Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the NYSE American Options Fee Schedule, 10153-10156 [2023-03250]

Download as PDF Federal Register / Vol. 88, No. 32 / Thursday, February 16, 2023 / Notices 14. What investments in human capital and data infrastructure can STLT law enforcement agencies make to disaggregate data and conduct equity assessments to inform policies, programs, and protocols to reduce disparities? 15. How might philanthropic organizations and academic researchers work effectively with government officials to evaluate and improve data collection, use, and transparency practices for small and resourceconstrained STLT law enforcement agencies? lotter on DSK11XQN23PROD with NOTICES1 Data Transparency 16. What are exemplary models of police-community partnerships where police actively work with the community to share data findings and discuss how these data can address community needs? What lessons have been learned? 17. To what extent do law enforcement agencies currently make data publicly available about their efforts to reduce disparities in policing outcomes? What are examples and opportunities for law enforcement agencies to use relevant and accessible approaches to data transparency? 18. How might small and resourceconstrained jurisdictions participate in public data sharing and use it to inform decision-making and increase accountability? 19. What relationship-building and what resources would be effective for expanding opportunities for historically underrepresented scholars and research institutions to access law enforcement data while protecting privacy? 20. The E.O. intends to maximize STLT participation in the National Incident-Based Report System (NIBRS). What are the barriers and opportunities for improving agency participation in NIBRS, including its hate crime reporting section and the FBI’s National Use-Of-Force Data Collection? 21. How might the Federal government better share the criminal justice data it collects through surveys and programs like these in a manner that assists and empowers STLT government officials, researchers, and civil society to make use of such data to understand trends and inform policy decisions? Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the NYSE American Options Fee Schedule February 10, 2023. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on February 9, 2023, 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 and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the NYSE American Options Fee Schedule (‘‘Fee Schedule’’) regarding the Firm Monthly Fee Cap. The Exchange proposes to implement the fee change effective February 9, 2023.4 The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at 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. U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 4 The Exchange previously filed to amend the Fee Schedule on January 31, 2023 (SR–NYSEAMER– 2023–10) and withdrew such filing on February 9, 2023. 2 15 [FR Doc. 2023–03260 Filed 2–15–23; 8:45 am] BILLING CODE 3270–F1–P 16:51 Feb 15, 2023 [Release No. 34–96879; File No. SR– NYSEAMER–2023–13] 1 15 Dated: February 10, 2023. Rachel Wallace, Deputy General Counsel. VerDate Sep<11>2014 SECURITIES AND EXCHANGE COMMISSION Jkt 259001 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 10153 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 amend the Fee Schedule to modify the Firm Monthly Fee Cap. The Exchange proposes to implement the rule change on February 9, 2023. The Firm Monthly Fee Cap is set forth in Section I.I. of the Fee Schedule.5 Currently, a Firm’s fees associated with Manual transactions are capped at $150,000 per month per Firm. The Exchange proposes to raise the Firm Monthly Fee Cap to $200,000 per month per Firm. To effect this change, the Exchange proposes to modify Section I.I. to replace references to a $150,000 cap with references to a $200,000 cap.6 The Exchange also proposes to increase the incremental service fee—which is charged for Manual transactions once the Firm Monthly Fee Cap has been reached— from $0.01 to $0.02 and to extend the proposed incremental service fee of $0.02 per contract to also apply to QCC transactions entered by Floor Brokers from the Trading Floor (i.e., manual QCC transactions). Royalty Fees and fees or volumes associated with Strategy Executions will continue to be excluded from the calculation of fees towards the Firm Monthly Fee Cap. Firm Facilitation Manual trades will also continue to be executed at the rate of $0.00 per contract regardless of whether a Firm has reached the Firm Monthly Fee Cap. The Exchange believes that the proposed change, despite increasing the amount of the Firm Monthly Fee Cap and the incremental service fee for Manual transactions and QCC transactions, would continue to incentivize Firms to direct order flow to the Exchange to receive the benefits of a cap on their Manual transaction fees. