Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices 12053 

27See Exemptive Request, supra note 3. 

28See id. 

29See, e.g., Securities Exchange Act Release Nos. 

86896 (September 6, 2019), 84 FR 48186 (September 

12, 2019) (order granting exemptive request from 

Nasdaq BX, Inc. relating to rules of The Nasdaq 

Stock Market LLC incorporated by reference) 

(‘‘Nasdaq BX Order’’); 86422 (July 22, 2019), 84 FR 

36151 (July 26, 2019) (order granting exemptive 

request from Nasdaq BX, Inc., Nasdaq GEMX, LLC, 

Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq 

Phlx LLC relating to rules of The Nasdaq Stock 

Market LLC incorporated by reference); 80338 

(March 29, 2017), 82 FR 16464 (April 4, 2017) 

(order granting exemptive request from MIAX 

PEARL, LLC relating to rules of Miami International 

Securities Exchange, LLC incorporated by 

reference); and 72650 (July 22, 2014), 79 FR 44075 

(July 29, 2014) (order granting exemptive requests 

from NASDAQ OMX BX, Inc. and the NASDAQ 

Stock Market LLC relating to rules of NASDAQ 

OMX PHLX LLC incorporated by reference). 

30See 17 CFR 240.0–12 and Securities Exchange 

Act Release No. 39624 (February 5, 1998), 63 FR 

8101 (February 18, 1998) (‘‘Commission Procedures 

for Filing Applications for Orders for Exemptive 

Relief Pursuant to Section 36 of the Exchange Act; 

Final Rule’’). 

31See Nasdaq BX Order, supra note 29. 

32 15 U.S.C. 78mm. 

33 17 CFR 200.30–3(a)(76). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4On January 27, 2021, the Exchange filed to 

implement the AON functionality for Complex 

CUBE auctions, which functionality was operative 

on an immediately effective basis retroactive to the 

date of filing given the waiver of the 30-day 

operative delay, as well as to make clarifications to 

the AON functionality for Single-Leg CUBE 

auctions. See Securities Exchange Release No. 

91068 (February 5, 2021), 86 FR 9112 (February 11, 

2021) (NYSEAMER–2021–06). 

5See Securities Exchange Release Nos. 90584 

(December 7, 2020), 85 FR 80196 (December 11, 

Continued 

well as helping to ensure that C2-only 

Permit Holders are subject to consistent 

regulation as Cboe Trading Permit 

Holders.27 The Exchange believes that, 

without such an exemption, such Permit 

Holders could be subject to two 

different standards.28

The Commission has issued 

exemptions similar to the Exchange’s 

request.29 In granting similar 

exemptions, the Commission stated that 

it would consider future exemption 

requests, provided that: 

• A self-regulatory organization 

(‘‘SRO’’) wishing to incorporate rules of 

another SRO by reference has submitted 

a written request for an order exempting 

it from the requirement in Section 19(b) 

of the Exchange Act to file proposed 

rule changes relating to the rules 

incorporated by reference, has identified 

the applicable originating SRO(s), 

together with the rules it wants to 

incorporate by reference, and otherwise 

has complied with the procedural 

requirements set forth in the 

Commission’s release governing 

procedures for requesting exemptive 

orders pursuant to Rule 0–12 under the 

Exchange Act; 30

• The incorporating SRO has 

requested incorporation of categories of 

rules (rather than individual rules 

within a category) that are not trading 

rules (e.g., the SRO has requested 

incorporation of rules such as margin, 

suitability, or arbitration); and 

• The incorporating SRO has 

reasonable procedures in place to 

provide written notice to its members 

each time a change is proposed to the 

incorporated rules of another SRO.31

The Commission believes that the 

Exchange has satisfied each of these 

conditions. Further, the Commission 

also believes that granting the Exchange 

an exemption from the rule filing 

requirements under Section 19(b) of the 

Exchange Act will promote efficient use 

of the Commission’s and the Exchange’s 

resources by avoiding duplicative rule 

filings based on simultaneous changes 

to identical rule text sought by more 

than one SRO. The Commission 

therefore finds it appropriate in the 

public interest and consistent with the 

protection of investors to exempt the 

Exchange from the rule filing 

requirements under Section 19(b) of the 

Exchange Act with respect to the abovedescribed rules it incorporates by 

reference. This exemption is 

conditioned upon the Exchange 

promptly providing written notice to its 

applicants and members whenever Cboe 

changes a Cboe Incorporated Rule. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,32 that 

the Exchange is exempt from the rule 

filing requirements of Section 19(b) of 

the Exchange Act solely with respect to 

changes to the rules identified in the 

Exemptive Request, provided that the 

Exchange promptly provides written 

notice to its applicants and members 

whenever Cboe proposes to change a 

Cboe Incorporated Rule. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–04092 Filed 2–26–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91180; File No. SR– 

NYSEAMER–2021–11] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Change Amending the NYSE American 

Options Fee Schedule To Introduce 

Pricing for the Use of a New AON 

Functionality in Single-Leg and 

Complex Customer Best Execution 

Auctions 

February 22, 2021. 

