Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE American Options Fee Schedule, 28992-28996 [2020-10286]
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28992
Federal Register / Vol. 85, No. 94 / Thursday, May 14, 2020 / Notices
Prehearing Conference:
September 1, 2020 at 1:00 p.m. Eastern
Daylight Time (10:00 a.m. Pacific
Daylight Time) by telephone; Hearing of
evidence to begin: October 5, 2020;
Deadline for requests to hold a hearing
before the Presiding Officer for oral
presentation of evidence: no later than
7 days before the prehearing conference.
DATES:
For additional information,
Presiding Officer’s Ruling No. 4 can be
accessed electronically through the
Commission’s website at https://
www.prc.gov.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
Table of Contents
I. Introduction
II. Revised Procedural Schedule
I. Introduction
Pursuant to 39 CFR 3001.19 and 39
CFR 3001.17, the Commission gives
notice that the procedural schedule has
been adjusted for the Complaint of
Randall Ehrlich v. United States Postal
Service, which relates to alleged
discrimination by Postal Service
management in continuing a suspension
of mail service due to a dog hold on the
Complainant’s residence, potentially
violating 39 U.S.C. 403(c).1 This notice
informs the public of the revised
procedural schedule established in
Presiding Officer’s Ruling No. 4.2
II. Revised Procedural Schedule
1. A prehearing conference is
scheduled to be conducted before the
Presiding Officer on September 1, 2020
at 1:00 p.m. Eastern Daylight Time
(10:00 a.m. Pacific Daylight Time) by
telephone.
2. The hearing of evidence in this case
shall begin October 5, 2020.
3. A request to hold a hearing before
the Presiding Officer for the oral
presentation of evidence (including any
testimony) shall be filed no later than 7
days before the prehearing conference
and shall specify each witness for which
oral testimony is proposed.
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[FR Doc. 2020–10354 Filed 5–13–20; 8:45 am]
BILLING CODE 7710–FW–P
1 Complaint of Randall Ehrlich, December 23,
2019.
2 See Presiding Officer’s Ruling Adjusting
Procedural Schedule, May 8, 2020.
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[Docket Nos. MC2020–130 and CP2020–137]
New Postal Product
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
a negotiated service agreement. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: May 18,
2020.
SUMMARY:
Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
ADDRESSES:
SUPPLEMENTARY INFORMATION:
Erica A. Barker,
Secretary.
POSTAL REGULATORY COMMISSION
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
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II. Docketed Proceeding(s)
1. Docket No(s).: MC2020–130 and
CP2020–137; Filing Title: USPS Request
to Add Priority Mail Contract 614 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: May 8, 2020; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3040.130 et seq., and 39 CFR 3035.105;
Public Representative: Christopher C.
Mohr; Comments Due: May 18, 2020.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
I. Introduction
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with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
[FR Doc. 2020–10361 Filed 5–13–20; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88840; File No. SR–
NYSEAMER–2020–37]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change Modifying the NYSE American
Options Fee Schedule
May 8, 2020.
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 May 6,
2020, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
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Federal Register / Vol. 85, No. 94 / Thursday, May 14, 2020 / Notices
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.
Because the Trading Floor remains
closed and has been closed for a longer
period than expected—including seven
business days in March, the Exchange
proposes to extend the April 2020 fee
changes through May 2020.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify the
NYSE American Options Fee Schedule
(‘‘Fee Schedule’’) to extend through May
2020 certain fee changes implemented
for April 2020. The Exchange proposes
to implement the fee change effective
May 6, 2020.4 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.
Waiver of Floor-Based Fixed Fees
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
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1. Purpose
The purpose of this filing is to modify
the Fee Schedule to extend through May
2020 certain fee changes implemented
for April 2020, as described below. The
Exchange proposes to implement the fee
change effective May 6, 2020.
On March 18, 2020, the Exchange
announced that it would temporarily
close the Trading Floor, effective
Monday, March 23, 2020, as a
precautionary measure to prevent the
potential spread of COVID–19.
Following the temporary closure of the
Trading Floor, the Exchange temporarily
modified certain fees for April 2020.5
4 The Exchange originally filed to amend the Fee
Schedule on May 1, 2020 (SR–NYSEAMER–2020–
36) and withdrew such filing on May 6, 2020.
