Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Change To Modify the NYSE American Options Fee Schedule, 42034-42037 [2020-14966]
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Federal Register / Vol. 85, No. 134 / Monday, July 13, 2020 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SRCboeBYX–2020–020 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-CboeBYX–2020–020. 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-CboeBYX–2020–020 and
should be submitted on or before
August 3, 2020.
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IV. Commission’s Findings and Order
Granting Accelerated Approval of
Proposed Rule Change
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.17 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,18 which requires that
17 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
18 15 U.S.C. 78f(b)(5).
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the rules of an exchange be designed to
promote just and equitable principles of
trade, to remove impediments and to
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
Commission also believes that the
proposal is consistent with Sections
6(b)(1) and 6(b)(6) of the Act 19 which
require that the rules of an exchange
enforce compliance with, and provide
appropriate discipline for, violations of
Commission and Exchange rules.
Finally, the Commission finds that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, as required by Rule 19d–
1(c)(2) under the Act,20 which governs
minor rule violation plans.
As stated above, the Exchange
proposes to add the CAT Compliance
Rules to the list of minor rule violations
in Rule 8.15 to be consistent with the
approach FINRA has taken for minor
violations of its corresponding CAT
Compliance Rules.21 The Commission
has already approved FINRA’s treatment
of CAT Compliance Rules violations
when it approved the addition of CAT
Compliance Rules to FINRA’s MRVP.22
As noted in that order, and similarly
herein, the Commission believes that
Exchange’s treatment of CAT
Compliance Rules violations as part of
its MRVP provides a reasonable means
of addressing violations that do not rise
to the level of requiring formal
disciplinary proceedings, while
providing greater flexibility in handling
certain violations. However, the
Commission expects that, as with
FINRA, the Exchange will continue to
conduct surveillance with due diligence
and make determinations based on its
findings, on a case-by-case basis,
regarding whether a sanction under the
rule is appropriate, or whether a
violation requires formal disciplinary
action. Accordingly, the Commission
believes the proposal raises no novel or
significant issues.
U.S.C. 78f(b)(1) and 78f(b)(6).
CFR 240.19d–1(c)(2).
21 As discussed above, the Exchange has entered
into a Rule 17d–2 Plan and an RSA with FINRA
with respect to the CAT Compliance Rules. The
Commission notes that, unless relieved by the
Commission of its responsibility, as may be the case
under the Rule 17d–2 Plan, the Exchange continues
to bear the responsibility for self-regulatory conduct
and liability for self-regulatory failures, not the selfregulatory organization retained to perform
regulatory functions on the Exchange’s behalf
pursuant to an RSA. See Securities Exchange
Release No. 61419 (January 26, 2010), 75 FR 5157
(February 1, 2010) (SR–BATS–2009–031), note 93
and accompanying text.
22 See supra note 7.
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19 15
20 17
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For the same reasons discussed above,
the Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,23 for approving the proposed rule
change prior to the thirtieth day after
the date of publication of the notice of
the filing thereof in the Federal
Register. The proposal merely adds the
CAT Compliance Rules to the
Exchange’s MRVP and harmonizes its
application with FINRA’s application of
CAT Compliance Rules under its own
MRVP. Accordingly, the Commission
believes that a full notice-and-comment
period is not necessary before approving
the proposal.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 24 and Rule
19d–1(c)(2) thereunder,25 that the
proposed rule change (SR-CboeBYX–
2020–020) be, and hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–14973 Filed 7–10–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89241; File No. SR–
NYSEAMER–2020–47]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Change To Modify the NYSE American
Options Fee Schedule
July 7, 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 June 25,
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
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.
23 15
U.S.C. 78s(b)(2).
U.S.C. 78s(b)(2).
25 17 CFR 240.19d–1(c)(2).
