Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE American Options Fee Schedule Concerning the Options Regulatory Fee (ORF), 101674-101678 [2024-29470]
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101674
Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Notices
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This information collection
requirement was previously approved
by OMB, but the approval expired on
November 30, 2021. Accordingly, the
Commission will request a
reinstatement without change of OMB’s
approval.
The respondents to this collection of
information are attorneys who appear
and practice before the Commission
and, in certain cases, the issuer, and/or
officers, directors and committees of the
issuer. We believe that, in providing
quality representation to issuers,
attorneys report evidence of violations
to others within the issuer, including
the Chief Legal Officer, the Chief
Executive Officer, and, where necessary,
the directors. In addition, officers and
directors investigate evidence of
violations and report within the issuer
the results of the investigation and the
remedial steps they have taken or
sanctions they have imposed. Except as
discussed below, we therefore believe
that the reporting requirements imposed
by the rule are ‘‘usual and customary’’
activities that do not add to the burden
that would be imposed by the collection
of information.
Certain aspects of the collection of
information, however, may impose a
burden. For an issuer to establish a
QLCC, the QLCC must adopt written
procedures for the confidential receipt,
retention, and consideration of any
report of evidence of a material
violation. We estimate for purposes of
the PRA that there are approximately
11,484 issuers that are subject to the
rules.1 Of these, we estimate that
approximately 346, which is
approximately 3 percent, have
established or will establish a QLCC.2
Establishing the written procedures
required by the rule should not impose
a significant burden. We assume that an
issuer would incur a greater burden in
the year that it first establishes the
procedures than in subsequent years, in
which the burden would be incurred in
updating, reviewing, or modifying the
procedures. For purposes of the PRA,
we assume that an issuer would spend
6 hours every three-year period on the
procedures. This would result in an
average burden of 2 hours per year.
Thus, we estimate for purposes of the
PRA that the total annual burden
1 This figure is based on the estimated 8,230
operating companies that filed annual reports on
Form 10–K, Form 20–F, or Form 40–F during the
2023 calendar year, and the estimated 3,254
investment companies that filed periodic reports on
Form N–CEN during that same period.
2 This estimate is based on issuer-filings made
with the Commission between January 1, 2021, and
September 30, 2024, that include a reference to the
issuer’s QLCC.
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imposed by the collection of
information would be 692 hours.
Assuming half of the burden hours will
be incurred by outside counsel at a rate
of $700 per hour, the resulting cost
would be $242,200.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study. An
agency may not conduct or sponsor, and
a person is not required to respond to,
a collection of information unless it
displays a currently valid OMB control
number.
Written comments are requested on:
(a) whether the collection of information
is necessary for the proper performance
of the functions of the Commission,
including whether the information has
practical utility; (b) the accuracy of the
Commission’s estimate of the burden[s]
of the collection of information; (c) ways
to enhance the quality, utility, and
clarity of the information collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing by February 14, 2025.
Please direct your written comments
to: Austin Gerig, Director/Chief Data
Officer, Securities and Exchange
Commission, c/o Tanya Ruttenberg, 100
F Street NE, Washington, DC 20549, or
send an email to: PRA_Mailbox@
sec.gov.
Dated: December 10, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–29477 Filed 12–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101866; File No. SR–
NYSEAMER–2024–63]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE
American Options Fee Schedule
Concerning the Options Regulatory
Fee (ORF)
December 10, 2024.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
Frm 00126
Fmt 4703
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notice is hereby given that, on
November 25, 2024, 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 Exchange. 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.
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 (1) temporarily waive
the ORF for the period December 1,
2024 through December 31, 2024 (the
‘‘Waiver Period’’), and (2) delete
outdated language relating to a prior
ORF waiver and superseded ORF rate.
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.4 More specifically, the ORF
4 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),
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Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Notices
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 ATP
Holder clearing firms by the OCC on
behalf of NYSE American.5 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.6 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.
