Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule, 39800-39802 [2018-17124]

Download as PDF 39800 Federal Register / Vol. 83, No. 155 / Friday, August 10, 2018 / Notices NUCLEAR REGULATORY COMMISSION Notice of Meeting of the Advisory Committee on Reactor Safeguards (ACRS) Subcommittee on Regulatory Policies & Practices The ACRS Subcommittee on Regulatory Policies and Practices will hold a meeting on August 22, 2018, at 11545 Rockville Pike, Room T–2B1, Rockville, Maryland 20852. This meeting will be open to public attendance. The agenda for the subject meeting shall be as follows: daltland on DSKBBV9HB2PROD with NOTICES Wednesday, August 22, 2018—1:00 p.m. Until 5:00 p.m. The Subcommittee will review the Early Site Permit for Clinch River (Section 13.3, ‘‘Emergency Planning’’) and will hear presentations by and hold discussions with the NRC staff and other interested persons regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the Full Committee. Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official (DFO), Quynh Nguyen (Telephone 301–415–5844 or Email Quynh.Nguyen@nrc.gov) five days prior to the meeting, if possible, so that appropriate arrangements can be made. Thirty-five hard copies of each presentation or handout should be provided to the DFO thirty minutes before the meeting. In addition, one electronic copy of each presentation should be emailed to the DFO one day before the meeting. If an electronic copy cannot be provided within this timeframe, presenters should provide the DFO with a CD containing each presentation at least thirty minutes before the meeting. Electronic recordings will be permitted only during those portions of the meeting that are open to the public. The public bridgeline number for the meeting is 866–822–3032, passcode 8272423. Detailed procedures for the conduct of and participation in ACRS meetings were published in the Federal Register on October 4, 2017 (82 FR 46312). Detailed meeting agendas and meeting transcripts are available on the NRC website at https://www.nrc.gov/readingrm/doc-collections/acrs. Information regarding topics to be discussed, changes to the agenda, whether the meeting has been canceled or rescheduled, and the time allotted to present oral statements can be obtained from the website cited above or by VerDate Sep<11>2014 19:03 Aug 09, 2018 Jkt 244001 contacting the identified DFO. Moreover, in view of the possibility that the schedule for ACRS meetings may be adjusted by the Chairman as necessary to facilitate the conduct of the meeting, persons planning to attend should check with these references if such rescheduling would result in a major inconvenience. If attending this meeting, please enter through the One White Flint North building, 11555 Rockville Pike, Rockville, Maryland 20852. After registering with Security, please contact Mr. Theron Brown (Telephone 301– 415–6207) to be escorted to the meeting room. Dated: August 2, 2018. Mark L. Banks, Chief, Technical Support Branch, Advisory Committee on Reactor Safeguards. [FR Doc. 2018–17119 Filed 8–9–18; 8:45 am] BILLING CODE 7590–01–P 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 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83780; File No. SR– NYSEARCA–2018–56] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule August 6, 2018. 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 July 31, 2018, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, 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 Arca Options Fee Schedule (‘‘Fee Schedule’’). The Exchange proposes to implement the fee change effective August 1, 2018. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 The purpose of this filing is to modify the Fee Schedule, effective August 1, 2018, to modify or eliminate the criteria for achieving various credits. The Exchange currently provides a number of incentives for OTP Holders and OTP Firms (collectively, ‘‘OTPs’’) designed to encourage OTPs to direct additional order flow to the Exchange to achieve more favorable pricing and higher credits. Among these incentives are enhanced posted liquidity credits based on achieving certain percentages of NYSE Arca Equity daily activity, also known as ‘‘cross-asset pricing.’’ In addition, certain of the qualifications for achieving these incentives are more tailored to specific activity (i.e., posting in Penny Pilot issues only, or cross-asset pricing based only on levels of Retail Orders on the NYSE Arca Equity Market). Similarly, because the Exchange allows Order Flow Providers (‘‘OFPs’’) to aggregate their volume executed on NYSE Arca with affiliated or Appointed Market Makers, OFPs may encourage an increased level of activity from these participants to qualify for various incentives, including higher credits for Customer orders.4 The Exchange proposes to modify certain of the thresholds for achieving posting credits on the Exchange as described below. Pursuant to the Customer Penny Pilot Posting Tiers (the ‘‘Penny Credit Tiers’’, each a ‘‘Penny Tier’’), Customer orders 4 Per the Fee Schedule, ‘‘[u]nless Professional Customer executions are specifically delineated, such executions will be treated as ‘Customer’ executions for fee/credit purposes.’’ See Fee Schedule, NYSE Arca OPTIONS: TRADE-RELATED CHARGES FOR STANDARD OPTIONS. E:\FR\FM\10AUN1.SGM 10AUN1 Federal Register / Vol. 83, No. 155 / Friday, August 10, 2018 / Notices daltland on DSKBBV9HB2PROD with NOTICES that post liquidity and are executed on the Exchange earn a base credit of $0.25 per contract, with the ability to earn increased credits (up to $0.50) based on the participant’s activity. Currently, there are eight (8) Penny Credit Tiers, with increasing minimum volume thresholds associated with each tier. The Exchange proposes to eliminate Penny Tier 4, which would remove the $0.46 per contract credit for OTPs that achieve at least 0.60% of TCADV from Customer posted interest in all issues, plus executed Average Daily Volume (‘‘ADV’’) of Retail Orders of 0.1% ADV of U.S. Equity Market Share Posted and Executed on NYSE Arca Equity Market. Consistent with this change, the Exchange proposed to renumber the remaining higher Tiers (i.e., to renumber current Penny Tiers 5–8 to Penny Tiers 4–7). The Exchange also proposes to modify certain minimum volume thresholds in new Penny Tiers 5 and 6. In new Penny Tier 5, in the alternative qualification, an OTP would earn the $0.48 per contract credit by achieving at least 0.75% (up from 0.50%) of TCADV from Customer posted interest in all issues, plus at least 0.45% of TCADV from Market Maker Total Electronic Volume.5 As proposed, in the new Penny Tier 6, an OTP would earn the $0.49 per contract credit by achieving at least 0.75% (up from 0.50%) of TCADV from Customer posted interest in all issues, plus at least 0.60% of TCADV from Market Maker Total Electronic Volume. The Exchange also offers a Customer Incentive Program (the ‘‘Incentive Program’’), which offers OTPs the ability to earn one additional credit by achieving the minimum thresholds listed.6 The Exchange now proposes to eliminate one of the alternatives. Specifically, the Exchange would no longer provide an additional $0.03 per contract credit for achieving executed ADV of retail orders of 0.10% ADV of U.S. Equity Market Share Posted and Executed on NYSE Arca Equity Market. The Exchange also offers increasing credits to be applied to executions of Customer posted interest in non-Penny Pilot issues based on minimum volume 5 Per the Fee Schedule, the ‘‘Total Industry Customer equity and ETF option average daily volume (‘TCADV’) includes OCC calculated Customer volume of all types, including Complex Order Transactions and QCC transactions, in equity and ETF options.’’ See Fee Schedule, endnote 8. 6 The Exchange proposes to make a nonsubstantive change to the second alternative basis for the Incentive Program by replacing reference to ‘‘Total Industry Customer equity and ETF option ADV’’ with the defined abbreviation of ‘‘TCADV,’’ which would add clarity and internal consistency to the Fee Schedule. See proposed Fee Schedule, Customer Incentive Program. VerDate Sep<11>2014 19:03 Aug 09, 2018 Jkt 244001 thresholds through the Customer Posting Credit Tiers in Non-Penny Pilot Issues (‘‘Non-Penny Credit Tiers’’, each a ‘‘Non-Penny Tier’’). The Exchange proposes to eliminate one Non-Penny Tier (the current Tier A), which would remove the $0.83 per contract credit for OTPs that achieve at least 0.70% of TCADV from Customer posted interest in all issues, plus executed ADV of Retail Orders of 0.1% ADV of U.S. Equity Market Share Posted and Executed on NYSE Arca Equity Market. Consistent with this change, the Exchange proposes to re-title the balance of the Non-Penny Tiers (i.e., to re-title current Non-Penny Tiers B–F to Non-Penny Tiers A through E). Additionally, the Exchange proposes to modify the minimum volume threshold required to achieve new Tier B, such that an OTP would earn the $0.94 per contract credit by achieving at least 0.75% (up from 0.50%) of TCADV from Customer posted interest in all issues, plus an ADV from Market Maker Total Electronic Volume equal to 0.45% of TCADV. The Exchange also proposes to modify the minimum volume threshold for the new Tier D, such that an OTP would earn the $1.00 per contract credit by achieving at least 0.75% (up from 0.50%) of TCADV from Customer posted interest in all issues, plus an ADV from Market Maker Total Electronic Volume equal to 0.60% of TCADV. 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 modifications to the minimum threshold qualification for certain of the Penny, and Non-Penny, Credit Tiers and the Incentive Program are reasonable, equitable, and not unfairly discriminatory because, among other things, the proposed changes would streamline the available means for an OTP to qualify for credits on the Exchange, while still offering OTPs incentives to direct volume to the Exchange. The Exchange notes that it proposes to remove certain tiers from the various posting credit programs 7 15 8 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(4) and (5). Frm 00145 Fmt 4703 Sfmt 4703 39801 because such tiers are underutilized. The proposed changes, therefore, should provide more meaningful criteria for OTPs to qualify for (and seek to achieve higher) credits by posting desired volume on the Exchange. The Exchange believes that the proposed changes would continue to attract Customer (and Professional Customer) orders to the Exchange, which results in increased liquidity to the benefit of all participants by offering greater price discovery, increased transparency, and an increased