exchange also believes the allocation of reasonable dues, fees, and proposed discounts on the Rights Fees other charges among its members, available to e-Specialists, DOMMs, and issuers and other persons using its Specialists are reasonable, equitable and facilities and does not unfairly not unfairly discriminatory for a number discriminate between customers, of reasons. First, the proposed discounts issuers, brokers or dealers. would reduce the overhead costs of eThe Exchange believes that the Specialists, DOMMs, and Specialists (by proposed modifications to the Rights reducing the monthly Rights Fees), Fees are reasonable, equitable and not which would, in turn, enhance their unfairly discriminatory for a number of ability to provide liquidity to the benefit reasons. First, the Rights Fees apply of all market participants. Second, solely to e-Specialists, DOMMs, and Specialists (other Market Makers are not because Market Makers that are not eSpecialists, DOMMs, or Specialists are subject to this Fee) and are assessed to not subject to the Rights Fees (as such account for the enhanced allocation fees are assessed to account for the opportunities and economic benefits enhanced allocation opportunities and that inure to these market participants. economic benefits that inure to these Second, the monthly Rights Fees are market participants), the proposed directly related to the number of discount would not disadvantage allocations in the appointment of each Market Makers. In addition, all ee-Specialist, DOMM, or Specialist, Specialists, DOMMs, and Specialists (as which appointments are completely well as any other Market Makers) are voluntary. Any e-Specialist, DOMM, or eligible to participate in the Prepayment Specialist can opt to relinquish any Program, which would enable them to issue in its allocation to reduce its total qualify for the proposed 20% discount Rights Fee. In addition, the proposed on the Rights Fees. Further, the Rights Fees would be more closely proposed discounts available upon satisfying certain Tiers of the ACE 5 The Exchange notes that it is proposing to add a Base Tier to the ACE Program in a separate fee Program are not discriminatory as they filing, also for December 1, 2016. Thus, reference are open to all e-Specialists, DOMMS, to a Base Tier herein is designed to align with that and Specialists, as well as all other proposed change. See File No. SR–NYSEMKT– Market Makers who may arrange for 2016–114. 6 15 U.S.C. 78f(b). ‘‘appointment’’ status with an Order 7 15 U.S.C. 78f(b)(4) and (5). Flow Provider (‘‘OFP’’). PO 00000 RIGHTS FEE DISCOUNT Frm 00155 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1 Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices Finally, the Exchange is subject to significant competitive forces, as described below in the Exchange’s statement regarding the burden on competition. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition mstockstill on DSK3G9T082PROD with NOTICES In accordance with Section 6(b)(8) of the Act,8 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 that the proposed modifications on the Rights Fees would not impose an unfair burden on competition because the proposed Rights Fees would more closely align with the economic benefit of being eSpecialist, DOMM, or Specialist in a given issue. Because other Market Makers are not subject to the Rights Fee, the proposed discount would not disadvantage Market Makers. Instead, the proposed ACE-related discounts would operate to incent each eSpecialist, DOMM, or Specialist to achieve higher ACE Tiers to reduce its own Rights Fee. The Exchange believes that the proposed discounts would encourage e-Specialists, DOMMs, or Specialists to quote and trade competitively in their issues and would reduce the burden on competition among e-Specialists, DOMMs, or Specialists in the most actively-traded issues because e-Specialists, DOMMs, or Specialists that achieve the discounts would have reduced overhead. 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) 9 of the Act and subparagraph (f)(2) of Rule 19b–4 10 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) 11 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–2016–115 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–2016–115. 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–2016–115, and should be submitted on or before January 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–30564 Filed 12–19–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79560; File No. SR–CBOE– 2016–081] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Move the Web Site and Vendor Through Which It Sells and Disseminates Open and Close Volume Data on the CBOE December 14, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 9, 2016, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. U.S.C. 78f(b)(8). VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 9 15 12 17 10 17 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 11 15 U.S.C. 78s(b)(2)(B). 1 15 PO 00000 Frm 00156 Fmt 4703 Sfmt 4703 92925 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. E:\FR\FM\20DEN1.SGM 20DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)]
[Notices]
[Pages 92923-92925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30564]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79559; File No. SR-NYSEMKT-2016-115]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Change Modifying the NYSE Amex
Options Fee Schedule

