Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Modify the NYSE American Options Fee Schedule, 66675-66677 [2020-23140]

Download as PDF Federal Register / Vol. 85, No. 203 / Tuesday, October 20, 2020 / Notices V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1 prior to the thirtieth day after the date of publication of notice of the filing of Amendment No. 1 in the Federal Register. Amendment No. 1 does not modify the substance of the proposal or raise new regulatory issues. As described more fully above, Amendment No. 1 clarifies several aspects of the proposal and provides updated data and additional analysis to support the proposal. Among other things, Amendment No. 1 provides further analysis regarding the potential effect of the proposal on non-auction response message traffic, including customer orders. Amendment No. 1 also states that all market participants are permitted to submit auction responses to any of the Exchange’s auction mechanisms and that all auction responses will be processed through the priority queue. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,36 to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,37 that the proposed rule change (SR–CBOE–2020– 072), as modified by Amendment No. 1, is approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.38 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–23137 Filed 10–19–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Modify the NYSE American Options Fee Schedule Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the U.S.C. 78s(b)(2). 37 15 U.S.C. 78s(b)(2). 38 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 18:08 Oct 19, 2020 The Exchange proposes to modify the NYSE American Options Fee Schedule (‘‘Fee Schedule’’) to extend the waiver of certain Floor-based fixed fees. The Exchange proposes to implement the fee change effective October 8, 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. 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 The purpose of this filing is to modify the Fee Schedule to extend the waiver of certain Floor-based fixed fees 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 October 8, 2020. On March 18, 2020, the Exchange announced that it would temporarily 2 15 U.S.C. 78a. CFR 240.19b–4. 4 The Exchange originally filed to amend the Fee Schedule on September 24, 2020. (SR– NYSEAMER–2020–70) and withdrew such filing on October 8, 2020. 3 17 36 15 VerDate Sep<11>2014 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change 1. Purpose [Release No. 34–90185; File No. SR– NYSEAMER–2020–75] October 14, 2020. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 8, 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. Jkt 253001 PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 66675 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, May and June 2020.5 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. As a result, the Exchange extended the fee waiver through July, August, and September 2020, but only for Floor Broker firms that were 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’’).6 Because the Trading Floor will continue to operate with reduced capacity, the Exchange proposes to extend the fee waiver for Qualifying Firms through the earlier of the first full month of a full reopening of the Trading Floor facilities to Floor personnel or December 2020.7 The Exchange also proposes to clarify that Qualifying Firms would include firms that began Floor operations after March 2020 that are unable to operate at more than 50% of their Exchange-approved on-Floor staffing levels.8 Specifically, as with the prior fee waivers, the proposed fee waiver covers the following fixed fees for Qualifying 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); 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 June 2020). See also Fee Schedule, Section III. Monthly Trading Permit, Rights, Floor Access and Premium Product Fees, and IV. Monthly Floor Communication, Connectivity, Equipment and Booth or Podia Fees. 6 See Securities Exchange Act Release Nos. 89241 (July 7, 2020), 85 FR 42034 (July 13, 2020) (SR– NYSEAMER–2020–47); 89482 (August 5, 2020), 85 FR 48577 (August 11, 2020) (SR–NYSEAMER– 2020–55); 89692 (August 27, 2020), 85 FR 54611 (September 2, 2020) (SR–NYSEAMER–2020–65). See also Fee Schedule, Section III., Monthly Trading Permit, Rights, Floor Access and Premium Product Fees, and IV. Monthly Floor Communication, Connectivity, Equipment and Booth or Podia Fees. 7 See proposed Fee Schedule, Section III., Monthly Trading Permit, Rights, Floor Access and Premium Product Fees, and IV. Monthly Floor Communication, Connectivity, Equipment and Booth or Podia Fees. 8 See id. The Exchange originally filed in September 2020 (see supra note 4) to make explicit the treatment of firms that began Floor operations after March 2020 and this change applies to firms that joined the Exchange on September 1st or thereafter. E:\FR\FM\20OCN1.SGM 20OCN1 66676 Federal Register / Vol. 85, No. 203 / Tuesday, October 20, 2020 / Notices 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 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 August 2020, the Exchange had less than 10% market share of executed volume of multiplylisted equity & ETF options trades.15 This proposed fee change is reasonable, equitable, and not unfairly discriminatory because it would reduce monthly costs for all Qualifying Firms whose operations have been disrupted 2. Statutory Basis despite the fact that the Trading Floor The Exchange believes that the has partially reopened because of the proposed rule change is consistent with social distancing requirements and/or Section 6(b) of the Act,11 in general, and other health concerns related to furthers the objectives of Sections resuming operation on the Floor. In 6(b)(4) and (5) of the Act,12 in particular, reducing this monthly financial burden, because it provides for the equitable the proposed change would allow allocation of reasonable dues, fees, and Qualifying Firms that had Floor other charges among its members, operations in March 2020 to reallocate issuers and other persons using its funds to assist with the cost of shifting facilities and does not unfairly and maintaining their prior fully-staffed discriminate between