Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Modify the NYSE Amex Options Fee Schedule, 28726-28728 [2017-13095]

Download as PDF 28726 Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices arbitrator selection process at an earlier date. Accordingly, the Commission believes that the approach proposed by FINRA is appropriate and designed to protect investors and the public interest, consistent with Section 15A(b)(6) of the Exchange Act. For these reasons, the Commission finds that the proposed rule change is consistent with the Exchange Act and the rules and regulations thereunder. V. Conclusion It is therefore ordered pursuant to Section 19(b)(2) of the Exchange Act 30 that the proposal (SR–FINRA–2017– 009), be and hereby is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.31 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–13104 Filed 6–22–17; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–80964; File No. SR– NYSEMKT–2017–37] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Modify the NYSE Amex Options Fee Schedule June 19, 2017. asabaliauskas on DSKBBXCHB2PROD with NOTICES 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 June 9, 2017, 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 June 9, 2017. The proposed change is available on the Exchange’s U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 31 17 VerDate Sep<11>2014 19:21 Jun 22, 2017 Jkt 241001 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 SECURITIES AND EXCHANGE COMMISSION 30 15 Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. The purpose of this filing is to establish fees and credits for a recently adopted Exchange trading mechanism known as Broadcast Order Liquidity Delivery Mechanism (‘‘BOLD’’), which was launched on May 31, 2017.4 BOLD is a new feature within the Exchange’s trading system that provides automated order handling in eligible orders that are executable against quotations disseminated by other exchanges that are participants in the Options Order Protection and Locked/ Crossed Market Plan.5 First, the Exchange proposes to adopt definitions related to BOLD. The Exchange proposes to define the ‘‘BOLD Mechanism’’ as referring to ‘‘the Exchange’s automated order handling for eligible orders in designated classes, pursuant to Rule 994NY.’’ 6 As a general matter, the BOLD Mechanism is Exchange functionality that allows ATP Holders to ‘‘step-up’’ and trade against orders that are exposed by the Exchange prior to such orders being routed to another market or posted on the Exchange’s order book. ATP Holders that submit orders that are designated to be BOLD-eligible will be considered BOLD Initiating Orders for purposes of this proposed rule change. As such, the Exchange proposes to define a ‘‘BOLD Initiating Order’’ as ‘‘an order submitted 4 See Securities Exchange Act Release Nos. 80494 (April 20, 2017) 82 FR 19300 (April 26, 2017) (SR– NYSEMKT–2017–21) and 80695 (May 16, 2017) (SR–NYSEMKT–2017–28). 5 See Rule 994NY. 6 See proposed Fee Schedule, Key Terms and Definitions. PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 to be executed via the BOLD Mechanism.’’ 7 ATP Holders that ‘‘stepup’’ to trade against a BOLD Initiating Order will be considered BOLD Responding Order for purposes of this proposed rule change. As such, the Exchange proposes to define a ‘‘BOLD Responding Order’’ as ‘‘an order that trades with the BOLD Initiating Order.’’ 8 The Exchange believes these proposed changes would add clarity and transparency to the Fee Schedule. Regarding pricing, the Exchange proposes that Non-Customer 9 and Professional Customer orders executed via BOLD would be charged the same rate as currently applied to Electronic executions in standard options contracts, based on participant type and whether the option traded is a Penny Pilot issue.10 The Exchange proposes to apply a per contract credit for all BOLD Initiating Orders that are Customer orders executed via BOLD, which credit would be the greater of $0.12 or the rebate amount achieved through the Amex Customer Engagement (‘‘ACE’’) Program.11 The Exchange proposes to exclude from this proposed credit any transactions in Binary Return Derivatives—or ByRDs—executed via BOLD as ByRDs transactions are not currently subject to transaction charges.12 The Exchange proposes to impose no fee on Customer orders that are BOLD Responding Orders. The Exchange notes that, as proposed, NYSE Amex Options Market Makers would not be assessed Marketing Charges for transactions executed via the BOLD Mechanism.13 The Exchange believes this proposed change would encourage Market Makers to provide additional liquidity to orders directed to BOLD Mechanism for execution on the Exchange. The Exchange proposes that, beginning in June 2017, volume 7 See id. id. 9 Non-Customers include Broker-Dealers, DOMMs, e-Specialists, Firms, Market Makers, and Specialists. 10 See Fee Schedule, Section I.A. (Rates for Standard Options transactions—Electronic and Manual), available here, https://www.nyse.com/ publicdocs/nyse/markets/amex-options/NYSE_ Amex_Options_Fee_Schedule.pdf. 11 See proposed Fee Schedule, Section I.M. (BOLD Mechanism Fees & Credits). 