December 14, 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 December 1, 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.
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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 December 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 Section III. C. of the Fee
Schedule to adjust the monthly Rights Fees assessed on Specialists, e-
Specialists, Directed Order Market Markers (each a ``DOMM), and to
provide alternative means to qualify for a discount on the Rights Fees.
The Exchange proposes to implement these changes effective on December
1, 2016.
Currently, the Exchange charges a Rights Fee on each issue in the
allocation of an e-Specialist, DOMM, and Specialist.\4\ The monthly
Rights Fee ranges from $75 to $1,500 and is based on the Average
National Daily Customer Contracts (``CADV'') per issue. With one
exception, the more active an issue, the higher the Rights Fee
assessed. The exception is that the Exchange currently charges a higher
rate for the lowest-volume issues (i.e., less than 201 CADV) to offset
the Exchange's revenue with the cost of listing and maintaining these
low-volume issues.
---------------------------------------------------------------------------

\4\ See Fee Schedule, Section III. C. (e-Specialist, DOMM and
Specialist Monthly Rights Fees) (describing how the Rights Fee is
assessed and setting forth the current rates), available here,
https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
---------------------------------------------------------------------------

Proposed Modification to the Rights Fees
The Exchange proposes to align the Rights Fees with the economic
benefit of being the e-Specialist, DOMM, or Specialist in a given
issue, based on trading activity in an issue. The Exchange therefore
proposes that some rates would decrease (for lower-volume issues) and
others would increase (for higher-volume issues). Using the same CADV
levels currently in place, the Exchange proposes to amend the Rights
Fees as follows:

e-Specialist, DOMM, and Specialist Rights Fee
------------------------------------------------------------------------
Average national daily customer
contracts per issue Current fee Proposed fee
------------------------------------------------------------------------
0 to 200................................ $250 $50
201 to 2,000............................ 75 60
2,001 to 5,000.......................... 200 150
5,001 to 15,000......................... 375 375
15,001 to 100,000....................... 750 1,250
Over 100,000............................ 1,500 2,000
------------------------------------------------------------------------

[[Page 92924]]

As shown in the chart above, the Exchange proposes to significantly
decrease the Rights Fee for the lowest-volume issues (i.e., between 0-
200 contracts) to better account for the costs to each e-Specialist,
DOMM, and Specialist, irrespective of costs and revenue to the Exchange
associated with listing an issue. The Exchange also proposes to
slightly decrease the Rights Fee for option issues trading between 201-
2,000 CADV and trading between 2,001-5,000 CADV to better align with
the cost to the Exchange associated with such issues. The Exchange
believes the proposed reduction in the Rights Fee for issues trading
under 5,001 CADV would create an incentive for Specialists and e-
Specialists to request appointments in these lower-volume issues, which
may result in increased liquidity to the benefit of market
participants. Similarly, the Exchange believes the proposed reductions
would encourage DOMMs to seek to transact more in these less active
issues (i.e., to make order flow arrangements with Customers to direct
orders in these issues to them), which in turn should increase volume
on the Exchange.
In addition, the Exchange proposes to increase the Rights Fees
associated with the two most active CADV categories of issues to better
reflect the economic benefits of being an e-Specialist, DOMM, or
Specialist in more actively-traded issues (i.e., option issues trading
more than 5,000 CADV). The Exchange believes the proposed modifications
to the Rights Fees are appropriate as an e-Specialist, DOMM, or
Specialist would have an opportunity to interact with fewer than 201
contracts per day to cover the proposed $50 per month Rights Fees and
would have the opportunity to interact with more than 100,000 contracts
per day to cover the proposed $2,000 per month Rights Fee.
Proposed Discounts to the Rights Fees
The Exchange proposes two alternative methods for Specialists, e-
Specialists, and DOMMs to qualify for a discount on the monthly Rights
Fees. First, as proposed, any Specialist, e-Specialist, or DOMM that
participates in the Prepayment Program (outlined in Section I.D. of the
Fee Schedule) would be eligible for a 20% discount to their monthly
Rights Fees. Alternatively, the Exchange proposes that any Specialist,
e-Specialist, or DOMM that achieves one of the Tiers in the Amex
Customer Engagement (``ACE'') Program (outlined in Section I.E. of the
Fee Schedule) would be eligible for a discount on their Rights Fees, as
set forth in the table below.

