Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 3701 

8 15 U.S.C. 78q–1(b)(3)(F). 

9 15 U.S.C. 78q–1. 

10 15 U.S.C. 78s(b)(2). 

11 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

12 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4This information appears at the end of the 

current Fee Schedule, right before the Endnotes. 

ICE Clear Europe, in particular, Section 

17(A)(b)(3)(F).8

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the Act 9

and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (File No. SR– 

ICEEU–2014–20) be, and hereby is, 

approved.11

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01071 Filed 1–22–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74086; File No. SR– 

NYSEMKT–2015–04] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending the NYSE 

Amex Options Fee Schedule 

January 16, 2015. 

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 

14, 2015, NYSE MKT LLC (the 

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

the Securities and Exchange 

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

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Amex Options Fee Schedule 

(‘‘Fee Schedule’’) to: (1) Make certain 

changes to transaction fees for Standard 

Options; (2) provide a discount to NYSE 

Amex Options Market Makers for 

transaction fees based on a sliding 

volume scale; (3) offer to NYSE Amex 

Options Market Makers the opportunity 

to prepay a portion of certain 

transaction fees; (4) eliminate the Order 

Flow Provider (‘‘OFP’’) Electronic 

average daily volume (‘‘ADV’’) Tiers as 

well as the Customer Electronic 

Complex Order ADV Tiers and replace 

them with a new Amex Customer 

Engagement Program, which would 

provide credits payable to an OFP for 

certain Electronic Customer volume; 

and (5) reformat and reorganize the Fee 

Schedule. The Exchange proposes to 

implement the changes on January 2, 

2015. The text of the proposed rule 

change is available on the Exchange’s 

Web site at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to: (1) Make 

certain changes to transaction fees for 

Standard Options; (2) provide a 

discount to NYSE Amex Options Market 

Makers for transaction fees based on a 

sliding volume scale; (3) offer to NYSE 

Amex Options Market Makers the 

opportunity to prepay a portion of 

certain transaction fees; (4) eliminate 

the OFP Electronic ADV Tiers as well as 

the Customer Electronic Complex Order 

ADV Tiers and replace them with a new 

Amex Customer Engagement Program, 

which would provide credits payable to 

an OFP solely for certain Electronic 

Customer volume; and (5) reformat and 

reorganize the Fee Schedule. The 

Exchange proposes to implement the 

changes on January 2, 2015. 

As a general matter, the Exchange 

notes that it has proposed to reorganize 

certain content within and reorder 

certain sections of the current Fee 

Schedule. For example, as will be 

discussed further below, the Exchange 

has proposed to eliminate Endnotes and 

instead include notes relevant to each 

Section within that Section, often using 

the text that is contained in the current 

Endnotes within each new Section. If 

the Exchange revises any text in the 

Endnotes when moving it to notes 

within relevant Sections, including for 

non-substantive reasons, we will 

explain in more detail below. The 

Exchange believes this structure will 

make the Fee Schedule easier to 

comprehend. 

The Exchange describes below each of 

the sections, together with any changes, 

in the proposed Fee Schedule. 

Table of Contents, Preface, Definitions 

and Terms 

The Exchange proposes to amend its 

Fee Schedule by adding a Table of 

Contents, using numbered and lettered 

headings and subheadings that list the 

various transaction fees and credits 

offered by the Exchange. The Exchange 

believes that including a Table of 

Contents would make the Fee Schedule 

easier to navigate and assist market 

participants in locating fees and/or 

credits related to those transactions in 

which they may be most interested. 

Following the Table of Contents, the 

Exchange proposes to add a Preface that 

includes information about the 

Exchange’s billing and rounding 

practices and that sets forth key terms 

and definitions. First, the Exchange 

proposes to include information about 

Billing Disputes, as the first part of the 

Preface. The current Fee Schedule 

describes how the Exchange handles 

Billing Disputes under ‘‘NYSE Amex 

Options General,’’ 4 and this description 

will be incorporated into the proposed 

Preface verbatim. 

Second, the Exchange proposes to add 

a description of its rounding practices. 

Specifically, the Exchange proposes to 

include the following language. 