5 See Securities Exchange Act Release Nos. 88595
(April 8, 2020), 85 FR 20737 (April 14, 2020) (SR–
NYSEAMER–2020–25) (waiving Floor-based fixed
fees); 88682 (April 8, 2020), 85 FR 20799 (April 14,
2020) (SR–NYSEAMER–2020–26) (raising Floor
Broker QCC Rebate Cap); 88682 (April 17, 2020), 85
FR 22772 (April 23, 2020) (SR–NYSEAMER–2020–
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First, the Exchange proposes to
extend through May 2020 the waiver of
the following Floor-based fix fees,
which relate directly to Floor
operations, are charged only to Floor
participants and do not apply to
participants that conduct business offFloor:
• Floor Access Fee;
• Floor Broker Handheld
• Transport Charges
• Floor Market Maker Podia;
• Booth Premises; and
• Wire Services.6
This proposed extension of the fee
waiver would reduce monthly costs for
Floor participants whose operations
have been disrupted by the
unanticipated Floor closure. In reducing
this monthly financial burden while the
Floor remains temporarily closed, the
proposed change would allow affected
participants to reallocate funds to assist
with the cost of shifting and
maintaining their previously on-Floor
operations to off-Floor and recoup
losses as a result of the unanticipated
Floor closure. Absent this change, such
participants may experience an
unexpected increase in the cost of doing
business on the Exchange.7 The
Exchange believes that all ATP Holders
that conduct business on the Trading
Floor would benefit from this proposed
fee change.
Floor Broker QCC Cap
Second, the Exchange proposes to
extend through May 2020 the increase
in the maximum allowable Floor Broker
credit, which is typically $425,000 up to
$625,000 per month per Floor Broker
(the ‘‘FB QCC Cap’’).8 Following the
31) (including reversals and conversions in Strategy
Execution Fee Cap).
6 See proposed Fee Schedule, Section III.B,
Monthly Trading Permit, Rights, Floor Access and
Premium Product Fees, and IV. Monthly Floor
Communication, Connectivity, Equipment and
Booth or Podia Fees.
7 The Exchange will refund participants of the
Floor Broker Prepayment Program for any prepaid
May 2020 fees that are waived. See proposed Fee
Schedule, Section III.E (providing that ‘‘the
Exchange will refund certain of the prepaid Eligible
Fixed costs that were waived for April and May
2020, per Sections III.B and IV’’).
8 See proposed Fee Schedule, Section I.F., QCC
Fees & Credits, n. 1 (setting forth available credits
to Floor Brokers and providing that ‘‘[t]he
maximum Floor Broker credit paid shall not exceed
$425,000 per month per Floor Broker firm (the
‘‘Cap’’), except that for the months of April and May
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28993
temporary closure of the Trading Floor,
the Exchange experienced an
unanticipated surge in QCC trades. The
Exchange therefore believes that
extending this fee change during the
period while the Trading Floor remains
temporarily closed would allow
incentives to operate as intended—to
encourage Floor Brokers to execute
volume on the Exchange and to
continue to execute all QCC transactions
on the Exchange and, for the month of
May, to continue to increase the number
of such QCC transactions.
Absent the proposed change,
participating Floor Brokers—whose
operations have been disrupted by the
unanticipated Floor closure for more
than a month—could experience an
unintended increase in the cost of
trading on the Exchange, a result that is
unintended and undesirable to the
Exchange and its Floor Brokers trading
QCCs. The Exchange believes that
extending the increase in the FB QCC
Cap through May would provide Floor
Brokers with greater certainty as to their
monthly costs and diminish the
likelihood of an effective increase in the
cost of trading.
The Exchange cannot predict with
certainty whether any Floor Brokers
would benefit from this proposed fee
change. However, without this proposed
change during a time when Floor
Brokers have increasingly turned to
QCCs because the temporary Trading
Floor closure prevents open outcry
trading, the Exchange believes the
proposed change is necessary to prevent
Floor Brokers from diverting QCC order
flow from the Exchange if and when
they hit the Cap.
Strategy Fee Execution Cap
Finally, the Exchange proposes to
extend through May 2020 the inclusion
of reversals and conversions executed as
QCCs (‘‘RevCon QCCs’’) in the $1,000
daily Strategy Execution Cap (the
‘‘Strategy Cap’’).9 Absent this change,
RevCon QCCs are not eligible for the
Strategy Cap (but instead are subject to
QCC Fees & Credits).10 With the
temporary closure of the Trading Floor,
which has continued longer than
anticipated, Floor Brokers are unable to
execute RevCons in open outcry. Floor
2020, the Cap would be $625,000 per Floor Broker
firm’’).
9 See proposed Fee Schedule, Sections I.J.,
Strategy Execution Fee Cap (including RevCon
QCCs in the Strategy Cap during May 2020) and
Section I.F., QCC Fees & Credits, n. 1 (providing
that ‘‘[t]he Floor Broker credit will not apply to any
QCC trades that qualify for the Strategy Cap during
the months of April and May 2020 (per Section
I.J.)’’).
