Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the NYSE American Options Fee Schedule To Modify the Options Regulatory Fee, 69973-69977 [2023-22348]
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Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 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–NYSEARCA–2023–68. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSEARCA–2023–68 and should be
submitted on or before October 31,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Sherry R. Haywood,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98680]
[Release No. 34–98678; File No. SR–
NYSEAMER–2023–48]
Order Cancelling Registrations of
Certain Municipal Advisors Pursuant
to Section 15B(c)(3) of the Securities
Exchange Act of 1934
October 3, 2023.
The municipal advisors whose names
appear in the attached Appendix,
hereinafter referred to as the
‘‘registrants,’’ are registered as
municipal advisors pursuant to Sections
15B(a)(1)(B) and 15B(a)(2) of the
Securities Exchange Act of 1934 (the
‘‘Act’’).
On August 29, 2023, a Notice of
Intention to Cancel Registration of
Certain Municipal Advisors, including
the registrants, was published in the
Federal Register (Securities Exchange
Act Release No. 34–98208). The notice
gave interested persons an opportunity
to request a hearing and stated that an
order or orders cancelling the
registrations would be issued unless a
hearing was ordered. No request for a
hearing has been filed by any of the
registrants, and the Securities and
Exchange Commission (the
‘‘Commission’’) has not ordered a
hearing.
Pursuant to Section 15B(c)(3) of the
Act, the Commission has found that
each of the registrants is no longer in
existence or has ceased to do business
as a municipal advisor.
Accordingly,
It is ordered, pursuant to Section
15B(c)(3) of the Act, that the registration
of each registrant be, and hereby is,
cancelled.
For the Commission, by the Office of
Municipal Securities, pursuant to delegated
authority.1
Sherry R. Haywood,
Assistant Secretary.
Appendix:
Registrant name
SEC
ID No.
Betnun Nathan S ...................................
Christen Group, Inc ...............................
Southern Cross Financial Group LLC ...
OCONNOR & Co SECURITIES, INC ...
Capital Alaska LLC ...............................
Fray Municipal Securities ......................
Massena Associates LLC .....................
SUMMERS, CARROLL, WHISLER LLC
867–02495
867–02467
867–02544
867–01245
867–02604
867–02064
867–02569
867–01938
[FR Doc. 2023–22347 Filed 10–6–23; 8:45 am]
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BILLING CODE 8011–01–P
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the NYSE
American Options Fee Schedule To
Modify the Options Regulatory Fee
October 3, 2023.
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
September 29, 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 amend the
NYSE American Options Fee Schedule
(‘‘Fee Schedule’’) regarding the Options
Regulatory Fee (‘‘ORF’’). 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.
[FR Doc. 2023–22349 Filed 10–6–23; 8:45 am]
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
17 17
CFR 200.30–3(a)(12).
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to decrease the ORF from
$0.0055 per contract to $0.0038 per
contract, effective on January 1, 2024,
and to provide for a temporary waiver
of the ORF for the three months leading
up to such change, from October 1, 2023
through December 31, 2023 (the
‘‘Waiver Period’’).4
Background
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As a general matter, the Exchange
may only use regulatory funds such as
the ORF ‘‘to fund the legal, regulatory,
and surveillance operations’’ of the
Exchange.5 More specifically, the ORF
is designed to recover a material
portion, but not all, of the Exchange’s
costs for the supervision and regulation
of ATP Holders, including the
Exchange’s regulatory program and legal
expenses associated with options
regulation, such as the costs related to
in-house staff, third-party service
providers, and technology that facilitate
regulatory functions such as
surveillance, investigation,
examinations and enforcement
(collectively, the ‘‘ORF Costs’’). ORF
funds may also be used for indirect
expenses such as human resources and
other administrative costs. The
Exchange monitors the amount of
revenue collected from the ORF to
ensure that this revenue, in combination
with other regulatory fees and fines,
does not exceed regulatory costs.
The ORF is assessed on ATP Holders
for options transactions that are cleared
by the ATP Holder through the Options
Clearing Corporation (‘‘OCC’’) in the
Customer range regardless of the
exchange on which the transaction
occurs and is collected from OTP
Holder clearing firms by the OCC on
behalf of NYSE American.6 All options
4 See proposed Fee Schedule, Section VII.A.,
Options Regulatory Fee (‘‘ORF’’). The Exchange
proposes to modify the Fee Schedule to provide for
a waiver of ORF from October 1, 2023 until
December 31, 2023, and to provide that the ORF
rate would be $0.0038 when the Exchange resumes
assessing ORF on January 1, 2024.
5 The Exchange considers surveillance operations
part of regulatory operations. The limitation on the
use of regulatory funds also provides that they shall
not be distributed. See Thirteenth Amended and
Restated Operating Agreement of NYSE American
LLC, Article IV, Section 4.05 and Securities
Exchange Act Release No. 87993 (January 16, 2020),
85 FR 4050 (January 23, 2020) (SR–NYSEAMER–
2020–04).
6 See Fee Schedule, Section VII.A., Options
Regulatory Fee (‘‘ORF’’). The Exchange uses reports
from OCC when assessing and collecting the ORF.
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transactions must clear via a clearing
firm and such clearing firms can then
choose to pass through all, a portion, or
none of the cost of the ORF to its
customers, i.e., the entering firms. The
Exchange notes that the costs relating to
monitoring ATP Holders with respect to
Customer trading activity are generally
higher than the costs associated with
monitoring ATP Holders that do not
engage in Customer trading activity,
which tends to be more automated and
less labor-intensive. By contrast,
regulating ATP Holders that engage in
Customer trading activity is generally
more labor intensive and requires a
greater expenditure of human and
technical resources as the Exchange
needs to review not only the trading
activity on behalf of Customers, but also
the ATP Holder’s relationship with its
Customers via more labor-intensive
exam-based programs.7 As a result, the
costs associated with administering the
customer component of the Exchange’s
overall regulatory program are
materially higher than the costs
associated with administering the noncustomer component (e.g., ATP Holder
proprietary transactions) of its
regulatory program.