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 February 

16, 2021, 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, 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE American Options Fee Schedule 

(‘‘Fee Schedule’’) to introduce pricing 

for the use of a new AON functionality 

in Single-Leg and Complex Customer 

Best Execution (‘‘CUBE’’) auctions. The 

Exchange proposes to implement the fee 

change effective February 16, 2021.4

The proposed 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 introduce pricing 

for the Exchange’s newly approved 

optional all-or-none (‘‘AON’’) 

functionality for larger-sized orders in 

Single-Leg and Complex CUBE auctions 

(together, ‘‘AON CUBE’’).5 The 

12054 Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices 

2020) (NYSEAMER–2020–64) (approving AON 

functionality for Single-Leg CUBE auction); 91068 

(February 5, 2021), 86 FR 9112 (February 11, 2021) 

(NYSEAMER–2021–06) (approving AON 

functionality for Complex CUBE auction). 

6See proposed Fee Schedule, Key Terms and 

Definitions. See generally Rules 971.1NY (regarding 

Single-Leg CUBE auctions) and 971.2NY (regarding 

Complex CUBE auctions). 

7See proposed Fee Schedule, Key Terms and 

Definitions. 

8See proposed Fee Schedule, Section I.G., CUBE 

Auction Fees & Credits (setting forth applicable fees 

and credits for AON Single-Leg and AON Complex 

CUBE Auctions). 

9AON CUBE Orders executed by a Floor Broker 

on behalf of an ATP Holder may only be counted 

towards the Floor Broker’s eligibility for the Floor 

Broker Initiating Participant Rebate. An ATP 

Holder’s AON CUBE Orders that are executed by a 

Floor Broker are not eligible for the ACE Initiating 

Participant Rebate. 

10See, e.g., Nasdaq ISE LLC (‘‘Nasdaq ISE’’), 

Options 7, Pricing Schedule, available here: https:// 

listingcenter.nasdaq.com/rulebook/ise/rules/iseoptions-7 (setting forth pricing for Solicited Order 

Mechanism and Complex Solicited Order 

Mechanism); Cboe EDGX Exchange, Inc. (‘‘Cboe 

EDGX’’) fee schedule, available here: https://

www.cboe.com/us/options/membership/fee_

schedule/edgx/(setting forth pricing for Solicitation 

Auction Mechanism (‘‘SAM’’). See Statutory Basis 

below in ‘‘The Proposed Rule Change is 

Reasonable’’ section for discussion in greater detail, 

including infra notes 15 [sic] and 16. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4) and (5). 

13See Securities Exchange Act Release No. 51808 

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

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

14The 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. 

15Based on a compilation of OCC data for 

monthly volume of equity-based options and 

monthly volume of ETF-based options, see id., the 

Exchange’s market share in multiply-listed equity 

and ETF options increased from 8.06% for the 

month of November 2019 to 9.09% for the month 

of November 2020. 

Exchange proposes to introduce the 

pricing on February 16, 2021. 