12 See Fee Schedule, supra note 11, at footnote 5 to Section I.A. (excluding transactions in ByRDs from transaction fees and credits) and proposed Fee Schedule, Section I.M., at footnote 2 (excluding ByRDs from proposed credit for executions via the BOLD Mechanism). See also Fee Schedule, Section I.H. (Early Adopter Specialist) (providing incentive to Specialists appointed to trade ByRDs). 13 See proposed Fee Schedule, Section I.M., at footnote 1. Only Market Makers incur Marketing Charges, such charges are not imposed on any other market participants. 8 See E:\FR\FM\23JNN1.SGM 23JNN1 Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices same or lower fees as are currently imposed on these market participants for Electronic transactions executed on the Exchange. Further, the Exchange believes the proposed treatment of Customer orders executed via BOLD—i.e., the proposed credit for BOLD Initiating Orders, no fee for BOLD Responding Orders and absence of Marketing Charge—is reasonable, equitable, and not unfairly discriminatory as these fees and credits recognize the benefits of additional liquidity delivered to the Exchange when ATP Holders utilize the BOLD Mechanism. Specifically, the proposed pricing provides an incentive for Customer orders that are marketable against the National Best Bid/Offer (‘‘NBBO’’) to be sent to NYSE Amex, which benefits all market participants by providing more trading opportunities. The Exchange also notes that other markets have utilized pricing incentives for features similar to the BOLD Mechanism and therefore the concept is not new or novel.20 The Exchange also notes that it is reasonable 2. Statutory Basis to exclude transactions in ByRDs from the proposed credit for BOLD Initiating The Exchange believes that the proposed rule change is consistent with Orders because ByRDs are not currently Section 6(b) of the Act,18 in general, and subject to any transaction fees.21 Further, the proposal to include furthers the objectives of Sections 6(b)(4) and (5) of the Act,19 in particular, orders executed via the BOLD Mechanism for purposes of calculating because it provides for the equitable monthly volume thresholds for the allocation of reasonable dues, fees, and Market Maker Sliding Scale and the other charges among its members, ACE Program, as well as to apply fees issuers and other persons using its incurred for BOLD transactions to the facilities and does not unfairly Prepayment Program, are reasonable, discriminate between customers, equitable, and not unfairly issuers, brokers or dealers. discriminatory as these programs are The Exchange believes applying designed to encourage participation by standard transaction fees (based on Customers and Market Makers in the participant type and whether a Penny full spectrum of NYSE Amex Options Pilot issue) for Non-Customer and transactions. The Exchange also believes Professional Customer orders executed it is reasonable, equitable, and not using the BOLD Mechanism is unfairly discriminatory to not impose reasonable, equitable, and not unfairly Marketing Charges on NYSE Amex discriminatory, because these market Market Makers for orders executed via participants would be subject to the the BOLD Mechanism because such orders do not interact with quoted 14 See proposed Fee Schedule, Sections I.C. (NYSE Amex Options Market Maker Sliding Scale— markets but are required to be filled at Electronic and Manual) and I.E (ACE Program). The prices no worse than the NBBO. The asabaliauskas on DSKBBXCHB2PROD with NOTICES executed via BOLD would be included for purposes of calculating monthly volume thresholds for the Market Maker Sliding Scale and the ACE Program.14 Also beginning in June 2017, the Exchange proposes to apply fees incurred via the BOLD Mechanism to the Prepayment Programs.15 Finally, the Exchange proposes to make a clarifying change to the ACE Program to make clear that ATP Holders that achieve Tier 2 and are eligible to receive the $0.19 per contract credit for Electronic Customer Complex Orders would receive such credit ‘‘regardless of whether the Complex Order trades against interest in the Complex Order Book or with individual orders and quotes in the Consolidated Book.’’ 16 The Exchange notes that this treatment would be consistent with how other credits for Complex Orders achieved through the ACE Program are handled.17 The Exchange believes this change would add clarity, transparency and internal consistency to the Fee Schedule. Exchange also proposes to remove from Section I.C. of the Fee Schedule the now-superfluous language ‘‘[e]ffective January 3, 2017,’’ which would add clarity and transparency to the Fee Schedule. See proposed Fee Schedule, Section I.C. 15 See proposed Fee Schedule, Section I.D. (Prepayment Program). 16 See proposed Fee Schedule, Section I.E., n. 4 (ACE Program). 17 See Fee Schedule, supra note 11, Section I.E., n. 2 (providing that credits for Complex Orders achieved under Tiers 4 or 5 of the ACE Program would be paid ‘‘regardless of whether the Complex Order trades against interest in the Complex Order Book or with individual orders and quotes in the Consolidated Book’’). 18 15 U.S.C. 78f(b). 