customers, on-Floor operations to off-Floor and issuers, brokers or dealers. recoup losses as a result of the partial The Exchange operates in a highly reopening of the Floor. Absent this competitive market. The Commission change, all Qualifying Firms may has repeatedly expressed its preference experience an unexpected increase in for competition over regulatory the cost of doing business on the Exchange. The Exchange believes that 9 See id. (including the deletion of the now all Qualifying Firms would benefit from superfluous word ‘‘only’’ regarding the duration of this proposed fee change. the fee waiver). In addition, consistent with the The Exchange believes the proposed proposed changes to the preamble of Section IV of rule change is an equitable allocation of the Fee Schedule to update the potential duration its fees and credits as it merely of the fee waiver, which includes a delineation of each fee waived, the Exchange proposes to delete continues the previous fee waiver for (the now repetitive) references that appear (again) Qualifying Firms, which affects fees next to each fee waived for Qualifying Firms as well charged only to Floor participants and as to delete references to prior months (now does not apply to participants that concluded) during which the fee waivers were in 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.9 The proposed fee change is designed to reduce monthly costs for all Qualifying Firms whose operations continue to be disrupted even though the Trading Floor has partially reopened. In reducing this monthly financial burden, the proposed change would allow Qualifying Firms that had Floor operations in March 2020 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, all Qualifying Firms may experience an unexpected increase in the cost of doing business on the Exchange.10 The Exchange believes that all Qualifying Firms would benefit from this proposed fee change. place. See proposed Fee Schedule, IV. Monthly Floor Communication, Connectivity, Equipment and Booth or Podia Fees. 10 The Exchange will refund participants of the Floor Broker Prepayment Program for any prepaid 2020 fees that are waived. See proposed Fee Schedule, Section III.E.1 (providing that ‘‘the Exchange will refund certain of the prepaid Eligible Fixed costs that were waived for Qualifying Firms, as defined, and set forth in, Sections III.B and IV’’). 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(4) and (5). VerDate Sep<11>2014 18:08 Oct 19, 2020 Jkt 253001 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’’). 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 increased slightly from 7.73% for the month of August 2019 to 8.18% for the month of August 2020. PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 conduct business off-Floor. The Exchange believes it is an equitable allocation of fees and credits to extend the fee waiver for Qualifying Firms because such firms have either no more than half of their Floor staff (as measured by either the March 2020 or Exchange-approved) levels or have vacant podia—and this reduction in staffing levels on the Floor impacts the speed, volume and efficiency with which these firms can operate, which is to their financial 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. The Exchange believes that it is reasonable to clarify that firms that began Floor operations on the Exchange after March 2020 would be included as ‘‘Qualifying Firms’’ if such firms are unable to operate at more than 50% of their Exchange-approved on-Floor staffing levels as such treatment places all firms on a level playing field and avoids placing ‘‘newer’’ Qualifying Firms at a financial disadvantage. The Exchange believes that this proposed change would add clarity and transparency and reduce the potential for confusion in the Fee Schedule as relates to the treatment new Floor participants. 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 would enhance 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. E:\FR\FM\20OCN1.SGM 20OCN1 Federal Register / Vol. 85, No. 203 / Tuesday, October 20, 2020 / Notices Intramarket Competition. The proposed change, which continues the fee waiver for all Qualifying Firms, is designed to reduce monthly costs for those Floor participants whose operations continue to be impacted, even though the Trading Floor has partially reopened. In reducing this monthly financial burden, the proposed change would allow Qualifying Firms that had Floor operations in March 2020 to reallocate funds to assist with the cost of shifting and maintaining their previously on-Floor operations to offFloor. Absent this change, all 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, In addition, Floor-based firms that are not subject to the extent of staffing shortfalls as are Qualifying Firms, i.e., such firms have more than 50% of their March 2020— or Exchange-approved—staffing levels on the Floor and/or have no vacant Podia during the month, 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 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 August 2020, the 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 17 See supra note 14. on OCC data, supra note 15, the Exchange’s market share in equity-based options was 7.73% for the month of August 2019 and 8.18% for the month of August 2020. 18 Based VerDate Sep<11>2014 18:08 Oct 19, 2020 Jkt 253001 waives fees for Qualifying Firms and is designed to reduce monthly costs for Floor participants whose operations continue to be disrupted even though 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 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) 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. Comments may be submitted by any of the following methods: 19 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 21 15 U.S.C. 78s(b)(2)(B). 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–2020–75 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–2020–75. 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–2020–75, and should be submitted on or before November 10, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–23140 Filed 10–19–20; 8:45 am] BILLING CODE 8011–01–P 20 17 PO 00000 Frm 00145 Fmt 4703 Sfmt 9990 66677 22 17 E:\FR\FM\20OCN1.SGM CFR 200.30–3(a)(12). 20OCN1