10 See Fee Schedule, Section I.F., QCC Fees &
Credits.
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Federal Register / Vol. 85, No. 94 / Thursday, May 14, 2020 / Notices
Brokers, however, are able to execute
RevCon QCCs electronically via the
Exchange systems. The Exchange
believes the proposed inclusion of
RevCon QCCs in the Strategy Cap,
which is available to all ATP Holders,
would encourage ATP Holders
(including those acting as Floor Brokers)
to execute their RevCon QCC volume on
the Exchange, particularly during the
period when open outcry is unavailable
and to continue to increase the number
of such RevCon QCC transactions
during the month of May.
The Exchange cannot predict with
certainty whether any ATP Holders
would benefit from this proposed fee
change. At present, whether or when an
ATP Holder qualifies for the Strategy
Cap varies day-to-day, month-to-month.
That said, the Exchange believes that
ATP Holders would be encouraged to
take advantage of the modified Cap. In
addition, the Exchange believes the
proposed change is necessary to prevent
ATP Holders from diverting RevCon
QCC order flow from the Exchange to a
more economical venue.
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,11 in general, and
furthers the objectives of Sections
6(b)(4) and (5) of the Act,12 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 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.’’13
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
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
13 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(S7–10–04) (‘‘Reg NMS Adopting Release’’).
12 15
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executed volume of multiply-listed
equity and ETF options trades.14
Therefore, currently no exchange
possesses significant pricing power in
the execution of multiply-listed equity &
ETF options order flow. More
specifically, in January 2020, the
Exchange had less than 10% market
share of executed volume of multiplylisted equity & ETF options trades.15
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. Stated otherwise, changes to
exchange transaction fees and credits
can have a direct effect on the ability of
an exchange to compete for order flow.
The proposed rule change is a
reasonable attempt by the Exchange to
increase the depth of its market and
improve its market share relative to its
competitors. The Exchange’s fees are
constrained by intermarket competition,
as ATP Holders—whose operations may
have been (unintentionally) disrupted
by the unanticipated temporary closure
of the Floor—may direct their order
flow to any of the 16 options exchanges.
Waiver of Floor-Based Fixed Fees
This proposed extension of the fee
waiver is reasonable, equitable, and not
unfairly discriminatory because it
would reduce monthly costs for Floor
participants whose operations have
been disrupted by the unanticipated
Floor closure for more than a month. In
reducing this monthly financial burden,
the proposed change would allow
affected participants to reallocate funds
to assist with the cost of shifting and
maintaining their previously on-Floor
operations to off-Floor and recoup
losses as a result of the unanticipated
Floor closure. Absent this change, such
participants may experience an
unexpected increase in the cost of doing
business on the Exchange.
The Exchange believes the proposed
rule change is an equitable allocation of
its fees and credits as it merely
continues the fee waiver granted in
April 2020, which impacts fees charged
only to Floor participants and do not
14 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.
15 Based on OCC data, see id., the Exchange’s
market share in equity-based options declined from
9.82% for the month of January 2019 to 8.08% for
the month of January 2020.
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apply to participants that conduct
business off-Floor.
The Exchange believes that the
proposal is not unfairly discriminatory
because the proposed continuation of
the fee waiver would affect all similarlysituated market participants on an equal
and non-discriminatory basis.
The Exchange believes that all ATP
Holders that conduct business on the
Trading Floor would benefit from this
proposed fee change.
FB QCC Cap
This proposed extension of the
increase to the FB QCC Cap through
May is reasonable, equitable, and not
unfairly discriminatory because it
would allow Exchange incentives to
operate as intended and continue
encourage QCC volume, which has seen
an uptick in volume on the Exchange
following the temporary closure of the
Trading Floor. The proposed change
would also facilitate fair and orderly
markets by attempting to avoid an
unintended increase in the cost of Floor
Brokers’ QCC trading on the Exchange.
Absent the proposed change,
participating Floor Brokers could
experience an unintended increase in
the cost of trading on the Exchange, a
result that is unintended and
undesirable to the Exchange and its
Floor Brokers trading QCCs. The
Exchange believes that the proposed
increase to the Cap for May when the
Trading Floor continues to be
unavailable would provide Floor
Brokers with greater certainty as to their
monthly costs and diminish the
likelihood of an effective increase in the
cost of trading. To the extent that the
proposed change attracts more QCC
trades to the Exchange, this increased
order flow would continue to make the
Exchange a more competitive venue for,
among other things, order execution,
which, in turn, promotes just and
equitable principles of trade and
removes impediments to and perfects
the mechanism of a free and open
market and a national market system.