26 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
24 15
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Federal Register / Vol. 85, No. 134 / Monday, July 13, 2020 / Notices
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 waive certain Floorbased fixed fees for July 2020. The
Exchange proposes to implement the fee
change effective July 1, 2020. 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
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1. Purpose
The purpose of this filing is to modify
the Fee Schedule to waive certain Floorbased fixed fees for July 2020 for market
participants that have been unable to
resume their Floor operations to a
certain capacity level, as discussed
below. The Exchange proposes to
implement the fee change effective July
1, 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, May and
June 2020.4 Although the Trading Floor
partially reopened on May 26, 2020 and
4 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); 88840 (May 8, 2020), 85 FR 28992 (May 14,
2020) (SR–NYSEAMER–2020–37) (extending April
2020 fee changes through May 2020); and 89049
(June 11, 2020), 85 FR 36649 (June 17, 2020) (SR–
NYSEAMER–2020–44) (extending April and May
fee changes through 2020). See also 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.
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Floor-based open outcry activity is
supported, certain participants have
been unable to resume pre-Floor closure
levels of operations. Thus, the Exchange
proposes to extend the fee waiver
through July 2020, but only for Floor
Broker firms that are unable to operate
at more than 50% of their March 2020
on-Floor staffing levels and for Market
Maker firms that have vacant or
‘‘unmanned’’ Podia for the entire month
due to COVID–19 related considerations
(the ‘‘Qualifying Firms’’).5
Specifically, the proposed fee waiver
covers the following fixed fees for
Qualifying Firms, 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
Like the previous fee waiver, the
proposed fee change is designed to
reduce monthly costs for Qualifying
Firms whose operations continue to be
disrupted, despite the fact that the
Trading Floor has partially reopened. In
reducing this monthly financial burden,
the proposed change would allow
Qualifying Firms to reallocate funds to
assist with the cost of shifting and
maintaining their prior fully-staffed onFloor operations to off-Floor and recoup
losses as a result of the partial reopening
of the Floor. 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 Qualifying
Firms would benefit from this proposed
fee change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,8 in general, and
furthers the objectives of Sections
6(b)(4) and (5) of the Act,9 in particular,
because it provides for the equitable
5 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.
6 See id.
7 The Exchange will refund participants of the
Floor Broker Prepayment Program for any prepaid
July 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 July 2020 for
Qualifying Firms, as defined, and set forth in,
Sections III.B and IV’’).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4) and (5).
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42035
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.’’ 10
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.11
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.12
This proposed fee change is
reasonable, equitable, and not unfairly
discriminatory because it would reduce
monthly costs for Qualifying Firms
whose operations have been disrupted
despite the fact that the Trading Floor
has partially reopened because of the
social distancing requirements and/or
other health concerns related to
resuming operation on the Floor. In
reducing this monthly financial burden,
the proposed change would allow
Qualifying Firms to reallocate funds to
assist with the cost of shifting and
maintaining their prior fully-staffed onFloor operations to off-Floor and recoup
losses as a result of the partial
reopening. Absent this change, such
participants may experience an
unexpected increase in the cost of doing
business on the Exchange.
10 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(S7–10–04) (‘‘Reg NMS Adopting Release’’).
11 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.
12 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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Federal Register / Vol. 85, No. 134 / Monday, July 13, 2020 / Notices
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The Exchange believes the proposed
rule change is an equitable allocation of
its fees and credits as it merely
continues the previous fee waiver,
which affects fees charged only to Floor
participants and do not apply to
participants that conduct business offFloor. The Exchange believes it is an
equitable allocation of fees and credits
to extend this fee waiver to Qualifying
Firms because such firms have either
less than half of their Floor staff (March
2020) levels or have vacant podia—and
this reduction in physical capacity on
the Floor impacts the speed, volume
and efficiency with which these firms
can operate, which is to their detriment.
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.
