Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Notices 657 

56 17 CFR 200.30–3(a)(12) and 17 CFR 200.30– 

3(a)(57). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release Nos. 88596 

(April 8, 2020), 85 FR 20796 (April 14, 2020) (SR– 

NYSEArca–2020–29); 88812 (May 5, 2020), 85 FR 

27787 (May 11, 2020) (SR–NYSEArca–2020–38). 

5See Securities Exchange Act Release Nos. 89038 

(June 10, 2020), 85 FR 36447 (June 16, 2020) (SR– 

NYSEArca–2020–52); 89242 (June 7, 2020), 85 FR 

42037 (July 13, 2020) (SR–NYSEArca–2020–60); 

89480 (August 5, 2020), 85 FR 48591 (August 11, 

2020) (SR–NYSEArca–2020–69); 89694 (August 27, 

2020), 85 FR 54608 (September 2, 2020) (SR– 

NYSEArca–2020–76); 90191 (October 15, 2020), 85 

FR 67032 (October 21, 2020) (SR–NYSEArca–2020– 

90). See also Fee Schedule, NYSE Arca OPTIONS: 

FLOOR and EQUIPMENT and CO-LOCATION 

FEES. 

6See proposed Fee Schedule, NYSE Arca 

OPTIONS: FLOOR and EQUIPMENT and COLOCATION FEES. 

7See id. 

All submissions should refer to File 

Number SR–FINRA–2020–031. 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 the 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 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–FNRA– 

2020–031 and should be submitted on 

or before January 27, 2021. Rebuttal 

comments should be submitted by 

February 10, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.56

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–29215 Filed 1–5–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90838; File No. SR– 

NYSEArca–2020–115] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

December 31, 2020. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

29, 2020, NYSE Arca, Inc. (‘‘NYSE 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’) to extend the waiver of 

certain Floor-based fixed fees. The 

Exchange proposes to implement the fee 

change effective January 1, 2021. 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 purpose of this filing is to modify 

the Fee Schedule to extend the waiver 

of certain Floor-based fixed fees for 

market participants that have been 

unable to resume their Floor operations 

to a certain capacity level, as discussed 

below. The Exchange proposes to 

implement the fee change effective 

January 1, 2021. 

On March 18, 2020, the Exchange 

announced that it would temporarily 

close the Trading Floor, effective 

Monday, March 23, 2020, as a 

precautionary measure to prevent the 

potential spread of COVID–19. 

Following the temporary closure of the 

Trading Floor, the Exchange waived 

certain Floor-based fixed fees for April 

and May 2020.4 Although the Trading 

Floor partially reopened on May 4, 2020 

and Floor-based open outcry activity is 

supported, certain participants have 

been unable to resume pre-Floor closure 

levels of operations. As a result, the 

Exchange extended the fee waiver 

through December 2020, but only for 

Floor Broker firms that were unable to 

operate at more than 50% of their March 

2020 on-Floor staffing levels and for 

Market Maker firms that have vacant or 

‘‘unmanned’’ Podia for the entire month 

due to COVID–19 related considerations 

(the ‘‘Qualifying Firms’’).5 Because the 

Trading Floor will continue to operate 

with reduced capacity, the Exchange 

proposes to extend the fee waiver for 

Qualifying Firms through the earlier of 

the first full month of a full reopening 

of the Trading Floor facilities to Floor 

personnel or March 2021.6

Specifically, as with the prior fee 

waivers, the proposed fee waiver covers 

the following fixed fees for Qualifying 

Firms, which relate directly to Floor 

operations, are charged only to Floor 

participants and do not apply to 

participants that conduct business offFloor: 

• Floor Booths; 

• Market Maker Podia; 

• Options Floor Access; 

• Wire Services; and 

• ISP Connection.7

The proposed fee change is designed 

to reduce monthly costs for all 

Qualifying Firms whose operations 

continue to be disrupted even though 

the Trading Floor has partially 

reopened. In reducing this monthly 

financial burden, the proposed change 

would allow Qualifying Firms that had 

Floor operations in March 2020 to 

reallocate funds to assist with the cost 

of shifting and maintaining their prior 

fully-staffed on-Floor operations to offFloor and recoup losses as a result of the 


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658 Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Notices 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4) and (5). 

