Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend the NYSE American Options Fee Schedule, 58772-58778 [2019-23857]
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
4. Subadvised Funds will inform
shareholders of the hiring of a new
Subadviser within 90 days after the
hiring of the new Subadviser pursuant
to the Modified Notice and Access
Procedures.
5. At all times, at least a majority of
the Board will be Independent Trustees,
and the selection and nomination of
new or additional Independent Trustees
will be placed within the discretion of
the then-existing Independent Trustees.
6. Independent Legal Counsel, as
defined in Rule 0–1(a)(6) under the Act,
will be engaged to represent the
Independent Trustees. The selection of
such counsel will be within the
discretion of the then-existing
Independent Trustees.
7. Whenever a Subadviser is hired or
terminated, the Adviser will provide the
Board with information showing the
expected impact on the profitability of
the Adviser.
8. The Board must evaluate any
material conflicts that may be present in
a subadvisory arrangement. Specifically,
whenever a subadviser change is
proposed for a Subadvised Fund
(‘‘Subadviser Change’’) or the Board
considers an existing Subadvisory
Agreement as part of its annual review
process (‘‘Subadviser Review’’):
(a) The Adviser will provide the
Board, to the extent not already being
provided pursuant to section 15(c) of
the Act, with all relevant information
concerning:
(i) Any material interest in the
proposed new Subadviser, in the case of
a Subadviser Change, or the Subadviser
in the case of a Subadviser Review, held
directly or indirectly by the Adviser or
a parent or sister company of the
Adviser, and any material impact the
proposed Subadvisory Agreement may
have on that interest;
(ii) any arrangement or understanding
in which the Adviser or any parent or
sister company of the Adviser is a
participant that (A) may have had a
material effect on the proposed
Subadviser Change or Subadviser
Review, or (B) may be materially
affected by the proposed Subadviser
Change or Subadviser Review;
(iii) any material interest in a
Subadviser held directly or indirectly by
an officer or Trustee of the Subadvised
Fund, or an officer or board member of
the Adviser (other than through a
pooled investment vehicle not
controlled by such person); and
(iv) any other information that may be
relevant to the Board in evaluating any
potential material conflicts of interest in
the proposed Subadviser Change or
Subadviser Review.
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(b) the Board, including a majority of
the Independent Trustees, will make a
separate finding, reflected in the Board
minutes, that the Subadviser Change or
continuation after Subadviser Review is
in the best interests of the Subadvised
Fund and its shareholders and, based on
the information provided to the Board,
does not involve a conflict of interest
from which the Adviser, a Subadviser,
any officer or Trustee of the Subadvised
Fund, or any officer or board member of
the Adviser derives an inappropriate
advantage.
9. Each Subadvised Fund will
disclose in its registration statement the
Aggregate Fee Disclosure.
10. In the event that the Commission
adopts a rule under the Act providing
substantially similar relief to that in the
order requested in the Application, the
requested order will expire on the
effective date of that rule.
11. Any new Subadvisory Agreement
or any amendment to an existing
Investment Advisory Agreement or
Subadvisory Agreement that directly or
indirectly results in an increase in the
aggregate advisory fee rate payable by
the Subadvised Fund will be submitted
to the Subadvised Fund’s shareholders
for approval.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–23940 Filed 10–31–19; 8:45 am]
BILLING CODE 8011–01–P
engagement and enhance transparency,
improve disclosures, and increase
confidence in the proxy process. The
specific matters to be considered are:
1. Whether to propose amendments to
the proxy solicitation rules that would
provide for disclosure of material
conflicts of interest and set forth
procedures to facilitate issuer and
shareholder engagement, to provide
clarity to market participants, and to
improve the information provided to
investors.
2. Whether to propose amendments to
the shareholder proposal rules to
modernize the submission and
resubmission requirements and to
update procedural requirements.
In addition, the subject matter of the
Open Meeting will also include the
Commission’s continued efforts to
modernize the regulatory framework for
investment advisers and enhance
information to investors. The specific
matter to be considered is:
3. Whether to propose amendments
under the Investment Advisers Act of
1940 to rules 206(4)–1 and 206(4)–3, the
rules that prohibit certain investment
adviser advertisements and payments to
solicitors, respectively.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact
Vanessa A. Countryman, Office of the
Secretary, at (202) 551–5400.
SECURITIES AND EXCHANGE
COMMISSION
Dated: October 29, 2019.
Vanessa A. Countryman,
Secretary.
Sunshine Act Meetings
[FR Doc. 2019–24051 Filed 10–30–19; 4:15 pm]
BILLING CODE 8011–01–P
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, the Securities and
Exchange Commission will hold an
Open Meeting on Tuesday, November 5,
2019 at 10:00 a.m.
PLACE: The meeting will be held in
Auditorium LL–002 at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will begin at
10:00 a.m. (ET) and will be open to the
public. Seating will be on a first-come,
first-served basis. Visitors will be
subject to security checks. The meeting
will be webcast on the Commission’s
website at www.sec.gov.
MATTERS TO BE CONSIDERED: The subject
matter of the Open Meeting will be the
Commission’s continued efforts to
facilitate constructive shareholder
TIME AND DATE:
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87404; File No. SR–
NYSEAMER–2019–43]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change To Amend the NYSE American
Options Fee Schedule
October 28, 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 October
15, 2019, NYSE American LLC (‘‘NYSE
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE American Options Fee Schedule
(‘‘Fee Schedule’’). The Exchange
proposes to implement the fee change
effective October 15, 2019. The
proposed 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 modify
the Fee Schedule to introduce two
incentive programs that are designed to
encourage increased Manual and
Electronic order flow to the Exchange to
the benefit of all market participants.
In brief, and as described further
below, the first proposed change is
designed to encourage Manual
transactions by NYSE American Options
Market Makers and Specialists/eSpecialists by offering these participants
discounted rates on any portion of their
monthly Manual volume (excluding
Strategy Executions and QCC
Transactions) that exceeds, by a
specified percentage of Total Industry
Customer equity and ETF option
average daily volume (‘‘TCADV’’),4
4 The term ‘‘TCADV’’ is defined in the Key Terms
and Definitions Section of the Preface of the Fee
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either the participants’ August 2019
volume or, in the case of a new NYSE
American Options Market Makers or
and Specialists/e-Specialists, a base
level of 15,000 ADV. The second
proposed change is designed to
encourage ATP Holders to increase their
Electronic volume in the ‘‘Professional’’
range.5 Specifically, the Exchange
proposes to offer discounted rates on
monthly Professional volume as well as
certain credits on Customer Electronic
volume, including for initiating CUBE
volume, to ATP Holders that increase
their Professional volume (excluding
Strategy Executions, CUBE Auctions,
and QCC Transactions) by specified
percentages of TCADV over their August
2019 volume, or in the case of new ATP
Holders, above a base level of 10,000
ADV. The Exchange believes that the
baselines of 15,000 ADV Manual
volumes for new NYSE American
Options Market Makers and/or
Specialists/e-Specialists and 10,000
ADV Professional volumes for new ATP
Holders are appropriate because these
volumes are comparable to trading
volumes in August 2019 of active firms
on the Exchange in the respective
categories.
The Exchange proposes to implement
the rule changes on October 15, 2019.
Background
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets. In
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 6
There are currently 16 registered
options exchanges competing for order
flow. Based on publicly-available
information, and excluding index-based
options, no single exchange has more
than 16% of the market share of
executed volume of multiply-listed
Schedule, see infra note 8 [sic]. TCADV includes
Options Clearing Corporation (‘‘OCC’’) calculated
Customer volume of all types, including Complex
Order transactions and QCC transactions, in equity
and ETF options.
5 For purposes of this filing, ‘‘Professional’’
Electronic volume includes: Professional Customer,
Broker Dealer, Non-NYSE American Options
Market Maker, and Firm.
6 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(S7–10–04) (‘‘Reg NMS Adopting Release’’).