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 [sic]
the ORF Costs. If the Exchange
determines the amount of ORF collected
exceeds [sic] or may exceed [sic] ORF
Costs, the Exchange will, as appropriate,
adjust the ORF by submitting a fee
change filing to the Securities and
Exchange Commission (the
‘‘Commission’’). 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.7
Proposed Rule Change
Based on the Exchange’s recent
review of regulatory costs, ORF
collections, and options transaction
volume, the Exchange proposes to waive
the ORF from December 1 through
December 31, 2024 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 proposes to resume
assessing the ORF on January 1, 2025 at
the current rate of $0.0038 per contract.
The Exchange notified ATP Holders of
the proposed change to the ORF via
Trader Update on October 30, 2024 8
(which was at least 30 calendar days
prior to the proposed operative date of
the waiver, December 1, 2024) so that
market participants have sufficient
opportunity to configure their systems
to account properly for the waiver of the
ORF.
The proposed waiver is based on the
Exchange’s analysis of recent options
volumes and its regulatory costs. The
Exchange believes 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. The options industry has
continued to experience very high
options trading volumes and volatility,
and although the Exchange recently
reduced the ORF as of January 1, 2024,9
the persisting increased options
volumes have impacted the Exchange’s
ORF collection.
The options industry has continued to
experience high options trading
volumes, as illustrated in the table
below reflecting industry data from OCC
for 2022, 2023, and 2024: 10
2022
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Customer ADV .............................................................................................................................
Total ADV ....................................................................................................................................
101675
2023
34,091,409
76,488,459
35,957,560
81,483,685
2024
38,412,142
86,706,482
Both total average daily volume and
customer average daily volume in 2024
increased over the already elevated
levels in 2022 and 2023. In addition, the
below industry data from OCC
demonstrates the high options trading
85 FR 4050 (January 23, 2020) (SR–NYSEAMER–
2020–04).
5 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.
6 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).
7 See Fee Schedule, supra note 5.
8 See https://www.nyse.com/trader-update/
history#110000945374.
9 See Securities Exchange Act Release No. 98678
(October 3, 2023), 88 FR 69973 (October 10, 2023)
(SR–NYSEAMER–2023–48) (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).
The Exchange also previously filed to waive the
ORF from October 1, 2023 through December 31,
2023. See id.
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. 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.
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volumes and volatility that the industry
has continued to experience in 2024:
May 2024
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Customer ADV .........................................
Total ADV .................................................
I
Because of the sustained impact of the
trading volumes that have persisted
through 2024, along with the difficulty
of predicting if and when volumes may
return to historical levels, the Exchange
proposes to waive the ORF from
December 1 through December 31, 2024
to help ensure that ORF collection will
not exceed [sic] ORF Costs for 2024. The
Exchange cannot predict whether
options volumes will remain at these
levels going forward and projections for
future regulatory costs are estimated,
preliminary, and may change. However,
the Exchange believes that the proposed
waiver of the ORF would allow the
Exchange to continue to monitor the
amount collected from the ORF to help
ensure that ORF collection, in
combination with other regulatory fees
and fines, does not exceed regulatory
costs without the need to account for
any ORF collection during the Waiver
Period.
Based on the Exchange’s estimated
projections for its regulatory costs,
balanced with the observed increase in
options volumes, the Exchange proposes
to resume assessing the current ORF rate
of $0.0038 per contract as of January 1,
2025. As noted above, although the
options industry has experienced high
options trading volumes in recent years,
the Exchange cannot predict with
certainty whether options volumes will
remain at these levels going forward.
The Exchange believes that maintaining
the current rate when ORF collection
resumes following the Waiver Period
would allow the Exchange to continue
assessing an ORF designed to recover a
material portion, but not all, of the
Exchange’s ORF Costs, based on current
projections that the Exchange’s ORF
Costs will increase in 2025. The
Exchange will continue monitoring ORF
Costs in advance of the resumption of
the ORF and when it resumes assessing
ORF on January 1, 2025, and, if the
Exchange determines that, in light of
projected volumes and ORF Costs, the
ORF rate should be 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.