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Sections 5 See Fee Schedule, Section I.I., Firm Monthly Fee Cap, available at: https://www.nyse.com/ publicdocs/nyse/markets/american-options/NYSE_ American_Options_Fee_Schedule.pdf. 6 The Exchange also proposes a conforming change to footnote 4 in Section I.A. (Rates for Options transactions) of the Fee Schedule, which cross-references the Firm Monthly Fee Cap as set forth in Section I.I. The Exchange likewise proposes to modify footnote 4 to replace the reference to a $150,000 cap with a reference to a $200,000 cap. 7 15 U.S.C. 78f(b). E:\FR\FM\16FEN1.SGM 16FEN1 10154 Federal Register / Vol. 88, No. 32 / Thursday, February 16, 2023 / Notices 6(b)(4) and (5) of the Act,8 in particular, because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. The Proposed Rule Change Is Reasonable The Exchange operates in a highly competitive market. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 9 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.10 Therefore, no exchange possesses significant pricing power in the execution of multiply-listed equity and ETF options order flow. More specifically, in December 2022, the Exchange had less than 8% market share of executed volume of multiplylisted equity and ETF options trades.11 The Exchange believes that the evershifting market share among the exchanges from month to month demonstrates that market participants can shift order flow, or discontinue or reduce use of certain categories of products, in response to fee changes. Accordingly, competitive forces constrain options exchange transaction fees. Stated otherwise, changes to exchange transaction fees can have a direct effect on the ability of an exchange to compete for order flow. 8 15 U.S.C. 78f(b)(4) and (5). Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (S7–10–04) (‘‘Reg NMS Adopting Release’’). 10 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/Market-DataReports/Volume-and-Open-Interest/MonthlyWeekly-Volume-Statistics. 11 Based on a compilation of OCC data for monthly volume of equity-based options and monthly volume of ETF-based options, see id., the Exchange’s market share in equity-based options was 6.77% for the month of December 2021 and 7.11% for the month of December 2022. lotter on DSK11XQN23PROD with NOTICES1 9 See VerDate Sep<11>2014 16:51 Feb 15, 2023 Jkt 259001 The proposed change to the Firm Monthly Fee Cap is reasonable because the Exchange believes the fee cap would continue to incentivize Firms to direct order flow to the Exchange to receive the benefits of capped fees for their Manual transactions (including manual QCC transactions), even though the proposed change would increase the amount of the fee cap and the incremental service charge applicable to Manual transactions (including manual QCC transactions) after a Firm has reached the fee cap. The Exchange also believes the proposed change is reasonable because the proposed fee cap amount would be applicable to all Firms and the proposed incremental service charge would be applicable to all Manual transactions (including manual QCC transactions) executed by a Firm once it reaches the fee cap. In addition, although the proposed change would establish a higher fee cap amount, it would continue to offer Firms the ability to qualify for capped fees on Manual transactions (including manual QCC transactions), which the Exchange believes provides Firms with a benefit not offered by at least one other options exchange.12 To the extent that the proposed change continues to attract volume to the Exchange, this order flow would continue to make the Exchange a more competitive venue for order execution, which, in turn, promotes just and equitable principles of trade and removes impediments to and perfects the mechanism of a free and open market and a national market system. The Exchange notes that all market participants stand to benefit from any increase in volume, which could promote market depth, facilitate tighter spreads and enhance price discovery, particularly to the extent the proposed change encourages market participants to utilize the Exchange as a primary trading venue, and may lead to a corresponding increase in order flow from other market participants. Finally, to the extent the proposed change continues to attract greater volume and liquidity, the Exchange believes the proposed change would improve the Exchange’s overall competitiveness and strengthen its market quality for all market participants. In the backdrop of the competitive environment in which the Exchange operates, the proposed rule change is a reasonable attempt by the Exchange to increase the depth of its market and improve its market share 12 See, e.g., BOX Options Fee Schedule, available at: https://boxoptions.com/fee-schedule/ (no cap on Firm manual transaction fees). PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 relative to its competitors. The Exchange’s fees are constrained by intermarket competition, as market participants can choose to direct their order flow to any of the 16 options exchanges The Exchange believes that proposed rule change is designed to continue to incent market participants to direct liquidity to the Exchange, and, to the extent they continue to be incentivized to aggregate their trading activity at the Exchange, that increased liquidity could promote