The Exchange proposes to define 

‘‘AON CUBE Order’’ as a ‘‘Single-Leg 

CUBE Order of at least 500 contracts or 

a Complex CUBE Order of at least 500 

contracts on the smallest leg, that is 

designated AON per Rule 971.1NY 

Commentary .05 and Rule 971.2NY 

Commentary .04, respectively.’’ 6

Similarly, the Exchange proposes to 

define an AON Contra Order as 

‘‘principal interest or solicited interest 

an Initiating Participant is using to 

guarantee the execution of an AON 

CUBE Order in a Single-Leg or Complex 

CUBE Auction.’’ 7

Section I.G. of the Fee Schedule sets 

forth the rates for per contract fees and 

credits for executions associated with 

CUBE Auctions. The Exchange proposes 

to include an additional table of fees 

and credits under Section I.G. to apply 

to certain contracts executed in AON 

CUBE Auctions, whether Single-Leg or 

Complex.8

The process for commencing an AON 

CUBE auction mirrors that of non-AON 

CUBE auctions. In particular, the AON 

CUBE auction process begins with the 

entry of an AON CUBE Order and a 

paired AON Contra Order. As with nonAON CUBE auctions, the Exchange 

similarly proposes to not charge for 

AON CUBE Order executions on behalf 

of a Customer or for Customer 

executions against AON CUBE Orders 

(i.e., Customer Request for Responses 

(‘‘RFR’’) to an AON CUBE Order). The 

Exchange proposes to charge $0.20 per 

contract for non-Customer executions of 

AON CUBE Orders and Customer and 

non-Customer AON Contra Orders alike. 

As with non-AON CUBE Auctions, 

the Exchange proposes to charge 

executions of non-Customer RFR 

Responses to an AON CUBE Auction 

$0.50 per contract in Penny issues and 

$1.05 per contract executed in nonPenny issues. 

The Exchange proposes an Initiating 

Participant Credit for each contract in 

an AON Contra Order that does not 

trade with the AON CUBE Order 

because it is replaced in the auction, 

including when the AON Contra Order 

is replaced entirely by RFR Responses. 

As proposed, the Initiating Participant 

Credit for AON CUBE Orders would be 

$0.30 per contract in Penny issues and 

$0.70 per contract in non-Penny issues. 

The Exchange also proposes an ACE 

Initiating Participant Rebate payable to 

Initiating Participants that are ATP 

Holders who qualify for Tiers 1, 2, 3, 4 

or 5 of the ACE Program. The proposed 

$0.12 per contract rebate would be paid 

to a qualifying Initiating Participant in 

an AON Single-Leg CUBE Auction for 

each of the first 5,000 contracts of an 

AON CUBE Order executed and/or to a 

qualifying Initiating Participant in an 

AON Complex CUBE Auction for each 

of the first 1,000 contracts per leg of an 

AON CUBE Order executed. 

The Exchange also proposes a Floor 

Broker Initiating Participant Rebate of 

$0.12 per contract payable to Floor 

Brokers that execute a minimum of 

2,500 contracts average daily volume 

(‘‘ADV’’) in AON CUBE Orders in either 

an AON Single-Leg or AON Complex 

CUBE auction.9 As with the ACE 

Initiating Participant Rebate, the Floor 

Broker Initiating Participant Rebate is 

paid to a qualifying Initiating 

Participant for each contract in an AON 

CUBE Order and applies to each of the 

first 5,000 contracts of an AON CUBE 

Order executed in an AON Single-Leg 

CUBE Auction, or to the first 1,000 

contracts per leg of an AON CUBE Order 

in an AON Complex CUBE Auction. 

The Exchange’s fees are constrained 

by intermarket competition, as ATP 

Holders may direct their order flow to 

any of the 16 options exchanges, 

including those with similar auction 

functionalities and corresponding 

fees.10 Thus, ATP Holders have a choice 

of where they direct their order flow, 

including electronic auction volume. 

To the extent that the proposed fees 

and credits relating to the use of the 

AON CUBE auction functionality 

encourage ATP Holders to direct their 

order flow to the Exchange, all market 

participants stand to benefit from 

increased order flow, which promotes 

market depth, facilitates tighter spreads 

and enhances price discovery. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,11 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,12 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Proposed Rule Change Is 

Reasonable 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 13

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.14

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 less than 10% market 

share of executed volume of multiplylisted equity and ETF options trades.15

Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices 12055 

16See, e.g., Cboe EDGX fee schedule, supra note 

10 (providing, for example, $0.20 per contract fee 

for non-customer agency orders and $0.20 per 

contract fee for non-customer contra orders in a 

SAM auction, in line with the Exchange’s proposed 

$0.20 per contract fee for non-Customer AON CUBE 

Orders and AON Contra Orders); Nasdaq ISE 

Pricing Schedule, supra note 10 (providing, for 

example, $0.20 per contract fee for non-customer 

contra orders in Solicited Order Mechanism, in line 

with the Exchange’s proposed $0.20 per contract fee 

for non-Customer AON Contra Orders). 

17See, e.g., Cboe EDGX fee schedule and Nasdaq 

ISE Pricing Schedule, supra note 10 (providing, for 

example, $0.20 per contract fee for non-customer 

initiating orders and no fee for customer initiating 

orders, consistent with the Exchange’s proposal). 