19 15 U.S.C. 78f(b)(4) and (5). VerDate Sep<11>2014 19:21 Jun 22, 2017 Jkt 241001 20 See, e.g., Nasdaq ISE Schedule of Fees, available here, https://www.ise.com/fees (Section IV.G., providing credit for responses to Flash Orders). See also NASDAQ PHLX LLC Pricing Schedule, available here, https:// www.nasdaqtrader.com/Micro.aspx?id=phlxpricing (providing that ‘‘[n]o Marketing Fees will be assessed on transactions which execute against an order for which the Exchange broadcast an order exposure alert in Penny Pilot Options,’’ which exposure alert is similar to BOLD). 21 The Exchange notes that ByRDs, which were relaunched in 2016, are exempted from standard transaction fees and are also not subject to monthly rights fees. See Fee Schedule, supra note 11, Section I.A., n. 5 and Section III. C., n. 1, respectively. PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 28727 Exchange believes that removing the Marketing Charges should incentivize Market Makers to more actively provide liquidity in response to orders submitted via BOLD.22 To the extent that the proposed changes attract additional order flow to the Exchange, this would result in liquidity and more trading opportunities to the benefit of all market participants. In addition, the Exchange believes the proposed changes are consistent with the Act because to the extent the BOLD Mechanism permits 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. Finally, the Exchange believes the proposed clarifying change to the ACE Program regarding how credits for Complex Orders would be handled is consistent with the Act as this change would add clarity, transparency and internal consistency to the Fee Schedule. In addition, the proposal to remove extraneous language from Section I.C. of the Fee Schedule 23 would likewise add clarity, transparency and internal consistency to the Fee Schedule. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,24 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 credit for Customer orders executed via BOLD and the proposed absence of a fee for Customer orders that are BOLD Responding Orders are pro-competitive as the proposed pricing is designed to encourage Order Flow Providers (‘‘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. The proposed fees for Non-Customer and Professional Customer orders executed via BOLD would not discourage competition and are instead intended to promote competition and better improve the Exchange’s competitive position. Further, the proposed changes only 22 The Exchange also notes that other options exchanges do not charge marketing fees for orders similar to BOLD-designated orders. See supra note 21 (citing NASDAQ PHLX fee schedule). 23 See supra note 15. 24 15 U.S.C. 78f(b)(8). E:\FR\FM\23JNN1.SGM 23JNN1 28728 Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices affect trading on the Exchange. To the extent that the proposed changes make NYSE Amex a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become ATP Holders on the Exchange. 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) 25 of the Act and subparagraph (f)(2) of Rule 19b–4 26 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) 27 of the Act to determine whether the proposed rule change should be approved or disapproved. asabaliauskas on DSKBBXCHB2PROD with NOTICES 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: U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 27 15 U.S.C. 78s(b)(2)(B). Electronic Comments SMALL BUSINESS ADMINISTRATION • 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–2017–37 on the subject line. • 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–2017–37. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEMKT–2017–37, and should be submitted on or before July 14, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–13095 Filed 6–22–17; 8:45 am] BILLING CODE 8011–01–P 25 15 26 17 VerDate Sep<11>2014 19:21 Jun 22, 2017 Jkt 241001 PO 00000 CFR 200.30–3(a)(12). Frm 00111 Fmt 4703 Presidential Declaration of a Major Disaster for Public Assistance Only for the State of KANSAS U.S. Small Business Administration. ACTION: Notice. AGENCY: Paper Comments 28 17 [Disaster Declaration #15183 and #15184; KANSAS Disaster #KS–00102] Sfmt 4703 This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of KANSAS (FEMA–4319–DR), dated 06/16/2017. Incident: Severe Winter Storm, Snowstorm, Straight-line Winds, and Flooding. Incident Period: 04/28/2017 through 05/03/2017. DATES: Effective 06/16/2017. Physical Loan Application Deadline Date: 08/15/2017. Economic Injury (Eidl) Loan Application Deadline Date: 03/16/2018. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416, (202) 205–6734. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President’s major disaster declaration on 06/16/2017, Private Non-Profit organizations that provide essential services of governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Cherokee, Cheyenne, Crawford, Decatur, Finney, Gove, Graham, Grant, Greeley, Hamilton, Haskell, Kearny, Lane, Logan, Morton, Neosho, Norton, Rawlins, Scott, Seward, Sheridan, Sherman, Stanton, Stevens, Thomas, Wallace, Wichita. The Interest Rates are: SUMMARY: Percent For Physical Damage: Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury: E:\FR\FM\23JNN1.SGM 23JNN1 2.500 2.500