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58773
equity and ETF options trades.7
Therefore, no exchange possesses
significant pricing power in the
execution of multiply-listed equity &
ETF options order flow. More
specifically, in the first quarter of 2019,
the Exchange had less than 10% market
share of executed volume of multiplylisted equity & ETF options trades.8
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can shift order flow, or discontinue or
reduce use of certain categories of
products, in response to fee changes.
Accordingly, competitive forces
constrain options exchange transaction
fees.
In response to this competitive
environment, the Exchange has
established various pricing incentives
designed to encourage increased Manual
and Electronic volume executed on the
Exchange, including (but not limited to)
the American Customer Engagement
(‘‘ACE’’) Program. While the ACE
Program is limited to Electronic
Customer volume, the Exchange
proposes two new pricing incentives
that focus on encouraging additional
Manual volume and Professional
Electronic volume. To the extent that
these incentives succeed, the increased
liquidity on the Exchange would result
in enhanced market quality for all
participants.
Proposed Rule Change
Manual Volume Incentive for MMs and
Specialists
The Exchange proposes to offer NYSE
American Options Market Makers
(‘‘MMs’’) and Specialists/e-Specialists
(‘‘Specialists) discounted rates on
Manual transactions that exceed a
specified volume threshold. Currently,
Manual transactions in both Penny and
Non-Penny Pilot issues are subject to a
per contract rate of $0.25 for MMs and
$0.18 for Specialists.9 As proposed,
MMs or Specialists that increase their
monthly Manual volumes by a specified
percentage of TCADV over their August
2019 volume or, for new MMs or
Specialists, that increase Manual
7 The OCC publishes options and futures volume
in a variety of formats, including daily and monthly
volume by exchange, available here: https://
www.theocc.com/market-data/volume/default.jsp.
8 Based on OCC data, see id., the Exchange’s
market share in equity-based options declined from
9.82% for the month of January to 8.84% for the
month of April.
9 See Fee Schedule, Section I.A. (Options
Transaction Fees and Credits, Rates for Options
transactions), available here: https://
www.nyse.com/publicdocs/nyse/markets/americanoptions/NYSE_American_Options_Fee_
Schedule.pdf.
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
volume by a specified percentage of
TCADV above a base level of 15,000
ADV (‘‘Increased Manual Volume’’) are
eligible to receive a discounted rate
solely on the Increased Manual Volume
as set forth below. The Exchange will
exclude any volumes attributable to
QCC trades or Strategy Execution from
monthly calculations of base level or
Increased Manual Volume, as these
transactions are subject to separate
pricing described in Fee Schedule,
Sections I.F., I.G. and I.J., respectively.
As proposed:
• MMs with Increased Manual
Volume of at least 0.15% TCADV will
be charged $0.18 per contract for the
Increased Manual Volume. (Specialists
currently pay $0.18 per contract for all
Manual transactions); and
• MMs and Specialists with an
Increased Manual Volume of at least
0.30% TCADV will be charged $0.12 per
contract for the Increased Manual
Volume.10
For example, assume a MM executed
18,000 ADV Manual Volume in August,
2019. In October, the TCADV is
17,200,000. An increase of 0.15% of
TCADV would be equal to 25,800
contracts. An increase of 0.30% of
TCADV would be equal to 51,600
contracts.
Thus, if the MM executed 44,500 ADV
in October, the MM would qualify for
$0.18 per contract on the MM’s volume
above the 18,000 ADV (i.e., the
Increased Volume Amount of 26,500
contracts). The MM’s billing would
reflect $0.25 per contract on the MM’s
base amount of 18,000 ADV, and $0.18
per contact on the Increased Manual
Volume of 26,500 ADV.
If the same MM executed 74,000 ADV
in October, the MM would qualify for
$0.12 per contract on the MM’s volume
above the 18,000 ADV (i.e., the
Increased Volume Amount of 56,000
contracts). The MM’s billing would
reflect $0.25 per contract on the MM’s
base amount of 18,000 ADV, and $0.12
per contract on the Increased Manual
Volume of 56,000 ADV.
The Exchange believes this proposed
incentive pricing is appropriate because
Market Makers (Specialists) serve a
crucial role in the options markets by
providing liquidity to facilitate market
efficiency and functioning. The
Exchange’s fees are constrained by
intermarket competition, as Market
Makers can register on any or all of the
16 options exchanges. Thus, ATP
Holders that are also members of other
exchanges have a choice of where they
register and operate as Market Makers.
The proposed pricing incentive for MMs
and Specialists is therefore designed to
encourage these participants to
(continue to) conduct Manual (open
outcry) trading on the Floor of the
Exchange. The Exchange notes that all
market participants stand to benefit
from increased Manual transaction
volume, which promotes market depth,
facilitates tighter spreads and enhances
price discovery, and may lead to a
corresponding increase in (Manual or
Electronic) order flow from other market
participants.
The Exchange cannot predict with
certainty whether any ATP Holders
would avail themselves of this proposed
fee change, particularly because the
proposed pricing incentive is new.
Assuming historical behavior can be
predictive of future behavior, however,
the Exchange believes that at present
participation rates, between two and
four firms may be able to qualify for
discounted Manual rates.
Professional Step-Up Incentive
The Exchange also proposes to
introduce an incentive for ATP Holders
to increase (or ‘‘step up’’) their
Electronic Professional 11 volume by
offering lower rates and credits based on
volume growth (i.e., Tier A, Tier B, and
Tier C). Specifically, an ATP Holder
may qualify for discounted rates on its
monthly Electronic Professional volume
and receive credits on certain Electronic
Customer volume, including initiating
CUBE volume, provided the ATP Holder
increases its monthly Electronic
Professional volume by specified
percentages of TCADV over their August
2019 volume or, for new ATP Holders,
that increase Electronic Professional
volume by a specified percentages of
TCADV above a base level of 10,000
contracts ADV (the ‘‘Qualifying
Volume’’), as set forth in the table
below. The Exchange will exclude any
volumes attributable to QCC trades,
CUBE Auctions, or Strategy Execution
from monthly calculations of base level
or Qualifying Volume, as these
transactions are subject to separate
pricing described in Fee Schedule
Sections I.F., I.G. and I.J., respectively.
PROFESSIONAL STEP-UP INCENTIVE
Qualifying
volume as a
% of TCADV
Tier A ................
Tier B ................
Tier C ................
Per contract
penny pilot
rate
0.04
0.07
0.09
10 See proposed Fee Schedule, Section I.A.
(Options Transaction Fees and Credits, Rates for
Options transactions), note 8 [sic].
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Per contract
non-penny
pilot rate
$0.42
0.35
0.25
$0.65
0.55
0.50
ACE benefits
N/A.
Tier 1 Customer Credits only (per Section I.E.).
Tier 1 Customer Credits (per Section I.E.), plus ACE Initiating Participant
Rebate—All issues (per Section I.G.).
11 See supra note 5 (defining Professional
volume).
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
As shown in the table above, the
greater the increase in Qualifying
Volume, the more benefits that accrue to
the ATP Holder. To put in context,
assume an ATP Holder executed
Electronic Professional volume in
August 2019 totaling 9,000 ADV and, in
October, the TCADV is 17,200,000. To
qualify for the Professional Step-Up
Incentive program, that ATP Holder
would need to execute Electronic
Professional volume above its August
2019 that is at least 6,880 (i.e., 0.04% of
TCADV) for Tier A; 12,040 (i.e., 0.07%
of TCADV) for Tier B; or 15,480 (i.e.,
0.09% of TCADV) for Tier C. If that
same ATP Holder did not have August
2019 volume, it would have to execute
at least this much volume above the
10,000 ADV base level.