10See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(S7–10–04) (‘‘Reg NMS Adopting Release’’). 

11The OCC publishes options and futures volume 

in a variety of formats, including daily and monthly 

volume by exchange, available here: https://

www.theocc.com/market-data/volume/default.jsp. 

12Based on OCC data, see id., the Exchange’s 

market share in equity-based options increased 

from 9.65% for the month of November 2019 to 

10.35% for the month of November 2020. 

13See Reg NMS Adopting Release, supra note 10, 

at 37499. 

14See supra note 11. 

15Based on OCC data, supra note 12, the 

Exchange’s market share in equity-based options 

was the Exchange’s market share in equity-based 

options increased from 9.65% for the month of 

November 2019 to 10.35% for the month of 

November 2020. 

partial reopening. The Exchange 

believes that all Qualifying Firms would 

benefit from this proposed fee change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,8 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,9 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 Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 10

There are currently 16 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange has more 

than 16% of the market share of 

executed volume of multiply-listed 

equity and ETF options trades.11

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity 

and ETF options order flow. More 

specifically, in November 2020, the 

Exchange had slightly over 10% market 

share of executed volume of multiplylisted equity and ETF options trades.12

This proposed fee change is 

reasonable, equitable, and not unfairly 

discriminatory because it would reduce 

monthly costs for all Qualifying Firms 

whose operations have been disrupted 

despite the fact that the Trading Floor 

has partially reopened because of the 

social distancing requirements and/or 

other health concerns related to 

resuming operation on the Floor. In 

reducing this monthly financial burden, 

the proposed change would allow 

Qualifying Firms that had Floor 

operations in March 2020 to reallocate 

funds to assist with the cost of shifting 

and maintaining their prior fully-staffed 

on-Floor operations to off-Floor and 

recoup losses as a result of the partial 

reopening of the Floor. The Exchange 

believes that all Qualifying Firms would 

benefit from this proposed fee change. 

The Exchange believes the proposed 

rule change is an equitable allocation of 

its fees and credits as it merely 

continues the previous fee waiver for 

Qualifying Firms, which affects fees 

charged only to Floor participants and 

does not apply to participants that 

conduct business off-Floor. The 

Exchange believes it is an equitable 

allocation of fees and credits to extend 

the fee waiver for Qualifying Firms 

because such firms have either no more 

than half of their Floor staff (as 

measured by either the March 2020 or 

Exchange-approved) levels or have 

vacant podia—and this reduction in 

staffing levels on the Floor impacts the 

speed, volume and efficiency with 

which these firms can operate, which is 

to their financial detriment. 

The Exchange believes that the 

proposal is not unfairly discriminatory 

because the proposed continuation of 

the fee waiver would affect all similarlysituated market participants on an equal 

and non-discriminatory basis. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

the Act, the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange believes that the 

proposed changes would encourage the 

continued participation of Qualifying 

Firms, thereby promoting market depth, 

price discovery and transparency and 

would enhance order execution 

opportunities for all market 

participants. As a result, the Exchange 

believes that the proposed change 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

integrated competition among orders, 

which promotes ‘‘more efficient pricing 

of individual stocks for all types of 

orders, large and small.’’ 13

Intramarket Competition. The 

proposed change, which continues the 

fee waiver for all Qualifying Firms, is 

designed to reduce monthly costs for 

those Floor participants whose 

operations continue to be impacted even 

though the Trading Floor has partially 

reopened. In reducing this monthly 

financial burden, the proposed change 

would allow Qualifying Firms that had 

Floor operations in March 2020 to 

reallocate funds to assist with the cost 

of shifting and maintaining their 

previously on-Floor operations to offFloor. The Exchange believes that the 

proposed waiver of fees for Qualifying 

Firms would not impose a disparate 

burden on competition among market 

participants on the Exchange because 

off-Floor market participants are not 

subject to these Floor-based fixed fees. 