market depth, price discovery and improvement, and enhanced order execution opportunities for all market participants. The Proposed Rule Change Is an Equitable Allocation of Credits and Fees The Exchange believes the proposed rule change is an equitable allocation of its fees and credits. The proposed change is equitable because the increased Firm Monthly Fee Cap would be available to all Firms equally. The proposed change is also equitable because the increased incremental service charge would apply equally to all Firms that achieve the fee cap and would now also apply to manual QCC transactions executed by Firms once they have reached the fee cap. The Exchange also believes that the proposed rule change is equitable with respect to non-Firm market participants because the Firm Monthly Fee Cap would not be as meaningful for Customers or Professional Customers and because Market Makers are offered other incentives to reduce transaction fees.13 The Exchange believes that the proposed changes, although they increase the fee cap and incremental service charge amounts, would not discourage Firms from directing order flow to the Exchange. To the extent that the proposed change achieves its purpose in continuing to incent Firms to aggregate their executions at the Exchange as a primary execution venue and attracting more volume to the Exchange, this increased order flow would continue to make the Exchange a more competitive venue for, among other things, order execution. Thus, the Exchange believes the proposed rule change would improve market quality for all market participants on the Exchange and, as a consequence, attract more order flow to the Exchange, 13 Customers are not subject to a fee for Manual transactions, and neither Customers nor Professional Customers pay transaction fees for QCC transactions. See Fee Schedule at Sections I.A. and I.F. The Exchange offers various incentives to Market Makers, including the Market Maker Sliding Scale and Prepayment Program. See id. at Sections I.C. and I.D. E:\FR\FM\16FEN1.SGM 16FEN1 Federal Register / Vol. 88, No. 32 / Thursday, February 16, 2023 / Notices thereby improving market-wide quality and price discovery. lotter on DSK11XQN23PROD with NOTICES1 The Proposed Rule Change Is Not Unfairly Discriminatory The Exchange believes that the modification of the Firm Monthly Fee Cap is not unfairly discriminatory because the fee cap and incremental service charge amounts, as proposed, would continue to be applicable to all similarly situated Firms, any of which could continue to be incentivized to direct order flow to the Exchange to qualify for the fee cap. The Exchange notes that offering the Firm Monthly Fee Cap, as proposed, to Firms but not to other market participants is not unfairly discriminatory because the Firm Monthly Fee Cap would not be as meaningful for Customers or Professional Customers and because Market Makers are offered other incentives to reduce transaction fees.14 Thus, to the extent the proposed change continues to attract Manual transactions (including manual QCC transactions) to the Exchange, the Exchange believes the proposed rule change would improve market quality for all market participants on the Exchange and, as a consequence, attract more order flow to the Exchange, thereby improving market-wide quality and price discovery. The resulting increased volume and liquidity would provide more trading opportunities and tighter spreads to all market participants and thus would promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors and the public interest. 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. Instead, as discussed above, the Exchange believes that the proposed changes would encourage the submission of additional liquidity to a public exchange, thereby promoting market depth, price discovery and transparency and enhancing order execution opportunities for all market 14 See note 13, supra. VerDate Sep<11>2014 16:51 Feb 15, 2023 Jkt 259001 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.’’ 15 Intramarket Competition. The proposed change is designed to continue to attract order flow to the Exchange, which could increase the volumes of contracts traded on the Exchange. Greater liquidity benefits all market participants on the Exchange, and the Exchange believes that the proposed modification of the Firm Monthly Fee Cap (even though it would raise the amount of the fee cap and incremental service charge) would not impose any burden on competition that is not necessary or appropriate because it is intended to continue to incentivize Firms to direct order flow to the Exchange to be eligible for the benefits of capped fees on Manual transactions, thereby promoting liquidity on the Exchange to the benefit of all market participants. Intermarket Competition. The Exchange operates in a highly competitive market in which market participants can readily favor one of the 16 competing option exchanges if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and to attract order flow to the Exchange. Based on publiclyavailable information, and excluding index-based options, no single exchange