Any per contract fees that are less 

than $0.01 will be handled in the 

following manner. All volume for the 

month will be summed and the 

applicable rate applied. In those cases 

where a fractional cent occurs, the 

Exchange will round up to the nearest 

whole cent for purposes of computing 

the invoice. For example, if the monthly 

volume is 3,001 contracts and the 

applicable rate is $0.055 per contract, 


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5See proposed Fee Schedule, Key Terms and 

Definitions; see, e.g., Rule 900.2NY (Definitions). 

6The Exchange proposes to import the balance of 

the information contained in current Endnote 12 

into Section II (‘‘Monthly Excessive Bandwidth 

Utilization Fees’’) of the proposed Fee Schedule as 

discussed below. 

7See, e.g., NASDAQ OMX PHLX LLC (‘‘PHLX’’) 

fee schedule, available here, http://

www.nasdaqtrader.com/

Micro.aspx?id=PHLXPricing (defining the term 

‘‘Common Ownership’’ as meaning ‘‘members or 

member organizations under 75% common 

ownership or control’’); see also The Chicago Board 

Options Exchange, Inc. (‘‘CBOE’’) fee schedule, 

available here, http://www.cboe.com/publish/

feeschedule/CBOEFeeSchedule.pdf (defining 

‘‘affiliate’’ as ‘‘having at least 75% common 

ownership’’ between the two entities in question); 

see also BATS BZX Exchange (‘‘BATS’’) fee 

schedule, available here, http://

cdn.batstrading.com/resources/regulation/rule_

book/BZX_Fee_Schedule.pdf (defining the term 

‘‘ADAV’’ to specify, ‘‘a Member may aggregate 

ADAV or ADV with other Members that control, are 

controlled by, or are under common control with 

such Member’’). 

8See Securities Exchange Act Release No. 72469 

(June 25, 2014), 79 FR 37380 (July 1, 2014) (NYSE– 

MKT–2014–52). 

9 In addition, the Exchange proposes to import 

the balance of the information contained in current 

Endnote 6 into Section I.I (‘‘Firm Monthly Fee 

Cap’’) of the proposed Fee Schedule as discussed 

below. 

10Where applicable, capitalized terms used 

herein have the meanings set forth in the proposed 

Fee Schedule in the Key Terms and Definitions 

section. 

11 In the current Fee Schedule, the table of fees 

for Standard Options includes several Endnotes. 

The information contained in Endnote 5 will be 

discussed in this Section and again in proposed 

Section I.C. (NYSE Amex Market Maker Sliding 

Scale). As noted above, existing Endnotes 6 and 14 

describe the terms Firm Proprietary, Firm 

Facilitation, and Non-NYSE Market Maker, 

respectively, and the Exchange proposes the nonsubstantive change of relocating these terms to the 

Key Terms and Definitions section of the proposed 

Fee Schedule, although Firm Proprietary has been 

simplified to Firm; the proposed definition of Firm 

includes information from Endnote 6 together with 

the definition from Rule 900.2NY(28). 

12The Exchange will describe the proposed notes 

after discussing the distinctions between the fees. 

13 In adopting the new $0.23 base rate for 

Electronic transactions for e-Specialists, Specialists, 

DOMMs, and NYSE Amex Options Market 

Makers—Non Directed, the Exchange will no longer 

offer differentiated pricing for the Electronic 

transactions of these participants. Thus, these 

participants will be collectively referred to as 

‘‘NYSE Amex Options Market Makers’’ for purposes 

of the proposed Fee Schedule and will be subject 

to the same rates for Electronic transactions. 

the result is $165.055 which will be 

rounded to $165.06 in computing the 

invoiced amount. 

The Exchange believes that including 

this information in the Fee Schedule 

would better inform Exchange members 

about how the Exchange bills them for 

transactions executed on the Exchange. 

Next, the Exchange proposes to add a 

new section that sets forth Key Terms 

and Definitions to make clear to 

members the meaning of certain terms 

used throughout the Fee Schedule. The 

Exchange believes this proposed change 

would make the Fee Schedule more 

comprehensive, thereby better 

informing members. Unless otherwise 

noted below, the proposed Key Terms 

and Definitions are non-substantive as 

they have been excerpted from the rules 

of the Exchange.5

The Exchange proposes to add a 

definition of Affiliate, which 

incorporates the ‘‘Affiliate’’ standard in 

Endnote 12 of the current Fee Schedule. 