The Exchange cannot predict with
certainty whether any Floor Brokers
would benefit from this proposed fee
change. However, without this proposed
change during a time when Floor
Brokers have increasingly turned to
QCCs because the ongoing temporary
Trading Floor closure prevents open
outcry trading, the Exchange believes
the proposed change is necessary to
prevent Floor Brokers from diverting
QCC order flow from the Exchange if
and when they hit the FB QCC Cap.
The Exchange believes the proposed
rule change is an equitable allocation of
its fees and credits and not unfairly
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Federal Register / Vol. 85, No. 94 / Thursday, May 14, 2020 / Notices
discriminatory because it is based on
the amount and type of business
transacted on the Exchange during May
and Floor Brokers can opt to avail
themselves of the modified Cap (i.e., by
executing more QCC transactions) or
not. The proposed change would incent
Floor Brokers to attract increased QCC
order flow to the Exchange that might
otherwise go to other options exchanges.
The Exchange believes it is not
unfairly discriminatory to modify the
maximum allowable credit on QCC
transactions to Floor Brokers because
the proposed modification would be
available to all similarly-situated market
participants (i.e., Floor Brokers) on an
equal and non-discriminatory basis.
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Strategy Cap
This proposed extension of the
inclusion of RevCon QCCs in the $1,000
daily Strategy Cap for May 2020 is
reasonable, equitable, and not unfairly
discriminatory because it would
encourage ATP Holders to execute their
RevCon QCC volume on the Exchange,
particularly during the period when
open outcry is unavailable due to the
ongoing temporary closure of the
Trading Floor and to increase the
number of such RevCon QCC
transactions during the month of May.
Further, the proposal is designed to
encourage ATP Holders to aggregate all
Strategy Executions—including RevCon
QCCs—at the Exchange as a primary
execution venue. To the extent that the
proposed change attracts more Strategy
Executions to the Exchange, this
increased order flow would continue to
make the Exchange a more competitive
venue for order execution. Thus, the
Exchange believes the proposed rule
change 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 the proposed
rule change is an equitable allocation of
its fees and credits and not unfairly
discriminatory because it is based on
the amount and type of business
transacted on the Exchange and ATP
Holders can opt to avail themselves of
the modified Strategy Cap (i.e., by
executing more RevCon QCC
transactions) or not.
The Exchange believes it is not
unfairly discriminatory to extend the
modification of the Strategy Cap
through May because the proposed
change would be available to all
similarly-situated market participants
on an equal and non-discriminatory
basis.
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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.
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.
The Exchange believes that the
proposed changes would encourage the
continued participation of affected ATP
Holders, 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.’’ 16
Intramarket Competition. The
proposed continuation of the April 2020
fee changes through May 2020 are
designed to reduce monthly costs for
Floor participants whose operations
have been disrupted by the
unanticipated Floor closure as well as to
avoid an unintended increase in trading
costs given the unavailability of open
outcry trading on the Exchange. In
addition, the continuation of the April
2020 fee changes is designed to attract
additional order flow (particularly QCC
trades and RevCon QCCs) to the
Exchange
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
currently has more than 16% of the
market share of executed volume of
multiply-listed equity and ETF options
trades.17 Therefore, currently no
exchange possesses significant pricing
power in the execution of multiplylisted equity & ETF options order flow.
More specifically, in January 2020, the
16 See Reg NMS Adopting Release, supra note 13,
at 37499.
17 See supra note 14.
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28995
Exchange had less than 10% market
share of executed volume of multiplylisted equity & ETF options trades.18
The Exchange believes that the
proposed rule change reflects this
competitive environment because it
modifies the Exchange’s fees in a
manner designed to reduce monthly
costs for Floor participants whose
operations have been disrupted by the
unanticipated Floor closure and to
encourage ATP Holders to direct trading
interest (particularly QCCs and RevCon
QCCs) 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.
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) 19 of the Act and
subparagraph (f)(2) of Rule 19b–4 20
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) 21 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.
18 Based on OCC data, supra note 15, the
Exchange’s market share in equity-based options
was 9.57% for the month of January 2019 and
9.59% for the month of January, 2020.
19 15 U.S.C. 78s(b)(3)(A).
20 17 CFR 240.19b–4(f)(2).
21 15 U.S.C. 78s(b)(2)(B).
E:\FR\FM\14MYN1.SGM
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28996
Federal Register / Vol. 85, No. 94 / Thursday, May 14, 2020 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–88843; File No. SR–
CboeEDGX–2020–021]
• 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–
NYSEAMER–2020–37 on the subject
line.