opportunity to trade on the Exchange. The Exchange also believes the proposed changes are reasonable, equitable and not unfairly discriminatory because the modified minimum volume thresholds for the Penny, and Non-Penny, Tiers and the Incentive Program would be available to all similarly-situated market participants on an equal and nondiscriminatory basis. The Exchange believes the proposed modifications are reasonable, equitable and not unfairly discriminatory because they encourage participants to enhance their order flow to qualify for the various incentives, including encouraging more participants to have affiliated or appointed order flow directed to the Exchange. Further, encouraging OFPs to send higher volumes of Customer (and Professional Customer) orders to the Exchange would also contribute to the Exchange’s depth of book as well as to the top of book liquidity. The proposed changes to the various posting credit incentives offered on the Exchange are also reasonable as they are consistent with similar such programs offered on other exchanges.9 Finally, the Exchange believes the proposed non-substantive changes to the Fee Schedule (see supra note 6) are reasonable, equitable, and not unfairly discriminatory because it would 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, the Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, the Exchange believes that the 9 See e.g., NASDAQ Options Market, Chapter XV Options Pricing, Sec. 2, Fees and Rebates, available here, https://nasdaq.cchwallstreet.com/NASDAQ Tools/PlatformViewer.asp?selectednode=chp_1_1_ 15&manual=%2Fnasdaq%2Fmain%2Fnasdaqoptionsrules%2F (setting forth various rebates per executed contract, including for adding Customer and Professional Customer volume). E:\FR\FM\10AUN1.SGM 10AUN1 39802 Federal Register / Vol. 83, No. 155 / Friday, August 10, 2018 / Notices proposed changes would encourage competition, including by attracting additional liquidity to the Exchange, which would continue to make the Exchange a more competitive venue for, among other things, order execution and price discovery. The Exchange does not believe that the proposed change would impair the ability of any market participants or competing order execution venues to maintain their competitive standing in the financial markets. Further, the incentive would be available to all similarly-situated participants, and, as such, the proposed change would not impose a disparate burden on competition either among or between classes of market participants and may, in fact, encourage competition. The Exchange notes that the proposed rule change merely modifies existing posting tiers that offer additional credits to OTPs that (opt to) meet certain volume thresholds. The proposed change does not impose any new burden or requirement on OTPs, as achieving the modified tiers is voluntary (i.e., an OTP that does not does not seek to achieve additional credits by meeting the modified volume thresholds has no obligation to do so). 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. daltland on DSKBBV9HB2PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 10 of the Act and subparagraph (f)(2) of Rule 19b–4 11 thereunder, because it establishes a due, 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 10 15 11 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). VerDate Sep<11>2014 19:03 Aug 09, 2018 it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 12 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEARCA–2018–56 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEARCA–2018–56. 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 website (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 website 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. Persons submitting comments are 12 15 Jkt 244001 PO 00000 U.S.C. 78s(b)(2)(B). Frm 00146 Fmt 4703 cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEARCA–2018–56 and should be submitted on or before August 31, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–17124 Filed 8–9–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meetings FEDERAL REGISTER CITATION OF PREVIOUS ANNOUNCEMENT: 83 FR 38759, August 7, 2018. PREVIOUSLY ANNOUNCED TIME AND DATE OF THE MEETING: Thursday, August 9, 2018 at 2:00 p.m. The Closed Meeting scheduled for Thursday, August 9, 2018 at 2:00 p.m. has been changed to Thursday, August 9, 2018 at 1:00 p.m. CONTACT PERSON FOR MORE INFORMATION: For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551– 5400. CHANGES IN THE MEETING: Dated: August 7, 2018. Brent J. Fields, Secretary. [FR Doc. 2018–17259 Filed 8–8–18; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83781; File No. SR–FINRA– 2018–027] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 9000 Series (Code of Procedure) To Reflect an Internal Reorganization of FINRA’s Enforcement Operations August 6, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 13 17 Sfmt 4703 E:\FR\FM\10AUN1.SGM CFR 200.30–3(a)(12). 10AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 155 (Friday, August 10, 2018)]
[Notices]
[Pages 39800-39802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17124]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83780; File No. SR-NYSEARCA-2018-56]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE 
Arca Options Fee Schedule

