Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 873 

17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 84751 

(December 7, 2018), 83 FR 63948 (December 12, 

2018) (SR–DTC–2018–010). 

4 15 U.S.C. 78s(b)(2). 

5 15 U.S.C. 78s(b)(2). 

6 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Exchange Act Release No. 83074 (April 20, 

2018), 83 FR 18374 (April 26, 2018) (SR– 

NYSEArca–2018–24). See also Fee Schedule, 

FLOOR BROKER FIXED COST PREPAYMENT 

INCENTIVE PROGRAM (the ‘‘FB Prepay Program’’), 

available here, https://www.nyse.com/publicdocs/ 

nyse/markets/arca-options/NYSE_Arca_Options_

Fee_Schedule.pdf. 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549–1090 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BX–2018–067 and should 

be submitted on or before February 21, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2019–00507 Filed 1–30–19; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84954; File No. SR–DTC– 

2018–010] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Designation of Longer Period for 

Commission Action on Proposed Rule 

Change To Amend the Settlement 

Guide Procedures To Provide Status 

Information for Institutional 

Transactions to a Matching Utility 

December 26, 2018. 

On November 29, 2018, The 

Depository Trust Company (‘‘DTC’’), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change, to allow DTC to 

share status information with matching 

utilities (SR–DTC–2018–010), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder.2 The proposed rule 

change was published for comment in 

the Federal Register on December 12, 

2018.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for the 

proposed rule change is January 25, 

2019. 

The Commission is extending the 45- 

day time period for Commission action 

on the proposed rule change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider and take action on the 

proposed rule change. 

Accordingly, pursuant to Section 

19(b)(2) of the Act 5 and for the reasons 

stated above, the Commission 

designates March 12, 2019 as the date 

by which the Commission shall either 

approve, disapprove, or institute 

proceedings to determine whether to 

disapprove proposed rule change SR– 

DTC–2018–010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2019–00467 Filed 1–30–19; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84971; File No. SR– 

NYSEArca–2018–95] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Options Fee Schedule 

December 26, 2018. 

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 December 

21, 2018, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’). The Exchange proposes to 

implement the fee change effective 

January 1, 2019. 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to modify 

the Fee Schedule to extend for another 

year the prepayment incentive program 

for Floor Broker organizations (each a 

‘‘Floor Broker’’) that the Exchange 

introduced in April 2018 (the ‘‘FB 

Prepay Program’’ or ‘‘Program’’).4

Pursuant to the FB Prepay Program, 

the Exchange offered Floor Brokers that 

operate on the Exchange a 10% discount 

on their ‘‘Eligible Fixed Costs’’ 

(described in the table below) if Floor 

Brokers prepaid such costs for April 

through December 2018. 

ELIGIBLE FIXED COSTS

OTP trading participant rights. 


amozie on DSK3GDR082PROD with NOTICES1
874 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 

5See SR–NYSEArca–2018–80 (filed on December 

13, 2018). 

6To participate in the 2019 FB Prepay Program, 

Floor Brokers would have to notify the Exchange in 

writing by emailing optionsbilling@nyse.com, 

indicating a commitment to submit prepayment, by 

no later than December 31, 2018. The email to 

enroll in the Program would have to originate from 

an officer of the Floor Broker organization and, 

except as provided for below, represents a binding 

commitment through the end of 2019. To 

participate in the Program, prepayment for the 

balance of the year must be received by the close 

of business on January 31, 2019. See proposed Fee 

Schedule, FLOOR BROKER FIXED COST 

PREPAYMENT INCENTIVE PROGRAM (the ‘‘FB 

Prepay Program’’). ‘‘Participating Floor Broker 

organizations that qualify for the Percentage Growth 

Incentive will receive their 2019 rebate in January 

2020.’’ See id. 