Paper Comments
jbell on DSKJLSW7X2PROD with NOTICES
• 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–NYSEAMER–2020–37. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet 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–NYSEAMER–2020–37, and
should be submitted on or before June
4, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–10286 Filed 5–13–20; 8:45 am]
BILLING CODE 8011–01–P
22 17
18:29 May 13, 2020
May 8, 2020.
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 May 7,
2020, Cboe EDGX Exchange, Inc.
(‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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
Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) is filing with
the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change to adopt Rule
14.12 to permit the trading, pursuant to
unlisted trading privileges, of ExchangeTraded Fund Shares. Additionally, the
Exchange proposes to make
corresponding changes to Rule 14.1(a).
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/edgx/),
at the Exchange’s Office of the
Secretary, 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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Adopting Rule
14.12 Governing the Trading, Pursuant
to Unlisted Trading Privileges, of
Exchange-Traded Fund Shares
Jkt 250001
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
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
Exchange 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
The Exchange proposes to adopt Rule
14.12 to permit the trading, pursuant to
unlisted trading privileges (‘‘UTP’’), of
Exchange-Traded Fund (also referred to
as ‘‘ETF’’) Shares,5 which substantially
conforms to Cboe BZX Exchange, Inc.
(‘‘BZX’’) Rule 14.11(l).6 Additionally,
the Exchange proposes to make
corresponding changes to Rule 14.1(a) to
reference Exchange-Traded Fund Shares
and proposed Rule 14.12, where
applicable.
The Exchange does not currently list
any securities as a primary listing
market. Consistent with this fact,
Exchange Rule 14.1(a) currently states
that all securities traded on the
Exchange are traded pursuant to UTP
and that the Exchange will not list any
securities before first filing and
obtaining Commission approval of rules
that incorporate qualitative listing
criteria and comply with Rules 10A–3 7
(‘‘Rule 10A–3’’) and 10C–1 8 (‘‘Rule
10C–1’’) under the Act. Therefore, the
provisions of existing Rules 14.2
through 14.9, 14.11, and proposed Rule
14.12 that permit the listing of certain
Equity Securities 9 will not be effective
5 ETF Shares means shares of stock issued by an
Exchange-Traded Fund. See proposed Rule
14.12(c)(1).
6 See Securities and Exchange Act Release No.
88566 (April 6, 2020) 85 FR 20312 (April 10, 2020)
(SR–CboeBZX–2019–097) (the ‘‘BZX Approval
Order’’).
7 Rule 10A–3 obligates the Exchange to prohibit
the initial or continued listing of any security of an
issuer that is not in compliance with certain
required standards. See 17 CFR 240.10A–3.
8 Rule 10C–1 obligates the Exchange to establish
listing standards that require each member of a
listed issuer’s compensation committee to be a
member of the issuer’s board and to be
independent, as well as establish certain factors that
an issuer must consider when evaluating the
independence of a director. See 17 CFR 240.10C–
1.
9 As provided in Rule 14.1(a), the term ‘‘Equity
Security’’ means, but is not limited to, common
stock, secondary classes of common stock, preferred
stock and similar issues, shares or certificates of
beneficial interest of trusts, notes, limited
partnership interests, warrants, certificates of
deposit for common stock, convertible debt
securities, ADRs, CVRs, Investment Company Units,
Trust Issued Receipts (including those based on
Investment Shares), Commodity-Based Trust
Shares, Currency Trust Shares, Partnership Units,
E:\FR\FM\14MYN1.SGM
14MYN1
]]>Agencies
[Federal Register Volume 85, Number 94 (Thursday, May 14, 2020)]
[Notices]
[Pages 28992-28996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10286]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88840; File No. SR-NYSEAMER-2020-37]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change Modifying the
NYSE American Options Fee Schedule
May 8, 2020.
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 May 6, 2020, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in
[[Page 28993]]
Items I, II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify the NYSE American Options Fee
Schedule (``Fee Schedule'') to extend through May 2020 certain fee
changes implemented for April 2020. The Exchange proposes to implement
the fee change effective May 6, 2020.\4\ 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.
---------------------------------------------------------------------------
\4\ The Exchange originally filed to amend the Fee Schedule on
May 1, 2020 (SR-NYSEAMER-2020-36) and withdrew such filing on May 6,
2020.
---------------------------------------------------------------------------
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 to extend
through May 2020 certain fee changes implemented for April 2020, as
described below. The Exchange proposes to implement the fee change
effective May 6, 2020.
On March 18, 2020, the Exchange announced that it would temporarily
close the Trading Floor, effective Monday, March 23, 2020, as a
precautionary measure to prevent the potential spread of COVID-19.