ORF Collections and Monitoring of ORF
Exchange rules establish that market
participants must be notified of any
change in the ORF via Trader Update at
least 30 calendar days prior to the
effective date of the change.8
Because the ORF is based on options
transactions volume, the amount of ORF
collected is variable. For example, if
options transactions reported to OCC in
a given month increase, the ORF
collected from ATP Holders will likely
increase as well. Similarly, if options
transactions reported to OCC in a given
month decrease, the ORF collected from
ATP Holders will likely decrease as
well. Accordingly, the Exchange
monitors the amount of ORF collected
The ORF is not assessed on outbound linkage
trades. An ATP Holder is not assessed the fee until
it has satisfied applicable technological
requirements necessary to commence operations on
NYSE American. See id.
7 The Exchange notes that many of the Exchange’s
market surveillance programs require the Exchange
to look at and evaluate activity across all options
markets, such as surveillance for position limit
violations, manipulation, front-running and
contrary exercise advice violations/expiring
exercise declarations. The Exchange and other
options SROs are parties to a 17d–2 agreement
allocating among the SROs regulatory
responsibilities relating to compliance by the
common members with rules for expiring exercise
declarations, position limits, OCC trade
adjustments, and Large Option Position Report
reviews. See, e.g., Securities Exchange Act Release
No. 85097 (February 11, 2019), 84 FR 4871
(February 19, 2019).
8 See Fee Schedule, supra note 6.
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to ensure that it does not exceed the
ORF Costs. If the Exchange determines
the amount of ORF collected exceeds
ORF Costs, the Exchange will adjust the
ORF by submitting a fee change filing to
the Securities and Exchange
Commission (the ‘‘Commission’’).
Reduction of ORF and Temporary ORF
Waiver
The Exchange currently assesses an
ORF of $0.0055 per contract. Based on
the Exchange’s recent review of
regulatory costs, ORF collections, and
options transaction volume, the
Exchange proposes to decrease the ORF
from the current rate of $0.0055 per
contract to $0.0038 per contract
effective January 1, 2024 and, in concert
with the proposed reduction of the ORF,
to waive the ORF from October 1, 2023
through December 31, 2023 in order to
help ensure that the amount collected
from the ORF, in combination with
other regulatory fees and fines, does not
exceed the Exchange’s total regulatory
costs. The Exchange notified ATP
Holders of the proposed temporary
waiver of the ORF via Trader Update on
September 1, 2023 (which was at least
30 calendar days prior to the proposed
operative date of the waiver, October 1,
2023) 9 and will also notify ATP Holders
of the proposed change to the ORF rate
via Trader Update at least 30 days prior
to the proposed operative date of the
new rate, January 1, 2024. The Exchange
believes such notices will ensure that
market participants have sufficient
opportunity to configure their systems
to account properly for both the ORF
waiver and revised ORF.
The proposed modification of the
ORF and accompanying waiver are
informed by the Exchange’s analysis of
recent options volumes. The Exchange
proposes to reduce the ORF because it
believes that options transaction volume
has increased to a level that if the ORF
is not adjusted, the ORF revenue to the
Exchange year-over-year could exceed a
material portion of the Exchange’s ORF
Costs.10 The options industry has
continued to experience extremely high
options trading volumes and volatility,
as illustrated in the table below
9 See https://www.nyse.com/trader-update/
history#110000672056.
10 The Exchange notes that it last modified the
ORF rate in February 2014. See Securities Exchange
Act Release No. 71410 (January 27, 2014), 79 FR
5506 (January 31, 2014) (SR–NYSEMKT–2014–09).
The Exchange also previously filed to waive the
ORF from November 1, 2022 through January 31,
2023. See Securities Exchange Act Release No.
96373 (November 22, 2022), 87 FR 73376
(November 29, 2022) (SR–NYSEAMER–2022–52).
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Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Notices
reflecting industry data from OCC for
2021, 2022, and 2023: 11
2021
Customer ADV .........................................................................................................................................
Total ADV ................................................................................................................................................
For example, although customer
average daily volume decreased slightly
from 2021 to 2022, both total average
daily volume and customer average
daily volume in 2023 increased over the
already elevated levels in 2021 and
2022.
April 2023
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Customer ADV .....................................................................
Total ADV .............................................................................
May 2023
32,498,578
73,005,006
34,535,662
78,571,791
34,730,276
74,339,870
2022
34,091,409
76,488,459
2023
35,957,560
81,483,685
The below industry data from OCC
demonstrates the high options trading
volumes and volatility that the industry
has continued to experience in 2023:
June 2023
37,028,394
83,362,815
July 2023
35,965,918
80,391,999
August 2023
35,387,029
81,381,473
The persisting increased options
volumes have, in turn, impacted the
amount of ORF collected. To determine
whether ORF fees should be adjusted,
the Exchange reviewed options
transaction volume from 2021 through
August 2023. Based on the Exchange’s
review and analysis of historical options
transaction volume and predictions
regarding future options transaction
volume, the Exchange projects that
options transaction volume is likely to
continue to remain high into 2024.