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 Qualifying
Firms, 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.’’ 13
Intramarket Competition. The
proposed change, which continues the
fee waiver in place when the Floor was
temporarily closed but only for
Qualifying Firms, is designed to reduce
monthly costs for Floor participants
whose operations continue to be
impacted, despite the fact that the
Trading Floor has partially reopened. In
reducing this monthly financial burden,
the proposed change would allow
Qualifying Firms to reallocate funds to
assist with the cost of shifting and
maintaining their previously on-Floor
13 See
Reg NMS Adopting Release, supra note 10,
at 37499.
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operations to off-Floor. Absent this
change, such Qualifying Firms may
experience an unintended increase in
the cost of doing business on the
Exchange, given that the Floor has only
reopened in a limited capacity. The
Exchange believes that the proposed
waiver of fees for Qualifying Firms
would not impose a disparate burden on
competition among market participants
on the Exchange because off-Floor
market participants are not subject to
these Floor-based fixed fees, and Floorbased firms that are not subject to the
extent of staffing shortfalls as the
Qualifying Firms—i.e., have at least
50% of their March 2020 staffing levels
on the Floor and/or have no vacant
Podia during June 2020, do not face the
same operational disruption and
potential financial impact during the
partial reopening of the Floor.
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.14 Therefore, currently no
exchange possesses significant pricing
power in the execution of multiplylisted 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
proposed rule change reflects this
competitive environment because it
waives fees for Qualifying Firms and is
designed to reduce monthly costs for
Floor participants whose operations
continue to be disrupted despite the fact
that the Trading Floor has partially
reopened. 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 prior
fully-staffed on-Floor operations to offFloor. Absent this change, Qualifying
Firms may experience an unintended
increase in the cost of doing business on
supra note 11.
on OCC data, supra note 12, the
Exchange’s market share in equity-based options
was 9.82% for the month of January 2019 and
8.08% for the month of January 2020.
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14 See
15 Based
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the Exchange, which would make the
Exchange a less competitive venue on
which to trade as compared to other
options exchanges.
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) 16 of the Act and
subparagraph (f)(2) of Rule 19b–4 17
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) 18 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEAMER–2020–47 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–2020–47. This
file number should be included on the
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
18 15 U.S.C. 78s(b)(2)(B).
17 17
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Federal Register / Vol. 85, No. 134 / Monday, July 13, 2020 / Notices
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–2020–47, and
should be submitted on or before
August 3, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–14966 Filed 7–10–20; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Modify the NYSE Arca
Options Fee Schedule
jbell on DSKJLSW7X2PROD with NOTICES
July 7, 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 June 25,
2020, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
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The Exchange proposes to modify the
NYSE Arca Options Fee Schedule (‘‘Fee
Schedule’’) to extend the waiver of
certain Floor-based fixed fees through
July 2020. The Exchange proposes to
implement the fee change effective July
1, 2020. 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. Purpose
[Release No. 34–89242; File No. SR–
NYSEArca–2020–60]
1 15
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
19 17
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.
The purpose of this filing is to modify
the Fee Schedule to extend the waiver
of certain Floor-based fixed fees through
July 2020 for market participants that
have been unable to resume their Floor
operations to a certain capacity level, as
discussed below. The Exchange
proposes to implement the fee change
effective July 1, 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 waived
certain Floor-based fixed fees for April
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42037
and May 2020 (the ‘‘fee waiver’’).4
Although the Trading Floor partially
reopened on May 4, 2020 and Floorbased open outcry activity is supported,
certain participants have been unable to
resume pre-Floor closure levels of
operations. As a result, the Exchange
extended the fee waiver through June
2020, but only for Floor Broker firms
that are unable to operate at more than
50% of their March 2020 on-Floor
staffing levels and for Market Maker
firms that have vacant or ‘‘unmanned’’
Podia for the entire month due to
COVID–19 related considerations (the
‘‘Qualifying Firms’’).5 Because the
Trading Floor will continue to operate
with reduced capacity, the Exchange
proposes to extend the fee waiver for
Qualifying Firms through July 2020.