has more than 16% of the market share of executed volume of multiply-listed equity and ETF options trades.16 Therefore, no exchange possesses significant pricing power in the execution of multiply-listed equity and ETF options order flow. More specifically, in December 2022, the Exchange had less than 8% market share of executed volume of multiplylisted equity and ETF options trades.17 The Exchange believes that the proposed rule change reflects this competitive environment because it modifies the Exchange’s fees in a manner designed to continue to incent market participants to direct trading interest to the Exchange, to provide liquidity and to attract order flow. To the extent that Firms are incentivized to utilize the Exchange as a primary trading venue for all transactions, all of 15 See Reg NMS Adopting Release, supra note 9, at 37499. 16 See note 10, supra. 17 See note 11, supra. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 10155 the Exchange’s market participants should benefit from the improved market quality and increased opportunities for price improvement. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues, including those that do not offer a cap on Firm fees.18 In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other 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: 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–2023–13 on the subject line. 18 See note 12, supra. U.S.C. 78s(b)(3)(A). 20 17 CFR 240.19b–4(f)(2). 21 15 U.S.C. 78s(b)(2)(B). 19 15 E:\FR\FM\16FEN1.SGM 16FEN1 10156 Federal Register / Vol. 88, No. 32 / Thursday, February 16, 2023 / Notices 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–2023–13. 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–2023–13, and should be submitted on or before March 9, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–03250 Filed 2–15–23; 8:45 am] lotter on DSK11XQN23PROD with NOTICES1 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96878; File No. SR– NYSEARCA–2023–14] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule February 10, 2023. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on February 9, 2023, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the NYSE Arca Options Fee Schedule (‘‘Fee Schedule’’) regarding the Firm and Broker Dealer Monthly Fee Cap and the Ratio Threshold Fee. The Exchange proposes to implement the fee change effective February 9, 2023.4 The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 22 17 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 The Exchange previously filed to amend the Fee Schedule on January 31, 2023 (SR–NYSEARCA– 2023–11) and withdrew such filing on February 9, 2023. CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:51 Feb 15, 2023 Jkt 259001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to (1) modify the Firm and Broker Dealer Monthly Fee Cap (the ‘‘Monthly Fee Cap’’) and (2) extend the waiver of the Ratio Threshold Fee. The Exchange proposes to implement the rule change on February 9, 2023. Firm and Broker Dealer Monthly Fee Cap The Exchange proposes to modify the Monthly Fee Cap, which currently provides that combined Firm proprietary fees and Broker Dealer fees for transactions in standard option contracts cleared in the customer range for Manual executions and QCC transactions are capped at $150,000 per month.5 The Exchange proposes to raise the Monthly Fee Cap to $200,000 per month. Accordingly, the Exchange proposes to modify the Fee Schedule to replace $150,000 with $200,000 in the description of the Monthly Fee Cap. Strategy executions, royalty fees, and firm trades executed via a Joint Back Office agreement will continue to be excluded from fees to which the Monthly Fee Cap would apply. Once a Firm or Broker Dealer has reached the Monthly Fee Cap, an incremental service fee of $0.01 per contract for Firm or Broker Dealer Manual transactions will continue to apply, except for the execution of a QCC order. The Exchange believes that the proposed change, despite increasing the amount of the Monthly Fee Cap, would continue to incent Firms and Broker Dealers to direct order flow to the Exchange to receive the benefits of a fee cap on Manual and QCC transactions. Ratio Threshold Fee The Exchange proposes to further extend the waiver of the Ratio Threshold Fee that was originally implemented in connection with the Exchange’s migration to the Pillar platform.6 The Ratio Threshold Fee is based on the number of orders entered as compared to the number of executions received in a calendar month and is 5 See Fee Schedule, NYSE Arca OPTIONS: TRADE-RELATED CHARGES FOR STANDARD OPTIONS, FIRM AND BROKER DEALER MONTHLY FEE CAP. 6 See Securities Exchange Act Release No. 94095 (January 28, 2022), 87 FR 6216 (February 3, 2022) (SR–NYSEArca–2022–04) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule). E:\FR\FM\16FEN1.SGM 16FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 88, Number 32 (Thursday, February 16, 2023)]
[Notices]
[Pages 10153-10156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03250]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96879; File No. SR-NYSEAMER-2023-13]