18The Exchange also notes that, as discussed 

above, certain non-Customers may be eligible for 

various credits and rebates, which would offset 

their transaction costs. 

19For example, the Exchange offers Customers 

preferential rates for other trades executed on the 

Exchange such as for Qualified Contingent Cross 

orders. 

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow, or discontinue or 

reduce use of certain categories of 

products, in response to fee changes. 

Accordingly, competitive forces 

constrain options exchange transaction 

fees. Stated otherwise, changes to 

exchange transaction fees and rebates 

can have a direct effect on the ability of 

an exchange to compete for order flow, 

including auction volume. 

The proposed rule change is designed 

to incent ATP Holders to direct liquidity 

to the Exchange in AON CUBE Auction 

executions, similar to other exchange 

programs with competitive pricing 

programs, thereby promoting market 

depth, price discovery and 

improvement and enhancing order 

execution opportunities for market 

participants. Specifically, the Exchange 

believes that the proposed fee structure 

for AON CUBE Orders is reasonably 

designed to incent ATP Holders to 

direct liquidity to the Exchange in the 

form of AON CUBE Auction executions, 

which increased order flow would 

improve the overall competitiveness 

and strengthen the market quality of the 

Exchange to the benefit of all market 

participants. The Exchange notes that 

the proposed structure of fees and 

credits for AON CUBE Auctions is 

reasonable because it is both consistent 

with fees and credits already in place 

for the same types of orders in SingleLeg and Complex CUBE auctions and is 

likewise within the range of fees and 

credits assessed by other exchanges 

employing similar fee structures for 

auction mechanisms.16 Consistent with 

this proposal, competing options 

exchanges similarly offer different fees 

and credits for initiating orders, contraside orders, and responders to an 

auction, and competing options 

exchanges likewise charge different 

rates for transactions in their price 

improvement mechanisms for 

Customers versus non-Customers.17

The Exchange also believes that it is 

reasonable for AON CUBE Orders and 

AON Contra Orders to be assessed lower 

fees than those providing RFR 

Responses, as structuring fees in this 

manner would incent market 

participants to direct orders to initiate 

AON CUBE Auctions (rather than 

simply respond to them). Further, the 

Exchange believes that the proposed 

fees for responding to AON CUBE 

Auctions would not deter market 

participants from providing price 

improvement, as they are consistent 

with fees for responding to a non-AON 

CUBE auction—whether Single-Leg or 

Complex—and are also consistent with 

fees charged to responders on options 

exchanges offering similar auction 

mechanisms. 

The Exchange also believes that the 

qualification bases to achieve the ACE 

Initiating Participant Rebate are 

reasonably designed to encourage ATP 

Holders to utilize the optional AON 

CUBE functionality, which may lead to 

greater opportunities to trade—and for 

price improvement—for all participants. 

In addition, the Exchange believes that 

the proposed Floor Broker Initiating 

Participant Rebate would encourage 

Floor Brokers to use the AON CUBE 

mechanism to execute larger-size orders 

(both Single-Leg and Complex), which 

would also lead to greater opportunities 

to trade for all participants because such 

order flow will be exposed to additional 

market participants. The Exchange also 

believes that the proposed rebates are 

reasonably designed because they are 

(as mentioned above) similar to rebates 

currently available to participants in 

non-AON CUBE auctions and, to the 

extent the proposed rebates are higher 

than existing rebates, the Exchange 

believes that they represent a reasonable 

effort to incent the use of a new 

functionality. 

Further, the Exchange believes the 

proposed fees and credits in connection 

with AON CUBE auctions would attract 

more volume and liquidity to the 

Exchange generally and would therefore 

benefit all market participants 

(including those that do not participate 

in auction mechanisms) through 

increased opportunities to trade at 

potentially improved prices as well as 

enhancing price discovery. To the 

extent the proposed fees and credits 

encourage greater volume and liquidity 

directed to the Exchange, the proposed 

changes would improve the Exchange’s 

overall competitiveness and strengthen 

its market quality for all market 

participants. 

The Proposed Rule Change Is an 

Equitable Allocation of Fees and 

Rebates 

The Exchange believes the proposed 

rule change is an equitable allocation of 

its fees and credits. The proposal is 

based on the amount and type of 

business transacted on the Exchange, 

and ATP Holders can opt to avail 

themselves of the auction mechanism or 

not. To the extent that the proposed 

change attracts more auction executions 

to the Exchange, this increased order 

flow would make the Exchange a more 

competitive venue for order execution. 