The Exchange believes that it has
sufficient information based on recent
options transaction volume to determine
how to adjust the ORF for 2024. Taking
into consideration both the sustained
increase in options transaction volume,
which has persisted into 2023 (and
which has translated to increased ORF
collection), the Exchange proposes to
decrease the ORF from $0.0055 to
$0.0038 per contract. The Exchange
further proposes to make this change
effective on January 1, 2024 and to not
assess any ORF during the Waiver
Period, rather than further adjusting the
ORF for the duration of the Waiver
Period, as the Exchange believes this
proposal would most efficiently
accomplish the goals of ensuring that
ORF collection does not exceed ORF
Costs for 2023 and modifying the ORF
rate so that the Exchange may assess an
ORF that is designed to recover a
material portion, but not all, of the
Exchange’s projected ORF Costs when
the Exchange resumes assessing ORF on
January 1, 2024.
The proposed decrease in ORF is
based on the Exchange’s estimated
projections for its regulatory costs,
balanced with the observed increase in
options volumes. The Exchange cannot
predict whether options volume will
remain at the current level going
forward and projections for future
regulatory costs are estimated,
preliminary, and may change. However,
the Exchange believes that amounts
collected from assessment of the ORF
(as modified) will continue to cover a
material portion, but not all, of the
Exchange’s ORF Costs. In addition,
because of the sustained impact of the
elevated trading volumes that have
persisted into 2023, along with the
difficulty of predicting when volumes
may return to more normal levels, the
Exchange believes that waiving ORF
from October 1, 2023 to December 31,
2023 and implementing the reduced
ORF rate of $0.0038 on January 1, 2024
(rather than reducing ORF more
drastically in the interim) would lessen
the potential for generating excess funds
and help ensure that the ORF is
designed to recover a material portion,
but not all, of the Exchange’s projected
ORF Costs. The Exchange will continue
monitoring ORF Costs in advance of the
resumption of the ORF and when it
resumes assessing ORF on January 1,
2024, and, if the Exchange determines
that, in light of projected volumes and
ORF Costs, the ORF rate should be
further modified to help ensure that
ORF collections would not exceed a
material portion of ORF Costs, adjust
the ORF by submitting a proposed rule
change and notifying ATP Holders of
such change by Trader Update.
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6(b) 12 of the
The Exchange believes the proposed
reduction of ORF and accompanying
temporary waiver of the ORF is
reasonable because it would help ensure
that collections from the ORF do not
exceed a material portion of the
Exchange’s ORF Costs. As noted above,
the ORF is designed to recover a
material portion, but not all, of the
Exchange’s ORF Costs.
Although there can be no assurance
that the Exchange’s final costs for 2023
will not differ materially from its
expectations and prior practice, nor can
the Exchange predict with certainty
whether options volume will remain at
current or similar levels going forward,
the Exchange believes that the amount
collected based on the current ORF rate,
when combined with regulatory fees
and fines, may result in collections in
excess of the estimated ORF Costs for
the year and going forward. Particularly,
as noted above, the options market has
continued to experience elevated
volumes and volatility in 2023, thereby
resulting in substantially higher ORF
collections than projected. The
Exchange therefore believes that it
would be reasonable to decrease the
ORF from $0.0055 per contract to
$0.0038 per contract effective January 1,
2024, and, in connection with that
change, to waive ORF from October 1,
11 The OCC publishes options and futures volume
in a variety of formats, including daily and monthly
volume by exchange, available here: https://
www.theocc.com/Market-Data/Market-Data-
Reports/Volume-and-Open-Interest/MonthlyWeekly-Volume-Statistics. The volume discussed in
this filing is based on a compilation of OCC data
for monthly volume of equity-based options and
monthly volume of ETF-based options, in contract
sides.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(4) and (5).
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2. Statutory Basis
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Act, in general, and Section 6(b)(4) and
(5) 13 of the Act, in particular, in that it
is designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
other persons using its facilities and
does not unfairly discriminate between
customers, issuers, brokers, or dealers.
The Proposal Is Reasonable
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2023 through December 31, 2023. The
Exchange believes the proposed change
is reasonable because it would help the
Exchange ensure that ORF collection
does not exceed a material portion of
the ORF Costs for 2023 and facilitate the
efficient implementation of a revised
ORF rate designed to recover a material
portion, but not all, of the Exchange’s
projected ORF Costs. The Exchange
proposes to make the new ORF rate
effective on January 1, 2024 and to not
assess any ORF during the Waiver
Period, rather than further adjusting the
ORF for the duration of the Waiver
Period, as the Exchange believes this
proposal would most efficiently
accomplish these objectives. The
Exchange believes that not assessing
ORF during the Waiver Period and
taking into account all of the Exchange’s
other regulatory fees and fines would
allow the Exchange to continue covering
a material portion of ORF Costs, while
lessening the potential for generating
excess funds that may otherwise occur
using the current rate. The Exchange
also believes that it is reasonable to
resume ORF at the decreased rate of
$0.0038 on January 1, 2024. The
proposed rate of $0.0038 per contract is
based on the Exchange’s estimated
projections for its regulatory costs,
balanced with the increase in options
volumes that has persisted into 2023
and that is likely to continue into 2024;
the Exchange thus believes that
resumption of the ORF at this rate on
January 1, 2024 is reasonable because it
would permit the Exchange to resume
assessing an ORF that is designed to
recover a material portion, but not all,
of the Exchange’s projected ORF Costs.
The Exchange would continue
monitoring ORF Costs in advance of the
resumption of the ORF and when it
resumes assessing ORF on January 1,
2024 and, if the Exchange determines
that, in light of projected volumes and
ORF Costs, the ORF rate should be
further modified to help ensure that
ORF collections would not exceed a
material portion of ORF Costs, further
adjust the ORF by submitting a
proposed rule change and notifying ATP
Holders of such change by Trader
Update.