Specifically, the proposed fee waiver
covers the following fixed fees for
Qualifying Firms, which relate directly
to Floor operations, are charged only to
Floor participants and do not apply to
participants that conduct business offFloor:
• Floor Booths;
• Market Maker Podia;
• Options Floor Access;
• Wire Services; and
• ISP Connection.6
Like the previous June 2020 fee
waiver, the proposed fee change is
designed to reduce monthly costs for
Qualifying Firms whose operations
continue to be disrupted despite the fact
that the Trading Floor has partially
reopened. In reducing this monthly
financial burden, the proposed change
would allow Qualifying Firms to
reallocate funds to assist with the cost
of shifting and maintaining their prior
fully-staffed on-Floor operations to offFloor and recoup losses as a result of the
partial reopening. Absent this change,
such participants may experience an
unexpected increase in the cost of doing
business on the Exchange.7
4 See Securities Exchange Act Release Nos. 88596
(April 8, 2020), 85 FR 20796 (April 14, 2020) (SR–
NYSEArca–2020–29); 88812 (May 5, 2020), 85 FR
27787 (May 11, 2020) (SR–NYSEArca–2020–38).
See also Fee Schedule, NYSE Arca OPTIONS:
FLOOR and EQUIPMENT and CO-LOCATION
FEES.
5 See proposed Fee Schedule, NYSE Arca
OPTIONS: FLOOR and EQUIPMENT and COLOCATION FEES (adding ‘‘and July’’ between
‘‘June’’ and ‘‘2020’’ as applicable to effectuate this
change).
6 See id.
7 The Exchange will refund participants of the
Floor Broker Prepayment Program for any prepaid
July 2020 fees that are waived. See proposed Fee
Schedule, FLOOR BROKER FIXED COST
PREPAYMENT INCENTIVE PROGRAM (the ‘‘FB
Prepay Program’’) (providing that ‘‘the Exchange
will refund certain of the prepaid Eligible Fixed
costs that were waived for July 2020 for Qualifying
Firms as defined, and set forth in, NYSE Arca
E:\FR\FM\13JYN1.SGM
Continued
13JYN1
]]>Agencies
[Federal Register Volume 85, Number 134 (Monday, July 13, 2020)]
[Notices]
[Pages 42034-42037]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14966]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89241; File No. SR-NYSEAMER-2020-47]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Change To Modify the
NYSE American Options Fee Schedule
July 7, 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 June 25, 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 Items I,
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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[[Page 42035]]
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 waive certain Floor-based fixed fees for
July 2020. The Exchange proposes to implement the fee change effective
July 1, 2020. 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 to modify the Fee Schedule to waive
certain Floor-based fixed fees for July 2020 for market participants
that have been unable to resume their Floor operations to a certain
capacity level, as discussed below. The Exchange proposes to implement
the fee change effective July 1, 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, May and June 2020.\4\
Although the Trading Floor partially reopened on May 26, 2020 and
Floor-based open outcry activity is supported, certain participants
have been unable to resume pre-Floor closure levels of operations.
Thus, the Exchange proposes to extend the fee waiver through July 2020,
but only for Floor Broker firms that are unable to operate at more than
50% of their March 2020 on-Floor staffing levels and for Market Maker
firms that have vacant or ``unmanned'' Podia for the entire month due
to COVID-19 related considerations (the ``Qualifying Firms'').\5\
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\4\ 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); 88840 (May 8, 2020), 85 FR 28992 (May 14,
2020) (SR-NYSEAMER-2020-37) (extending April 2020 fee changes
through May 2020); and 89049 (June 11, 2020), 85 FR 36649 (June 17,
2020) (SR-NYSEAMER-2020-44) (extending April and May fee changes
through 2020). See also 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.
\5\ 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.
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Specifically, the proposed fee waiver covers the following fixed
fees for Qualifying Firms, 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\
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\6\ See id.
