Federal Register / Vol. 89, No. 23 / Friday, February 2, 2024 / Notices 7429 

76 17 CFR 200.30–3(a)(11) and (12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange originally filed to amend the Fee 

Schedule on January 2, 2024 (NYSEArca–2023–90) 

[sic] and withdrew such filing on January 12, 2024 

(SR–NYSEArca–2024–07) [sic], which latter filing 

the Exchange withdrew on January 25, 2024. 

5See Fee Schedule, Floor Broker Fixed Cost 

Prepayment Incentive Program (the ‘‘FB Prepay 

Program’’). The Exchange notes that the FB Prepay 

Program is currently structured similarly to the 

Floor Broker prepayment program offered by its 

affiliated exchange, NYSE American LLC (‘‘NYSE 

American’’). 

6See Fee Schedule, FB Prepay Program, endnote 

17 (providing in relevant part that ‘‘Submitting 

Broker QCC credits and Floor Broker rebates earned 

through the Manual Billable Rebate Program shall 

not combine to exceed $2,500,000 per month per 

firm’’). A ‘‘Submitting Broker QCC credit’’ is 

available to any broker submitting a QCC 

transaction to the Exchange (a ‘‘Submitting 

Broker’’), whether the broker is a Floor Broker on 

the Trading Floor or a broker that enters orders 

electronically through an interface with the 

Exchange. The Exchange provides a ($0.22) per 

contract credits to Submitting Brokers for NonCustomer vs.Non-Customer QCC transactions and a 

($0.16) per contract credit to Submitting Brokers for 

Customer vs. Non-Customer QCC transactions. See 

Fee Schedule, NYSE Arca OPTIONS: TRADERELATED CHARGES FOR STANDARD OPTIONS, 

QUALIFIED CONTINGENT CROSS (‘‘QCC’’) 

TRANSACTION FEES AND CREDITS. 

7See Fee Schedule, FB Prepay Program 

(providing, in relevant part, that the notification 

‘‘email to enroll in the Program must originate from 

an officer of the Floor Broker organization and, 

except as provided for below, represents a binding 

commitment through the end of the following 

calendar year.’’). The Exchange proposes to modify 

Section III.E. [sic] of the Fee Schedule to remove the 

now obsolete phrase ‘‘except as provided for 

below,’’ as there is no exception to the notification 

requirement, which modification will add clarity, 

transparency, and internal consistency to the Fee 

Schedule. See proposed Fee Schedule, FB Prepay 

Program. 

For the Commission, pursuant to delegated 

authority.76

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–02069 Filed 2–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99440; File No. SR– 

NYSEARCA–2024–10] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

January 29, 2024. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on January 

25, 2024, 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 and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’) regarding the Floor Broker 

Fixed Cost Prepayment Incentive 

Program (the ‘‘FB Prepay Program’’). 

The Exchange proposes to implement 

the fee change effective January 25, 

2024.4 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 amend 

the Fee Schedule to modify the FB 

Prepay Program. The Exchange proposes 

to implement the rule change on 

January 25, 2024. 

The FB Prepay Program is a 

prepayment incentive program that 

allows Floor Brokers to prepay certain 

of their annual Eligible Fixed Costs in 

exchange for volume rebates. 

Participating Floor Brokers receive their 

monthly rebate amount on a monthly 

basis.5 All Floor Brokers that participate 

in the FB Prepay Program are eligible for 

a rebate on manual billable volume of 

($0.08) per billable side, payable on a 

monthly basis. In addition, FB Prepay 

Program participants that achieve more 

than 500,000 billable sides in a month 

are eligible for an additional rebate of 

($0.02) per billable side. The additional 

($0.02) is retroactive to the first billable 

side. Manual billable volume includes 

transactions for which at least one side 

is subject to manual transaction fees and 

excludes QCCs. Any volume calculated 

to achieve the Limit of Fees on Options 

Strategy Executions (‘‘Strategy Cap’’), 

regardless of whether this cap is 

achieved, is likewise excluded from the 

Manual Billable Rebate Program because 

fees on such volume are already capped 

and therefore such volume does not 

increase billable manual volume. The 

Exchange notes that it places a 

$2,000,000 per firm, monthly maximum 

limit on the rebates earned through the 

Manual Billable Rebate Program when 

combined with ‘‘Submitting Broker QCC 

Credits.’’ 6

Floor Brokers that wish to participate 

in the FB Prepay Program for the 

following calendar year must notify the 

Exchange no later than the last business 

day of December in the current year.7

The Exchange does not issue any 

refunds in the event that a Floor Broker 

organization’s prepaid Eligible Fixed 

Costs exceeds actual costs. 