The proposed definition of ‘‘Affiliate’’ 

states, in part, that the Exchange ‘‘will 

apply a 70% common ownership test’’ 

to determine affiliation for purposes of 

aggregating routing and market making 

activity. Although Endnote 12 relates 

solely to a determination of affiliation 

for purposes of Excessive Bandwidth 

Fees, the Exchange proposes to apply 

the Affiliate definition (i.e., 70% 

common ownership) more broadly in 

the proposed Fee Schedule.6 The 

Exchange notes that this proposed 

definition of Affiliate is consistent with 

that of other options exchanges, and at 

least two other options exchanges apply 

a 75% common ownership threshold for 

affiliation and that there is at least one 

other exchange that does not specify the 

level of common ownership or common 

control required in order to have the 

activity of affiliates aggregated for 

purposes of the fee schedule.7

The Exchange has proposed to add a 

‘‘Non-Customer’’ definition for purposes 

of the proposed Fee Schedule. The 

definition of ‘‘Non-Customer’’ would be 

any market participant that is not a 

Customer. Because the definition of 

Customer in proposed Fee Schedule 

would be any individual or organization 

that is not a Broker-Dealer and is not a 

Professional Customer, as defined in 

Rule 900.2NY(18)(A), a Non-Customer 

would be defined as any individual or 

organization that is either a BrokerDealer or Professional Customer. 

In addition, the Exchange proposes to 

add the definition of Standard Option 

contracts, which it defines as any option 

other than a Mini Option contract, as 

described in Rule 901, Commentary .01. 

The Exchange notes that the other 

proposed Key Terms and Definitions are 

non-substantive. Specifically, the 

proposed definitions related to the 

CUBE Auction—CUBE Order, Contra 

Order, and Initiating Participant—are 

taken directly from the CUBE Auction 

fee filing and are, therefore, nonsubstantive proposed changes.8 Also, 

the proposed addition of the terms 

Electronic and Manual to differentiate 

these types of transactions on the 

Exchange are non-substantive as this 

information can be found in Exchange 

rules, as well as in the current Fee 

Schedule. Specifically, Rule 

900.2NY(29) explains that Floor Market 

Maker quotations may be entered ‘‘(A) 

manually, by public outcry, and (B) 

electronically through an auto-quoting 

device.’’ Similarly, Endnote 6 to the 

current Fee Schedule states that 

‘‘Manual trades are those trades 

executed in open outcry.’’ Further, the 

Exchange notes that there are references 

to Manual and Electronic transactions 

throughout the current (and proposed) 

Fee Schedule. Thus, the Exchange 

believes it would be logical to add these 

definitions to explain these transaction 

types to market participants. 

Finally, the Exchange also proposes 

non-substantive additions to the Key 

Terms and Definitions by importing the 

information from current Endnotes 6 

and 14, which contain the definitions of 

Firm Proprietary, Firm Facilitation and 

Non-NYSE Market Maker, respectively 

(with slight stylistic wording changes to 

these definitions). In particular, the 

Exchange proposes to simplify the term 

‘‘Firm Proprietary’’ to ‘‘Firm’’ 

throughout the proposed Fee Schedule. 

The proposed definition of ‘‘Firm’’ 

includes information from current 

Endnote 6 together with the definition 

from Rule 900.2NY(28).9

Except as otherwise indicated above, 

the Exchange believes the addition of 

this Key Terms and Definitions section 

is a non-substantive addition that will 

aid its members in navigating and 

understanding certain terms 

consistently used through the Fee 

Schedule. 