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36,231,012
72,462,024
June 2024
I
July 2024
39,784,756
79,569,512
I
40,657,739
81,315,478
I
The Exchange also proposes to delete
language in the Fee Schedule pertaining
to the ORF waiver that was in effect
from October 1, 2023 to December 31,
2023, as well as the old ORF rate of
$0.0058 per contract, which was
superseded by the current ORF rate of
$0.0038 as of January 1, 2024. The
Exchange believes this change would
improve the clarity of the Fee Schedule
by removing obsolete language.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6(b) 11 of the
Act, in general, and Section 6(b)(4) and
(5) 12 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
The Exchange believes the proposed
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 2024
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. Particularly, as noted above,
the options market has continued to
experience elevated volumes and
volatility in 2024, thereby resulting in
higher ORF collections than projected
despite the reduced ORF rate in effect
as of January 1, 2024. The Exchange
therefore believes that it would be
reasonable to waive ORF from December
11 15
12 15
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U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
Frm 00128
Fmt 4703
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September
2024
August 2024
38,558,587
77,117,174
I
39,214,407
78,428,814
October 2024
39,920,560
79,841,120
1 through December 31, 2024 to help
ensure that ORF collection does not
exceed [sic] the ORF Costs for 2024.
Particularly, the Exchange believes that
waiving the ORF from December 1
through December 31, 2024 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
proposes to resume assessing its current
ORF ($0.0038 per contract) following
the Waiver Period. The Exchange
believes that resumption of the ORF at
the current rate on January 1, 2025
(unless the Exchange determines it
necessary to adjust the ORF rate to help
ensure that ORF collections do not
exceed [sic] ORF Costs) is reasonable
because it would permit the Exchange to
resume collecting an ORF that is
designed to recover a material portion,
but not all, of the Exchange’s projected
ORF Costs. The Exchange’s proposal to
resume ORF collection following the
Waiver Period at the current ORF rate is
based on the Exchange’s estimated
projections for its regulatory costs,
which are currently projected to
increase in 2025, balanced with the
increase in options volumes that has
persisted into 2024 and that may
continue into 2025. The Exchange will
continue monitoring ORF Costs in
advance of the resumption of the ORF
and when it resumes assessing ORF on
January 1, 2025, and, if the Exchange
determines that, in light of projected
volumes and ORF Costs, the ORF rate
should be 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 also believes that the
proposed deletion of language relating
to an ORF waiver period that has now
elapsed and a superseded ORF rate is
reasonable because it would remove
obsolete language and thus improve the
clarity of the Fee Schedule.
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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 it would
apply equally to all ATP Holders on all
their transactions that clear in the
Customer range at the OCC and would
allow the Exchange to continue to
monitor the amount collected from the
ORF to help ensure that ORF collection,
in combination with other regulatory
fees and fines, does not exceed
regulatory costs. The Exchange also
believes that recommencing the ORF on
January 1, 2025 at the current rate,
unless the Exchange determines it
necessary to 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,
based on current projections that such
costs will increase in 2025.
The proposed change to remove
language relating to an ORF waiver
period that has now elapsed and a
superseded ORF rate is also equitable
because it would eliminate language
from the Fee Schedule that is no longer
applicable to any ATP Holders.
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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 the change
would apply to all ATP Holders subject
to the ORF and would allow the
Exchange to continue to monitor the
amount collected from the ORF to help
ensure that ORF collection, in
combination with other regulatory fees
and fines, does not exceed regulatory
costs. The Exchange also has provided
all such ATP Holders with 30 days’
advance notice of the planned change to
the ORF. The Exchange also believes
that recommencing the ORF on January
1, 2025 at the current rate, unless the
Exchange determines it necessary to
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
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101677
ORF Costs, based on current projections
that such costs will increase in 2025. In
addition, the ORF would resume
applying equally to all ATP Holders
based on their transactions that clear in
the Customer range at the OCC.
The proposed change to remove
language relating to an ORF waiver
period that has now elapsed and a
superseded ORF rate is also not unfairly
discriminatory because it would
eliminate outdated language from the
Fee Schedule that no longer impacts any
ATP Holders.
competition because it is intended only
to add clarity to the Fee Schedule by
removing obsolete text.
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 [sic] total
regulatory costs and to promote clarity
in the Fee Schedule by deleting obsolete
text.
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 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,
2025 at the current rate (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 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, based on current
projections that such costs will increase
in 2025. The ORF would, as currently,
apply to all ATP Holders on their
options transactions that clear in the
Customer range at the OCC when ORF
collection resumes on January 1, 2025.