The Exchange proposes to modify the 

FB Prepay Program as follows. First, the 

Exchange proposes to increase the 

maximum allowable combined 

Submitting Broker QCC credits and 

Floor Broker rebates earned through the 

Manual Billable Rebate Program (the 

‘‘Maximum Combined Rebate/Credit’’) 

to $2,500,000 per month per firm, an 

increase from the current maximum of 

$2,000,000. The proposed increase is 

designed to encourage Floor Broker 

firms to continue to direct transactions 

to the Exchange, despite increasing 

industry volumes making it less difficult 

to attain the maximum rebate. 

Next, the Exchange proposes to 

modify the FB Prepay Program to 

remove reference to a specific year (i.e., 

November 2022) and to instead 

reference ‘‘November of the current 

year’’ as the date that the Exchange will 

use for the calculation of a Floor 

Broker’s Eligible Fixed Costs for the 

following calendar year. The FB Prepay 

Program currently specifies that a Floor 

Broker that commits to the program will 

be invoiced in January for Eligible Fixed 

Costs, based on annualizing their 

Eligible Fixed Costs incurred in 

November 2022. The Exchange believes 

that this proposed change would 

prevent the Exchange from relying on a 

stale date and would add flexibility to 

the program (insofar as it would not 

need to be revised each year). 

Finally, the Exchange proposes to 

allow a Floor Broker to join the Program 

after the first of the year To do so, 


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8See proposed Fee Schedule, FB Prepay Program 

(providing, in relevant part, that ‘‘[t]o participate in 

the FB Prepay Program after the first of the year, 

Floor Broker organizations must notify the 

Exchange in writing by emailing optionsbilling@

nyse.com, indicating a commitment to submit 

prepayment for the balance of the calendar year’’ 

and that the notification ‘‘email to enroll in the 

Program must originate from an officer of the Floor 

Broker organization and represents a binding 

commitment through the balance of the calendar 

year.’’). 

9See proposed Fee Schedule, FB Prepay Program. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4) and (5). 

12See Securities Exchange Act Release No. 51808 

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

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

13The 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. 

14Based on a compilation of OCC data for 

monthly volume of equity-based options and 

monthly volume of equity-based ETF options, see 

id., the Exchange’s market share in equity-based 

options decreased from 12.31% for the month of 

November 2022 to 11.67% for the month of 

November 2023. 

similar to the protocol required of 

existing Program participants, such 

Floor Broker organizations would notify 

the Exchange in writing by emailing 

optionsbilling@nyse.com and indicating 

their commitment to submit prepayment 

for the balance of the calendar year; the 

email notification would have to 

originate from an officer of the Floor 

Broker organization and would 

represent a binding commitment 

through the balance of the calendar 

year.8 As further proposed, the Floor 

Broker organization would be enrolled 

in the Program beginning on the first 

day of the next full month and would 

be invoiced for that first full month for 

Eligible Fixed Costs and the balance of 

the year, based on annualizing for the 

remainder of the calendar year their 

Eligible Fixed Costs incurred in its first 

full month in the Program.9 The 

Exchange notes that both the current 

and proposed methodology rely on 

recently incurred Eligible Fixed Costs to 

predict anticipated Eligible Fixed Costs. 

For current program Participants the 

Exchange relies on November costs; 

whereas, for later-joining Program 

participants, the Exchange would rely 

on costs incurred in the Floor Broker’s 

first full month in the Program. The 

Exchange believes that this approach 

allows the Exchange the flexibility to 

offer the FB Prepay Program to Floor 

Brokers that did not enroll before the 

end of the prior calendar year, 

including/especially Floor Brokers new 

to the Exchange, without putting these 

Floor Brokers at a competitive 

disadvantage. 