ATP Holders that qualify for Tier A—
the lowest Professional volume growth
threshold, would be charged reduced
rates of $0.42 and $0.65 on Professional
Electronic executions on Penny and
Non-Penny issues, respectively.12 ATP
Holders that qualify for Tier B would be
charged even further reduced rates—of
$0.35 and $0.55 on Professional
Electronic executions on Penny and
Non-Penny issues, respectively,13 and
would also receive credits on
Professional Electronic Customer
executions that are the same as those
available to ATP Holders that achieve
Tier 1 of the ACE Program (the ‘‘ACE
Tier 1 Customer Credits’’).14 However,
participants that qualify for Tier B of the
Professional Step-Up Incentive do not
receive any other benefits that inure to
ATP Holders that qualify for ACE Tier
1. Finally, ATP Holders that qualify for
Tier C would be charged the most
reduced rates—$0.25 and $0.50 on
Electronic Professional executions on
Penny and Non-Penny issues,
respectively; 15 would receive the ACE
Tier 1 Customer Credits; and would
receive the ‘‘ACE Initiating Participant
Rebate—All Issues’’ (or ‘‘ACE Rebate’’),
which applies rebates to certain volume
that initiates a Customer Best Execution
Auction or ‘‘CUBE.16
12 See Fee Schedule, Section I. A., supra note 9
(setting forth options transactions rates for
Electronic Professional volume of $0.50 and $0.75
for Penny and Non-Penny issues respectively;
except that Firm execution in Penny issues are
charged $0.47 per contract).
13 See proposed Fee Schedule, Section I.A.
(Options Transaction Fees and Credits, Rates for
Options transactions), note 8 [sic].
14 See id.; see also Fee Schedule, Section I.E.
(describing ACE Program).
15 See id.
16 See Fee Schedule, Section I.G. (describing
CUBE Auctions Fees & Credits, for Single-Leg and
Complex CUBE Auctions). In the case of a SingleLeg CUBE Auction, the pricing table (at note 2),
states that the ACE Rebate ‘‘is applied to each of
the first 5,000 Customer contracts of a CUBE Order
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The Exchange’s fees are constrained
by intermarket competition, as ATP
Holders may direct their order flow to
any of the 16 options exchanges,
including those with similar incentive
programs.17 Thus, ATP Holders have a
choice of where they direct their order
flow. This proposed Professional StepUp Incentive program is designed to
encourage ATP Holders to increase the
amount of Electronic Professional
volume directed to and executed on the
Exchange. The Exchange notes that all
market participants stand to benefit
from increased Electronic Professional
volume, which promotes market depth,
facilitates tighter spreads and enhances
price discovery, and may lead to a
corresponding increase in order flow
from other market participants.
The Exchange cannot predict with
certainty whether any ATP Holders
would avail themselves of this proposed
fee change, particularly because the
proposed Professional Step-Up
Incentive program is new. Assuming
historical behavior can be predictive of
future behavior, however, the Exchange
believes that at present participation
rates, between two and four firms may
be able to qualify for Professional StepUp Incentive program.
The Proposed Rule Change Is
Reasonable
executed in a [Single-Leg] CUBE Auction,’’ and is
available to participants that qualify for ACE Tier
1. See id. In the case of a Complex CUBE Auction,
the pricing table (at note 2), ACE ‘‘is applied to each
of the first 1,000 Customer contracts per leg of a
Complex CUBE Order executed in a Complex CUBE
Auction,’’ and is available to participants that
qualify for ACE Tier 1. See id.
17 See e.g., MIAX Options fee schedule, Section
1.a.iv, Professional Rebate Program, available here,
https://www.miaxoptions.com/sites/default/files/
fee_schedule-files/MIAX_Options_Fee_Schedule_
04012019.pdf (setting forth per contract credits on
volume submitted for the account of Public
Customers that are not Priority Customers, NonMIAX Market Makers, Non-Member Broker Dealers,
and Firms (collectively, Professional for purposes of
MIAX program), provided the Member achieves
certain Professional volume increase percentage
thresholds (set forth in the schedule) in the month
relative to the fourth quarter of 2015).
18 15 U.S.C. 78f(b).
19 15 U.S.C. 78f(b)(4) and (5).
The Exchange believes that the
proposal to offer reduced rates for MMs
and Specialists on Increased Manual
Volume is reasonable because it is
designed to incent these participants to
increase the number and type of Manual
executions sent to the Floor of the
Exchange. Market Makers (and
Specialists) serve a crucial role in the
options markets by providing liquidity
to facilitate market efficiency and
functioning. The Exchange’s fees are
The Exchange operates in a highly
competitive market. The Commission
has repeatedly expressed its preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. In Regulation NMS, the
Commission highlighted the importance
of market forces in determining prices
and SRO revenues and, also, recognized
that current regulation of the market
system ‘‘has been remarkably successful
in promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 20
There are currently 16 registered
options exchanges competing for order
flow. Based on publicly-available
information, and excluding index-based
options, no single exchange has more
than 16% of the market share of
executed volume of multiply-listed
equity and ETF options trades.21
Therefore, no exchange possesses
significant pricing power in the
execution of multiply-listed equity &
ETF options order flow. More
specifically, in the first quarter of 2019,
the Exchange had less than 10% market
share of executed volume of multiplylisted equity & ETF options trades.22
The Exchange believes that the ever2. Statutory Basis
shifting market share among the
exchanges from month to month
The Exchange believes that the
demonstrates that market participants
proposed rule change is consistent with
can shift order flow, or discontinue or
18
Section 6(b) of the Act, in general, and
reduce use of certain categories of
furthers the objectives of Sections
products, in response to fee changes.
6(b)(4) and (5) of the Act,19 in particular, Accordingly, competitive forces
because it provides for the equitable
constrain options exchange transaction
allocation of reasonable dues, fees, and
fees. Stated otherwise, changes to
other charges among its members,
exchange transaction fees can have a
issuers and other persons using its
direct effect on the ability of an
facilities and does not unfairly
exchange to compete for order flow.
discriminate between customers,
Manual Volume Incentive for MMs and
issuers, brokers or dealers.
Specialists
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20 See Reg NMS Adopting Release, supra note 6,
at 37499.
21 See supra note 7.
22 Based on OCC data, see supra note 8, in 2019,
the Exchange’s market share in equity-based
options declined from 9.82% for the month of
January to 7.86% for the month of September.
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
constrained by intermarket competition,
as Market Makers can register on any or
all of the 16 options exchanges. ATP
Holders that are also members of other
exchanges have a choice of where they
register as Market Makers. Thus, the
Exchange believes that this proposed
rule change will provide an incentive
for MMs and Specialists to (continue to)
conduct (open outcry) Manual trading
on the Exchange with increased volume.
The Exchange notes that all market
participants stand to benefit from
increased Manual transaction volume,
which promotes market depth,
facilitates tighter spreads and enhances
price discovery, and may lead to a
corresponding increase in order flow
from other market participants.
Professional Step-Up Incentive
The Exchange believes that the
proposed Professional Step-Up
Incentive is reasonable because it is
designed to incent ATP Holders to
increase the amount of Electronic
Professional order flow directed to the
Exchange. In addition, because the top
two tiers (B and C) of this program allow
qualifying ATP Holders to also receive
credits on Electronic Customer volume
(per Tier 1 of the ACE program) and, for
Tier C only, to achieve rebates on
certain initiating CUBE Auction order
flow, the proposed program may
encourage ATP Holders to direct both
Professional and Customer Electronic
order flow, including initiating CUBE
volume to the Exchange. The Exchange
notes that all market participants stand
to benefit from increased Electronic
transaction volume—whether
Professional or Customer, as such
increase promotes market depth,
facilitates tighter spreads and enhances
price discovery, and may lead to a
corresponding increase in order flow
from other market participants that do
not participant in (or qualify for) the
Professional Step-Up Incentive program.
The Exchange believes that the
baselines of 15,000 ADV Manual
volumes for new NYSE American
Options Market Makers and/or
Specialists/e-Specialists and 10,000
ADV Professional volumes for new ATP
Holders are reasonable because these
volumes are comparable to trading
volumes in August 2019 of active firms
on the Exchange in the respective
categories.