In addition, Floor-based firms that are 

not subject to the extent of staffing 

shortfalls as are Qualifying Firms, i.e., 

such firms have more than 50% of their 

March 2020—or Exchange-approved— 

staffing levels on the Floor and/or have 

no vacant Podia during the month, do 

not face the same operational disruption 

and potential financial impact during 

the partial reopening of the Floor. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

16 competing option exchanges if they 

deem fee levels at a venue to be 

excessive. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

currently has more than 16% of the 

market share of executed volume of 

multiply-listed equity and ETF options 

trades.14 Therefore, currently no 

exchange possesses significant pricing 

power in the execution of multiplylisted equity and ETF options order 

flow. More specifically, in November 

2020, the Exchange had slightly over 

10% market share of executed volume 

of multiply-listed equity and ETF 

options trades.15

The Exchange believes that the 

proposed rule change reflects this 


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Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Notices 659 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(2). 

18 15 U.S.C. 78s(b)(2)(B). 19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Notice of Filing infra note 4, 85 FR at 80829. 

4Securities Exchange Act Release No. 90603 (Dec. 

8, 2020), 85 FR 80829 (Dec. 14, 2020) (File No. SR– 

OCC–2020–015) (‘‘Notice of Filing’’). 

5Securities Exchange Act Release No. 83735 (Jul. 

27. 2018), 83 FR 37855 (Aug. 2, 2018) (File No. SR– 

OCC–2018–008). 

competitive environment because it 

waives fees for Qualifying Firms and is 

designed to reduce monthly costs for 

Floor participants whose operations 

continue to be disrupted even though 

the Trading Floor has partially 

reopened. In reducing this monthly 

financial burden, the proposed change 

would allow affected participants to 

reallocate funds to assist with the cost 

of shifting and maintaining their prior 

fully staffed on-Floor operations to offFloor. 

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) 16 of the Act and 

subparagraph (f)(2) of Rule 19b–4 17

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) 18 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–2020–115 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–2020–115. 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 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–NYSEArca–2020–115 and 

should be submitted on or before 

January 27, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–29285 Filed 1–5–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90827; File No. SR–OCC– 

2020–015] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Granting Accelerated Approval of 

Proposed Rule Change Concerning the 

Implementation of New Sufficiency 

Scenarios in the Options Clearing 

Corporation’s Stress Testing Inventory 

December 30, 2020. 

I. Introduction 

On December 2, 2020, the Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2020– 

015 (‘‘Proposed Rule Change’’) pursuant 

to Section 19(b) of the Securities 

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 2 thereunder to 

implement additional stress test 

scenarios to OCC’s Comprehensive 

Stress Testing & Clearing Fund 

Methodology, and to its Liquidity Risk 

Management Description.3 The 

Proposed Rule Change was published 

for public comment in the Federal 

Register on December 14, 2020.4 The 

Commission has received no comments 

regarding the Proposed Rule Change. 

This order approves the Proposed Rule 

Change on an accelerated basis. 

II. Background 

The Proposed Rule Change by OCC 

would take existing informational stress 

test scenarios and add them to the list 

of stress test scenarios designed to test 

the sufficiency of OCC’s prefunded 

financial resources. The proposed 

changes are to OCC’s Comprehensive 

Stress Testing & Clearing Fund 

Methodology, and to its Liquidity Risk 

Management Description 

(‘‘Methodology Description’’). 

In 2018, OCC established its current 

clearing fund methodology, using a 

stress testing framework to measure its 

credit exposure at a level sufficient to 

cover potential losses under extreme but 

plausible market conditions.5 OCC 

performs daily stress testing using a 

wide range of scenarios, both 

hypothetical and historical. Its stress 

testing scenario inventory includes four 


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