The Exchange also believes that the
proposed change to eliminate language
relating to an ORF waiver period that
has now elapsed and a superseded ORF
rate would not impact intramarket
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
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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 has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 13 and Rule
19b–4(f)(2) 14 thereunder.
At any time within 60 days of the
filing of the 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
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–2024–63 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
13 15
14 17
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U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Notices
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–NYSEAMER–2024–63. 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–2024–63 and should
be submitted on or before January 6,
2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–29470 Filed 12–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 101869; File No. 4–844]
lotter on DSK11XQN23PROD with NOTICES1
Self-Regulatory Organizations; MIAX
Sapphire, LLC; Order Declaring
Effective a Minor Rule Violation Plan
December 10, 2024.
On October 1, 2024, MIAX Sapphire,
LLC (‘‘Sapphire’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed minor rule violation plan
15 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:41 Dec 13, 2024
Jkt 265001
(‘‘MRVP’’ or ‘‘Plan’’) pursuant to Section
19(d)(1) of the Securities Exchange Act
of 1934 (the ‘‘Act’’),1 and Rule 19d–
1(c)(2) thereunder.2 The proposed
MRVP was published for comment on
October 15, 2024.3 The Commission
received no comments on the proposal.
This order declares the Exchange’s
proposed MRVP effective.
The Exchange’s MRVP specifies the
rule violations that will be included in
the Plan and will have sanctions not
exceeding $2,500. Any violations
resolved under the MRVP would not be
subject to the provisions of Rule 19d–
1(c)(1) of the Act,4 which requires that
a self-regulatory organization (‘‘SRO’’)
promptly file notice with the
Commission of any final disciplinary
action taken with respect to any person
or organization.5 In accordance with
Rule 19d–1(c)(2) under the Act,6 the
Exchange proposed to designate certain
specified rule violations as minor rule
violations and requested that it be
relieved of the prompt reporting
requirements regarding such violations,
provided it gives notice of such
violations to the Commission on a
quarterly basis.
The Exchange proposed to include in
its MRVP the procedures and violations
currently included in Exchange Rule
1014 (‘‘Imposition of Fines for Minor
Rule Violations’’).7 According to the
1 15
U.S.C. 78s(d)(1).
CFR 240.19d–1(c)(2).
3 See Securities Exchange Act Release No. 101283
(October 8, 2024), 89 FR 83067 (‘‘Notice’’).
4 17 CFR 240.19d–1(c)(1).
5 The Commission adopted amendments to
paragraph (c) of Rule 19d–1 to allow SROs to
submit for Commission approval plans for the
abbreviated reporting of minor disciplinary
infractions. See Securities Exchange Act Release
No. 21013 (June 1, 1984), 49 FR 23828 (June 8,
1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO
which has been designated as a minor rule violation
pursuant to a plan filed with and declared effective
by the Commission is not considered ‘‘final’’ for
purposes of Section 19(d)(1) of the Act if the
sanction imposed consists of a fine not exceeding
$2,500 and the sanctioned person has not sought an
adjudication, including a hearing, or otherwise
exhausted his administrative remedies.
6 17 CFR 240.19d–1(c)(2).