Regarding both proposed pricing
changes, the Exchange cannot predict
with certainty whether any participants
would avail themselves of the proposed
fee changes, particularly because both of
the proposed incentives are new.
Assuming historical behavior can be
predictive of future behavior, however,
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19:23 Oct 31, 2019
Jkt 250001
the Exchange believes that at present
participation rates, between two and
four firms may be able to qualify for the
discounted Manual rates and between
two and four firms may be able to
qualify for the Professional Step-Up
Inventive.23
Finally, to the extent the proposed
pricing incentives attract greater volume
and liquidity (to the Floor or otherwise),
the Exchange believes the proposed
changes would improve the Exchange’s
overall competitiveness and strengthen
its market quality for all market
participants. In the backdrop of the
competitive environment in which the
Exchange operates, the proposed rule
changes are a reasonable attempt by the
Exchange to increase the depth of its
market and improve its market share
relative to its competitors. The proposed
rule changes are designed to incent ATP
Holders to direct liquidity to the
Exchange, in both Manual and
Electronic executions, similar to other
exchange programs with competitive
pricing programs,24 thereby promoting
market depth, price discovery and
improvement and enhancing order
execution opportunities for market
participants.
The Proposed Rule Change is an
Equitable Allocation of Credits and Fees
The Exchange believes the proposed
rule change is an equitable allocation of
its fees and credits. The proposals—both
for discounted rates on Increased
Manual Volume for MMs and
Specialists and the Professional Step-Up
Incentive program—are based on the
amount and type of business transacted
on the Exchange and ATP Holders can
opt to avail themselves of these
incentive or not. Moreover, the
proposals are designed to encourage
MMs, Specialists, and ATP Holders to
aggregate their executions—particularly
Manual and Electronic Professional—at
the Exchange as a primary execution
venue. To the extent that the proposed
changes attract more Manual and
(Professional) Electronic volume to the
Exchange, this increased order flow
would continue to make the Exchange a
more competitive venue for, among
other things, order execution. Thus, the
Exchange believes the proposed rule
changes would improve market quality
for all market participants on the
Exchange and, as a consequence, attract
more order flow to the Exchange thereby
23 The Exchange notes that the ‘‘two and four’’
firms that may qualify for the different incentives
proposed herein are not the same ‘‘two and four’’
firms.
24 See, e.g., supra note 17 (regarding MIAX
Professional Rebate Program).
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
improving market-wide quality and
price discovery.
The Exchange believes that the
baselines of 15,000 ADV Manual
volumes for new NYSE American
Options Market Makers and/or
Specialists/e-Specialists and 10,000
ADV Professional volumes for new ATP
Holders are appropriate because these
volumes are comparable to trading
volumes in August 2019 of active firms
on the Exchange in the respective
categories.
The Proposed Rule Change is not
Unfairly Discriminatory
The Exchange believes that the
proposals—both for discounted rates on
Increased Manual Volume for MMs and
Specialists and the Professional Step-Up
Incentive program—are not unfairly
discriminatory because the proposed
modifications would be available to all
similarly-situated market participants
on an equal and non-discriminatory
basis.
The Exchange believes that the
baselines of 15,000 ADV Manual
volumes for new NYSE American
Options Market Makers and/or
Specialists/e-Specialists and 10,000
ADV Professional volumes for new ATP
Holders are not unfairly discriminatory
because these volumes are comparable
to trading volumes in August 2019 of
active firms on the Exchange in the
respective categories.
The proposals are based on the
amount and type of business transacted
on the Exchange and MMs, Specialists,
and ATP Holders are not obligated to try
to achieve either of the incentive pricing
options. Rather, the proposals are
designed to encourage these participants
to utilize the Exchange as a primary
trading venue (if they have not done so
previously) or increase (both Manual
and Electronic) volume sent to the
Exchange. To the extent that the
proposed changes attract more
executions to the Exchange, this
increased order flow would continue to
make the Exchange a more competitive
venue for, among other things, order
execution. Thus, the Exchange believes
the proposed rule changes would
improve market quality for all market
participants on the Exchange and, as a
consequence, attract more order flow to
the Exchange thereby improving marketwide quality and price discovery. The
resulting increased volume and
liquidity would provide more trading
opportunities and tighter spreads to all
market participants and thus would
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
E:\FR\FM\01NON1.SGM
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
system and, in general, to protect
investors and the public interest.
With regard to the proposed discount
rates on certain increases in Manual
volume by MMs and Specialists, the
Exchange notes that the Manual rates
charged to these participants are already
lower than the rates charged to other
participants.25 MMs (and Specialists)
serve a crucial role in financial markets
by providing liquidity to facilitate
market efficiency and functioning.
Market Makers, unlike other market
participants, add value through
continuous quoting and the
commitment of capital. Because Market
Makers have these obligations and
regulatory requirements that normally
do not apply to other market
participants, the Exchange believes that
offering the proposed reduced Manual
rates is equitable and not unfairly
discriminatory in light of their
obligations and the costs associated
therewith.
Finally, the Exchange believes that it
is subject to significant competitive
forces, as described below in the
Exchange’s statement regarding the
burden on competition.
For the foregoing reasons, the
Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act, 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.
Instead, as discussed above, the
Exchange believes that the proposed
changes would encourage the
submission of additional liquidity to a
public exchange, thereby promoting
market depth, price discovery and
transparency and enhancing order
execution opportunities for all market
participants. As a result, the Exchange
believes that the proposed change
furthers the Commission’s goal in
adopting Regulation NMS of fostering
integrated competition among orders,
which promotes ‘‘more efficient pricing
of individual stocks for all types of
orders, large and small.’’ 26
Intramarket Competition. The
proposed changes are designed to attract
additional order flow (both Manual and
Electronic, particularly Professional
25 See Fee Schedule, Section I.A., supra note 9
(setting forth rates for Manual options transactions:
MMs and Specialists are charged $0.18 per contract,
while all other non-Customer participant (save for
DOMMs) is charged $0.25 per contract).
26 See Reg NMS Adopting Release, supra note 6,
at 37499.
VerDate Sep<11>2014
19:23 Oct 31, 2019
Jkt 250001
volume) to the Exchange. The Exchange
believes that the proposed pricing
incentives would incent market
participants to direct additional volume
to the Exchange. Greater liquidity
benefits all market participants on the
Exchange and increased Manual and
Electronic Professional volume would
increase opportunities for execution of
other trading interest. The proposed
pricing incentives would be available to
all similarly-situated market
participants that incur transaction fees
on Manual and Electronic executions,
and, as such, the proposed change
would not impose a disparate burden on
competition among market participants
on the Exchange.
Market Makers, unlike other market
participants, add value through
continuous quoting and the
commitment of capital. Because Market
Makers have these obligations and
regulatory requirements that normally
do not apply to other market
participants, the Exchange believes that
offering the proposed reduced rates, in
light of their obligations and the costs
associated therewith, does not create an
undue burden on non-Market Makers.
Intermarket Competition. The
Exchange operates in a highly
competitive market in which market
participants can readily favor one of the
16 competing option exchanges if they
deem fee levels at a particular venue to
be excessive. In such an environment,
the Exchange must continually adjust its
fees to remain competitive with other
exchanges and to attract order flow to
the Exchange. Based on publiclyavailable information, and excluding
index-based options, no single exchange
has more than 16% of the market share
of executed volume of multiply-listed
equity and ETF options trades.27
Therefore, no exchange possesses
significant pricing power in the
execution of multiply-listed equity &
ETF options order flow. More
specifically, in the first quarter of 2019,
the Exchange had less than 10% market
share of executed volume of multiplylisted equity & ETF options trades.28
The Exchange believes that the
proposed rule change reflects this
competitive environment because it
modifies the Exchange’s fees in a
manner designed to encourage ATP
Holders to direct trading interest (both
Manual and Electronic) to the Exchange,
to provide liquidity and to attract order
flow. To the extent that this purpose is
27 See
supra note 7.
on OCC data, supra note 8, the
Exchange’s market share in equity-based options
declined from 9.82% for the month of January to
8.84% for the month of April.