Section I. Options Transactions Fees 

and Credits 

A. Rates for Standard Option Contracts 

Transactions—Electronic and Manual 

The current Fee Schedule sets forth 

the rates for Standard Option 10

contracts in a table under ‘‘NYSE Amex 

Options: Trade-Related Charges for 

Standard Options.’’ 11 The Exchange 

proposes to set forth the per contract 

rate Electronic and Manual transactions 

in Standard Options under new Section 

I.A. in a table (with related notes to 

immediately follow).12

With the following exceptions, the 

Exchange is not proposing to change the 

rates for Standard Option contracts: 

• The Exchange proposes a new rate 

of $0.23 per contract for e-Specialists, 

Specialists, Directed Options Market 

Makers (‘‘DOMMs’’), and NYSE Amex 

Options Market Makers for Electronic 

transactions in Standard Option 

contracts.13 This rate is competitive 

with rates being charged on other 


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14See, e.g., CBOE fee schedule, available here, 

http://www.cboe.com/publish/feeschedule/

CBOEFeeSchedule.pdf (the ‘‘Liquidity Provider 

Sliding Scale’’); PHLX fee schedule, available here, 

http://www.nasdaqtrader.com/

Micro.aspx?id=PHLXPricing (per the ‘‘Multiply 

Listed Options Fees,’’ charging Specialists and 

Market Makers $0.22 or $0.25 per contract for 

Penny and Non-Penny electronic transactions); 

Boston Options Exchange LLC (‘‘BOX’’) fee 

schedule, available here, http://boxexchange.com/

assets/BOX_Fee_Schedule.pdf (per Section IA— 

Non Auction Transaction Fees, charging Marker 

Makers a variable rate between $0.00 and $0.90 per 

contract depending upon whether they are making 

or taking liquidity and which participant type 

counterparty (e.g., Customer, Firm, etc.). 

15 DOMMs do not execute Manual transactions. 

16The Marketing Charge entry is found right 

below the ‘‘Limit on Strategy Executions’’ [sic] 

section in the current Fee Schedule, which comes 

after the heading ‘‘NYSE Amex Options: TradeRelated Charges for Mini Options.’’ 

17The Exchange notes that while it has imported 

the information from current Endnotes 9 and 10, the 

language has been streamlined to make the text 

more concise and comprehensible. 

exchanges.14 The new base rate of $0.23 

per contract represents an increase in 

fees charged to market participants. 

Under the current Fee Schedule, each 

market participant is charged a per 

contract fee for Electronic transactions 

(described below), which rate is subject 

to a three-cent per contract discount if 

the market participant trades 50,000 

contracts ADV or greater for each day of 

the month. Thus, the current 

undiscounted per contract charges for 

Standard Options are as follows: 

Specialists and e-Specialists are charged 

$0.13 per contract; DOMMs are charged 

$0.18 per contract, and NYSE Amex 

Options Market Makers—Non Directed 

are charged $0.20 per contract. 

Although this proposal represents an 

increase across the board in the per 

contract rate charged for Electronic 

transactions, as noted above, the 

proposed rate is consistent with other 

exchanges. Further, the Exchange 

proposes to afford these market 

participants an opportunity to pay lower 

per contract rates for their Electronic 

executions under the proposed Sliding 

Scale, as discussed in Section I.C. 

below. 

• In conjunction with the proposed 

base rate change, the Exchange proposes 

to eliminate the three-cent per contract 

discount (noted above) for e-Specialists, 

Specialists, DOMMs, and NYSE Amex 

Options Market Makers that execute 

50,000 or more contracts ADV for each 

day of the month. For example, under 

the current Fee Schedule, a Specialist or 

e-Specialist that does not execute more 

than 50,000 contracts ADV is charged 

$0.13 per contract, but if they meet the 

volume threshold they are charged only 

$0.10 per contract. The Exchange 

undiscounted rate of $0.13 per contract 

for Specialists and e-Specialists and 

$0.20 per contract for NYSE Amex 

Options Market Makers would continue 

to apply to these members’ Manual 

transactions in Standard Option 

contracts.15 Current Endnote 5 describes 

the calculation used in determining 

whether a Specialist, e-Specialist, 

DOMM or NYSE Amex Options Market 

Maker has reached the 50,000 contract 

ADV threshold, which calculation 

excludes volumes from Mini Options 

and CUBE Auctions. In conjunction 

with eliminating the discount associated 

with achieving the 50,000 contract ADV 

threshold, the Exchange also proposes 

to eliminate the portions of current 

Endnote 5 relating to the 50,000 contract 

ADV threshold. 

• The Exchange is also proposing to 

eliminate the $0.10 per contract charge 

for SPY Electronic Complex executions 

for NYSE Amex Options Market Makers. 

The Exchange proposes that these 

transactions will be charged the same 

rate as any other Electronic Standard 

Option transaction by a NYSE Amex 

Market Maker going forward. 