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)]
[Notices]
[Pages 28726-28728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13095]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80964; File No. SR-NYSEMKT-2017-37]

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

June 19, 2017.
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 June 9, 2017, 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.
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\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 June 9, 2017. 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 establish fees and credits for a
recently adopted Exchange trading mechanism known as Broadcast Order
Liquidity Delivery Mechanism (``BOLD''), which was launched on May 31,
2017.\4\
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\4\ See Securities Exchange Act Release Nos. 80494 (April 20,
2017) 82 FR 19300 (April 26, 2017) (SR-NYSEMKT-2017-21) and 80695
(May 16, 2017) (SR-NYSEMKT-2017-28).
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BOLD is a new feature within the Exchange's trading system that
provides automated order handling in eligible orders that are
executable against quotations disseminated by other exchanges that are
participants in the Options Order Protection and Locked/Crossed Market
Plan.\5\
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\5\ See Rule 994NY.
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First, the Exchange proposes to adopt definitions related to BOLD.
The Exchange proposes to define the ``BOLD Mechanism'' as referring to
``the Exchange's automated order handling for eligible orders in
designated classes, pursuant to Rule 994NY.'' \6\ As a general matter,
the BOLD Mechanism is Exchange functionality that allows ATP Holders to
``step-up'' and trade against orders that are exposed by the Exchange
prior to such orders being routed to another market or posted on the
Exchange's order book. ATP Holders that submit orders that are
designated to be BOLD-eligible will be considered BOLD Initiating
Orders for purposes of this proposed rule change. As such, the Exchange
proposes to define a ``BOLD Initiating Order'' as ``an order submitted
to be executed via the BOLD Mechanism.'' \7\ ATP Holders that ``step-
up'' to trade against a BOLD Initiating Order will be considered BOLD
Responding Order for purposes of this proposed rule change. As such,
the Exchange proposes to define a ``BOLD Responding Order'' as ``an
order that trades with the BOLD Initiating Order.'' \8\ The Exchange
believes these proposed changes would add clarity and transparency to
the Fee Schedule.
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\6\ See proposed Fee Schedule, Key Terms and Definitions.
\7\ See id.
\8\ See id.
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Regarding pricing, the Exchange proposes that Non-Customer \9\ and
Professional Customer orders executed via BOLD would be charged the
same rate as currently applied to Electronic executions in standard
options contracts, based on participant type and whether the option
traded is a Penny Pilot issue.\10\ The Exchange proposes to apply a per
contract credit for all BOLD Initiating Orders that are Customer orders
executed via BOLD, which credit would be the greater of $0.12 or the
rebate amount achieved through the Amex Customer Engagement (``ACE'')
Program.\11\ The Exchange proposes to exclude from this proposed credit
any transactions in Binary Return Derivatives--or ByRDs--executed via
BOLD as ByRDs transactions are not currently subject to transaction
charges.\12\ The Exchange proposes to impose no fee on Customer orders
that are BOLD Responding Orders. The Exchange notes that, as proposed,
NYSE Amex Options Market Makers would not be assessed Marketing Charges
for transactions executed via the BOLD Mechanism.\13\ The Exchange
believes this proposed change would encourage Market Makers to provide
additional liquidity to orders directed to BOLD Mechanism for execution
on the Exchange.
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\9\ Non-Customers include Broker-Dealers, DOMMs, e-Specialists,
Firms, Market Makers, and Specialists.
\10\ See Fee Schedule, Section I.A. (Rates for Standard Options
transactions--Electronic and Manual), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
\11\ See proposed Fee Schedule, Section I.M. (BOLD Mechanism
Fees & Credits).
\12\ See Fee Schedule, supra note 11, at footnote 5 to Section
I.A. (excluding transactions in ByRDs from transaction fees and
credits) and proposed Fee Schedule, Section I.M., at footnote 2
(excluding ByRDs from proposed credit for executions via the BOLD
Mechanism). See also Fee Schedule, Section I.H. (Early Adopter
Specialist) (providing incentive to Specialists appointed to trade
ByRDs).
\13\ See proposed Fee Schedule, Section I.M., at footnote 1.
Only Market Makers incur Marketing Charges, such charges are not
imposed on any other market participants.
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The Exchange proposes that, beginning in June 2017, volume