7 The Exchange received its grant of registration
on July 15, 2024, which included approving the
rules that govern the Exchange. See Securities
Exchange Act Release No. 100539 (July 15, 2024),
89 FR 58848 (July 19, 2024) (File No. 10–240).
Under the proposed MRVP, violations of the
following rules would be appropriate for
disposition under the MRVP: Rule 307 (Position
Limits); Rule 803 (Focus Reports); Rule 804
(Requests for Trade Data); Rule 520 (Order Entry);
Rule 605 (Execution of Orders in Appointed
Options); Rule 314 (Mandatory Systems Testing);
Rule 700 (Exercise of Option Contracts); Rule 309
(Exercise Limits); Rule 310 (Reports Related to
Position Limits); Rule 403 (Trading in Restricted
Classes); Rule 605 (Market Maker Quotations); Rule
1904 (Failure to Timely File Amendments to Form
U4, Form U5, and Form BD); and Rules 1701–1713
2 17
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
Exchange’s proposed MRVP, the
Exchange may impose a fine (not to
exceed $2,500) on any Member, or
person associated with or employed by
a Member, for any rule violation listed
in Rule 1014(d).8 The Exchange shall
serve the person against whom a fine is
imposed with a written statement
setting forth the rule or rules allegedly
violated, the act or omission
constituting each such violation, the
fine imposed for each violation, and the
date by which such determination
becomes final or by which such fine
must be paid or contested. If the person
against whom the fine is imposed pays
the fine, such payment shall be deemed
to be a waiver of such person’s right to
a disciplinary proceeding and any
review of the matter under the Exchange
rules. Any person against whom a fine
is imposed may contest the Exchange’s
determination by filing with the
Exchange a written answer, at which
point the matter shall become a
disciplinary proceeding.9
According to the Exchange, upon the
Commission’s declaration of
effectiveness of the MRVP, the Exchange
will provide to the Commission a
quarterly report for any actions taken on
minor rule violations under the
MRVP.10 The quarterly report will
include: the disposition date, the name
of the firm/individual, the Exchange’s
internal enforcement number, the
review period, the nature of the
violation type, the number of the rule
that was violated, the number of
instances the violation occurred, and
the sanction imposed.11
The Exchange requested that the
Commission deem any changes to the
rules applicable to the Exchange’s
MRVP to be deemed modifications to
the Exchange’s MRVP.
The Commission finds that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, as required by Rule 19d–
1(c)(2) under the Act,12 because the
MRVP will permit the Exchange to carry
out its oversight and enforcement
(Failure to Comply with the Consolidated Audit
Trail Compliance Rule Under Chapter XVII).
According to the Exchange, the Conduct and
Decorum Policies under Rule 1014(d)(1) are
excluded from the proposed MRVP. See Notice,
supra note 3, at 83067.
8 While Rule 1014 allows the Exchange to
administer fines up to $5,000, the Exchange is only
seeking relief from the reporting requirements of
paragraph (c)(1) of Rule 19d–1 for fines
administered under Rule 1014(d) that do not exceed
$2,500.
9 See Notice, supra note 3, at 83067.
10 See id.
11 See id.
12 17 CFR 240.19d–1(c)(2).
E:\FR\FM\16DEN1.SGM
16DEN1
]]>Agencies
[Federal Register Volume 89, Number 241 (Monday, December 16, 2024)]
[Notices]
[Pages 101674-101678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29470]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101866; File No. SR-NYSEAMER-2024-63]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
NYSE American Options Fee Schedule Concerning the Options Regulatory
Fee (ORF)
December 10, 2024.
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 November 25, 2024, 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 Exchange. 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.
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 (1) temporarily
waive the ORF for the period December 1, 2024 through December 31, 2024
(the ``Waiver Period''), and (2) delete outdated language relating to a
prior ORF waiver and superseded ORF rate.
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.\4\ More specifically, the ORF
[[Page 101675]]
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.
---------------------------------------------------------------------------
\4\ 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 ATP Holder clearing firms by
the OCC on behalf of NYSE American.\5\ 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.\6\ 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.
---------------------------------------------------------------------------
\5\ 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.
\6\ 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).
---------------------------------------------------------------------------
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 [sic] the ORF Costs. If the Exchange determines the
amount of ORF collected exceeds [sic] or may exceed [sic] ORF Costs,
the Exchange will, as appropriate, adjust the ORF by submitting a fee
change filing to the Securities and Exchange Commission (the
``Commission''). 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.\7\
---------------------------------------------------------------------------
\7\ See Fee Schedule, supra note 5.
---------------------------------------------------------------------------
Proposed Rule Change
Based on the Exchange's recent review of regulatory costs, ORF
collections, and options transaction volume, the Exchange proposes to
waive the ORF from December 1 through December 31, 2024 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 proposes to resume assessing the ORF on
January 1, 2025 at the current rate of $0.0038 per contract. The
Exchange notified ATP Holders of the proposed change to the ORF via
Trader Update on October 30, 2024 \8\ (which was at least 30 calendar
days prior to the proposed operative date of the waiver, December 1,
2024) so that market participants have sufficient opportunity to
configure their systems to account properly for the waiver of the ORF.