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

February 10, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on February 9, 2023, 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 and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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'') regarding the Firm Monthly Fee Cap. The 
Exchange proposes to implement the fee change effective February 9, 
2023.\4\ The proposed rule change is available on the Exchange's 
website at www.nyse.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.
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    \4\ The Exchange previously filed to amend the Fee Schedule on 
January 31, 2023 (SR-NYSEAMER-2023-10) and withdrew such filing on 
February 9, 2023.
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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 amend the Fee Schedule to modify 
the Firm Monthly Fee Cap. The Exchange proposes to implement the rule 
change on February 9, 2023.
    The Firm Monthly Fee Cap is set forth in Section I.I. of the Fee 
Schedule.\5\ Currently, a Firm's fees associated with Manual 
transactions are capped at $150,000 per month per Firm.
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    \5\ See Fee Schedule, Section I.I., Firm Monthly Fee Cap, 
available at: https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf.
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    The Exchange proposes to raise the Firm Monthly Fee Cap to $200,000 
per month per Firm. To effect this change, the Exchange proposes to 
modify Section I.I. to replace references to a $150,000 cap with 
references to a $200,000 cap.\6\ The Exchange also proposes to increase 
the incremental service fee--which is charged for Manual transactions 
once the Firm Monthly Fee Cap has been reached--from $0.01 to $0.02 and 
to extend the proposed incremental service fee of $0.02 per contract to 
also apply to QCC transactions entered by Floor Brokers from the 
Trading Floor (i.e., manual QCC transactions). Royalty Fees and fees or 
volumes associated with Strategy Executions will continue to be 
excluded from the calculation of fees towards the Firm Monthly Fee Cap. 
Firm Facilitation Manual trades will also continue to be executed at 
the rate of $0.00 per contract regardless of whether a Firm has reached 
the Firm Monthly Fee Cap.
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    \6\ The Exchange also proposes a conforming change to footnote 4 
in Section I.A. (Rates for Options transactions) of the Fee 
Schedule, which cross-references the Firm Monthly Fee Cap as set 
forth in Section I.I. The Exchange likewise proposes to modify 
footnote 4 to replace the reference to a $150,000 cap with a 
reference to a $200,000 cap.
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    The Exchange believes that the proposed change, despite increasing 
the amount of the Firm Monthly Fee Cap and the incremental service fee 
for Manual transactions and QCC transactions, would continue to 
incentivize Firms to direct order flow to the Exchange to receive the 
benefits of a cap on their Manual transaction fees.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Sections

[[Page 10154]]

6(b)(4) and (5) of the Act,\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposed Rule Change Is Reasonable
    The Exchange operates in a highly competitive market. The 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. In Regulation NMS, the Commission 
highlighted the importance of market forces in determining prices and 
SRO revenues and, also, recognized that current regulation of the 
market system ``has been remarkably successful in promoting market 
competition in its broader forms that are most important to investors 
and listed companies.'' \9\
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    \9\ 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.\10\ Therefore, no exchange possesses significant pricing power 
in the execution of multiply-listed equity and ETF options order flow. 
More specifically, in December 2022, the Exchange had less than 8% 
market share of executed volume of multiply-listed equity and ETF 
options trades.\11\
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    \10\ 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/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
    \11\ Based on a compilation of OCC data for monthly volume of 
equity-based options and monthly volume of ETF-based options, see 
id., the Exchange's market share in equity-based options was 6.77% 
for the month of December 2021 and 7.11% for the month of December 
2022.
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    The Exchange believes that the ever-shifting market share among the 
exchanges from month to month demonstrates that market participants can 
shift order flow, or discontinue or reduce use of certain categories of 
products, in response to fee changes. Accordingly, competitive forces 
constrain options exchange transaction fees. Stated otherwise, changes 
to exchange transaction fees can have a direct effect on the ability of 
an exchange to compete for order flow.
    The proposed change to the Firm Monthly Fee Cap is reasonable 
because the Exchange believes the fee cap would continue to incentivize 
Firms to direct order flow to the Exchange to receive the benefits of 
capped fees for their Manual transactions (including manual QCC 
transactions), even though the proposed change would increase the 
amount of the fee cap and the incremental service charge applicable to 
Manual transactions (including manual QCC transactions) after a Firm 
has reached the fee cap. The Exchange also believes the proposed change 
is reasonable because the proposed fee cap amount would be applicable 
to all Firms and the proposed incremental service charge would be 
applicable to all Manual transactions (including manual QCC 
transactions) executed by a Firm once it reaches the fee cap. In 
addition, although the proposed change would establish a higher fee cap 
amount, it would continue to offer Firms the ability to qualify for 
capped fees on Manual transactions (including manual QCC transactions), 
which the Exchange believes provides Firms with a benefit not offered 
by at least one other options exchange.\12\
---------------------------------------------------------------------------