Rights Fee Discount
------------------------------------------------------------------------
Discount on
ACE tier rights fees %
------------------------------------------------------------------------
Base \5\................................................ 0
1....................................................... 0
2....................................................... 0
3....................................................... 20
4....................................................... 30
5....................................................... 40
------------------------------------------------------------------------

In the event that\\ an e-Specialist, DOMM, or Specialist qualified
for both discounts in a given month, only the larger discount would be
applied. For instance, a Specialist in one of the Prepayment Programs
would be eligible to receive a 20% discount on the Rights Fees every
month or, if that same Specialist also qualifies for ACE Tier 4, making
it eligible for a 30% discount in a given month, the Specialist would
receive a 30% discount to the Rights Fees for that month in lieu of the
20% discount.
---------------------------------------------------------------------------

\5\ The Exchange notes that it is proposing to add a Base Tier
to the ACE Program in a separate fee filing, also for December 1,
2016. Thus, reference to a Base Tier herein is designed to align
with that proposed change. See File No. SR-NYSEMKT-2016-114.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\7\ 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.
---------------------------------------------------------------------------

\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Exchange believes that the proposed modifications to the Rights
Fees are reasonable, equitable and not unfairly discriminatory for a
number of reasons. First, the Rights Fees apply solely to e-
Specialists, DOMMs, and Specialists (other Market Makers are not
subject to this Fee) and are assessed to account for the enhanced
allocation opportunities and economic benefits that inure to these
market participants. Second, the monthly Rights Fees are directly
related to the number of allocations in the appointment of each e-
Specialist, DOMM, or Specialist, which appointments are completely
voluntary. Any e-Specialist, DOMM, or Specialist can opt to relinquish
any issue in its allocation to reduce its total Rights Fee. In
addition, the proposed Rights Fees would be more closely aligned with
the economic benefit of being e-Specialist, DOMM, or Specialist in a
given issue. For example, an e-Specialist, DOMM, or Specialist would
have an opportunity to interact with fewer than 201 contracts per day
to cover the proposed $50 per month Rights Fee and would have the
opportunity to interact with more than 100,000 contracts per day to
cover the proposed $2,000 per month Rights Fee. Further, e-Specialists,
DOMMs, and Specialists trading issues with similar activity levels
would be subject to the same Rights Fees.
The Exchange believes the proposed reduction in the Rights Fee for
issues trading under 5,001CADV is reasonable, equitable and not
unfairly discriminatory because it would create an incentive for
Specialists and e-Specialists to request appointments in these lower-
volume issues, which may result in increased liquidity to the benefit
of market participants. Similarly, the Exchange believes the proposed
reductions would encourage DOMMs to seek to transact more in these less
active issues (i.e., to make order flow arrangements with Customers to
direct orders in these issues to them), which in turn should increase
volume on the Exchange.
The Exchange also believes the proposed discounts on the Rights
Fees available to e-Specialists, DOMMs, and Specialists are reasonable,
equitable and not unfairly discriminatory for a number of reasons.
First, the proposed discounts would reduce the overhead costs of e-
Specialists, DOMMs, and Specialists (by reducing the monthly Rights
Fees), which would, in turn, enhance their ability to provide liquidity
to the benefit of all market participants. Second, because Market
Makers that are not e-Specialists, DOMMs, or Specialists are not
subject to the Rights Fees (as such fees are assessed to account for
the enhanced allocation opportunities and economic benefits that inure
to these market participants), the proposed discount would not
disadvantage Market Makers. In addition, all e-Specialists, DOMMs, and
Specialists (as well as any other Market Makers) are eligible to
participate in the Prepayment Program, which would enable them to
qualify for the proposed 20% discount on the Rights Fees. Further, the
proposed discounts available upon satisfying certain Tiers of the ACE
Program are not discriminatory as they are open to all e-Specialists,
DOMMS, and Specialists, as well as all other Market Makers who may
arrange for ``appointment'' status with an Order Flow Provider
(``OFP'').

[[Page 92925]]

Finally, the Exchange is subject to significant competitive forces,
as described below in the Exchange's statement regarding the burden on
competition.
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,\8\ 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 that the proposed
modifications on the Rights Fees would not impose an unfair burden on
competition because the proposed Rights Fees would more closely align
with the economic benefit of being e-Specialist, DOMM, or Specialist in
a given issue. Because other Market Makers are not subject to the
Rights Fee, the proposed discount would not disadvantage Market Makers.
Instead, the proposed ACE-related discounts would operate to incent
each e-Specialist, DOMM, or Specialist to achieve higher ACE Tiers to
reduce its own Rights Fee. The Exchange believes that the proposed
discounts would encourage e-Specialists, DOMMs, or Specialists to quote
and trade competitively in their issues and would reduce the burden on
competition among e-Specialists, DOMMs, or Specialists in the most
actively-traded issues because e-Specialists, DOMMs, or Specialists
that achieve the discounts would have reduced overhead.
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\8\ 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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\11\ 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-2016-115 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-2016-115. 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-2016-115, and should
be submitted on or before January 10, 2017.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-30564 Filed 12-19-16; 8:45 am]
BILLING CODE 8011-01-P

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