28 Based
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
58777
achieved, all the Exchange’s market
participants should benefit from the
improved market quality and increased
opportunities for price improvement.
The Exchange believes that the
proposed change could promote
competition between the Exchange and
other execution venues, including those
that currently offer similar pricing
incentives, by encouraging additional
orders to be sent to the Exchange for
execution. The Exchange also believes
that the proposed change is designed to
provide the public and investors with a
Fee Schedule that is clear and
consistent, thereby reducing burdens on
the marketplace and facilitating investor
protection.
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) 29 of the Act and
subparagraph (f)(2) of Rule 19b–4 30
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) 31 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
29 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
31 15 U.S.C. 78s(b)(2)(B).
30 17
E:\FR\FM\01NON1.SGM
01NON1
58778
Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
NYSEAMER–2019–43 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 No.
SR–NYSEAMER–2019–43. 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 No.
SR–NYSEAMER–2019–43, and should
be submitted on or before November 22,
2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–23857 Filed 10–31–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87408; File No. SR–
NYSECHX–2019–12]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Fee
Schedule of NYSE Chicago, Inc.
October 28, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on October
15, 2019 the NYSE Chicago, Inc.
(‘‘NYSE Chicago’’ or ‘‘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 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 amend the
Fee Schedule of NYSE Chicago, Inc. to
provide for co-location services and fees
in connection with its expected
migration to the NYSE Pillar platform in
the fourth quarter of 2019. 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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
32 17
CFR 200.30–3(a)(12).
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19:23 Oct 31, 2019
Jkt 250001
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to provide for co-location
services and fees in connection with its
expected migration to the NYSE Pillar
platform (‘‘Pillar’’) in the fourth quarter
of 2019.4 Pillar is an integrated trading
technology platform designed to use a
single specification for connecting to the
equities and options markets operated
by the Exchange’s affiliates New York
Stock Exchange LLC (‘‘NYSE’’), NYSE
American LLC (‘‘NYSE American’’),
NYSE Arca, Inc. (‘‘NYSE Arca’’), and
NYSE National, Inc. (‘‘NYSE National’’
and, together, the ‘‘Affiliate SROs’’).5 As
detailed below, current Users 6 would
not incur any new fees and no
incremental co-location revenue is
expected under this proposal.
The Affiliate SROs offer co-location
services.7 When a User purchases a co4 Subject to rule approvals, the migration to Pillar
is currently anticipated to be on November 4, 2019.
See Exchange Act Release Nos. 85297 (March 12,
2019), 84 FR 9854 (March 18, 2019) (SR–CHX–
2018–03), and 86709 (August 20, 2019), 84 FR
44654 (August 26, 2019) (SR–CHX–2019–08).
5 In July 2018, the Exchange and its direct parent
company were acquired by NYSE Group, Inc. As a
result, the Exchange and the Affiliate SROs are
direct or indirect subsidiaries of NYSE Group, Inc.
and, indirectly, Intercontinental Exchange, Inc. See
Exchange Act Release No. 83635 (July 13, 2018), 83
FR 34182 (July 19, 2018) (SR–CHX–2018–004); see
also Exchange Act Release No. 83303 (May 22,
2018), 83 FR 24517 (May 29, 2018) (SR–CHX–2018–
004).
6 Consistent with the Affiliate SRO Price Lists, for
purposes of the Exchange’s co-location services, a
‘‘User’’ shall mean any market participant that
requests to receive co-location services directly
from the Exchange. See Securities Exchange Act
Release Nos. 76008 (September 29, 2015), 80 FR
60190 (October 5, 2015) (SR–NYSE–2015–40);
76009 (September 29, 2015), 80 FR 60213 (October
5, 2015) (SR–NYSEMKT–2015–67); and 76010
(September 29, 2015), 80 FR 60197 (October 5,
2015) (SR–NYSEArca–2015–82); and 83351 (May
31, 2018), 83 FR 26314 (June 6, 2018) (SR–
NYSENAT–2018–07) (‘‘NYSE National Co-location
Notice’’).
7 With the exception of NYSE National, the
Affiliate SROs initially filed rule changes relating
to their co-location services and related fees with
the Commission in 2010. See Securities Exchange
Act Release Nos. 62960 (September 21, 2010), 75 FR
59310 (September 27, 2010) (SR–NYSE–2010–56);
62961 (September 21, 2010), 75 FR 59299
(September 27, 2010) (SR–NYSEAmex–2010–80);
and 63275 (November 8, 2010), 75 FR 70048
(November 16, 2010) (SR–NYSEArca–2010–100).
NYSE National initially filed rule changes relating
to its co-location services and related fees with the
Commission on May 18, 2018. See NYSE National
Co-location Notice, supra note 6. If any change to
the Affiliate SROs’ colocation services become
operative after the present filing is made but before
it becomes operative, the Exchange would make an
additional rule filing implementing the change,
with the intention that the Exchange would offer
the same co-location services offered by the
Affiliate SROs.
E:\FR\FM\01NON1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 212 (Friday, November 1, 2019)]
[Notices]
[Pages 58772-58778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23857]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87404; File No. SR-NYSEAMER-2019-43]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend the NYSE
American Options Fee Schedule
October 28, 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 October 15, 2019, NYSE American LLC (``NYSE
[[Page 58773]]
American'' or the ``Exchange'') 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 amend the NYSE American Options Fee
Schedule (``Fee Schedule''). The Exchange proposes to implement the fee
change effective October 15, 2019. The proposed 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 modify the Fee Schedule to introduce
two incentive programs that are designed to encourage increased Manual
and Electronic order flow to the Exchange to the benefit of all market
participants.
In brief, and as described further below, the first proposed change
is designed to encourage Manual transactions by NYSE American Options
Market Makers and Specialists/e-Specialists by offering these
participants discounted rates on any portion of their monthly Manual
volume (excluding Strategy Executions and QCC Transactions) that
exceeds, by a specified percentage of Total Industry Customer equity
and ETF option average daily volume (``TCADV''),\4\ either the
participants' August 2019 volume or, in the case of a new NYSE American
Options Market Makers or and Specialists/e-Specialists, a base level of
15,000 ADV. The second proposed change is designed to encourage ATP
Holders to increase their Electronic volume in the ``Professional''
range.\5\ Specifically, the Exchange proposes to offer discounted rates
on monthly Professional volume as well as certain credits on Customer
Electronic volume, including for initiating CUBE volume, to ATP Holders
that increase their Professional volume (excluding Strategy Executions,
CUBE Auctions, and QCC Transactions) by specified percentages of TCADV
over their August 2019 volume, or in the case of new ATP Holders, above
a base level of 10,000 ADV. The Exchange believes that the baselines of
15,000 ADV Manual volumes for new NYSE American Options Market Makers
and/or Specialists/e-Specialists and 10,000 ADV Professional volumes
for new ATP Holders are appropriate because these volumes are
comparable to trading volumes in August 2019 of active firms on the
Exchange in the respective categories.
---------------------------------------------------------------------------
\4\ The term ``TCADV'' is defined in the Key Terms and
Definitions Section of the Preface of the Fee Schedule, see infra
note 8 [sic]. TCADV includes Options Clearing Corporation (``OCC'')
calculated Customer volume of all types, including Complex Order
transactions and QCC transactions, in equity and ETF options.
\5\ For purposes of this filing, ``Professional'' Electronic
volume includes: Professional Customer, Broker Dealer, Non-NYSE
American Options Market Maker, and Firm.
