Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule Regarding Certain Credits, 17439-17441 [2019-08332]
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Federal Register / Vol. 84, No. 80 / Thursday, April 25, 2019 / 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 Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 14 and Rule
19b–4(f)(6) thereunder.15 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.16
A proposed rule change filed under
Rule 19b–4(f)(6)17 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),18 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest as it will allow the
Exchange to augment the accuracy of
their rulebook by removing the expired
Incentive Program and related
references in its fee schedule.
Accordingly, the Commission waives
the 30-day operative delay and
designates the proposed rule change
operative upon filing.19
14 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
17 17 CFR 240.19b–4(f)(6).
18 17 CFR 240.19b–4(f)(6)(iii).
19 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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15 17
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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) 20 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–2019–27 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–NYSEArca–2019–27. 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
20 15
PO 00000
U.S.C. 78s(b)(2)(B).
Frm 00066
Fmt 4703
Sfmt 4703
17439
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–2019–27 and
should be submitted on or before May
16, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–08333 Filed 4–24–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85696; File No. SR–
NYSEArca–2019–24]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Modify the NYSE Arca
Options Fee Schedule Regarding
Certain Credits
April 19, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on April 8,
2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify the
NYSE Arca Options Fee Schedule (‘‘Fee
Schedule’’). The Exchange proposes to
implement the fee change effective
April 8, 2019.4 The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
21 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.
4 On March 28, 2019, the Exchange filed to amend
the Fee Schedule for effectiveness on April 1, 2019
(SR–NYSEArca–2019–19) and withdrew such filing
on April 8, 2019.
1 15
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17440
Federal Register / Vol. 84, No. 80 / Thursday, April 25, 2019 / Notices
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
khammond on DSKBBV9HB2PROD with NOTICES
1. Purpose
The purpose of this filing is to modify
the Fee Schedule, effective April 8,
2019, to modify 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.’’
Similarly, because the Exchange allows
Market Makers (‘‘MMs’’) to aggregate
their volume executed on NYSE Arca
with affiliated or Appointed Order Flow
Providers (‘‘OFPs’’), MMs may
encourage an increased level of activity
from these participants to qualify for
various incentives. As a result, NYSE
Arca becomes a more attractive venue
for Customer (and Professional
Customer) orders offering enhanced
rebates.
Pursuant to the Customer Penny Pilot
Posting Credit Tiers (the ‘‘Penny Credit
Tiers’’), Customer and Professional
Customer orders that post liquidity and
are executed on the Exchange earn a
base credit of $0.25 per contract, and
may be eligible for increased credits
based on the participant’s activity.
Currently, there are 7 Penny Credit
Tiers, with increasing minimum volume
thresholds (as well as increasing credits)
associated with each tier.
The Exchange proposes to modify the
minimum volume thresholds for Tier 5,
but will not modify the $0.48 per
contract credit associated with this Tier.
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Specifically, the Exchange proposes to
modify Tier 5 to require that an OTP
achieve at least 0.22% (decreased from
0.35%) of Total Customer Average Daily
Volume (‘‘TCADV’’) from Customer
Posted interest in all issues, plus
Executed ADV of at least 0.90%
(increased from 0.80%) of U.S. Equity
Market Share Posted and Executed on
NYSE Arca Equity Market.5 This
proposed change seeks to incent OTPs
to achieve this Tier by increasing
trading on the equities market (while
making the Tier easier to achieve based
on the lower minimum threshold for
options trading activity).
The Exchange also offers a Customer
Incentive Program (the ‘‘Incentive
Program’’), which offers OTPs the
ability to earn one additional credit by
achieving one of the five alternative
minimum thresholds. The Exchange
proposes to modify one of the
alternatives. Specifically, the Exchange
proposes that an OTP must achieve
Executed ADV of 0.90% (increased from
0.80%) of U.S. Equity Market Share
Posted and Executed on NYSE Arca
Equity Market to be eligible for the
associated $0.03 per contract credit
(which credit is not changing). This
proposed change is designed to
encourage increased trading on NYSE
Arca Equity Market.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act, in general, and
furthers the objectives of Sections
6(b)(4) and (5) of the Act, 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 Penny
Credit Tiers and the Incentive Program
are reasonable, equitable, and not
unfairly discriminatory because they are
designed to encourage more participants
to qualify for the various Tiers or
Incentives, particularly those with a
cross-asset pricing component. The
Exchange believes these proposed
changes should result in more order
flow being directed to the Exchange,
including from affiliated or Appointed
OFPs. The proposed modification to
Tier 5 should incent OTPs to increase
5 The Exchange is not modifying the alternative
basis for an OTP to achieve Tier 5, which requires
an OTP to achieve at least 0.75% of TCADV from
Customer posted interest in all issues, plus at least
0.45% of TCADV from Market Maker Total
Electronic Volume.