Although the Exchange cannot predict 

with certainty whether the proposed 

changes to the FB Prepay Program 

would encourage Floor Brokers to 

participate in the program or to increase 

their manual billable volume, the 

Exchange believes that the proposed 

changes would continue to incent Floor 

Brokers to participate in the FB Prepay 

Program by adding flexibility to the 

structure of the Program, including by 

allowing Floor Brokers to join the 

Program after the first of the year and 

increasing the Maximum Combined 

Rebate/Credit. All Floor Brokers are 

eligible to participate in the FB Prepay 

Program and qualify for the proposed 

rebates. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,10 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,11 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.’’ 12

There are currently 17 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.13

Therefore, no exchange possesses 

significant pricing power in the 

execution of multiply-listed equity and 

ETF options order flow. More 

specifically, in November 2023, the 

Exchange had less than 12% market 

share of executed volume of multiplylisted equity and ETF options trades.14

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, modifications to 

exchange transaction fees can have a 

direct effect on the ability of an 

exchange to compete for order flow. 

The Exchange believes that the 

proposed changes are reasonable 

because they are designed to continue to 

incent Floor Brokers to increase the 

number of manual transactions sent to 

the Exchange by offering them rebates 

on manual transactions with at least one 

billable side. The Exchange also 

believes that the proposed higher 

maximum monthly amount that a firm 

could earn from Submitting Broker QCC 

credits and Floor Broker rebates on 

manual billable volume (i.e., the 

Maximum Combined Rebate/Credit) is 

reasonable because it is set at an amount 

that is designed to encourage Floor 

Brokers to direct QCC transactions and 

manual billable volume to the Exchange 

to receive the existing credits and 

proposed rebates. 

With respect to the FB Prepay 

Program, the Exchange also believes that 

the proposed changes are reasonable 

because participation in the program is 

optional, and Floor Brokers can elect to 

participate in the program to be eligible 

for the rebates offered through the 

Manual Billable Rebate Program or not. 

The Exchange also believes that the 

proposed modification of the FB Prepay 

Program is reasonable because it is 

designed to continue to encourage Floor 

Brokers to participate in the FB Prepay 

Program, and to provide liquidity on the 

Exchange. Specifically, the Exchange 

believes that the proposed continuation 

of the FB Prepay Program to offer 

participating Floor Brokers rebates on 

manual billable volume is reasonable 

because it would maintain both the 

incentives offered to Floor Brokers and 

the qualification basis for such 

incentives; all Floor Brokers 

participating in the FB Prepay Program 

would be eligible for the same rebate on 

manual billable volume and would 

qualify for the same additional rebate on 

manual billable volume by meeting a set 

volume threshold (which the Exchange 

believes is reasonable and is attainable 

based on manual billable volume 

rebates earned by Floor Brokers). 

To the extent that the continued 

aspects of the program continue to 

attract more volume to the Exchange, 

this increased order flow would 

continue to make the Exchange a more 

competitive venue for order execution, 

which, in turn, promotes just and 


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15See id. 

equitable principles of trade and 

removes impediments to and perfects 

the mechanism of a free and open 

market and a national market system. 

The Exchange notes that all market 

participants stand to benefit from any 

increase in volume entered by Floor 

Brokers, which could promote market 

depth, facilitate tighter spreads, and 

enhance price discovery, to the extent 

the proposed change encourages Floor 

Brokers to utilize the Exchange as a 

primary trading venue, and may lead to 

a corresponding increase in order flow 

from other market participants. In 

addition, any increased liquidity on the 

Exchange would result in enhanced 

market quality for all participants. 

The Exchange also believes that the 

proposed change to modify the Program 

to remove reference to a specific year is 

reasonable because it would prevent the 

Exchange from using a benchmark based 

on a stale date and would add flexibility 

to the Program (insofar as it would not 

need to be revised each year). In 

addition, the proposed change to allow 

Floor Brokers to join the Program after 

the first of the year—by prepaying an 

amount (to cover the balance of the 

year) based on their Eligible Fixed Costs 

incurred in their first month in the 

Program—is reasonable for several 

reasons. First, the proposed method 

used to determine the prepayment 

amount for any later-joining Floor 

Brokers is analogous to the Exchange’s 

current method of determining the 

prepayment amount for Program 

participants (i.e., prepayment amount is 

based on the Eligible Fixed Costs 

recently-incurred). Second, the 

Exchange believes that the proposed 

method of determining a (later-joining) 

Floor Broker’s prepayment amount 

would provide the most accurate basis 

for anticipating that Floor Broker’s 

future Eligible Fixed Costs. Moreover, 

the Exchange believes that this 

approach would allow the Exchange the 

flexibility to offer the FB Prepay 

Program to later-joining Floor Brokers, 

including/especially Floor Brokers new 

to the Exchange, without putting these 

Floor Brokers at a competitive 

disadvantage. 