---------------------------------------------------------------------------
The Exchange proposes to implement the rule changes on October 15,
2019.
Background
The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS,
the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \6\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (``Reg NMS
Adopting Release'').
---------------------------------------------------------------------------
There are currently 16 registered options exchanges competing for
order flow. Based on publicly-available information, and excluding
index-based options, no single exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\7\ Therefore, no exchange possesses significant pricing power
in the execution of multiply-listed equity & ETF options order flow.
More specifically, in the first quarter of 2019, the Exchange had less
than 10% market share of executed volume of multiply-listed equity &
ETF options trades.\8\
---------------------------------------------------------------------------
\7\ The OCC publishes options and futures volume in a variety of
formats, including daily and monthly volume by exchange, available
here: https://www.theocc.com/market-data/volume/default.jsp.
\8\ Based on OCC data, see id., the Exchange's market share in
equity-based options declined from 9.82% for the month of January to
8.84% for the month of April.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees.
In response to this competitive environment, the Exchange has
established various pricing incentives designed to encourage increased
Manual and Electronic volume executed on the Exchange, including (but
not limited to) the American Customer Engagement (``ACE'') Program.
While the ACE Program is limited to Electronic Customer volume, the
Exchange proposes two new pricing incentives that focus on encouraging
additional Manual volume and Professional Electronic volume. To the
extent that these incentives succeed, the increased liquidity on the
Exchange would result in enhanced market quality for all participants.
Proposed Rule Change
Manual Volume Incentive for MMs and Specialists
The Exchange proposes to offer NYSE American Options Market Makers
(``MMs'') and Specialists/e-Specialists (``Specialists) discounted
rates on Manual transactions that exceed a specified volume threshold.
Currently, Manual transactions in both Penny and Non-Penny Pilot issues
are subject to a per contract rate of $0.25 for MMs and $0.18 for
Specialists.\9\ As proposed, MMs or Specialists that increase their
monthly Manual volumes by a specified percentage of TCADV over their
August 2019 volume or, for new MMs or Specialists, that increase Manual
[[Page 58774]]
volume by a specified percentage of TCADV above a base level of 15,000
ADV (``Increased Manual Volume'') are eligible to receive a discounted
rate solely on the Increased Manual Volume as set forth below. The
Exchange will exclude any volumes attributable to QCC trades or
Strategy Execution from monthly calculations of base level or Increased
Manual Volume, as these transactions are subject to separate pricing
described in Fee Schedule, Sections I.F., I.G. and I.J., respectively.
As proposed:
---------------------------------------------------------------------------
\9\ See Fee Schedule, Section I.A. (Options Transaction Fees and
Credits, Rates for Options transactions), available here: https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf.
---------------------------------------------------------------------------
MMs with Increased Manual Volume of at least 0.15% TCADV
will be charged $0.18 per contract for the Increased Manual Volume.
(Specialists currently pay $0.18 per contract for all Manual
transactions); and
MMs and Specialists with an Increased Manual Volume of at
least 0.30% TCADV will be charged $0.12 per contract for the Increased
Manual Volume.\10\
---------------------------------------------------------------------------
\10\ See proposed Fee Schedule, Section I.A. (Options
Transaction Fees and Credits, Rates for Options transactions), note
8 [sic].
---------------------------------------------------------------------------
For example, assume a MM executed 18,000 ADV Manual Volume in
August, 2019. In October, the TCADV is 17,200,000. An increase of 0.15%
of TCADV would be equal to 25,800 contracts. An increase of 0.30% of
TCADV would be equal to 51,600 contracts.
Thus, if the MM executed 44,500 ADV in October, the MM would
qualify for $0.18 per contract on the MM's volume above the 18,000 ADV
(i.e., the Increased Volume Amount of 26,500 contracts). The MM's
billing would reflect $0.25 per contract on the MM's base amount of
18,000 ADV, and $0.18 per contact on the Increased Manual Volume of
26,500 ADV.
If the same MM executed 74,000 ADV in October, the MM would qualify
for $0.12 per contract on the MM's volume above the 18,000 ADV (i.e.,
the Increased Volume Amount of 56,000 contracts). The MM's billing
would reflect $0.25 per contract on the MM's base amount of 18,000 ADV,
and $0.12 per contract on the Increased Manual Volume of 56,000 ADV.
The Exchange believes this proposed incentive pricing is
appropriate because Market Makers (Specialists) serve a crucial role in
the options markets by providing liquidity to facilitate market
efficiency and functioning. The Exchange's fees are constrained by
intermarket competition, as Market Makers can register on any or all of
the 16 options exchanges. Thus, ATP Holders that are also members of
other exchanges have a choice of where they register and operate as
Market Makers. The proposed pricing incentive for MMs and Specialists
is therefore designed to encourage these participants to (continue to)
conduct Manual (open outcry) trading on the Floor of the Exchange. The
Exchange notes that all market participants stand to benefit from
increased Manual transaction volume, which promotes market depth,
facilitates tighter spreads and enhances price discovery, and may lead
to a corresponding increase in (Manual or Electronic) order flow from
other market participants.
The Exchange cannot predict with certainty whether any ATP Holders
would avail themselves of this proposed fee change, particularly
because the proposed pricing incentive is new. Assuming historical
behavior can be predictive of future behavior, however, the Exchange
believes that at present participation rates, between two and four
firms may be able to qualify for discounted Manual rates.
Professional Step-Up Incentive
The Exchange also proposes to introduce an incentive for ATP
Holders to increase (or ``step up'') their Electronic Professional \11\
volume by offering lower rates and credits based on volume growth
(i.e., Tier A, Tier B, and Tier C). Specifically, an ATP Holder may
qualify for discounted rates on its monthly Electronic Professional
volume and receive credits on certain Electronic Customer volume,
including initiating CUBE volume, provided the ATP Holder increases its
monthly Electronic Professional volume by specified percentages of
TCADV over their August 2019 volume or, for new ATP Holders, that
increase Electronic Professional volume by a specified percentages of
TCADV above a base level of 10,000 contracts ADV (the ``Qualifying
Volume''), as set forth in the table below. The Exchange will exclude
any volumes attributable to QCC trades, CUBE Auctions, or Strategy
Execution from monthly calculations of base level or Qualifying Volume,
as these transactions are subject to separate pricing described in Fee
Schedule Sections I.F., I.G. and I.J., respectively.
---------------------------------------------------------------------------
\11\ See supra note 5 (defining Professional volume).
Professional Step-Up Incentive
----------------------------------------------------------------------------------------------------------------
Qualifying Per contract Per contract
volume as a % penny pilot non-penny ACE benefits
of TCADV rate pilot rate
----------------------------------------------------------------------------------------------------------------
Tier A............................ 0.04 $0.42 $0.65 N/A.
Tier B............................ 0.07 0.35 0.55 Tier 1 Customer Credits only
(per Section I.E.).
Tier C............................ 0.09 0.25 0.50 Tier 1 Customer Credits (per
Section I.E.), plus ACE
Initiating Participant
Rebate--All issues (per
Section I.G.).
----------------------------------------------------------------------------------------------------------------
[[Page 58775]]
As shown in the table above, the greater the increase in Qualifying
Volume, the more benefits that accrue to the ATP Holder. To put in
context, assume an ATP Holder executed Electronic Professional volume
in August 2019 totaling 9,000 ADV and, in October, the TCADV is
17,200,000. To qualify for the Professional Step-Up Incentive program,
that ATP Holder would need to execute Electronic Professional volume
above its August 2019 that is at least 6,880 (i.e., 0.04% of TCADV) for
Tier A; 12,040 (i.e., 0.07% of TCADV) for Tier B; or 15,480 (i.e.,
0.09% of TCADV) for Tier C. If that same ATP Holder did not have August
2019 volume, it would have to execute at least this much volume above
the 10,000 ADV base level.