Following the temporary closure of the Trading Floor, the Exchange
temporarily modified certain fees for April 2020.\5\ Because the
Trading Floor remains closed and has been closed for a longer period
than expected--including seven business days in March, the Exchange
proposes to extend the April 2020 fee changes through May 2020.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release Nos. 88595 (April 8,
2020), 85 FR 20737 (April 14, 2020) (SR-NYSEAMER-2020-25) (waiving
Floor-based fixed fees); 88682 (April 8, 2020), 85 FR 20799 (April
14, 2020) (SR-NYSEAMER-2020-26) (raising Floor Broker QCC Rebate
Cap); 88682 (April 17, 2020), 85 FR 22772 (April 23, 2020) (SR-
NYSEAMER-2020-31) (including reversals and conversions in Strategy
Execution Fee Cap).
---------------------------------------------------------------------------
Waiver of Floor-Based Fixed Fees
First, the Exchange proposes to extend through May 2020 the waiver
of the following Floor-based fix fees, which relate directly to Floor
operations, are charged only to Floor participants and do not apply to
participants that conduct business off-Floor:
Floor Access Fee;
Floor Broker Handheld
Transport Charges
Floor Market Maker Podia;
Booth Premises; and
Wire Services.\6\
---------------------------------------------------------------------------
\6\ See proposed Fee Schedule, Section III.B, Monthly Trading
Permit, Rights, Floor Access and Premium Product Fees, and IV.
Monthly Floor Communication, Connectivity, Equipment and Booth or
Podia Fees.
---------------------------------------------------------------------------
This proposed extension of the fee waiver would reduce monthly
costs for Floor participants whose operations have been disrupted by
the unanticipated Floor closure. In reducing this monthly financial
burden while the Floor remains temporarily closed, the proposed change
would allow affected participants to reallocate funds to assist with
the cost of shifting and maintaining their previously on-Floor
operations to off-Floor and recoup losses as a result of the
unanticipated Floor closure. Absent this change, such participants may
experience an unexpected increase in the cost of doing business on the
Exchange.\7\ The Exchange believes that all ATP Holders that conduct
business on the Trading Floor would benefit from this proposed fee
change.
---------------------------------------------------------------------------
\7\ The Exchange will refund participants of the Floor Broker
Prepayment Program for any prepaid May 2020 fees that are waived.
See proposed Fee Schedule, Section III.E (providing that ``the
Exchange will refund certain of the prepaid Eligible Fixed costs
that were waived for April and May 2020, per Sections III.B and
IV'').
---------------------------------------------------------------------------
Floor Broker QCC Cap
Second, the Exchange proposes to extend through May 2020 the
increase in the maximum allowable Floor Broker credit, which is
typically $425,000 up to $625,000 per month per Floor Broker (the ``FB
QCC Cap'').\8\ Following the temporary closure of the Trading Floor,
the Exchange experienced an unanticipated surge in QCC trades. The
Exchange therefore believes that extending this fee change during the
period while the Trading Floor remains temporarily closed would allow
incentives to operate as intended--to encourage Floor Brokers to
execute volume on the Exchange and to continue to execute all QCC
transactions on the Exchange and, for the month of May, to continue to
increase the number of such QCC transactions.
---------------------------------------------------------------------------
\8\ See proposed Fee Schedule, Section I.F., QCC Fees & Credits,
n. 1 (setting forth available credits to Floor Brokers and providing
that ``[t]he maximum Floor Broker credit paid shall not exceed
$425,000 per month per Floor Broker firm (the ``Cap''), except that
for the months of April and May 2020, the Cap would be $625,000 per
Floor Broker firm'').
---------------------------------------------------------------------------
Absent the proposed change, participating Floor Brokers--whose
operations have been disrupted by the unanticipated Floor closure for
more than a month--could experience an unintended increase in the cost
of trading on the Exchange, a result that is unintended and undesirable
to the Exchange and its Floor Brokers trading QCCs. The Exchange
believes that extending the increase in the FB QCC Cap through May
would provide Floor Brokers with greater certainty as to their monthly
costs and diminish the likelihood of an effective increase in the cost
of trading.
The Exchange cannot predict with certainty whether any Floor
Brokers would benefit from this proposed fee change. However, without
this proposed change during a time when Floor Brokers have increasingly
turned to QCCs because the temporary Trading Floor closure prevents
open outcry trading, the Exchange believes the proposed change is
necessary to prevent Floor Brokers from diverting QCC order flow from
the Exchange if and when they hit the Cap.