To the extent the continuation of the 

program would continue to attract 

greater volume and liquidity, the 

Exchange believes the proposed change 

would improve the Exchange’s overall 

competitiveness and strengthen its 

market quality for all market 

participants. In the backdrop of the 

competitive environment in which the 

Exchange operates, the proposed rule 

change is a reasonable attempt by the 

Exchange to increase the depth of its 

market and improve its market share 

relative to its competitors. The 

Exchange’s fees are constrained by 

intermarket competition, as Floor 

Brokers may direct their order flow to 

any of the 17 options exchanges, 

including an exchange offering Floor 

Broker rebates on manual 

transactions.15 Thus, Floor Brokers have 

a choice of where they direct their order 

flow, including their manual 

transactions. The proposed rule changes 

are designed to continue to incent Floor 

Brokers to direct liquidity and, in 

particular, manual transactions to the 

Exchange. In addition, to the extent 

Floor Brokers are incented to continue 

to aggregate their trading activity at the 

Exchange, that increased liquidity could 

promote market depth, price discovery 

and improvement, and enhanced order 

execution opportunities for market 

participants. 

Finally, the proposed changes to 

remove superfluous or obsolete text 

from the FB Prepay Program, are 

reasonable because they would add 

clarity, transparency, and internal 

consistency to the Fee Schedule to the 

benefit of all market participants. 

The Proposed Rule Change Is an 

Equitable Allocation of Credits and Fees 

The Exchange believes the proposed 

rule change is an equitable allocation of 

its fees and credits because the proposal 

is based on the amount and type of 

business transacted on the Exchange. 

Floor Brokers are not obligated to 

participate in the FB Prepay Program, 

and those who do can choose to execute 

manual billable volume to earn rebates 

through the Manual Billable Rebate 

Program or not. In addition, the Manual 

Billable Rebate Program continues to be 

equally available to all Floor Brokers 

that participate in the FB Prepay 

Program and the proposed monthly 

limit on the amount that firms could 

earn from Floor Broker manual billable 

rebates and Submitting Broker QCC 

credits combined would apply to all 

firms equally (i.e., the Maximum 

Combined Rebate/Credit). 

The Exchange also notes that the 

proposed changes are designed to 

encourage Floor Brokers that have 

previously enrolled in the FB Prepay 

Program to reenroll for the upcoming 

year, as well as to attract Floor Brokers 

that have not yet participated in the 

program. Moreover, the Exchange 

believes that the proposed modifications 

to the FB Prepay Program are an 

equitable allocation of fees and credits 

because they would apply to 

participating Floor Brokers equally and 

are intended to encourage the role 

performed by Floor Brokers in 

facilitating the execution of orders via 

open outcry, a function which the 

Exchange wishes to support for the 

benefit of all market participants. 

The Exchange also believes that the 

proposed change to modify the Program 

to remove reference to a specific year is 

equitable because it would prevent the 

Exchange from using a benchmark based 

on a stale date. In addition, the 

proposed change to allow Floor Brokers 

to join the Program after the first of the 

year—by prepaying an amount (to cover 

the balance of the year) based on their 

Eligible Fixed Costs incurred in their 

first month in the Program—is equitable 

for several reasons. First, the proposed 

method used to determine the 

prepayment amount for any later-joining 

Floor Brokers is analogous to the 

Exchange’s current method of 

determining the prepayment amount for 

Program participants (i.e., prepayment 

amount is based on the Eligible Fixed 

Costs recently-incurred). Second, the 

Exchange believes that the proposed 

method of determining a (later-joining) 

Floor Broker’s prepayment amount 

would provide the most accurate basis 

for anticipating that Floor Broker’s 

future Eligible Fixed Costs. Moreover, 

the Exchange believes that this 

approach would allow the Exchange the 

flexibility to offer the FB Prepay 

Program to later-joining Floor Brokers, 

including/especially Floor Brokers new 

to the Exchange, without putting these 

Floor Brokers at a competitive 

disadvantage. 

Moreover, the proposed changes are 

designed to continue to incent Floor 

Brokers to encourage OTP Holders to 

aggregate their executions at the 

Exchange as a primary execution venue. 

To the extent that the proposed change 

achieves its purpose in attracting more 

volume to the Exchange, this increased 

order flow would continue to make the 

Exchange a more competitive venue for, 

among other things, order execution. 