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
trading on the equities market, while
making it easier to meet the requisite
volume threshold in options trading.
The Exchange notes that OTPs are still
eligible to qualify for Tier 5 under the
existing alternative (see supra note 5)
based on posted Customer volume and
Market Maker Electronic volume. By
continuing to provide such alternative
methods to qualify for a Tier or an
Incentive, the Exchange believes the
opportunities to qualify for credits is
increased, which benefits all
participants through both increased
Customer (and Professional Customer)
volume and increased Market Maker
activity. Further, encouraging Market
Maker activity on, as well as
encouraging OFPs to send higher
volumes of Customer orders to, the
Exchange would also contribute to the
Exchange’s depth of book as well as to
the top of book liquidity.
To the extent that order flow that adds
liquidity is increased by the proposal,
market participants will increasingly
compete for the opportunity to trade on
the Exchange, including sending more
orders to reach higher Tiers or achieve
alternative Incentives. The resulting
increased volume and liquidity would
provide more trading opportunities and
tighter spreads to the investing public
and, thus, would promote just and
equitable principles of trade and remove
impediments to, and perfect the
mechanism of, a free and open market.
The Exchange also believes the
proposed changes 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, which potential increase in
order flow would benefit the investing
public by improving order execution
and price discovery, which promotes
just and equitable principles of trade
and removes impediments to, and
perfects the mechanism of, a free and
open market.
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
proposed changes would encourage
E:\FR\FM\25APN1.SGM
25APN1
Federal Register / Vol. 84, No. 80 / Thursday, April 25, 2019 / Notices
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 changes
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
changes would not impose a disparate
burden on competition either among or
between classes of market participants
and, in fact, may encourage
competition.
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.
khammond on DSKBBV9HB2PROD with NOTICES
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) 6 of the Act and
subparagraph (f)(2) of Rule 19b–4 7
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.
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:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–85695; File No. SR–BOX–
2019–12]
• 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–2019–24 on the subject line.
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 7130
April 19, 2019.
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–NYSEArca–2019–24. 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–2019–24 and
should be submitted on or before May
16, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–08332 Filed 4–24–19; 8:45 am]
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 9,
2019, BOX Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend
Rule 7130. The text of the proposed rule
change is available from the principal
office of the Exchange, at the
Commission’s Public Reference Room
and also on the Exchange’s internet
website at https://boxoptions.com.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BOX Rule 7130(a)(4) governs the
criteria for order matching and trade
execution priority on BOX. BOX Rule
7130(a)(4)(iv), Options Participant
Match Trade Prevention, describes an
exception to the order matching and
BILLING CODE 8011–01–P
U.S.C. 78s(b)(3)(A).
7 17 CFR 240.19b–4(f)(2).
6 15
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16:25 Apr 24, 2019
1 15
8 17
Jkt 247001
17441
PO 00000
CFR 200.30–3(a)(12).
Frm 00068
Fmt 4703
2 17
Sfmt 4703
E:\FR\FM\25APN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
25APN1
]]>Agencies
[Federal Register Volume 84, Number 80 (Thursday, April 25, 2019)]
[Notices]
[Pages 17439-17441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08332]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85696; File No. SR-NYSEArca-2019-24]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Modify the
NYSE Arca Options Fee Schedule Regarding Certain Credits
April 19, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 8, 2019, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify the NYSE Arca Options Fee Schedule
(``Fee Schedule''). The Exchange proposes to implement the fee change
effective April 8, 2019.\4\ The proposed rule change is available on
the Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at
[[Page 17440]]
the Commission's Public Reference Room.
---------------------------------------------------------------------------
\4\ On March 28, 2019, the Exchange filed to amend the Fee
Schedule for effectiveness on April 1, 2019 (SR-NYSEArca-2019-19)
and withdrew such filing on April 8, 2019.