Thus, the Exchange believes the 

proposed fees and credits would 

improve market quality for all market 

participants on the Exchange and, as a 

consequence, attract more order flow to 

the Exchange thereby improving marketwide quality and price discovery. 

The Exchange also believes that the 

proposed fees and credits are equitable 

because they would apply equally 

among Customers and would also apply 

equally among all non-Customers. With 

respect to Customers, all similarly 

situated orders for Customers are subject 

to the same transaction fee schedule. 

Furthermore, the Exchange believes that 

it is equitable that Customers be charged 

lower fees in AON CUBE Auctions than 

other market participants, as the 

exchanges in general have historically 

aimed to improve markets for investors 

and develop various features within 

market structure for customer benefit.18

The Exchange may in some instances 

assess Customers lower or no 

transactions fees 19 because Customer 

order flow enhances liquidity on the 

Exchange for the benefit of all market 

participants, and customer liquidity 

benefits all market participants by 

providing more trading opportunities, 

which attracts Market Makers. An 

increase in the activity of these market 

participants in turn facilitates tighter 

spreads, which may encourage a 

corresponding increase in order flow 

from other market participants. 

The Exchange also believes that it is 

equitable for AON CUBE Orders and 

AON Contra Orders to be assessed lower 

fees than those providing RFR 

Responses, as structuring fees in this 

manner would incent market 

participants to direct orders to 

participate in AON CUBE Auctions. The 

Exchange believes that it is equitable to 

12056 Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices 

20See Reg NMS Adopting Release, supra note 13, 

at 37499. 

21See supra note 14. 

22Based on OCC data, supra note 15, the 

Exchange’s market share in equity- and ETF-based 

options increased from 8.06% for the month of 

November 2019 to 9.09% for the month of 

November 2020. 

23See, e.g., supra note 10 (regarding Nasdaq ISE’s 

Solicited Order Mechanism and Complex Solicited 

Order Mechanism). 

24 15 U.S.C. 78s(b)(3)(A). 

25 17 CFR 240.19b–4(f)(2). 

assess fees to responders to AON CUBE 

Auctions and credits to another 

participant to provide incentive for 

participants to submit order flow. 

The Proposed Rule Change Is Not 

Unfairly Discriminatory 

The Exchange believes that the 

proposal is not unfairly discriminatory 

because the proposed fees and credits 

would be available to all similarlysituated market participants on an equal 

and non-discriminatory basis. The 

Exchange’s proposed fees and credits for 

AON CUBE Auctions are designed to 

encourage greater use of the AON CUBE 

Auction, which may lead to greater 

opportunities to trade—and for price 

improvement—for all participants. 

To the extent that there is a 

differentiation between proposed fees 

assessed to Customers as compared to 

non-Customers, the Exchange believes 

that this is not unfairly discriminatory 

because preferential pricing to 

Customers is a long-standing options 

industry practice to incentivize 

increased Customer order flow through 

a fee and rebate schedule in order to 

attract professional liquidity providers. 

To the extent the proposed fees serve to 

enhance Customer volume on the 

Exchange, the Exchange believes 

increased Customer volume would 

attract liquidity, including Market 

Maker activity, by providing more 

trading opportunities. Increased Market 

Maker activity could, in turn, facilitate 

tighter spreads and increased order flow 

from other market participants, 

contributing to increased price 

discovery and overall enhanced quality 

of the market. 

The Exchange also believes that the 

proposed fee structure is not unfairly 

discriminatory because it is based on 

the amount and type of business 

transacted on the Exchange, and ATP 

Holders are not obligated to participate 

in AON CUBE Auctions. Rather, the 

proposal is designed to encourage 

participants to utilize the Exchange as a 

primary trading venue (if they have not 

done so previously) or increase 

Electronic (auction) volume sent to the 

Exchange. To the extent that the 

proposed fees and credits are successful 

in incenting ATP Holders to utilize 

AON CUBE Auctions, this increased 

order flow would improve price 

discovery and make the Exchange a 

more competitive venue for order 

execution, which, in turn, would 

improve market quality for all market 

participants (including those that do not 

participate in AON CUBE Auctions). 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

the Act, the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Instead, as discussed above, the 