    \12\ See, e.g., BOX Options Fee Schedule, available at: https://boxoptions.com/fee-schedule/ (no cap on Firm manual transaction 
fees).
---------------------------------------------------------------------------

    To the extent that the proposed change continues to attract volume 
to the Exchange, this order flow would continue to make the Exchange a 
more competitive venue for order execution, which, in turn, promotes 
just and equitable principles of trade and removes impediments to and 
perfects the mechanism of a free and open market and a national market 
system. The Exchange notes that all market participants stand to 
benefit from any increase in volume, which could promote market depth, 
facilitate tighter spreads and enhance price discovery, particularly to 
the extent the proposed change encourages market participants to 
utilize the Exchange as a primary trading venue, and may lead to a 
corresponding increase in order flow from other market participants.
    Finally, to the extent the proposed change continues to attract 
greater volume and liquidity, the Exchange believes the proposed change 
would improve the Exchange's overall competitiveness and strengthen its 
market quality for all market participants. In the backdrop of the 
competitive environment in which the Exchange operates, the proposed 
rule change is a reasonable attempt by the Exchange to increase the 
depth of its market and improve its market share relative to its 
competitors. The Exchange's fees are constrained by intermarket 
competition, as market participants can choose to direct their order 
flow to any of the 16 options exchanges The Exchange believes that 
proposed rule change is designed to continue to incent market 
participants to direct liquidity to the Exchange, and, to the extent 
they continue to be incentivized to aggregate their trading activity at 
the Exchange, that increased liquidity could promote market depth, 
price discovery and improvement, and enhanced order execution 
opportunities for all market participants.
The Proposed Rule Change Is an Equitable Allocation of Credits and Fees
    The Exchange believes the proposed rule change is an equitable 
allocation of its fees and credits. The proposed change is equitable 
because the increased Firm Monthly Fee Cap would be available to all 
Firms equally. The proposed change is also equitable because the 
increased incremental service charge would apply equally to all Firms 
that achieve the fee cap and would now also apply to manual QCC 
transactions executed by Firms once they have reached the fee cap. The 
Exchange also believes that the proposed rule change is equitable with 
respect to non-Firm market participants because the Firm Monthly Fee 
Cap would not be as meaningful for Customers or Professional Customers 
and because Market Makers are offered other incentives to reduce 
transaction fees.\13\ The Exchange believes that the proposed changes, 
although they increase the fee cap and incremental service charge 
amounts, would not discourage Firms from directing order flow to the 
Exchange. To the extent that the proposed change achieves its purpose 
in continuing to incent Firms to aggregate their executions at the 
Exchange as a primary execution venue and attracting more volume to the 
Exchange, this increased order flow would continue to make the Exchange 
a more competitive venue for, among other things, order execution. 
Thus, the Exchange believes the proposed rule change would improve 
market quality for all market participants on the Exchange and, as a 
consequence, attract more order flow to the Exchange,

[[Page 10155]]

thereby improving market-wide quality and price discovery.
---------------------------------------------------------------------------

    \13\ Customers are not subject to a fee for Manual transactions, 
and neither Customers nor Professional Customers pay transaction 
fees for QCC transactions. See Fee Schedule at Sections I.A. and 
I.F. The Exchange offers various incentives to Market Makers, 
including the Market Maker Sliding Scale and Prepayment Program. See 
id. at Sections I.C. and I.D.
---------------------------------------------------------------------------