ATP Holders that qualify for Tier A--the lowest Professional volume
growth threshold, would be charged reduced rates of $0.42 and $0.65 on
Professional Electronic executions on Penny and Non-Penny issues,
respectively.\12\ ATP Holders that qualify for Tier B would be charged
even further reduced rates--of $0.35 and $0.55 on Professional
Electronic executions on Penny and Non-Penny issues, respectively,\13\
and would also receive credits on Professional Electronic Customer
executions that are the same as those available to ATP Holders that
achieve Tier 1 of the ACE Program (the ``ACE Tier 1 Customer
Credits'').\14\ However, participants that qualify for Tier B of the
Professional Step-Up Incentive do not receive any other benefits that
inure to ATP Holders that qualify for ACE Tier 1. Finally, ATP Holders
that qualify for Tier C would be charged the most reduced rates--$0.25
and $0.50 on Electronic Professional executions on Penny and Non-Penny
issues, respectively; \15\ would receive the ACE Tier 1 Customer
Credits; and would receive the ``ACE Initiating Participant Rebate--All
Issues'' (or ``ACE Rebate''), which applies rebates to certain volume
that initiates a Customer Best Execution Auction or ``CUBE.\16\
---------------------------------------------------------------------------
\12\ See Fee Schedule, Section I. A., supra note 9 (setting
forth options transactions rates for Electronic Professional volume
of $0.50 and $0.75 for Penny and Non-Penny issues respectively;
except that Firm execution in Penny issues are charged $0.47 per
contract).
\13\ See proposed Fee Schedule, Section I.A. (Options
Transaction Fees and Credits, Rates for Options transactions), note
8 [sic].
\14\ See id.; see also Fee Schedule, Section I.E. (describing
ACE Program).
\15\ See id.
\16\ See Fee Schedule, Section I.G. (describing CUBE Auctions
Fees & Credits, for Single-Leg and Complex CUBE Auctions). In the
case of a Single-Leg CUBE Auction, the pricing table (at note 2),
states that the ACE Rebate ``is applied to each of the first 5,000
Customer contracts of a CUBE Order executed in a [Single-Leg] CUBE
Auction,'' and is available to participants that qualify for ACE
Tier 1. See id. In the case of a Complex CUBE Auction, the pricing
table (at note 2), ACE ``is applied to each of the first 1,000
Customer contracts per leg of a Complex CUBE Order executed in a
Complex CUBE Auction,'' and is available to participants that
qualify for ACE Tier 1. See id.
---------------------------------------------------------------------------
The Exchange's fees are constrained by intermarket competition, as
ATP Holders may direct their order flow to any of the 16 options
exchanges, including those with similar incentive programs.\17\ Thus,
ATP Holders have a choice of where they direct their order flow. This
proposed Professional Step-Up Incentive program is designed to
encourage ATP Holders to increase the amount of Electronic Professional
volume directed to and executed on the Exchange. The Exchange notes
that all market participants stand to benefit from increased Electronic
Professional volume, which promotes market depth, facilitates tighter
spreads and enhances price discovery, and may lead to a corresponding
increase in order flow from other market participants.
---------------------------------------------------------------------------
\17\ See e.g., MIAX Options fee schedule, Section 1.a.iv,
Professional Rebate Program, available here, https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Options_Fee_Schedule_04012019.pdf (setting forth per contract
credits on volume submitted for the account of Public Customers that
are not Priority Customers, Non-MIAX Market Makers, Non-Member
Broker Dealers, and Firms (collectively, Professional for purposes
of MIAX program), provided the Member achieves certain Professional
volume increase percentage thresholds (set forth in the schedule) in
the month relative to the fourth quarter of 2015).
---------------------------------------------------------------------------
The Exchange cannot predict with certainty whether any ATP Holders
would avail themselves of this proposed fee change, particularly
because the proposed Professional Step-Up Incentive program is new.
Assuming historical behavior can be predictive of future behavior,
however, the Exchange believes that at present participation rates,
between two and four firms may be able to qualify for Professional
Step-Up Incentive program.
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.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Proposed Rule Change Is Reasonable
The Exchange operates in a highly competitive market. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. In Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \20\
---------------------------------------------------------------------------
\20\ See Reg NMS Adopting Release, supra note 6, at 37499.
---------------------------------------------------------------------------
There are currently 16 registered options exchanges competing for
order flow. Based on publicly-available information, and excluding
index-based options, no single exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\21\ Therefore, no exchange possesses significant pricing power
in the execution of multiply-listed equity & ETF options order flow.
More specifically, in the first quarter of 2019, the Exchange had less
than 10% market share of executed volume of multiply-listed equity &
ETF options trades.\22\
---------------------------------------------------------------------------
\21\ See supra note 7.
\22\ Based on OCC data, see supra note 8, in 2019, the
Exchange's market share in equity-based options declined from 9.82%
for the month of January to 7.86% for the month of September.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees. Stated otherwise, changes
to exchange transaction fees can have a direct effect on the ability of
an exchange to compete for order flow.
Manual Volume Incentive for MMs and Specialists
The Exchange believes that the proposal to offer reduced rates for
MMs and Specialists on Increased Manual Volume is reasonable because it
is designed to incent these participants to increase the number and
type of Manual executions sent to the Floor of the Exchange. Market
Makers (and Specialists) serve a crucial role in the options markets by
providing liquidity to facilitate market efficiency and functioning.
The Exchange's fees are
[[Page 58776]]
constrained by intermarket competition, as Market Makers can register
on any or all of the 16 options exchanges. ATP Holders that are also
members of other exchanges have a choice of where they register as
Market Makers. Thus, the Exchange believes that this proposed rule
change will provide an incentive for MMs and Specialists to (continue
to) conduct (open outcry) Manual trading on the Exchange with increased
volume. The Exchange notes that all market participants stand to
benefit from increased Manual transaction volume, which promotes market
depth, facilitates tighter spreads and enhances price discovery, and
may lead to a corresponding increase in order flow from other market
participants.
Professional Step-Up Incentive
The Exchange believes that the proposed Professional Step-Up
Incentive is reasonable because it is designed to incent ATP Holders to
increase the amount of Electronic Professional order flow directed to
the Exchange. In addition, because the top two tiers (B and C) of this
program allow qualifying ATP Holders to also receive credits on
Electronic Customer volume (per Tier 1 of the ACE program) and, for
Tier C only, to achieve rebates on certain initiating CUBE Auction
order flow, the proposed program may encourage ATP Holders to direct
both Professional and Customer Electronic order flow, including
initiating CUBE volume to the Exchange. The Exchange notes that all
market participants stand to benefit from increased Electronic
transaction volume--whether Professional or Customer, as such increase
promotes market depth, facilitates tighter spreads and enhances price
discovery, and may lead to a corresponding increase in order flow from
other market participants that do not participant in (or qualify for)
the Professional Step-Up Incentive program.
The Exchange believes that the baselines of 15,000 ADV Manual
volumes for new NYSE American Options Market Makers and/or Specialists/
e-Specialists and 10,000 ADV Professional volumes for new ATP Holders
are reasonable because these volumes are comparable to trading volumes
in August 2019 of active firms on the Exchange in the respective
categories.
Regarding both proposed pricing changes, the Exchange cannot
predict with certainty whether any participants would avail themselves
of the proposed fee changes, particularly because both of the proposed
incentives are new. Assuming historical behavior can be predictive of
future behavior, however, the Exchange believes that at present
participation rates, between two and four firms may be able to qualify
for the discounted Manual rates and between two and four firms may be
able to qualify for the Professional Step-Up Inventive.\23\
---------------------------------------------------------------------------
\23\ The Exchange notes that the ``two and four'' firms that may
qualify for the different incentives proposed herein are not the
same ``two and four'' firms.