[[Page 28727]]

executed via BOLD would be included for purposes of calculating monthly
volume thresholds for the Market Maker Sliding Scale and the ACE
Program.\14\ Also beginning in June 2017, the Exchange proposes to
apply fees incurred via the BOLD Mechanism to the Prepayment
Programs.\15\
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\14\ See proposed Fee Schedule, Sections I.C. (NYSE Amex Options
Market Maker Sliding Scale--Electronic and Manual) and I.E (ACE
Program). The Exchange also proposes to remove from Section I.C. of
the Fee Schedule the now-superfluous language ``[e]ffective January
3, 2017,'' which would add clarity and transparency to the Fee
Schedule. See proposed Fee Schedule, Section I.C.
\15\ See proposed Fee Schedule, Section I.D. (Prepayment
Program).
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Finally, the Exchange proposes to make a clarifying change to the
ACE Program to make clear that ATP Holders that achieve Tier 2 and are
eligible to receive the $0.19 per contract credit for Electronic
Customer Complex Orders would receive such credit ``regardless of
whether the Complex Order trades against interest in the Complex Order
Book or with individual orders and quotes in the Consolidated Book.''
\16\ The Exchange notes that this treatment would be consistent with
how other credits for Complex Orders achieved through the ACE Program
are handled.\17\ The Exchange believes this change would add clarity,
transparency and internal consistency to the Fee Schedule.
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\16\ See proposed Fee Schedule, Section I.E., n. 4 (ACE
Program).
\17\ See Fee Schedule, supra note 11, Section I.E., n. 2
(providing that credits for Complex Orders achieved under Tiers 4 or
5 of the ACE Program would be paid ``regardless of whether the
Complex Order trades against interest in the Complex Order Book or
with individual orders and quotes in the Consolidated Book'').
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\18\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\19\ 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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\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes applying standard transaction fees (based on
participant type and whether a Penny Pilot issue) for Non-Customer and
Professional Customer orders executed using the BOLD Mechanism is
reasonable, equitable, and not unfairly discriminatory, because these
market participants would be subject to the same or lower fees as are
currently imposed on these market participants for Electronic
transactions executed on the Exchange.
Further, the Exchange believes the proposed treatment of Customer
orders executed via BOLD--i.e., the proposed credit for BOLD Initiating
Orders, no fee for BOLD Responding Orders and absence of Marketing
Charge--is reasonable, equitable, and not unfairly discriminatory as
these fees and credits recognize the benefits of additional liquidity
delivered to the Exchange when ATP Holders utilize the BOLD Mechanism.
Specifically, the proposed pricing provides an incentive for Customer
orders that are marketable against the National Best Bid/Offer
(``NBBO'') to be sent to NYSE Amex, which benefits all market
participants by providing more trading opportunities. The Exchange also
notes that other markets have utilized pricing incentives for features
similar to the BOLD Mechanism and therefore the concept is not new or
novel.\20\ The Exchange also notes that it is reasonable to exclude
transactions in ByRDs from the proposed credit for BOLD Initiating
Orders because ByRDs are not currently subject to any transaction
fees.\21\
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\20\ See, e.g., Nasdaq ISE Schedule of Fees, available here,
https://www.ise.com/fees (Section IV.G., providing credit for
responses to Flash Orders). See also NASDAQ PHLX LLC Pricing
Schedule, available here, https://www.nasdaqtrader.com/Micro.aspx?id=phlxpricing (providing that ``[n]o Marketing Fees will
be assessed on transactions which execute against an order for which
the Exchange broadcast an order exposure alert in Penny Pilot
Options,'' which exposure alert is similar to BOLD).
\21\ The Exchange notes that ByRDs, which were re-launched in
2016, are exempted from standard transaction fees and are also not
subject to monthly rights fees. See Fee Schedule, supra note 11,
Section I.A., n. 5 and Section III. C., n. 1, respectively.
---------------------------------------------------------------------------