7The Percentage Growth Incentive would 

continue to exclude Customer volume, Firm 

Facilitation and Broker Dealer facilitating a 

Customer trades, and QCCs. Any volume calculated 

to achieve the Firm and Broker Dealer Monthly Fee 

Cap and the Limit of Fees on Options Strategy 

Executions, will likewise be excluded from the 

Percentage Growth Incentive because fees on such 

volume is already capped and therefore does not 

increase billable manual volume. See Fee Schedule, 

FLOOR BROKER FIXED COST PREPAYMENT 

INCENTIVE PROGRAM, supra note 4. 

8See id. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4) and (5). 

ELIGIBLE FIXED COSTS—Continued 

Floor broker order capture device—market 

data fees. 

Floor booths. 

Telephones. 

Options floor access fee. 

Wire services. 

Vendor equipment room/cabinet fee. 

The Exchange proposes to extend the 

FB Prepay Program and offer Floor 

Brokers the opportunity to prepay their 

annual Eligible Fixed Costs for 2019, 

with certain modifications. First, the 

Exchange proposes to eliminate 

Telephone charges and the Vendor 

Equipment Room/Cabinet Fee (‘‘Cabinet 

Fee’’) from the list of Eligible Fixed 

Costs in the 2019 Program. As noted in 

a recent filing, the Exchange plans to 

modify the Fee Schedule in connection 

with the relocation of the Trading Floor 

early next year, including changing the 

way Floor Brokers pay for telephone 

service and eliminating the Cabinet 

Fee.5 Thus, the Exchange proposes to 

remove these items from the list of 

Eligible Fixed Costs in an effort to 

prevent Floor Brokers from overpaying 

for 2019 based on November 2018 costs 

that would include these items. Second, 

the Exchange proposes to modify the 

benchmarks utilized to assess eligibility 

for the Percentage Growth Incentive.6

The Exchange proposes to continue to 

offer participants in the FB Prepay 

Program the opportunity to qualify for 

larger discounts (i.e., more than 10% of 

the 2019 Eligible Fixed Costs) through 

the Percentage Growth Incentive (the 

‘‘Incentive’’), which is designed to 

encourage Floor Brokers to increase 

their average daily volume (‘‘ADV’’) in 

billable manual contract sides by certain 

percentages (correlated with Tiers) as 

measured against one of two 

benchmarks.7

For the 2019 FB Prepay Program, the 

Exchange proposes to modify the first 

benchmark by requiring a minimum 

11,000 contract sides (up from 10,000) 

in billable ADV and proposes to modify 

the second benchmark by requiring 

110% of the Floor Broker’s total billable 

manual ADV in contract sides (up from 

100%) during the second half of 2017— 

i.e., July through December 2017. The 

Exchange is not modifying the 

percentages (correlated with Tiers 1–3) 

against which the benchmarks are 

measured.8 The Exchange notes that 

Equity Option Industry ADV for 2018 is 

up 24% as compared to Equity Option 

Industry ADV for the last six months of 

2017 (and the three years prior). Thus, 

in this climate, the Exchange believes it 

is appropriate to apply a nominal 

increase in the first benchmark—from a 

minimum of 10,000 ADV to 11,000 

ADV. Similarly, given that 2018 options 

industry volume has been elevated and 

the Exchange cannot predict whether 

volumes for 2019 will continue at the 

same pace, the Exchange believes it is 

appropriate to continue to use ADV 

from the latter half of 2017 as the 

alternative benchmark, with a nominal 

increase of 10% over the current 

requirement. The Exchange notes that 

the changes to the Program are designed 

to encourage those Floor Brokers that 

enrolled in the Program for 2018 to 

reenroll for 2019 as well as to attract 

Floor Brokers that have not yet 

participated. 

As proposed, a Floor Broker that 

commits to the Program for 2019 would 

be invoiced in January 2019 for its 

estimated Eligible Fixed Costs, through 

the end of 2019, less 10%. The 

estimated annual Eligible Fixed Costs 

(i.e., for January through December 

2019) for each participating Floor 

Broker would be based on that Floor 

Broker’s November, 2018 invoice for 

such costs. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,9 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,10 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The proposal to extend the FB 

Prepayment Program as modified is 

reasonable, equitable and not unfairly 

discriminatory for the following 

reasons. First, the Program is optional 

and Floor Brokers can elect to 

participate (or elect not to participate). 