August 6, 2018.
    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 July 31, 2018, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, 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 Arca Options Fee Schedule 
(``Fee Schedule''). The Exchange proposes to implement the fee change 
effective August 1, 2018. The proposed rule change is available on the 
Exchange's website 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 modify the Fee Schedule, effective 
August 1, 2018, to modify or eliminate the criteria for achieving 
various credits.
    The Exchange currently provides a number of incentives for OTP 
Holders and OTP Firms (collectively, ``OTPs'') designed to encourage 
OTPs to direct additional order flow to the Exchange to achieve more 
favorable pricing and higher credits. Among these incentives are 
enhanced posted liquidity credits based on achieving certain 
percentages of NYSE Arca Equity daily activity, also known as ``cross-
asset pricing.'' In addition, certain of the qualifications for 
achieving these incentives are more tailored to specific activity 
(i.e., posting in Penny Pilot issues only, or cross-asset pricing based 
only on levels of Retail Orders on the NYSE Arca Equity Market). 
Similarly, because the Exchange allows Order Flow Providers (``OFPs'') 
to aggregate their volume executed on NYSE Arca with affiliated or 
Appointed Market Makers, OFPs may encourage an increased level of 
activity from these participants to qualify for various incentives, 
including higher credits for Customer orders.\4\ The Exchange proposes 
to modify certain of the thresholds for achieving posting credits on 
the Exchange as described below.
---------------------------------------------------------------------------