Strategy Fee Execution Cap
Finally, the Exchange proposes to extend through May 2020 the
inclusion of reversals and conversions executed as QCCs (``RevCon
QCCs'') in the $1,000 daily Strategy Execution Cap (the ``Strategy
Cap'').\9\ Absent this change, RevCon QCCs are not eligible for the
Strategy Cap (but instead are subject to QCC Fees & Credits).\10\ With
the temporary closure of the Trading Floor, which has continued longer
than anticipated, Floor Brokers are unable to execute RevCons in open
outcry. Floor
[[Page 28994]]
Brokers, however, are able to execute RevCon QCCs electronically via
the Exchange systems. The Exchange believes the proposed inclusion of
RevCon QCCs in the Strategy Cap, which is available to all ATP Holders,
would encourage ATP Holders (including those acting as Floor Brokers)
to execute their RevCon QCC volume on the Exchange, particularly during
the period when open outcry is unavailable and to continue to increase
the number of such RevCon QCC transactions during the month of May.
---------------------------------------------------------------------------
\9\ See proposed Fee Schedule, Sections I.J., Strategy Execution
Fee Cap (including RevCon QCCs in the Strategy Cap during May 2020)
and Section I.F., QCC Fees & Credits, n. 1 (providing that ``[t]he
Floor Broker credit will not apply to any QCC trades that qualify
for the Strategy Cap during the months of April and May 2020 (per
Section I.J.)'').
\10\ See Fee Schedule, Section I.F., QCC Fees & Credits.
---------------------------------------------------------------------------
The Exchange cannot predict with certainty whether any ATP Holders
would benefit from this proposed fee change. At present, whether or
when an ATP Holder qualifies for the Strategy Cap varies day-to-day,
month-to-month. That said, the Exchange believes that ATP Holders would
be encouraged to take advantage of the modified Cap. In addition, the
Exchange believes the proposed change is necessary to prevent ATP
Holders from diverting RevCon QCC order flow from the Exchange to a
more economical venue.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\11\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\12\ 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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
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.''\13\
---------------------------------------------------------------------------
\13\ 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.\14\ Therefore, currently no exchange possesses significant
pricing power in the execution of multiply-listed equity & ETF options
order flow. More specifically, in January 2020, the Exchange had less
than 10% market share of executed volume of multiply-listed equity &
ETF options trades.\15\
---------------------------------------------------------------------------
\14\ 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.
\15\ Based on OCC data, see id., the Exchange's market share in
equity-based options declined from 9.82% for the month of January
2019 to 8.08% for the month of January 2020.
---------------------------------------------------------------------------
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 and credits can have a direct effect on
the ability of an exchange to compete for order flow. The proposed rule
change is a reasonable attempt by the Exchange to increase the depth of
its market and improve its market share relative to its competitors.
The Exchange's fees are constrained by intermarket competition, as ATP
Holders--whose operations may have been (unintentionally) disrupted by
the unanticipated temporary closure of the Floor--may direct their
order flow to any of the 16 options exchanges.
Waiver of Floor-Based Fixed Fees
This proposed extension of the fee waiver is reasonable, equitable,
and not unfairly discriminatory because it would reduce monthly costs
for Floor participants whose operations have been disrupted by the
unanticipated Floor closure for more than a month. In reducing this
monthly financial burden, the proposed change would allow affected
participants to reallocate funds to assist with the cost of shifting
and maintaining their previously on-Floor operations to off-Floor and
recoup losses as a result of the unanticipated Floor closure. Absent
this change, such participants may experience an unexpected increase in
the cost of doing business on the Exchange.
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits as it merely continues the fee
waiver granted in April 2020, which impacts fees charged only to Floor
participants and do not apply to participants that conduct business
off-Floor.
The Exchange believes that the proposal is not unfairly
discriminatory because the proposed continuation of the fee waiver
would affect all similarly-situated market participants on an equal and
non-discriminatory basis.
The Exchange believes that all ATP Holders that conduct business on
the Trading Floor would benefit from this proposed fee change.
FB QCC Cap
This proposed extension of the increase to the FB QCC Cap through
May is reasonable, equitable, and not unfairly discriminatory because
it would allow Exchange incentives to operate as intended and continue
encourage QCC volume, which has seen an uptick in volume on the
Exchange following the temporary closure of the Trading Floor. The
proposed change would also facilitate fair and orderly markets by
attempting to avoid an unintended increase in the cost of Floor
Brokers' QCC trading on the Exchange. Absent the proposed change,
participating Floor Brokers could experience an unintended increase in
the cost of trading on the Exchange, a result that is unintended and
undesirable to the Exchange and its Floor Brokers trading QCCs. The
Exchange believes that the proposed increase to the Cap for May when
the Trading Floor continues to be unavailable would provide Floor
Brokers with greater certainty as to their monthly costs and diminish
the likelihood of an effective increase in the cost of trading. To the
extent that the proposed change attracts more QCC trades to the
Exchange, this increased order flow would continue to make the Exchange
a more competitive venue for, among other things, order execution,
which, in turn, promotes just and equitable principles of trade and
removes impediments to and perfects the mechanism of a free and open
market and a national market system.