The Proposed Rule Change Is Not Unfairly Discriminatory
    The Exchange believes that the modification of the Firm Monthly Fee 
Cap is not unfairly discriminatory because the fee cap and incremental 
service charge amounts, as proposed, would continue to be applicable to 
all similarly situated Firms, any of which could continue to be 
incentivized to direct order flow to the Exchange to qualify for the 
fee cap. The Exchange notes that offering the Firm Monthly Fee Cap, as 
proposed, to Firms but not to other market participants is not unfairly 
discriminatory because the Firm Monthly Fee Cap would not be as 
meaningful for Customers or Professional Customers and because Market 
Makers are offered other incentives to reduce transaction fees.\14\
---------------------------------------------------------------------------

    \14\ See note 13, supra.
---------------------------------------------------------------------------

    Thus, to the extent the proposed change continues to attract Manual 
transactions (including manual QCC transactions) to the Exchange, the 
Exchange believes the proposed rule change would improve market quality 
for all market participants on the Exchange and, as a consequence, 
attract more order flow to the Exchange, thereby improving market-wide 
quality and price discovery. The resulting increased volume and 
liquidity would provide more trading opportunities and tighter spreads 
to all market participants and thus would promote just and equitable 
principles of trade, remove impediments to and perfect the mechanism of 
a free and open market and a national market system and, in general, 
protect investors and the public interest.
    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. Instead, as discussed above, the Exchange believes 
that the proposed changes would encourage the submission of additional 
liquidity to a public exchange, thereby promoting market depth, price 
discovery and transparency and enhancing order execution opportunities 
for all market participants. As a result, the Exchange believes that 
the proposed change furthers the Commission's goal in adopting 
Regulation NMS of fostering integrated competition among orders, which 
promotes ``more efficient pricing of individual stocks for all types of 
orders, large and small.'' \15\
---------------------------------------------------------------------------

    \15\ See Reg NMS Adopting Release, supra note 9, at 37499.
---------------------------------------------------------------------------

    Intramarket Competition. The proposed change is designed to 
continue to attract order flow to the Exchange, which could increase 
the volumes of contracts traded on the Exchange. Greater liquidity 
benefits all market participants on the Exchange, and the Exchange 
believes that the proposed modification of the Firm Monthly Fee Cap 
(even though it would raise the amount of the fee cap and incremental 
service charge) would not impose any burden on competition that is not 
necessary or appropriate because it is intended to continue to 
incentivize Firms to direct order flow to the Exchange to be eligible 
for the benefits of capped fees on Manual transactions, thereby 
promoting liquidity on the Exchange to the benefit of all market 
participants.
    Intermarket Competition. The Exchange operates in a highly 
competitive market in which market participants can readily favor one 
of the 16 competing option exchanges if they deem fee levels at a 
particular venue to be excessive. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
exchanges and to attract order flow to the Exchange. Based on publicly-
available information, and excluding index-based options, no single 
exchange has more than 16% of the market share of executed volume of 
multiply-listed equity and ETF options trades.\16\ Therefore, no 
exchange possesses significant pricing power in the execution of 
multiply-listed equity and ETF options order flow. More specifically, 
in December 2022, the Exchange had less than 8% market share of 
executed volume of multiply-listed equity and ETF options trades.\17\
---------------------------------------------------------------------------

    \16\ See note 10, supra.
    \17\ See note 11, supra.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change reflects this 
competitive environment because it modifies the Exchange's fees in a 
manner designed to continue to incent market participants to direct 
trading interest to the Exchange, to provide liquidity and to attract 
order flow. To the extent that Firms are incentivized to utilize the 
Exchange as a primary trading venue for all transactions, all of the 
Exchange's market participants should benefit from the improved market 
quality and increased opportunities for price improvement. The Exchange 
notes that it operates in a highly competitive market in which market 
participants can readily favor competing venues, including those that 
do not offer a cap on Firm fees.\18\ In such an environment, the 
Exchange must continually review, and consider adjusting, its fees and 
credits to remain competitive with other exchanges.
---------------------------------------------------------------------------

    \18\ See note 12, supra.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \19\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \20\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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-2023-13 on the subject line.

[[Page 10156]]

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-2023-13. 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-2023-13, and should be 
submitted on or before March 9, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03250 Filed 2-15-23; 8:45 am]
BILLING CODE 8011-01-P

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