    \4\ Per the Fee Schedule, ``[u]nless Professional Customer 
executions are specifically delineated, such executions will be 
treated as `Customer' executions for fee/credit purposes.'' See Fee 
Schedule, NYSE Arca OPTIONS: TRADE-RELATED CHARGES FOR STANDARD 
OPTIONS.
---------------------------------------------------------------------------

    Pursuant to the Customer Penny Pilot Posting Tiers (the ``Penny 
Credit Tiers'', each a ``Penny Tier''), Customer orders

[[Page 39801]]

that post liquidity and are executed on the Exchange earn a base credit 
of $0.25 per contract, with the ability to earn increased credits (up 
to $0.50) based on the participant's activity. Currently, there are 
eight (8) Penny Credit Tiers, with increasing minimum volume thresholds 
associated with each tier.
    The Exchange proposes to eliminate Penny Tier 4, which would remove 
the $0.46 per contract credit for OTPs that achieve at least 0.60% of 
TCADV from Customer posted interest in all issues, plus executed 
Average Daily Volume (``ADV'') of Retail Orders of 0.1% ADV of U.S. 
Equity Market Share Posted and Executed on NYSE Arca Equity Market. 
Consistent with this change, the Exchange proposed to renumber the 
remaining higher Tiers (i.e., to re-number current Penny Tiers 5-8 to 
Penny Tiers 4-7). The Exchange also proposes to modify certain minimum 
volume thresholds in new Penny Tiers 5 and 6. In new Penny Tier 5, in 
the alternative qualification, an OTP would earn the $0.48 per contract 
credit by achieving at least 0.75% (up from 0.50%) of TCADV from 
Customer posted interest in all issues, plus at least 0.45% of TCADV 
from Market Maker Total Electronic Volume.\5\ As proposed, in the new 
Penny Tier 6, an OTP would earn the $0.49 per contract credit by 
achieving at least 0.75% (up from 0.50%) of TCADV from Customer posted 
interest in all issues, plus at least 0.60% of TCADV from Market Maker 
Total Electronic Volume.
---------------------------------------------------------------------------

    \5\ Per the Fee Schedule, the ``Total Industry Customer equity 
and ETF option average daily volume (`TCADV') includes OCC 
calculated Customer volume of all types, including Complex Order 
Transactions and QCC transactions, in equity and ETF options.'' See 
Fee Schedule, endnote 8.
---------------------------------------------------------------------------

    The Exchange also offers a Customer Incentive Program (the 
``Incentive Program''), which offers OTPs the ability to earn one 
additional credit by achieving the minimum thresholds listed.\6\ The 
Exchange now proposes to eliminate one of the alternatives. 
Specifically, the Exchange would no longer provide an additional $0.03 
per contract credit for achieving executed ADV of retail orders of 
0.10% ADV of U.S. Equity Market Share Posted and Executed on NYSE Arca 
Equity Market.
---------------------------------------------------------------------------

    \6\ The Exchange proposes to make a non-substantive change to 
the second alternative basis for the Incentive Program by replacing 
reference to ``Total Industry Customer equity and ETF option ADV'' 
with the defined abbreviation of ``TCADV,'' which would add clarity 
and internal consistency to the Fee Schedule. See proposed Fee 
Schedule, Customer Incentive Program.
---------------------------------------------------------------------------