• Finally, the Exchange proposes to 

eliminate the $350,000 per month fee 

cap on NYSE Amex Options Market 

Makers, and the associated service fees 

of $0.01 per contract for volumes in 

excess of 3,500,000 contracts or the 

$0.10 per contract service fee for 

Complex volumes as described in 

Endnote 5 to the current Fee Schedule. 

Endnote 5 to the current Fee Schedule 

contains a description of the manner in 

which the $350,000 per month fee cap 

works and also includes a description of 

the application of the $0.01 per contract 

service fee for all Specialist, e-Specialist 

and Market Maker volume executed in 

excess of 3,500,000 contracts per month, 

as well as the exception for the 

execution of an Electronic Complex 

Order, in which case the incremental 

service fee is $0.10 per contract. Current 

Endnote 5 also describes transactions 

that are excluded from ADV volume 

calculations, such as Mini Options 

contract charges and executions 

resulting from CUBE Auctions. As the 

$350,000 per month fee cap is being 

eliminated, the Exchange also proposes 

to eliminate those portions of Endnote 

5 relating to the $350,000 per month fee 

cap. Consequently, in conjunction with 

the changes described in the bullet 

above, the Exchange proposes to 

eliminate Endnote 5 to the current Fee 

Schedule its entirety. 

In addition, immediately following 

the proposed fee table, there are four 

notes designed to amplify certain 

information in the table in Section I.A. 

The first, second, and fourth notes refer 

to fees and/or credits that may apply 

and which will be discussed in greater 

detail below in Sections I.K. (Royalty 

Fees), I.C. (NYSE Amex Options Market 

Maker Sliding Scale), and I.I. (Firm 

Monthly Fee Cap), respectively. The 

third note relates to Marketing Charges 

and is related to the column ‘‘Marketing 

Charges Per Contract for Electronic 

Transactions.’’ 

The third note contains the same 

information that appears on the current 

Fee Schedule under ‘‘Marketing 

Charge,’’ 16 together with the two 

associated Endnotes 9 and 10.17 The 

Exchange proposes to include 

information about the assessment and 

distribution of the Marketing Charges in 

the third note to the table of transaction 

fees for Standard Options contracts, 

which lists the Marketing Charges per 

contract for Electronic transactions. In 

addition, the Exchange is proposing to 

make changes to the language in the 

current Fee Schedule under ‘‘Marketing 

Charges’’ and in Endnotes 9 and 10. As 

proposed to be included in the third 

note, the proposed description of the 

manner in which the Marketing Charges 

are assessed and distributed would be 

clearer than in the current Fee 

Schedule. The Exchange is not, 

however, proposing to make any 

substantive changes to the manner in 

which Marketing Charges are assessed 

or distributed. Specifically, NYSE Amex 

Options Market Makers who are 

counterparties to an Electronic Trade 

with a Customer would continue to be 

assessed a Marketing Charge. The 

Exchange is proposing to remove the 

statement that Marketing Charges will 

not be assessed against executed QCC or 

CUBE orders because the table in which 

proposed note 3 appears only relates to 

Standard Options contracts. Further, the 

pool of monies resulting from the 

collection of Marketing Charges on 

Electronic non-Directed Orders would 

continue to be controlled by the 

Specialist or e-Specialist with superior 

volume performance over previous 

quarter. An ATP Holder that submits an 

Electronic non-Directed Order would 

continue to be able to designate a any 

NYSE Amex Options Market Maker to 

control Marketing Charges collected in 

connection with such non-Directed 

Order. And, Marketing Charges on 

Electronic Directed Orders would 

continue to be controlled by the NYSE 

Amex Options Market Maker to which 

the order was directed. In all cases, the 

Exchange would continue to distribute 

any monies to payment accepting firms 

as directed by the appropriate NYSE 

Amex Options Market Maker. 


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18 ‘‘Penny’’ option and ‘‘Non-Penny’’ option 

would be defined in the proposed new ‘‘Key Terms 

and Definitions’’ section. 