Agencies

[Federal Register Volume 85, Number 203 (Tuesday, October 20, 2020)]
[Notices]
[Pages 66675-66677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23140]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90185; File No. SR-NYSEAMER-2020-75]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Modify the 
NYSE American Options Fee Schedule

October 14, 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 October 8, 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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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 the waiver of certain Floor-based 
fixed fees. The Exchange proposes to implement the fee change effective 
October 8, 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.
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    \4\ The Exchange originally filed to amend the Fee Schedule on 
September 24, 2020. (SR-NYSEAMER-2020-70) and withdrew such filing 
on October 8, 2020.
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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 
the waiver of certain Floor-based fixed fees 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 October 8, 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, May and June 2020.\5\ 
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. As a 
result, the Exchange extended the fee waiver through July, August, and 
September 2020, but only for Floor Broker firms that were 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'').\6\ Because the Trading Floor will continue to 
operate with reduced capacity, the Exchange proposes to extend the fee 
waiver for Qualifying Firms through the earlier of the first full month 
of a full reopening of the Trading Floor facilities to Floor personnel 
or December 2020.\7\ The Exchange also proposes to clarify that 
Qualifying Firms would include firms that began Floor operations after 
March 2020 that are unable to operate at more than 50% of their 
Exchange-approved on-Floor staffing levels.\8\
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    \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); 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 June 2020). See also Fee Schedule, Section III. Monthly 
Trading Permit, Rights, Floor Access and Premium Product Fees, and 
IV. Monthly Floor Communication, Connectivity, Equipment and Booth 
or Podia Fees.
    \6\ See Securities Exchange Act Release Nos. 89241 (July 7, 
2020), 85 FR 42034 (July 13, 2020) (SR-NYSEAMER-2020-47); 89482 
(August 5, 2020), 85 FR 48577 (August 11, 2020) (SR-NYSEAMER-2020-
55); 89692 (August 27, 2020), 85 FR 54611 (September 2, 2020) (SR-
NYSEAMER-2020-65). See also Fee Schedule, Section III., Monthly 
Trading Permit, Rights, Floor Access and Premium Product Fees, and 
IV. Monthly Floor Communication, Connectivity, Equipment and Booth 
or Podia Fees.
    \7\ See proposed Fee Schedule, Section III., Monthly Trading 
Permit, Rights, Floor Access and Premium Product Fees, and IV. 
Monthly Floor Communication, Connectivity, Equipment and Booth or 
Podia Fees.
    \8\ See id. The Exchange originally filed in September 2020 (see 
supra note 4) to make explicit the treatment of firms that began 
Floor operations after March 2020 and this change applies to firms 
that joined the Exchange on September 1st or thereafter.
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    Specifically, as with the prior fee waivers, the proposed fee 
waiver covers the following fixed fees for Qualifying

[[Page 66676]]