    The Exchange also offers increasing credits to be applied to 
executions of Customer posted interest in non-Penny Pilot issues based 
on minimum volume thresholds through the Customer Posting Credit Tiers 
in Non-Penny Pilot Issues (``Non-Penny Credit Tiers'', each a ``Non-
Penny Tier''). The Exchange proposes to eliminate one Non-Penny Tier 
(the current Tier A), which would remove the $0.83 per contract credit 
for OTPs that achieve at least 0.70% of TCADV from Customer posted 
interest in all issues, plus executed ADV of Retail Orders of 0.1% ADV 
of U.S. Equity Market Share Posted and Executed on NYSE Arca Equity 
Market. Consistent with this change, the Exchange proposes to re-title 
the balance of the Non-Penny Tiers (i.e., to re-title current Non-Penny 
Tiers B-F to Non-Penny Tiers A through E).
    Additionally, the Exchange proposes to modify the minimum volume 
threshold required to achieve new Tier B, such that an OTP would earn 
the $0.94 per contract credit by achieving at least 0.75% (up from 
0.50%) of TCADV from Customer posted interest in all issues, plus an 
ADV from Market Maker Total Electronic Volume equal to 0.45% of TCADV. 
The Exchange also proposes to modify the minimum volume threshold for 
the new Tier D, such that an OTP would earn the $1.00 per contract 
credit by achieving at least 0.75% (up from 0.50%) of TCADV from 
Customer posted interest in all issues, plus an ADV from Market Maker 
Total Electronic Volume equal to 0.60% of TCADV.
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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed modifications to the 
minimum threshold qualification for certain of the Penny, and Non-
Penny, Credit Tiers and the Incentive Program are reasonable, 
equitable, and not unfairly discriminatory because, among other things, 
the proposed changes would streamline the available means for an OTP to 
qualify for credits on the Exchange, while still offering OTPs 
incentives to direct volume to the Exchange. The Exchange notes that it 
proposes to remove certain tiers from the various posting credit 
programs because such tiers are underutilized. The proposed changes, 
therefore, should provide more meaningful criteria for OTPs to qualify 
for (and seek to achieve higher) credits by posting desired volume on 
the Exchange. The Exchange believes that the proposed changes would 
continue to attract Customer (and Professional Customer) orders to the 
Exchange, which results in increased liquidity to the benefit of all 
participants by offering greater price discovery, increased 
transparency, and an increased opportunity to trade on the Exchange.
    The Exchange also believes the proposed changes are reasonable, 
equitable and not unfairly discriminatory because the modified minimum 
volume thresholds for the Penny, and Non-Penny, Tiers and the Incentive 
Program would be available to all similarly-situated market 
participants on an equal and non-discriminatory basis. The Exchange 
believes the proposed modifications are reasonable, equitable and not 
unfairly discriminatory because they encourage participants to enhance 
their order flow to qualify for the various incentives, including 
encouraging more participants to have affiliated or appointed order 
flow directed to the Exchange. Further, encouraging OFPs to send higher 
volumes of Customer (and Professional Customer) orders to the Exchange 
would also contribute to the Exchange's depth of book as well as to the 
top of book liquidity.
    The proposed changes to the various posting credit incentives 
offered on the Exchange are also reasonable as they are consistent with 
similar such programs offered on other exchanges.\9\
---------------------------------------------------------------------------

    \9\ See e.g., NASDAQ Options Market, Chapter XV Options Pricing, 
Sec. 2, Fees and Rebates, available here, https://nasdaq.cchwallstreet.com/NASDAQTools/PlatformViewer.asp?selectednode=chp_1_1_15&manual=%2Fnasdaq%2Fmain%2Fnasdaq-optionsrules%2F (setting forth various rebates per executed 
contract, including for adding Customer and Professional Customer 
volume).
---------------------------------------------------------------------------

    Finally, the Exchange believes the proposed non-substantive changes 
to the Fee Schedule (see supra note 6) are reasonable, equitable, and 
not unfairly discriminatory because it would 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, the Exchange does 
not believe that the proposed rule change will impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, the Exchange believes that the

[[Page 39802]]

proposed changes would encourage competition, including by attracting 
additional liquidity to the Exchange, which would continue to make the 
Exchange a more competitive venue for, among other things, order 
execution and price discovery. The Exchange does not believe that the 
proposed change would impair the ability of any market participants or 
competing order execution venues to maintain their competitive standing 
in the financial markets. Further, the incentive would be available to 
all similarly-situated participants, and, as such, the proposed change 
would not impose a disparate burden on competition either among or 
between classes of market participants and may, in fact, encourage 
competition. The Exchange notes that the proposed rule change merely 
modifies existing posting tiers that offer additional credits to OTPs 
that (opt to) meet certain volume thresholds. The proposed change does 
not impose any new burden or requirement on OTPs, as achieving the 
modified tiers is voluntary (i.e., an OTP that does not does not seek 
to achieve additional credits by meeting the modified volume thresholds 
has no obligation to do so).
    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues. In 
such an environment, the Exchange must continually review, and consider 
adjusting, its fees and credits to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed rule change reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \12\ 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 [email protected]. Please include 
File Number SR-NYSEARCA-2018-56 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEARCA-2018-56. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEARCA-2018-56 and should be submitted 
on or before August 31, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17124 Filed 8-9-18; 8:45 am]
BILLING CODE 8011-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.