Thus, the Exchange believes the 

proposed rule change would improve 

market quality for all market 

participants on the Exchange and, as a 

consequence, attract more order flow to 

the Exchange, thereby improving 

market-wide quality and price 

discovery. 

The Proposed Rule Change Is Not 

Unfairly Discriminatory 

The Exchange believes the proposed 

change is not unfairly discriminatory 

because it is based on the amount and 

type of business transacted on the 

Exchange. Floor Brokers are not 

obligated to execute manual billable 

transactions or participate in the FB 


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16See Reg NMS Adopting Release, supra note 12, 

at 37499. 

17The 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. 

18Based on a compilation of OCC data for 

monthly volume of equity-based options and 

monthly volume of equity-based ETF options, see 

id., the Exchange’s market share in equity-based 

options decreased from 12.31% for the month of 

November 2022 to 11.67% for the month of 

November 2023. 

Prepay Program, and the proposed 

rebates offered through the Manual 

Billable Rebate Program are available to 

all Floor Brokers that participate in the 

FB Prepay Program on a nondiscriminatory basis. The proposed 

changes are designed to add flexibility 

to the FB Prepay Program by offering all 

participating Floor Brokers the same 

increased Maximum Combined Rebate/ 

Credit and to encourage Floor Brokers to 

utilize the Exchange as a primary 

trading venue for all transactions (if 

they have not done so previously) and 

increase manual billable volume sent to 

the Exchange. 

The Exchange also believes that the 

proposed change to modify the Program 

to remove reference to a specific year is 

not unfairly discriminatory because it 

would apply equally to all Program 

participants and would prevent the 

Exchange from using a benchmark based 

on a stale date. In addition, the 

proposed change to allow Floor Brokers 

to join the Program after the first of the 

year—by prepaying an amount (to cover 

the balance of the year) based on their 

Eligible Fixed Costs incurred in their 

first month in the Program—is not 

unfairly discriminatory for several 

reasons. First, the proposed method 

used to determine the prepayment 

amount for any later-joining Floor 

Brokers is analogous to the Exchange’s 

current method of determining the 

prepayment amount for Program 

participants (i.e., prepayment amount is 

based on the Eligible Fixed Costs 

recently-incurred). Second, the 

Exchange believes that the proposed 

method of determining a (later-joining) 

Floor Broker’s prepayment amount 

would provide the most accurate basis 

for anticipating that Floor Broker’s 

future Eligible Fixed Costs. Moreover, 

the Exchange believes that this 

approach would allow the Exchange the 

flexibility to offer the FB Prepay 

Program to later-joining Floor Brokers, 

including/especially Floor Brokers new 

to the Exchange, without putting these 

Floor Brokers at a competitive 

disadvantage. 

To the extent that the proposed 

continuation of (and modifications to) 

the Program attracts more manual 

transactions to the Exchange, this 

increased order flow would continue to 

make the Exchange a more competitive 

venue for order execution. Thus, the 

Exchange believes the proposed rule 

change would improve market quality 

for all market participants on the 

Exchange and, as a consequence, attract 

more order flow to the Exchange, 

thereby improving market-wide quality 

and price discovery. The resulting 

increased volume and liquidity would 

provide more trading opportunities and 

tighter spreads to all market participants 

and thus would promote just and 

equitable principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest. 

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 

change would encourage the submission 

of additional liquidity 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 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.’’ 16

Intramarket Competition. The 

continuation of the rebates on manual 

billable volume is designed to attract 

additional order flow to the Exchange 

(particularly in manual billable 

transactions), which could increase the 

volumes of contracts traded on the 

Exchange. The proposed modification of 

the FB Prepay Program is likewise 

intended to incent Floor Brokers 

specifically to direct manual billable 

transactions to the Exchange, as well as 

encourage Floor Brokers to participate 

in the Program. The continued rebates 

would be available to all similarly 

situated Floor Brokers that participate in 

the FB Prepay Program. Greater 

liquidity benefits all market participants 

on the Exchange, and increased manual 

transactions could increase 

opportunities for execution of other 

trading interest. The proposed 

Maximum Combined Rebate/Credit 

would likewise apply equally to all 

similarly situated Floor Brokers. 