---------------------------------------------------------------------------
\8\ See https://www.nyse.com/trader-update/history#110000945374.
---------------------------------------------------------------------------
The proposed waiver is based on the Exchange's analysis of recent
options volumes and its regulatory costs. The Exchange believes 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. The
options industry has continued to experience very high options trading
volumes and volatility, and although the Exchange recently reduced the
ORF as of January 1, 2024,\9\ the persisting increased options volumes
have impacted the Exchange's ORF collection.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 98678 (October 3,
2023), 88 FR 69973 (October 10, 2023) (SR-NYSEAMER-2023-48) (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). The Exchange also previously filed to waive the ORF
from October 1, 2023 through December 31, 2023. See id.
---------------------------------------------------------------------------
The options industry has continued to experience high options
trading volumes, as illustrated in the table below reflecting industry
data from OCC for 2022, 2023, and 2024: \10\
---------------------------------------------------------------------------
\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.
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.
----------------------------------------------------------------------------------------------------------------
2022 2023 2024
----------------------------------------------------------------------------------------------------------------
Customer ADV.................................................... 34,091,409 35,957,560 38,412,142
Total ADV....................................................... 76,488,459 81,483,685 86,706,482
----------------------------------------------------------------------------------------------------------------
Both total average daily volume and customer average daily volume
in 2024 increased over the already elevated levels in 2022 and 2023. In
addition, the below industry data from OCC demonstrates the high
options trading
[[Page 101676]]
volumes and volatility that the industry has continued to experience in
2024:
--------------------------------------------------------------------------------------------------------------------------------------------------------
May 2024 June 2024 July 2024 August 2024 September 2024 October 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Customer ADV............................................ 36,231,012 39,784,756 40,657,739 38,558,587 39,214,407 39,920,560
Total ADV............................................... 72,462,024 79,569,512 81,315,478 77,117,174 78,428,814 79,841,120
--------------------------------------------------------------------------------------------------------------------------------------------------------
Because of the sustained impact of the trading volumes that have
persisted through 2024, along with the difficulty of predicting if and
when volumes may return to historical levels, the Exchange proposes to
waive the ORF from December 1 through December 31, 2024 to help ensure
that ORF collection will not exceed [sic] ORF Costs for 2024. The
Exchange cannot predict whether options volumes will remain at these
levels going forward and projections for future regulatory costs are
estimated, preliminary, and may change. However, the Exchange believes
that the proposed waiver of the ORF would allow the Exchange to
continue to monitor the amount collected from the ORF to help ensure
that ORF collection, in combination with other regulatory fees and
fines, does not exceed regulatory costs without the need to account for
any ORF collection during the Waiver Period.
Based on the Exchange's estimated projections for its regulatory
costs, balanced with the observed increase in options volumes, the
Exchange proposes to resume assessing the current ORF rate of $0.0038
per contract as of January 1, 2025. As noted above, although the
options industry has experienced high options trading volumes in recent
years, the Exchange cannot predict with certainty whether options
volumes will remain at these levels going forward. The Exchange
believes that maintaining the current rate when ORF collection resumes
following the Waiver Period would allow the Exchange to continue
assessing an ORF designed to recover a material portion, but not all,
of the Exchange's ORF Costs, based on current projections that the
Exchange's ORF Costs will increase in 2025. The Exchange will continue
monitoring ORF Costs in advance of the resumption of the ORF and when
it resumes assessing ORF on January 1, 2025, and, if the Exchange
determines that, in light of projected volumes and ORF Costs, the ORF
rate should be 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 also proposes to delete language in the Fee Schedule
pertaining to the ORF waiver that was in effect from October 1, 2023 to
December 31, 2023, as well as the old ORF rate of $0.0058 per contract,
which was superseded by the current ORF rate of $0.0038 as of January
1, 2024. The Exchange believes this change would improve the clarity of
the Fee Schedule by removing obsolete language.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) \11\ of the Act, in general, and
Section 6(b)(4) and (5) \12\ 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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Proposal Is Reasonable
The Exchange believes the proposed 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 2024 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.