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Like the previous fee waiver, the proposed fee change is designed
to reduce monthly costs for Qualifying Firms whose operations continue
to be disrupted, despite the fact that the Trading Floor has partially
reopened. In reducing this monthly financial burden, the proposed
change would allow Qualifying Firms to reallocate funds to assist with
the cost of shifting and maintaining their prior fully-staffed on-Floor
operations to off-Floor and recoup losses as a result of the partial
reopening of the Floor. 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 Qualifying Firms would
benefit from this proposed fee change.
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\7\ The Exchange will refund participants of the Floor Broker
Prepayment Program for any prepaid July 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 July 2020 for Qualifying Firms, as defined, and
set forth in, Sections III.B and IV'').
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\9\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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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.'' \10\
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\10\ 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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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.\11\ 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.\12\
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\11\ 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.
\12\ 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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This proposed fee change is reasonable, equitable, and not unfairly
discriminatory because it would reduce monthly costs for Qualifying
Firms whose operations have been disrupted despite the fact that the
Trading Floor has partially reopened because of the social distancing
requirements and/or other health concerns related to resuming operation
on the Floor. In reducing this monthly financial burden, the proposed
change would allow Qualifying Firms to reallocate funds to assist with
the cost of shifting and maintaining their prior fully-staffed on-Floor
operations to off-Floor and recoup losses as a result of the partial
reopening. Absent this change, such participants may experience an
unexpected increase in the cost of doing business on the Exchange.
[[Page 42036]]
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits as it merely continues the previous
fee waiver, which affects fees charged only to Floor participants and
do not apply to participants that conduct business off-Floor. The
Exchange believes it is an equitable allocation of fees and credits to
extend this fee waiver to Qualifying Firms because such firms have
either less than half of their Floor staff (March 2020) levels or have
vacant podia--and this reduction in physical capacity on the Floor
impacts the speed, volume and efficiency with which these firms can
operate, which is to their detriment.
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.
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 Qualifying Firms,
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.'' \13\
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\13\ See Reg NMS Adopting Release, supra note 10, at 37499.
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Intramarket Competition. The proposed change, which continues the
fee waiver in place when the Floor was temporarily closed but only for
Qualifying Firms, is designed to reduce monthly costs for Floor
participants whose operations continue to be impacted, despite the fact
that the Trading Floor has partially reopened. In reducing this monthly
financial burden, the proposed change would allow Qualifying Firms to
reallocate funds to assist with the cost of shifting and maintaining
their previously on-Floor operations to off-Floor. Absent this change,
such Qualifying Firms may experience an unintended increase in the cost
of doing business on the Exchange, given that the Floor has only
reopened in a limited capacity. The Exchange believes that the proposed
waiver of fees for Qualifying Firms would not impose a disparate burden
on competition among market participants on the Exchange because off-
Floor market participants are not subject to these Floor-based fixed
fees, and Floor-based firms that are not subject to the extent of
staffing shortfalls as the Qualifying Firms--i.e., have at least 50% of
their March 2020 staffing levels on the Floor and/or have no vacant
Podia during June 2020, do not face the same operational disruption and
potential financial impact during the partial reopening of the Floor.
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.\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\
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\14\ See supra note 11.
\15\ Based on OCC data, supra note 12, the Exchange's market
share in equity-based options was 9.82% for the month of January
2019 and 8.08% for the month of January 2020.
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The Exchange believes that the proposed rule change reflects this
competitive environment because it waives fees for Qualifying Firms and
is designed to reduce monthly costs for Floor participants whose
operations continue to be disrupted despite the fact that the Trading
Floor has partially reopened. 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 prior fully-staffed on-Floor operations to off-Floor. Absent this
change, Qualifying Firms may experience an unintended increase in the
cost of doing business on the Exchange, which would make the Exchange a
less competitive venue on which to trade as compared to other options
exchanges.
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) \16\ of the Act and subparagraph (f)(2) of Rule
19b-4 \17\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\18\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2020-47 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-2020-47. This
file number should be included on the
[[Page 42037]]
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-2020-47, and should be submitted on or before August 3, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14966 Filed 7-10-20; 8:45 am]
BILLING CODE 8011-01-P