To the extent that the proposed 

continuation of the program imposes an 

additional competitive burden on nonFloor Brokers, the Exchange believes 

that any such burden would be 

appropriate because all market 

participants stand to benefit from any 

increase in volume entered by Floor 

Brokers because an increase in trading 

volume could promote market depth, 

facilitate tighter spreads, and enhance 

price discovery. In addition, any 

increased liquidity on the Exchange 

would result in enhanced market 

quality for all participants. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

17 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 

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 

has more than 16% of the market share 

of executed volume of multiply-listed 

equity and ETF options trades.17

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity 

and ETF options order flow. More 

specifically, in November 2023, the 

Exchange had less than 12% market 

share of executed volume of multiplylisted equity and ETF options trades.18

The Exchange believes that the 

proposed changes reflect this 

competitive environment because they 

modify the Exchange’s fees and rebates 

in a manner designed to continue to 

incent OTP Holders to direct trading 

interest (particularly manual 

transactions) to the Exchange, to 

provide liquidity and to attract order 

flow. To the extent that Floor Brokers 

are encouraged to participate in the FB 

Prepay Program and/or incented to 

utilize the Exchange as a primary 

trading venue for all transactions, all of 

the Exchange’s market participants 

should benefit from the improved 

market quality and increased 

opportunities for price improvement. 

The Exchange further believes that the 

proposed change could promote 


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Federal Register / Vol. 89, No. 23 / Friday, February 2, 2024 / Notices 7433 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(2). 

21 15 U.S.C. 78s(b)(2)(B). 22 17 CFR 200.30–3(a)(12). 

competition between the Exchange and 

other execution venues, including those 

that currently offer rebates on manual 

transactions by encouraging additional 

orders to be sent to the Exchange for 

execution. 

Finally, the proposed changes to 

remove superfluous or obsolete text 

from the FB Prepay Program are not 

designed to address any competitive 

issue but are instead designed to add 

clarity, transparency, and internal 

consistency to the Fee Schedule. 

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) 19 of the Act and 

subparagraph (f)(2) of Rule 19b–4 20

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) 21 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSEARCA–2024–10 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–2024–10. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NYSEARCA–2024–10 and should be 

submitted on or before February 23, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–02068 Filed 2–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35118; 812–15403] 

Investment Managers Series Trust and 

Liberty Street Advisors, Inc. 

January 29, 2024. 

AGENCY: Securities and Exchange 

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

ACTION: Notice. 

Notice of an application under section 

6(c) of the Investment Company Act of 

1940 (‘‘Act’’) for an exemption from 

section 15(a) of the Act, as well as from 

certain disclosure requirements in rule 

20a–1 under the Act, Item 19(a)(3) of 

Form N–1A, Items 22(c)(1)(ii), 

22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 

Schedule 14A under the Securities 

Exchange Act of 1934, and sections 6– 

07(2)(a), (b), and (c) of Regulation S–X 

(‘‘Disclosure Requirements’’). 

SUMMARY OF APPLICATION: The requested 

exemption would permit Applicants to 

enter into and materially amend 

subadvisory agreements with 

subadvisers without shareholder 

approval and would grant relief from 

the Disclosure Requirements as they 

relate to fees paid to the subadvisers. 

APPLICANTS: Investment Managers 

Series Trust and Liberty Street Advisors, 

Inc. 

FILING DATES: The application was filed 

on November 2, 2022 and amended on 

April 25, 2023 and September 5, 2023. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing on any application by 

emailing the SEC’s Secretary at 

Secretarys-Office@sec.gov and serving 

the Applicants with a copy of the 

request by email, if an email address is 

listed for the relevant Applicant below, 

or personally or by mail, if a physical 

address is listed for the relevant 

Applicant below. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on February 23, 2024, and 

should be accompanied by proof of 

service on the Applicants, in the form 

of an affidavit, or, for lawyers, a 

certificate of service. Pursuant to rule 0– 

5 under the Act, hearing requests should 

state the nature of the writer’s interest, 

any facts bearing upon the desirability 

of a hearing on the matter, the reason for 

the request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

Diane Drake, Esq., diane.drake@mfacca.com, Investment Managers Series 

Trust, 235 West Galena Street, 

Milwaukee, WI 53212, and Laurie Anne 

Dee, Esq., laurie.dee@morganlewis.com, 

Morgan, Lewis & Bockius LLP, 600 

Anton Boulevard, Suite 1800, Costa 

Mesa, CA 92626–7653. 

FOR FURTHER INFORMATION CONTACT: 

Christopher D. Carlson, Senior Counsel, 

or Daniele Marchesani, Assistant Chief 


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