---------------------------------------------------------------------------
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
April 8, 2019, to modify 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.'' Similarly, because the Exchange allows Market Makers
(``MMs'') to aggregate their volume executed on NYSE Arca with
affiliated or Appointed Order Flow Providers (``OFPs''), MMs may
encourage an increased level of activity from these participants to
qualify for various incentives. As a result, NYSE Arca becomes a more
attractive venue for Customer (and Professional Customer) orders
offering enhanced rebates.
Pursuant to the Customer Penny Pilot Posting Credit Tiers (the
``Penny Credit Tiers''), Customer and Professional Customer orders that
post liquidity and are executed on the Exchange earn a base credit of
$0.25 per contract, and may be eligible for increased credits based on
the participant's activity. Currently, there are 7 Penny Credit Tiers,
with increasing minimum volume thresholds (as well as increasing
credits) associated with each tier.
The Exchange proposes to modify the minimum volume thresholds for
Tier 5, but will not modify the $0.48 per contract credit associated
with this Tier. Specifically, the Exchange proposes to modify Tier 5 to
require that an OTP achieve at least 0.22% (decreased from 0.35%) of
Total Customer Average Daily Volume (``TCADV'') from Customer Posted
interest in all issues, plus Executed ADV of at least 0.90% (increased
from 0.80%) of U.S. Equity Market Share Posted and Executed on NYSE
Arca Equity Market.\5\ This proposed change seeks to incent OTPs to
achieve this Tier by increasing trading on the equities market (while
making the Tier easier to achieve based on the lower minimum threshold
for options trading activity).
---------------------------------------------------------------------------
\5\ The Exchange is not modifying the alternative basis for an
OTP to achieve Tier 5, which requires an OTP to achieve at least
0.75% of TCADV from Customer posted interest in all issues, plus at
least 0.45% 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 one of the five alternative minimum
thresholds. The Exchange proposes to modify one of the alternatives.
Specifically, the Exchange proposes that an OTP must achieve Executed
ADV of 0.90% (increased from 0.80%) of U.S. Equity Market Share Posted
and Executed on NYSE Arca Equity Market to be eligible for the
associated $0.03 per contract credit (which credit is not changing).
This proposed change is designed to encourage increased trading on NYSE
Arca Equity Market.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act, in general, and furthers the objectives
of Sections 6(b)(4) and (5) of the Act, 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 Penny
Credit Tiers and the Incentive Program are reasonable, equitable, and
not unfairly discriminatory because they are designed to encourage more
participants to qualify for the various Tiers or Incentives,
particularly those with a cross-asset pricing component. The Exchange
believes these proposed changes should result in more order flow being
directed to the Exchange, including from affiliated or Appointed OFPs.
The proposed modification to Tier 5 should incent OTPs to increase
trading on the equities market, while making it easier to meet the
requisite volume threshold in options trading. The Exchange notes that
OTPs are still eligible to qualify for Tier 5 under the existing
alternative (see supra note 5) based on posted Customer volume and
Market Maker Electronic volume. By continuing to provide such
alternative methods to qualify for a Tier or an Incentive, the Exchange
believes the opportunities to qualify for credits is increased, which
benefits all participants through both increased Customer (and
Professional Customer) volume and increased Market Maker activity.
Further, encouraging Market Maker activity on, as well as encouraging
OFPs to send higher volumes of Customer orders to, the Exchange would
also contribute to the Exchange's depth of book as well as to the top
of book liquidity.
To the extent that order flow that adds liquidity is increased by
the proposal, market participants will increasingly compete for the
opportunity to trade on the Exchange, including sending more orders to
reach higher Tiers or achieve alternative Incentives. The resulting
increased volume and liquidity would provide more trading opportunities
and tighter spreads to the investing public and, thus, would promote
just and equitable principles of trade and remove impediments to, and
perfect the mechanism of, a free and open market.
The Exchange also believes the proposed changes 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, which
potential increase in order flow would benefit the investing public by
improving order execution and price discovery, which promotes just and
equitable principles of trade and removes impediments to, and perfects
the mechanism of, a free and open market.
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 proposed
changes would encourage
[[Page 17441]]
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 changes 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 changes would not impose a
disparate burden on competition either among or between classes of
market participants and, in fact, may encourage competition.
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) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 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.
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-2019-24 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-NYSEArca-2019-24. 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-2019-24 and should be submitted
on or before May 16, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-08332 Filed 4-24-19; 8:45 am]
BILLING CODE 8011-01-P