The Proposal Is an Equitable Allocation
of Fees
The Exchange believes its proposal is
an equitable allocation of fees among its
market participants. The Exchange
believes that the proposed waiver would
not place certain market participants at
an unfair disadvantage because all
options transactions must clear via a
clearing firm. Such clearing firms can
then choose to pass through all, a
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portion, or none of the cost of the ORF
to its customers, i.e., the entering firms.
As noted above, the ORF is collected
from ATP Holder clearing firms by the
OCC on behalf of NYSE American and
is assessed on all options transactions
that are cleared at the OCC in the
Customer range. In addition, the
Exchange notes that the costs relating to
monitoring ATP Holders with respect to
Customer trading activity are generally
higher than the costs associated with
monitoring ATP Holders that do not
engage in Customer trading activity,
which tends to be more automated and
less labor-intensive. By contrast,
regulating ATP Holders that engage in
Customer trading activity is generally
more labor intensive and requires a
greater expenditure of human and
technical resources as the Exchange
needs to review not only the trading
activity on behalf of Customers, but also
the ATP Holder’s relationship with its
Customers via more labor-intensive
exam-based programs. As a result, the
costs associated with administering the
customer component of the Exchange’s
overall regulatory program are
materially higher than the costs
associated with administering the noncustomer component (e.g., ATP Holder
proprietary transactions) of its
regulatory program. The Exchange
believes that the proposed reduction of
ORF from $0.0055 per contract to
$0.0038 per contract effective January 1,
2024, along with a temporary waiver of
the ORF for the three months prior to
such change, is an equitable allocation
of fees because the new ORF rate would
apply equally to all ATP Holders on all
their transactions that clear in the
Customer range at the OCC, and the
Exchange would not assess the ORF on
any such transactions during the Waiver
Period. The proposed change also
would permit the Exchange to
efficiently adjust the ORF, which is
applicable to all ATP Holders’
transactions that clear in the Customer
range at the OCC, to an amount
designed to recover a material portion,
but not all, of the Exchange’s projected
ORF Costs. The Exchange also believes
that recommencing the ORF at the
decreased rate of $0.0038 per contract
effective January 1, 2024, unless the
Exchange determines it necessary to
further adjust the ORF to ensure that
ORF collections do not exceed a
material portion of ORF Costs, is
equitable because the ORF would
resume applying equally to all ATP
Holders on options transactions in the
Customer range, at a rate designed to
recover a material portion, but not all,
of the Exchange’s projected ORF Costs.
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The Proposed Fee Is Not Unfairly
Discriminatory
The Exchange believes that the
proposal is not unfairly discriminatory.
The Exchange believes that the
proposed waiver of the ORF would not
place certain market participants at an
unfair disadvantage because all options
transactions must clear via a clearing
firm. Such clearing firms can then
choose to pass through all, a portion, or
none of the cost of the ORF to its
customers, i.e., the entering firms. As
noted above, the ORF is collected from
ATP Holder clearing firms by the OCC
on behalf of NYSE American and is
assessed on options transactions that are
cleared at the OCC in the Customer
range. In addition, the Exchange notes
that the costs relating to monitoring
ATP Holders with respect to Customer
trading activity are generally higher
than the costs associated with
monitoring ATP Holders that do not
engage in Customer trading activity,
which tends to be more automated and
less labor-intensive. By contrast,
regulating ATP Holders that engage in
Customer trading activity is generally
more labor intensive and requires a
greater expenditure of human and
technical resources as the Exchange
needs to review not only the trading
activity on behalf of Customers, but also
the ATP Holder’s relationship with its
Customers via more labor-intensive
exam-based programs. As a result, the
costs associated with administering the
customer component of the Exchange’s
overall regulatory program are
materially higher than the costs
associated with administering the noncustomer component (e.g., ATP Holder
proprietary transactions) of its
regulatory program. Thus, the Exchange
believes the proposed reduction of ORF
and accompanying temporary waiver of
the ORF is not unfairly discriminatory
because the changes would apply to all
ATP Holders subject to the ORF and the
Exchange would provide all such ATP
Holders with 30 days’ advance notice of
planned changes to the ORF. The
Exchange also believes that
recommencing the ORF on January 1,
2024 at $0.0038, unless the Exchange
determines it necessary to further adjust
the ORF to ensure that ORF collections
do not exceed a material portion of ORF
Costs, is not unfairly discriminatory
because the Exchange would resume
assessing an ORF designed to recover a
material portion, but not all, of the
Exchange’s projected ORF Costs, and
the ORF would resume applying equally
to all ATP Holders based on their
transactions that clear in the Customer
range at the OCC.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
Intramarket Competition. The
Exchange believes the proposed change
would not impose an undue burden on
intramarket competition because the
ORF is charged to all ATP Holders on
all their transactions that clear in the
Customer range at the OCC; thus, the
amount of ORF imposed is based on the
amount of Customer volume transacted.
The Exchange believes that the
proposed reduction of the ORF rate and
temporary waiver of the ORF would not
place certain market participants at an
unfair disadvantage because all options
transactions must clear via a clearing
firm. Such clearing firms can then
choose to pass through all, a portion, or
none of the cost of the ORF to its
customers, i.e., the entering firms. The
ORF is collected from ATP Holder
clearing firms by the OCC on behalf of
NYSE American and is assessed on all
options transactions cleared at the OCC
in the Customer range. The Exchange
also believes recommencing the ORF on
January 1, 2024 at $0.0038 (unless the
Exchange determines it necessary at that
time to adjust the ORF to ensure that
ORF collections do not exceed a
material portion of ORF Costs) would
not impose an undue burden on
competition because the proposed
decreased rate would apply equally to
all ATP Holders subject to ORF and
would permit the Exchange to resume
assessing an ORF that is designed to
recover a material portion, but not all,
of the Exchange’s projected ORF Costs
and the ORF would, as currently, apply
to all ATP Holders on their options
transactions that clear in the Customer
range at the OCC. The Exchange will
continue to provide advance notice of
changes to the ORF to all ATP Holders
via Trader Update to provide ATP
Holders with sufficient opportunity to
configure their systems to account
properly for both the Waiver Period and
resumption of ORF at a new, lower rate
on January 1, 2024.