In addition, the Exchange is continuing 

to offer two alternative means to achieve 

the same enhanced discount to ensure 

that Floor Brokers that are new to the 

Exchange (and therefore have no 

historical ADV from 2017) could 

nonetheless participate in the Program. 

The Exchange notes that Equity Option 

Industry ADV for 2018 is up 24% as 

compared to Equity Option Industry 

ADV for the last six months of 2017 

(and the three years prior). Thus, in this 

climate, the Exchange believes it is 

appropriate to apply a nominal increase 

in the first benchmark—from a 

minimum of 10,000 ADV to 11,000 

ADV. Similarly, given that 2018 options 

industry volume has been elevated and 

the Exchange cannot predict whether 

volumes for 2019 will continue at the 

same pace, the Exchange believes it is 

appropriate to continue to use ADV 

from the latter half of 2017 as the 

alternative benchmark, with a nominal 

increase of 10% over the current 

requirement. The Exchange notes that 

the changes to the Program are designed 

to encourage those Floor Brokers that 

enrolled in the Program for 2018 to 

reenroll for 2019 as well as to attract 

Floor Brokers that have not yet 

participated. 

The Exchange believes the proposed 

changes to the FB Program would 

continue to incent Floor Brokers to 

increase their billable volume executed 

in open outcry on the Exchange in an 

effort to achieve the Incentive (the 

percentages for which remain 

unchanged), which would benefit all 

market participants by expanding 

liquidity and providing more trading 

opportunities, even to those market 

participants that have not committed to 

the Program. Regardless of which 

benchmark a participating Floor 

Broker’s growth is measured against, all 

Floor Broker’s that opt to participate 

and seek to achieve the Incentive would 

be required to increase volume executed 

on the Exchange in order to receive the 

enhanced discount. Thus, the Exchange 

believes the proposed Program, is 

reasonable, equitable and not unfairly 

discriminatory to others. 

The Exchange believes the proposal to 

continue to offer the Percentage Growth 

Incentive for 2019 based on ADV in 


amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 875 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(2). 

13 15 U.S.C. 78s(b)(2)(B). 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

contract sides in 2019 is reasonable, 

equitable and not unfairly 

discriminatory because, just as under 

the existing program, this Incentive is 

designed to encourage Floor Brokers to 

increase their ADV in billable manual 

contract sides by certain percentages 

(correlated with Tiers) as measured 

against the two available benchmarks. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act, the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange believes that the 

proposed changes to the FB Prepayment 

Program may increase both inter-market 

and intra-market competition by 

incenting participants to direct their 

orders to the Exchange, which would 

enhance the quality of quoting and may 

increase the volume of contracts traded 

on the Exchange. To the extent that 

there is an additional competitive 

burden on non-Exchange participants, 

the Exchange believes that this is 

appropriate because the proposal should 

incent market participants to direct 

additional order flow to the Exchange, 

and thus provide additional liquidity 

that enhances the quality of its markets 

and increases the volume of contracts 

traded here. To the extent that this 

purpose is achieved, all of the 

Exchange’s market participants should 

benefit from the improved market 

liquidity. Enhanced market quality and 

increased transaction volume that 

results from the anticipated increase in 

order flow directed to the Exchange 

would benefit all market participants 

and improve competition on the 

Exchange. 

Given the robust competition for 

volume among options markets, many of 

which offer the same products, 

implementing programs to attract order 

flow, such as the proposed changes to 

the FB Prepayment Program, are 

consistent with the above-mentioned 

goals of the Act. 

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed 

rule change reflects this competitive 

environment. 

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) 11 of the Act and 

subparagraph (f)(2) of Rule 19b–4 12

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) 13 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2018–95 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–NYSEArca–2018–95. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2018–95, and 

should be submitted on or before 

February 21, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2019–00478 Filed 1–30–19; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84958; File No. SR–ISE– 

2018–101] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the Penny 

Pilot Program 

December 26, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

21, 2018, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 


amozie on DSK3GDR082PROD with NOTICES1