---------------------------------------------------------------------------
Finally, to the extent the proposed pricing incentives attract
greater volume and liquidity (to the Floor or otherwise), the Exchange
believes the proposed changes would improve the Exchange's overall
competitiveness and strengthen its market quality for all market
participants. In the backdrop of the competitive environment in which
the Exchange operates, the proposed rule changes are a reasonable
attempt by the Exchange to increase the depth of its market and improve
its market share relative to its competitors. The proposed rule changes
are designed to incent ATP Holders to direct liquidity to the Exchange,
in both Manual and Electronic executions, similar to other exchange
programs with competitive pricing programs,\24\ thereby promoting
market depth, price discovery and improvement and enhancing order
execution opportunities for market participants.
---------------------------------------------------------------------------
\24\ See, e.g., supra note 17 (regarding MIAX Professional
Rebate Program).
---------------------------------------------------------------------------
The Proposed Rule Change is an Equitable Allocation of Credits and Fees
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits. The proposals--both for discounted
rates on Increased Manual Volume for MMs and Specialists and the
Professional Step-Up Incentive program--are based on the amount and
type of business transacted on the Exchange and ATP Holders can opt to
avail themselves of these incentive or not. Moreover, the proposals are
designed to encourage MMs, Specialists, and ATP Holders to aggregate
their executions--particularly Manual and Electronic Professional--at
the Exchange as a primary execution venue. To the extent that the
proposed changes attract more Manual and (Professional) Electronic
volume to the Exchange, this increased order flow would continue to
make the Exchange a more competitive venue for, among other things,
order execution. Thus, the Exchange believes the proposed rule changes
would improve market quality for all market participants on the
Exchange and, as a consequence, attract more order flow to the Exchange
thereby improving market-wide quality and price discovery.
The Exchange believes that the baselines of 15,000 ADV Manual
volumes for new NYSE American Options Market Makers and/or Specialists/
e-Specialists and 10,000 ADV Professional volumes for new ATP Holders
are appropriate because these volumes are comparable to trading volumes
in August 2019 of active firms on the Exchange in the respective
categories.
The Proposed Rule Change is not Unfairly Discriminatory
The Exchange believes that the proposals--both for discounted rates
on Increased Manual Volume for MMs and Specialists and the Professional
Step-Up Incentive program--are not unfairly discriminatory because the
proposed modifications would be available to all similarly-situated
market participants on an equal and non-discriminatory basis.
The Exchange believes that the baselines of 15,000 ADV Manual
volumes for new NYSE American Options Market Makers and/or Specialists/
e-Specialists and 10,000 ADV Professional volumes for new ATP Holders
are not unfairly discriminatory because these volumes are comparable to
trading volumes in August 2019 of active firms on the Exchange in the
respective categories.
The proposals are based on the amount and type of business
transacted on the Exchange and MMs, Specialists, and ATP Holders are
not obligated to try to achieve either of the incentive pricing
options. Rather, the proposals are designed to encourage these
participants to utilize the Exchange as a primary trading venue (if
they have not done so previously) or increase (both Manual and
Electronic) volume sent to the Exchange. To the extent that the
proposed changes attract more executions to the Exchange, this
increased order flow would continue to make the Exchange a more
competitive venue for, among other things, order execution. Thus, the
Exchange believes the proposed rule changes would improve market
quality for all market participants on the Exchange and, as a
consequence, attract more order flow to the Exchange thereby improving
market-wide quality and price discovery. The resulting increased volume
and liquidity would provide more trading opportunities and tighter
spreads to all market participants and thus would promote just and
equitable principles of trade, remove impediments to and perfect the
mechanism of a free and open market and a national market
[[Page 58777]]
system and, in general, to protect investors and the public interest.
With regard to the proposed discount rates on certain increases in
Manual volume by MMs and Specialists, the Exchange notes that the
Manual rates charged to these participants are already lower than the
rates charged to other participants.\25\ MMs (and Specialists) serve a
crucial role in financial markets by providing liquidity to facilitate
market efficiency and functioning. Market Makers, unlike other market
participants, add value through continuous quoting and the commitment
of capital. Because Market Makers have these obligations and regulatory
requirements that normally do not apply to other market participants,
the Exchange believes that offering the proposed reduced Manual rates
is equitable and not unfairly discriminatory in light of their
obligations and the costs associated therewith.
---------------------------------------------------------------------------
\25\ See Fee Schedule, Section I.A., supra note 9 (setting forth
rates for Manual options transactions: MMs and Specialists are
charged $0.18 per contract, while all other non-Customer participant
(save for DOMMs) is charged $0.25 per contract).
---------------------------------------------------------------------------
Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act, 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. Instead, as discussed above, the Exchange believes
that the proposed changes would encourage the submission of additional
liquidity to a public exchange, thereby promoting market depth, price
discovery and transparency and enhancing order execution opportunities
for all market participants. As a result, the Exchange believes that
the proposed change furthers the Commission's goal in adopting
Regulation NMS of fostering integrated competition among orders, which
promotes ``more efficient pricing of individual stocks for all types of
orders, large and small.'' \26\
---------------------------------------------------------------------------
\26\ See Reg NMS Adopting Release, supra note 6, at 37499.
---------------------------------------------------------------------------
Intramarket Competition. The proposed changes are designed to
attract additional order flow (both Manual and Electronic, particularly
Professional volume) to the Exchange. The Exchange believes that the
proposed pricing incentives would incent market participants to direct
additional volume to the Exchange. Greater liquidity benefits all
market participants on the Exchange and increased Manual and Electronic
Professional volume would increase opportunities for execution of other
trading interest. The proposed pricing incentives would be available to
all similarly-situated market participants that incur transaction fees
on Manual and Electronic executions, and, as such, the proposed change
would not impose a disparate burden on competition among market
participants on the Exchange.
Market Makers, unlike other market participants, add value through
continuous quoting and the commitment of capital. Because Market Makers
have these obligations and regulatory requirements that normally do not
apply to other market participants, the Exchange believes that offering
the proposed reduced rates, in light of their obligations and the costs
associated therewith, does not create an undue burden on non-Market
Makers.
Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily favor one
of the 16 competing option exchanges if they deem fee levels at a
particular venue to be excessive. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
exchanges and to attract order flow to the Exchange. Based on publicly-
available information, and excluding index-based options, no single
exchange has more than 16% of the market share of executed volume of
multiply-listed equity and ETF options trades.\27\ Therefore, no
exchange possesses significant pricing power in the execution of
multiply-listed equity & ETF options order flow. More specifically, in
the first quarter of 2019, the Exchange had less than 10% market share
of executed volume of multiply-listed equity & ETF options trades.\28\
---------------------------------------------------------------------------
\27\ See supra note 7.
\28\ Based on OCC data, supra note 8, the Exchange's market
share in equity-based options declined from 9.82% for the month of
January to 8.84% for the month of April.
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change reflects this
competitive environment because it modifies the Exchange's fees in a
manner designed to encourage ATP Holders to direct trading interest
(both Manual and Electronic) to the Exchange, to provide liquidity and
to attract order flow. To the extent that this purpose is achieved, all
the Exchange's market participants should benefit from the improved
market quality and increased opportunities for price improvement.
The Exchange believes that the proposed change could promote
competition between the Exchange and other execution venues, including
those that currently offer similar pricing incentives, by encouraging
additional orders to be sent to the Exchange for execution. The
Exchange also believes that the proposed change is designed to provide
the public and investors with a Fee Schedule that is clear and
consistent, thereby reducing burdens on the marketplace and
facilitating investor protection.
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) \29\ of the Act and subparagraph (f)(2) of Rule
19b-4 \30\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78s(b)(3)(A).
\30\ 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) \31\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\31\ 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
[[Page 58778]]
Send an email to [email protected]. Please include
File No. SR-NYSEAMER-2019-43 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 No. SR-NYSEAMER-2019-43. 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 No. SR-NYSEAMER-2019-43, and should be submitted
on or before November 22, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------
\32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-23857 Filed 10-31-19; 8:45 am]
BILLING CODE 8011-01-P