Intermarket Competition. The
proposed fee change is not designed to
address any competitive issues. Rather,
the proposed change is designed to help
the Exchange adequately fund its
regulatory activities while seeking to
ensure that total collections from
regulatory fees do not exceed total
regulatory costs.
VerDate Sep<11>2014
18:39 Oct 06, 2023
Jkt 262001
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) 14 of the Act and
subparagraph (f)(2) of Rule 19b–4 15
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) 16 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–2023–48 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–2023–48. 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
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
16 15 U.S.C. 78s(b)(2)(B).
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSEAMER–2023–48 and should
be submitted on or before October 31,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–22348 Filed 10–6–23; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #18143 and #18144;
GEORGIA Disaster Number GA–00158]
Presidential Declaration Amendment of
a Major Disaster for the State of
Georgia
U.S. Small Business
Administration.
ACTION: Amendment 1.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the State of Georgia (FEMA–
4738–DR), dated 09/07/2023.
Incident: Hurricane Idalia.
Incident Period: 08/30/2023.
DATES: Issued on 10/02/2023.
Physical Loan Application Deadline
Date: 11/06/2023.
Economic Injury (EIDL) Loan
Application Deadline Date: 06/07/2024.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
SUMMARY:
15 17
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
69977
17 17
E:\FR\FM\10OCN1.SGM
CFR 200.30–3(a)(12).
10OCN1
]]>Agencies
[Federal Register Volume 88, Number 194 (Tuesday, October 10, 2023)]
[Notices]
[Pages 69973-69977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22348]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98678; File No. SR-NYSEAMER-2023-48]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the NYSE American Options Fee Schedule To Modify the Options Regulatory
Fee
October 3, 2023.
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 September 29, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE American Options Fee
Schedule (``Fee Schedule'') regarding the Options Regulatory Fee
(``ORF''). 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.
[[Page 69974]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule to decrease the ORF
from $0.0055 per contract to $0.0038 per contract, effective on January
1, 2024, and to provide for a temporary waiver of the ORF for the three
months leading up to such change, from October 1, 2023 through December
31, 2023 (the ``Waiver Period'').\4\
---------------------------------------------------------------------------
\4\ See proposed Fee Schedule, Section VII.A., Options
Regulatory Fee (``ORF''). The Exchange proposes to modify the Fee
Schedule to provide for a waiver of ORF from October 1, 2023 until
December 31, 2023, and to provide that the ORF rate would be $0.0038
when the Exchange resumes assessing ORF on January 1, 2024.
---------------------------------------------------------------------------
Background
As a general matter, the Exchange may only use regulatory funds
such as the ORF ``to fund the legal, regulatory, and surveillance
operations'' of the Exchange.\5\ More specifically, the ORF is designed
to recover a material portion, but not all, of the Exchange's costs for
the supervision and regulation of ATP Holders, including the Exchange's
regulatory program and legal expenses associated with options
regulation, such as the costs related to in-house staff, third-party
service providers, and technology that facilitate regulatory functions
such as surveillance, investigation, examinations and enforcement
(collectively, the ``ORF Costs''). ORF funds may also be used for
indirect expenses such as human resources and other administrative
costs. The Exchange monitors the amount of revenue collected from the
ORF to ensure that this revenue, in combination with other regulatory
fees and fines, does not exceed regulatory costs.
---------------------------------------------------------------------------
\5\ The Exchange considers surveillance operations part of
regulatory operations. The limitation on the use of regulatory funds
also provides that they shall not be distributed. See Thirteenth
Amended and Restated Operating Agreement of NYSE American LLC,
Article IV, Section 4.05 and Securities Exchange Act Release No.
87993 (January 16, 2020), 85 FR 4050 (January 23, 2020) (SR-
NYSEAMER-2020-04).
---------------------------------------------------------------------------
The ORF is assessed on ATP Holders for options transactions that
are cleared by the ATP Holder through the Options Clearing Corporation
(``OCC'') in the Customer range regardless of the exchange on which the
transaction occurs and is collected from OTP Holder clearing firms by
the OCC on behalf of NYSE American.\6\ All options transactions must
clear via a clearing firm and such clearing firms can then choose to
pass through all, a portion, or none of the cost of the ORF to its
customers, i.e., the entering firms. The Exchange notes that the costs
relating to monitoring ATP Holders with respect to Customer trading
activity are generally higher than the costs associated with monitoring
ATP Holders that do not engage in Customer trading activity, which
tends to be more automated and less labor-intensive. By contrast,
regulating ATP Holders that engage in Customer trading activity is
generally more labor intensive and requires a greater expenditure of
human and technical resources as the Exchange needs to review not only
the trading activity on behalf of Customers, but also the ATP Holder's
relationship with its Customers via more labor-intensive exam-based
programs.\7\ As a result, the costs associated with administering the
customer component of the Exchange's overall regulatory program are
materially higher than the costs associated with administering the non-
customer component (e.g., ATP Holder proprietary transactions) of its
regulatory program.
---------------------------------------------------------------------------
\6\ See Fee Schedule, Section VII.A., Options Regulatory Fee
(``ORF''). The Exchange uses reports from OCC when assessing and
collecting the ORF. The ORF is not assessed on outbound linkage
trades. An ATP Holder is not assessed the fee until it has satisfied
applicable technological requirements necessary to commence
operations on NYSE American. See id.