Particularly, as noted above, the options market has continued to
experience elevated volumes and volatility in 2024, thereby resulting
in higher ORF collections than projected despite the reduced ORF rate
in effect as of January 1, 2024. The Exchange therefore believes that
it would be reasonable to waive ORF from December 1 through December
31, 2024 to help ensure that ORF collection does not exceed [sic] the
ORF Costs for 2024. Particularly, the Exchange believes that waiving
the ORF from December 1 through December 31, 2024 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 proposes to
resume assessing its current ORF ($0.0038 per contract) following the
Waiver Period. The Exchange believes that resumption of the ORF at the
current rate on January 1, 2025 (unless the Exchange determines it
necessary to adjust the ORF rate to help ensure that ORF collections do
not exceed [sic] ORF Costs) is reasonable because it would permit the
Exchange to resume collecting an ORF that is designed to recover a
material portion, but not all, of the Exchange's projected ORF Costs.
The Exchange's proposal to resume ORF collection following the Waiver
Period at the current ORF rate is based on the Exchange's estimated
projections for its regulatory costs, which are currently projected to
increase in 2025, balanced with the increase in options volumes that
has persisted into 2024 and that may continue into 2025. The Exchange
will continue monitoring ORF Costs in advance of the resumption of the
ORF and when it resumes assessing ORF on January 1, 2025, and, if the
Exchange determines that, in light of projected volumes and ORF Costs,
the ORF rate should be 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 also believes that the proposed deletion of language
relating to an ORF waiver period that has now elapsed and a superseded
ORF rate is reasonable because it would remove obsolete language and
thus improve the clarity of the Fee Schedule.
[[Page 101677]]
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 it would apply equally to all ATP Holders
on all their transactions that clear in the Customer range at the OCC
and would allow the Exchange to continue to monitor the amount
collected from the ORF to help ensure that ORF collection, in
combination with other regulatory fees and fines, does not exceed
regulatory costs. The Exchange also believes that recommencing the ORF
on January 1, 2025 at the current rate, unless the Exchange determines
it necessary to 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,
based on current projections that such costs will increase in 2025.
The proposed change to remove language relating to an ORF waiver
period that has now elapsed and a superseded ORF rate is also equitable
because it would eliminate language from the Fee Schedule that is no
longer applicable to any ATP Holders.
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 the change would apply to all ATP Holders subject
to the ORF and would allow the Exchange to continue to monitor the
amount collected from the ORF to help ensure that ORF collection, in
combination with other regulatory fees and fines, does not exceed
regulatory costs. The Exchange also has provided all such ATP Holders
with 30 days' advance notice of the planned change to the ORF. The
Exchange also believes that recommencing the ORF on January 1, 2025 at
the current rate, unless the Exchange determines it necessary to 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, based on current
projections that such costs will increase in 2025. In addition, the ORF
would resume applying equally to all ATP Holders based on their
transactions that clear in the Customer range at the OCC.
The proposed change to remove language relating to an ORF waiver
period that has now elapsed and a superseded ORF rate is also not
unfairly discriminatory because it would eliminate outdated language
from the Fee Schedule that no longer impacts any ATP Holders.
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 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, 2025 at the current rate (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 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,
based on current projections that such costs will increase in 2025. The
ORF would, as currently, apply to all ATP Holders on their options
transactions that clear in the Customer range at the OCC when ORF
collection resumes on January 1, 2025. The Exchange also believes that
the proposed change to eliminate language relating to an ORF waiver
period that has now elapsed and a superseded ORF rate would not impact
intramarket competition because it is intended only to add clarity to
the Fee Schedule by removing obsolete text.
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 [sic] total regulatory costs and to promote clarity in the Fee
Schedule by deleting obsolete text.
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 has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \13\ and Rule 19b-4(f)(2) \14\ thereunder.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the 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 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 [email protected]. Please include
file number SR-NYSEAMER-2024-63 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 101678]]
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEAMER-2024-63. 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-2024-63 and should
be submitted on or before January 6, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29470 Filed 12-13-24; 8:45 am]
BILLING CODE 8011-01-P