Further, the proposal to include orders executed via the BOLD
Mechanism for purposes of calculating monthly volume thresholds for the
Market Maker Sliding Scale and the ACE Program, as well as to apply
fees incurred for BOLD transactions to the Prepayment Program, are
reasonable, equitable, and not unfairly discriminatory as these
programs are designed to encourage participation by Customers and
Market Makers in the full spectrum of NYSE Amex Options transactions.
The Exchange also believes it is reasonable, equitable, and not
unfairly discriminatory to not impose Marketing Charges on NYSE Amex
Market Makers for orders executed via the BOLD Mechanism because such
orders do not interact with quoted markets but are required to be
filled at prices no worse than the NBBO. The Exchange believes that
removing the Marketing Charges should incentivize Market Makers to more
actively provide liquidity in response to orders submitted via
BOLD.\22\ To the extent that the proposed changes attract additional
order flow to the Exchange, this would result in liquidity and more
trading opportunities to the benefit of all market participants.
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\22\ The Exchange also notes that other options exchanges do not
charge marketing fees for orders similar to BOLD-designated orders.
See supra note 21 (citing NASDAQ PHLX fee schedule).
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In addition, the Exchange believes the proposed changes are
consistent with the Act because to the extent the BOLD Mechanism
permits 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.
Finally, the Exchange believes the proposed clarifying change to
the ACE Program regarding how credits for Complex Orders would be
handled is consistent with the Act as this change would add clarity,
transparency and internal consistency to the Fee Schedule. In addition,
the proposal to remove extraneous language from Section I.C. of the Fee
Schedule \23\ would likewise add clarity, transparency and internal
consistency to the Fee Schedule.
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\23\ See supra note 15.
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B. Self-Regulatory Organization's Statement on Burden on Competition

In accordance with Section 6(b)(8) of the Act,\24\ 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 credit for
Customer orders executed via BOLD and the proposed absence of a fee for
Customer orders that are BOLD Responding Orders are pro-competitive as
the proposed pricing is designed to encourage Order Flow Providers
(``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. The proposed fees for Non-
Customer and Professional Customer orders executed via BOLD would not
discourage competition and are instead intended to promote competition
and better improve the Exchange's competitive position. Further, the
proposed changes only

[[Page 28728]]

affect trading on the Exchange. To the extent that the proposed changes
make NYSE Amex a more attractive marketplace for market participants at
other exchanges, such market participants are welcome to become ATP
Holders on the Exchange.
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\24\ 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) \25\ of the Act and subparagraph (f)(2) of Rule
19b-4 \26\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\25\ 15 U.S.C. 78s(b)(3)(A).
\26\ 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) \27\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\27\ 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-NYSEMKT-2017-37 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-2017-37. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEMKT-2017-37, and should
be submitted on or before July 14, 2017.
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\28\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-13095 Filed 6-22-17; 8:45 am]
BILLING CODE 8011-01-P

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