\7\ The Exchange notes that many of the Exchange's market
surveillance programs require the Exchange to look at and evaluate
activity across all options markets, such as surveillance for
position limit violations, manipulation, front-running and contrary
exercise advice violations/expiring exercise declarations. The
Exchange and other options SROs are parties to a 17d-2 agreement
allocating among the SROs regulatory responsibilities relating to
compliance by the common members with rules for expiring exercise
declarations, position limits, OCC trade adjustments, and Large
Option Position Report reviews. See, e.g., Securities Exchange Act
Release No. 85097 (February 11, 2019), 84 FR 4871 (February 19,
2019).
---------------------------------------------------------------------------
ORF Collections and Monitoring of ORF
Exchange rules establish that market participants must be notified
of any change in the ORF via Trader Update at least 30 calendar days
prior to the effective date of the change.\8\
---------------------------------------------------------------------------
\8\ See Fee Schedule, supra note 6.
---------------------------------------------------------------------------
Because the ORF is based on options transactions volume, the amount
of ORF collected is variable. For example, if options transactions
reported to OCC in a given month increase, the ORF collected from ATP
Holders will likely increase as well. Similarly, if options
transactions reported to OCC in a given month decrease, the ORF
collected from ATP Holders will likely decrease as well. Accordingly,
the Exchange monitors the amount of ORF collected to ensure that it
does not exceed the ORF Costs. If the Exchange determines the amount of
ORF collected exceeds ORF Costs, the Exchange will adjust the ORF by
submitting a fee change filing to the Securities and Exchange
Commission (the ``Commission'').
Reduction of ORF and Temporary ORF Waiver
The Exchange currently assesses an ORF of $0.0055 per contract.
Based on the Exchange's recent review of regulatory costs, ORF
collections, and options transaction volume, the Exchange proposes to
decrease the ORF from the current rate of $0.0055 per contract to
$0.0038 per contract effective January 1, 2024 and, in concert with the
proposed reduction of the ORF, to waive the ORF from October 1, 2023
through December 31, 2023 in order to help ensure that the amount
collected from the ORF, in combination with other regulatory fees and
fines, does not exceed the Exchange's total regulatory costs. The
Exchange notified ATP Holders of the proposed temporary waiver of the
ORF via Trader Update on September 1, 2023 (which was at least 30
calendar days prior to the proposed operative date of the waiver,
October 1, 2023) \9\ and will also notify ATP Holders of the proposed
change to the ORF rate via Trader Update at least 30 days prior to the
proposed operative date of the new rate, January 1, 2024. The Exchange
believes such notices will ensure that market participants have
sufficient opportunity to configure their systems to account properly
for both the ORF waiver and revised ORF.
---------------------------------------------------------------------------
\9\ See https://www.nyse.com/trader-update/history#110000672056.
---------------------------------------------------------------------------
The proposed modification of the ORF and accompanying waiver are
informed by the Exchange's analysis of recent options volumes. The
Exchange proposes to reduce the ORF because it believes that options
transaction volume has increased to a level that if the ORF is not
adjusted, the ORF revenue to the Exchange year-over-year could exceed a
material portion of the Exchange's ORF Costs.\10\ The options industry
has continued to experience extremely high options trading volumes and
volatility, as illustrated in the table below
[[Page 69975]]
reflecting industry data from OCC for 2021, 2022, and 2023: \11\
---------------------------------------------------------------------------
\10\ The Exchange notes that it last modified the ORF rate in
February 2014. See Securities Exchange Act Release No. 71410
(January 27, 2014), 79 FR 5506 (January 31, 2014) (SR-NYSEMKT-2014-
09). The Exchange also previously filed to waive the ORF from
November 1, 2022 through January 31, 2023. See Securities Exchange
Act Release No. 96373 (November 22, 2022), 87 FR 73376 (November 29,
2022) (SR-NYSEAMER-2022-52).
\11\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
The volume discussed in this filing is based on a compilation of OCC
data for monthly volume of equity-based options and monthly volume
of ETF-based options, in contract sides.
------------------------------------------------------------------------
2021 2022 2023
------------------------------------------------------------------------
Customer ADV..................... 34,730,276 34,091,409 35,957,560
Total ADV........................ 74,339,870 76,488,459 81,483,685
------------------------------------------------------------------------
For example, although customer average daily volume decreased
slightly from 2021 to 2022, both total average daily volume and
customer average daily volume in 2023 increased over the already
elevated levels in 2021 and 2022.
The below industry data from OCC demonstrates the high options
trading volumes and volatility that the industry has continued to
experience in 2023:
----------------------------------------------------------------------------------------------------------------
April 2023 May 2023 June 2023 July 2023 August 2023
----------------------------------------------------------------------------------------------------------------
Customer ADV.................... 32,498,578 34,535,662 37,028,394 35,965,918 35,387,029
Total ADV....................... 73,005,006 78,571,791 83,362,815 80,391,999 81,381,473
----------------------------------------------------------------------------------------------------------------
The persisting increased options volumes have, in turn, impacted
the amount of ORF collected. To determine whether ORF fees should be
adjusted, the Exchange reviewed options transaction volume from 2021
through August 2023. Based on the Exchange's review and analysis of
historical options transaction volume and predictions regarding future
options transaction volume, the Exchange projects that options
transaction volume is likely to continue to remain high into 2024.