Exchange believes that the proposed 

changes would encourage the 

submission of additional liquidity for 

larger-sized orders to a public exchange, 

thereby promoting market depth, price 

discovery and transparency and 

enhancing order execution 

opportunities for all market 

participants. As a result, the Exchange 

believes that the proposed changes 

further 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.’’ 20

Intramarket Competition. The 

proposed change is designed to attract 

order flow to the Exchange by offering 

competitive rates and credits based on 

increased volumes on the Exchange, 

which would enhance the quality of 

quoting and may increase the volumes 

of contracts traded on the Exchange. To 

the extent that this purpose is achieved, 

all of the Exchange’s market participants 

should benefit from the continued 

market liquidity. Enhanced market 

quality and increased transaction 

volume that results from the increase in 

order flow directed to the Exchange will 

benefit all market participants and 

improve competition on the Exchange. 

The Exchange believes that the 

proposed change to adopt fees and 

credits for the use of AON CUBE 

Auctions would not impose any burden 

on intramarket competition, but rather, 

would serve to promote intramarket 

competition by incentivizing order flow 

to the Exchange, and in particular, 

Customer orders, thereby providing for 

more opportunities to compete at 

improved prices. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

16 competing option exchanges if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

mechanisms and fees to remain 

competitive with other exchanges and to 

attract order flow to the Exchange. 

Based on publicly-available 

information, and excluding index-based 

options, no single exchange currently 

has more than 16% of the market share 

of executed volume of multiply-listed 

equity and ETF options trades.21

Therefore, no exchange currently 

possesses significant pricing power in 

the execution of multiply-listed equity 

and ETF options order flow. More 

specifically, in November 2020, the 

Exchange had less than 10% market 

share of executed volume of multiplylisted equity and ETF options trades.22

The Exchange believes that the 

proposed rule change reflects this 

competitive environment because it 

introduces new fees and rebates 

designed to encourage ATP Holders to 

direct trading interest to the Exchange, 

to provide liquidity, and to attract order 

flow. To the extent that this purpose is 

achieved, all the Exchange’s market 

participants should benefit from the 

improved market quality and increased 

opportunities for price improvement. 

The Exchange believes that the 

proposed changes could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar auction 

mechanisms for larger-sized orders, by 

encouraging additional orders to be sent 

to the Exchange for execution.23

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) 24 of the Act and 

subparagraph (f)(2) of Rule 19b–4 25

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 

Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices 12057 

26 15 U.S.C. 78s(b)(2)(B). 27 17 CFR 200.30–3(a)(12). 

1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3 15 U.S.C. 78a et seq. 

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) 26 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 No. SR– 

NYSEAMER–2021–11 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 No. 

SR–NYSEAMER–2021–11. 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 No. 

SR–NYSEAMER–2021–11, and should 

be submitted on or before March 22, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–04177 Filed 2–26–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Thursday, 

March 4, 2021. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

In the event that the time, date, or 

location of this meeting changes, an 

announcement of the change, along with 

the new time, date, and/or place of the 

meeting will be posted on the 

Commission’s website at https://

www.sec.gov. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to examinations 

and enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Dated: February 25, 2021. 

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2021–04273 Filed 2–25–21; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91184; File No. SR–OCC– 

2021–801] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of Advance Notice Relating to 

OCC’s Establishment of Persistent 

Minimum Skin-In-The-Game 

February 23, 2021. 

Pursuant to Section 806(e)(1) of Title 

VIII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 

entitled Payment, Clearing and 

Settlement Supervision Act of 2010 

(‘‘Clearing Supervision Act’’) 1 and Rule 

19b–4(n)(1)(i) 2 under the Securities 

Exchange Act of 1934 (‘‘Exchange 

Act’’),3 notice is hereby given that on 

February 10, 2021, the Options Clearing 

Corporation (‘‘OCC’’ or ‘‘Corporation’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

an advance notice as described in Items 

I, II and III below, which Items have 

been prepared by OCC. The Commission 

is publishing this notice to solicit 

comments on the advance notice from 

interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Advance 

Notice 

This advance notice is submitted in 

connection with proposed changes that 

would amend OCC’s Rules, Capital 

Management Policy, and certain other 

OCC policies to establish a persistent 

minimum level of OCC’s own prefunded financial resources (commonly 

referred to as ‘‘skin-in-the-game’’) that 

OCC would contribute to cover default 

losses or liquidity shortfalls. 

Amendments to OCC’s Rules are 

included in Exhibit 5a of filing SR– 

OCC–2021–801. Amendments to OCC’s 

Capital Management Policy are included 

in confidential Exhibit 5b of filing SR–