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.\9\
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    \9\ See id. (including the deletion of the now superfluous word 
``only'' regarding the duration of the fee waiver). In addition, 
consistent with the proposed changes to the preamble of Section IV 
of the Fee Schedule to update the potential duration of the fee 
waiver, which includes a delineation of each fee waived, the 
Exchange proposes to delete (the now repetitive) references that 
appear (again) next to each fee waived for Qualifying Firms as well 
as to delete references to prior months (now concluded) during which 
the fee waivers were in place. See proposed Fee Schedule, IV. 
Monthly Floor Communication, Connectivity, Equipment and Booth or 
Podia Fees.
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    The proposed fee change is designed to reduce monthly costs for all 
Qualifying Firms whose operations continue to be disrupted even though 
the Trading Floor has partially reopened. In reducing this monthly 
financial burden, the proposed change would allow Qualifying Firms that 
had Floor operations in March 2020 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, all Qualifying Firms may experience an 
unexpected increase in the cost of doing business on the Exchange.\10\ 
The Exchange believes that all Qualifying Firms would benefit from this 
proposed fee change.
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    \10\ The Exchange will refund participants of the Floor Broker 
Prepayment Program for any prepaid 2020 fees that are waived. See 
proposed Fee Schedule, Section III.E.1 (providing that ``the 
Exchange will refund certain of the prepaid Eligible Fixed costs 
that were waived 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,\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.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 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.'' \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'').
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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.\14\ Therefore, currently no exchange possesses significant 
pricing power in the execution of multiply-listed equity & ETF options 
order flow. More specifically, in August 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\ 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 increased slightly from 7.73% for the month of 
August 2019 to 8.18% for the month of August 2020.
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    This proposed fee change is reasonable, equitable, and not unfairly 
discriminatory because it would reduce monthly costs for all 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 that had Floor operations in March 
2020 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, all Qualifying Firms may experience an unexpected 
increase in the cost of doing business on the Exchange. The Exchange 
believes that all Qualifying Firms would benefit from this proposed fee 
change.
    The Exchange believes the proposed rule change is an equitable 
allocation of its fees and credits as it merely continues the previous 
fee waiver for Qualifying Firms, which affects fees charged only to 
Floor participants and does not apply to participants that conduct 
business off-Floor. The Exchange believes it is an equitable allocation 
of fees and credits to extend the fee waiver for Qualifying Firms 
because such firms have either no more than half of their Floor staff 
(as measured by either the March 2020 or Exchange-approved) levels or 
have vacant podia--and this reduction in staffing levels on the Floor 
impacts the speed, volume and efficiency with which these firms can 
operate, which is to their financial 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.
    The Exchange believes that it is reasonable to clarify that firms 
that began Floor operations on the Exchange after March 2020 would be 
included as ``Qualifying Firms'' if such firms are unable to operate at 
more than 50% of their Exchange-approved on-Floor staffing levels as 
such treatment places all firms on a level playing field and avoids 
placing ``newer'' Qualifying Firms at a financial disadvantage. The 
Exchange believes that this proposed change would add clarity and 
transparency and reduce the potential for confusion in the Fee Schedule 
as relates to the treatment new Floor participants.
    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 
would enhance 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\
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    \16\ See Reg NMS Adopting Release, supra note 13, at 37499.

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[[Page 66677]]

    Intramarket Competition. The proposed change, which continues the 
fee waiver for all Qualifying Firms, is designed to reduce monthly 
costs for those Floor participants whose operations continue to be 
impacted, even though the Trading Floor has partially reopened. In 
reducing this monthly financial burden, the proposed change would allow 
Qualifying Firms that had Floor operations in March 2020 to reallocate 
funds to assist with the cost of shifting and maintaining their 
previously on-Floor operations to off-Floor. Absent this change, all 
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, In 
addition, Floor-based firms that are not subject to the extent of 
staffing shortfalls as are Qualifying Firms, i.e., such firms have more 
than 50% of their March 2020--or Exchange-approved--staffing levels on 
the Floor and/or have no vacant Podia during the month, 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 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 
August 2020, the Exchange had less than 10% market share of executed 
volume of multiply-listed equity & ETF options trades.\18\
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    \17\ See supra note 14.
    \18\ Based on OCC data, supra note 15, the Exchange's market 
share in equity-based options was 7.73% for the month of August 2019 
and 8.18% for the month of August 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 even though 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) \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.
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 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-2020-75 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-2020-75. 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-2020-75, and should be 
submitted on or before November 10, 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. 2020-23140 Filed 10-19-20; 8:45 am]
BILLING CODE 8011-01-P
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