The Exchange believes that it has sufficient information based on
recent options transaction volume to determine how to adjust the ORF
for 2024. Taking into consideration both the sustained increase in
options transaction volume, which has persisted into 2023 (and which
has translated to increased ORF collection), the Exchange proposes to
decrease the ORF from $0.0055 to $0.0038 per contract. The Exchange
further proposes to make this change effective on January 1, 2024 and
to not assess any ORF during the Waiver Period, rather than further
adjusting the ORF for the duration of the Waiver Period, as the
Exchange believes this proposal would most efficiently accomplish the
goals of ensuring that ORF collection does not exceed ORF Costs for
2023 and modifying the ORF rate so that the Exchange may assess an ORF
that is designed to recover a material portion, but not all, of the
Exchange's projected ORF Costs when the Exchange resumes assessing ORF
on January 1, 2024.
The proposed decrease in ORF is based on the Exchange's estimated
projections for its regulatory costs, balanced with the observed
increase in options volumes. The Exchange cannot predict whether
options volume will remain at the current level going forward and
projections for future regulatory costs are estimated, preliminary, and
may change. However, the Exchange believes that amounts collected from
assessment of the ORF (as modified) will continue to cover a material
portion, but not all, of the Exchange's ORF Costs. In addition, because
of the sustained impact of the elevated trading volumes that have
persisted into 2023, along with the difficulty of predicting when
volumes may return to more normal levels, the Exchange believes that
waiving ORF from October 1, 2023 to December 31, 2023 and implementing
the reduced ORF rate of $0.0038 on January 1, 2024 (rather than
reducing ORF more drastically in the interim) would lessen the
potential for generating excess funds and help ensure that the ORF is
designed to recover a material portion, but not all, of the Exchange's
projected ORF Costs. The Exchange will continue monitoring ORF Costs in
advance of the resumption of the ORF and when it resumes assessing ORF
on January 1, 2024, and, if the Exchange determines that, in light of
projected volumes and ORF Costs, the ORF rate should be further
modified to help ensure that ORF collections would not exceed a
material portion of ORF Costs, adjust the ORF by submitting a proposed
rule change and notifying ATP Holders of such change by Trader Update.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) \12\ of the Act, in general, and
Section 6(b)(4) and (5) \13\ of the Act, in particular, in that it is
designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among its members and other persons using its
facilities and does not unfairly discriminate between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Proposal Is Reasonable
The Exchange believes the proposed reduction of ORF and
accompanying temporary waiver of the ORF is reasonable because it would
help ensure that collections from the ORF do not exceed a material
portion of the Exchange's ORF Costs. As noted above, the ORF is
designed to recover a material portion, but not all, of the Exchange's
ORF Costs.
Although there can be no assurance that the Exchange's final costs
for 2023 will not differ materially from its expectations and prior
practice, nor can the Exchange predict with certainty whether options
volume will remain at current or similar levels going forward, the
Exchange believes that the amount collected based on the current ORF
rate, when combined with regulatory fees and fines, may result in
collections in excess of the estimated ORF Costs for the year and going
forward. Particularly, as noted above, the options market has continued
to experience elevated volumes and volatility in 2023, thereby
resulting in substantially higher ORF collections than projected. The
Exchange therefore believes that it would be reasonable to decrease the
ORF from $0.0055 per contract to $0.0038 per contract effective January
1, 2024, and, in connection with that change, to waive ORF from October
1,
[[Page 69976]]
2023 through December 31, 2023. The Exchange believes the proposed
change is reasonable because it would help the Exchange ensure that ORF
collection does not exceed a material portion of the ORF Costs for 2023
and facilitate the efficient implementation of a revised ORF rate
designed to recover a material portion, but not all, of the Exchange's
projected ORF Costs. The Exchange proposes to make the new ORF rate
effective on January 1, 2024 and to not assess any ORF during the
Waiver Period, rather than further adjusting the ORF for the duration
of the Waiver Period, as the Exchange believes this proposal would most
efficiently accomplish these objectives. The Exchange believes that not
assessing ORF during the Waiver Period and taking into account all of
the Exchange's other regulatory fees and fines would allow the Exchange
to continue covering a material portion of ORF Costs, while lessening
the potential for generating excess funds that may otherwise occur
using the current rate. The Exchange also believes that it is
reasonable to resume ORF at the decreased rate of $0.0038 on January 1,
2024. The proposed rate of $0.0038 per contract is based on the
Exchange's estimated projections for its regulatory costs, balanced
with the increase in options volumes that has persisted into 2023 and
that is likely to continue into 2024; the Exchange thus believes that
resumption of the ORF at this rate on January 1, 2024 is reasonable
because it would permit the Exchange to resume assessing an ORF that is
designed to recover a material portion, but not all, of the Exchange's
projected ORF Costs. The Exchange would continue monitoring ORF Costs
in advance of the resumption of the ORF and when it resumes assessing
ORF on January 1, 2024 and, if the Exchange determines that, in light
of projected volumes and ORF Costs, the ORF rate should be further
modified to help ensure that ORF collections would not exceed a
material portion of ORF Costs, further adjust the ORF by submitting a
proposed rule change and notifying ATP Holders of such change by Trader
Update.