The Exchange cannot predict with certainty whether any Floor
Brokers would benefit from this proposed fee change. However, without
this proposed change during a time when Floor Brokers have increasingly
turned to QCCs because the ongoing temporary Trading Floor closure
prevents open outcry trading, the Exchange believes the proposed change
is necessary to prevent Floor Brokers from diverting QCC order flow
from the Exchange if and when they hit the FB QCC Cap.
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits and not unfairly
[[Page 28995]]
discriminatory because it is based on the amount and type of business
transacted on the Exchange during May and Floor Brokers can opt to
avail themselves of the modified Cap (i.e., by executing more QCC
transactions) or not. The proposed change would incent Floor Brokers to
attract increased QCC order flow to the Exchange that might otherwise
go to other options exchanges.
The Exchange believes it is not unfairly discriminatory to modify
the maximum allowable credit on QCC transactions to Floor Brokers
because the proposed modification would be available to all similarly-
situated market participants (i.e., Floor Brokers) on an equal and non-
discriminatory basis.
Strategy Cap
This proposed extension of the inclusion of RevCon QCCs in the
$1,000 daily Strategy Cap for May 2020 is reasonable, equitable, and
not unfairly discriminatory because it would encourage ATP Holders to
execute their RevCon QCC volume on the Exchange, particularly during
the period when open outcry is unavailable due to the ongoing temporary
closure of the Trading Floor and to increase the number of such RevCon
QCC transactions during the month of May. Further, the proposal is
designed to encourage ATP Holders to aggregate all Strategy
Executions--including RevCon QCCs--at the Exchange as a primary
execution venue. To the extent that the proposed change attracts more
Strategy Executions to the Exchange, this increased order flow would
continue to make the Exchange a more competitive venue for order
execution. Thus, the Exchange believes the proposed rule change 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 the proposed rule change is an equitable
allocation of its fees and credits and not unfairly discriminatory
because it is based on the amount and type of business transacted on
the Exchange and ATP Holders can opt to avail themselves of the
modified Strategy Cap (i.e., by executing more RevCon QCC transactions)
or not.
The Exchange believes it is not unfairly discriminatory to extend
the modification of the Strategy Cap through May because the proposed
change would be available to all similarly-situated market participants
on an equal and non-discriminatory basis.
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.
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. The Exchange believes that the proposed changes
would encourage the continued participation of affected ATP Holders,
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.'' \16\
---------------------------------------------------------------------------
\16\ See Reg NMS Adopting Release, supra note 13, at 37499.
---------------------------------------------------------------------------
Intramarket Competition. The proposed continuation of the April
2020 fee changes through May 2020 are designed to reduce monthly costs
for Floor participants whose operations have been disrupted by the
unanticipated Floor closure as well as to avoid an unintended increase
in trading costs given the unavailability of open outcry trading on the
Exchange. In addition, the continuation of the April 2020 fee changes
is designed to attract additional order flow (particularly QCC trades
and RevCon QCCs) to the Exchange
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 currently has more than 16% of the market share of executed
volume of multiply-listed equity and ETF options trades.\17\ Therefore,
currently no exchange possesses significant pricing power in the
execution of multiply-listed equity & ETF options order flow. More
specifically, in January 2020, the Exchange had less than 10% market
share of executed volume of multiply-listed equity & ETF options
trades.\18\
---------------------------------------------------------------------------
\17\ See supra note 14.
\18\ Based on OCC data, supra note 15, the Exchange's market
share in equity-based options was 9.57% for the month of January
2019 and 9.59% for the month of January, 2020.
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change reflects this
competitive environment because it modifies the Exchange's fees in a
manner designed to reduce monthly costs for Floor participants whose
operations have been disrupted by the unanticipated Floor closure and
to encourage ATP Holders to direct trading interest (particularly QCCs
and RevCon QCCs) 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.
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) \19\ of the Act and subparagraph (f)(2) of Rule
19b-4 \20\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 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) \21\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\21\ 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.
[[Page 28996]]
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-NYSEAMER-2020-37 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAMER-2020-37. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet 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-NYSEAMER-2020-37, and should be
submitted on or before June 4, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-10286 Filed 5-13-20; 8:45 am]
BILLING CODE 8011-01-P