The Proposal Is an Equitable Allocation of Fees
The Exchange believes its proposal is an equitable allocation of
fees among its market participants. The Exchange believes that the
proposed waiver would not place certain market participants at an
unfair disadvantage because all options transactions must clear via a
clearing firm. Such clearing firms can then choose to pass through all,
a portion, or none of the cost of the ORF to its customers, i.e., the
entering firms. As noted above, the ORF is collected from ATP Holder
clearing firms by the OCC on behalf of NYSE American and is assessed on
all options transactions that are cleared at the OCC in the Customer
range. In addition, the Exchange notes that the costs relating to
monitoring ATP Holders with respect to Customer trading activity are
generally higher than the costs associated with monitoring ATP Holders
that do not engage in Customer trading activity, which tends to be more
automated and less labor-intensive. By contrast, regulating ATP Holders
that engage in Customer trading activity is generally more labor
intensive and requires a greater expenditure of human and technical
resources as the Exchange needs to review not only the trading activity
on behalf of Customers, but also the ATP Holder's relationship with its
Customers via more labor-intensive exam-based programs. As a result,
the costs associated with administering the customer component of the
Exchange's overall regulatory program are materially higher than the
costs associated with administering the non-customer component (e.g.,
ATP Holder proprietary transactions) of its regulatory program. The
Exchange believes that the proposed reduction of ORF from $0.0055 per
contract to $0.0038 per contract effective January 1, 2024, along with
a temporary waiver of the ORF for the three months prior to such
change, is an equitable allocation of fees because the new ORF rate
would apply equally to all ATP Holders on all their transactions that
clear in the Customer range at the OCC, and the Exchange would not
assess the ORF on any such transactions during the Waiver Period. The
proposed change also would permit the Exchange to efficiently adjust
the ORF, which is applicable to all ATP Holders' transactions that
clear in the Customer range at the OCC, to an amount designed to
recover a material portion, but not all, of the Exchange's projected
ORF Costs. The Exchange also believes that recommencing the ORF at the
decreased rate of $0.0038 per contract effective January 1, 2024,
unless the Exchange determines it necessary to further adjust the ORF
to ensure that ORF collections do not exceed a material portion of ORF
Costs, is equitable because the ORF would resume applying equally to
all ATP Holders on options transactions in the Customer range, at a
rate designed to recover a material portion, but not all, of the
Exchange's projected ORF Costs.
The Proposed Fee Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. The Exchange believes that the proposed waiver of the
ORF would not place certain market participants at an unfair
disadvantage because all options transactions must clear via a clearing
firm. Such clearing firms can then choose to pass through all, a
portion, or none of the cost of the ORF to its customers, i.e., the
entering firms. As noted above, the ORF is collected from ATP Holder
clearing firms by the OCC on behalf of NYSE American and is assessed on
options transactions that are cleared at the OCC in the Customer range.
In addition, the Exchange notes that the costs relating to monitoring
ATP Holders with respect to Customer trading activity are generally
higher than the costs associated with monitoring ATP Holders that do
not engage in Customer trading activity, which tends to be more
automated and less labor-intensive. By contrast, regulating ATP Holders
that engage in Customer trading activity is generally more labor
intensive and requires a greater expenditure of human and technical
resources as the Exchange needs to review not only the trading activity
on behalf of Customers, but also the ATP Holder's relationship with its
Customers via more labor-intensive exam-based programs. As a result,
the costs associated with administering the customer component of the
Exchange's overall regulatory program are materially higher than the
costs associated with administering the non-customer component (e.g.,
ATP Holder proprietary transactions) of its regulatory program. Thus,
the Exchange believes the proposed reduction of ORF and accompanying
temporary waiver of the ORF is not unfairly discriminatory because the
changes would apply to all ATP Holders subject to the ORF and the
Exchange would provide all such ATP Holders with 30 days' advance
notice of planned changes to the ORF. The Exchange also believes that
recommencing the ORF on January 1, 2024 at $0.0038, unless the Exchange
determines it necessary to further adjust the ORF to ensure that ORF
collections do not exceed a material portion of ORF Costs, is not
unfairly discriminatory because the Exchange would resume assessing an
ORF designed to recover a material portion, but not all, of the
Exchange's projected ORF Costs, and the ORF would resume applying
equally to all ATP Holders based on their transactions that clear in
the Customer range at the OCC.
[[Page 69977]]
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
Intramarket Competition. The Exchange believes the proposed change
would not impose an undue burden on intramarket competition because the
ORF is charged to all ATP Holders on all their transactions that clear
in the Customer range at the OCC; thus, the amount of ORF imposed is
based on the amount of Customer volume transacted. The Exchange
believes that the proposed reduction of the ORF rate and temporary
waiver of the ORF would not place certain market participants at an
unfair disadvantage because all options transactions must clear via a
clearing firm. Such clearing firms can then choose to pass through all,
a portion, or none of the cost of the ORF to its customers, i.e., the
entering firms. The ORF is collected from ATP Holder clearing firms by
the OCC on behalf of NYSE American and is assessed on all options
transactions cleared at the OCC in the Customer range. The Exchange
also believes recommencing the ORF on January 1, 2024 at $0.0038
(unless the Exchange determines it necessary at that time to adjust the
ORF to ensure that ORF collections do not exceed a material portion of
ORF Costs) would not impose an undue burden on competition because the
proposed decreased rate would apply equally to all ATP Holders subject
to ORF and would permit the Exchange to resume assessing an ORF that is
designed to recover a material portion, but not all, of the Exchange's
projected ORF Costs and the ORF would, as currently, apply to all ATP
Holders on their options transactions that clear in the Customer range
at the OCC. The Exchange will continue to provide advance notice of
changes to the ORF to all ATP Holders via Trader Update to provide ATP
Holders with sufficient opportunity to configure their systems to
account properly for both the Waiver Period and resumption of ORF at a
new, lower rate on January 1, 2024.
Intermarket Competition. The proposed fee change is not designed to
address any competitive issues. Rather, the proposed change is designed
to help the Exchange adequately fund its regulatory activities while
seeking to ensure that total collections from regulatory fees do not
exceed total regulatory costs.
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) \14\ of the Act and subparagraph (f)(2) of Rule
19b-4 \15\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 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-2023-48 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-2023-48. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSEAMER-2023-48 and should
be submitted on or before October 31, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-22348 Filed 10-6-23; 8:45 am]
BILLING CODE 8011-01-P