19The current table of fees for Mini Options 

includes several Endnotes. The Exchange proposes 

to move the information discussed in current 

Endnote 17 to proposed Section I.E. (Amex 

Customer Engagement Program), which is discussed 

below. As noted above, supra n. 11, current 

Endnote 6 describes the term Firm and this term is 

now included in the proposed Fee Schedule in the 

Key Terms and Definitions section. 

20Note 1 to the proposed table relates to 

Marketing Charges, which, as noted in Section I.A. 

above, is information that was imported directly 

from the current Fee Schedule, with changes as 

noted herein (see supra n. 17), and therefore 

represents a non-substantive change. 

21See Current Fee Schedule, ‘‘NYSE Amex 

Options: Trade-Related Charges for Mini Options.’’ 

22See supra n. 13. 

23The current $350,000 per month fee cap is 

found in Endnote 5 of the current Fee Schedule, 

which also describes the $0.01 and $0.10 service fee 

for single leg and complex volumes in excess of the 

cap. 

24The volume thresholds are based on an NYSE 

Amex Options Market Makers’ volume transacted 

Electronically as a percentage of total industry 

Customer equity and ETF options volumes as 

reported by the Options Clearing Corporation (the 

‘‘OCC’’). Total industry Customer equity and ETF 

option volume is comprised of those equity and 

ETF contracts that clear in the Customer account 

type at OCC and does not include contracts that 

clear in either the Firm or Market Maker account 

type at OCC or contracts overlying a security other 

than an equity or ETF security. See OCC Monthly 

Statistics Reports, available here, http://

www.theocc.com/webapps/monthly-volume-reports. 

25 In calculating an NYSE Amex Options Market 

Maker Electronic volumes, the Exchange proposes 

to exclude any volumes attributable to Mini 

Options, QCC trades, CUBE Auctions, and Strategy 

Execution Fee Caps, as these transactions are 

subject to separate pricing described in proposed 

Fee Schedule Sections I.B., I.F., I.G., and I.J, 

respectively. 

26See, e.g., CBOE fee schedule, available here, 

http://www.cboe.com/publish/feeschedule/

CBOEFeeSchedule.pdf (the ‘‘Liquidity Provider 

Sliding Scale’’); BOX fee schedule, available here, 

http://boxexchange.com/assets/BOX_Fee_

Schedule.pdf (the ‘‘Tiered Volume Rebate for 

Market Makers’’); MIAX fee schedule, available 

here, http://www.miaxoptions.com/sites/default/

files/MIAX_Options_Fee_Schedule_12012014.pdf 

(‘‘Market Maker Sliding Scale’’). 

Finally, the Exchange proposes a nonsubstantive change with respect to the 

proposed table in Section I.A. The 

proposed table has separate columns for 

transaction type (Electronic v. Manual) 

and ‘‘Marketing Charges Per Contract for 

Electronic Transactions as well as 

separate rows to distinguish between 

whether the option is for a Penny or 

Non-Penny option.18 The Exchange 

believes that the re-formatted table 

provides the same information but in a 

manner that is easier to navigate. 

Section I.B. Rates for Mini Option 

Contracts Transactions—Electronic and 

Manual 

The current Fee Schedule sets forth 

the rates for Mini Option contracts in a 

table under ‘‘NYSE Amex Options: 

Trade-Related Charges for Mini 

Options.’’ 19 The Exchange proposes to 

include the per contract rate for 

Electronic and Manual transactions in 

Mini Options under new Section I.B. in 

a table (with a related note to 

immediately follow).20 The Exchange is 

not proposing any change to the rates 

charged for Mini Options. The Exchange 

is proposing two non-substantive 

changes to the presentation of charges 

related to Mini Options. First, the 

Exchange proposes to omit the fees and 

credits for QCC trades involving Mini 

Options from the table and to instead 

relocate this information to Section I.F. 

(QCC Fees & Credits). The Exchange 

believes it is logical to include all QCCrelated fees and credits for Standard and 

Mini Options in one place on the Fee 

Schedule and believes that this change 

would aid participants in QCC trades in 

locating information relating to these 

transactions. Second, the Exchange 

proposes to delete the column for fees 

applicable to ‘‘Electronic Complex 

Order Executions’’ in Mini Options from 

the table of charges for Mini Options as 

it appears in the current Fee Schedule 21

because the rates for simple (or singlelegged) executions and Complex (or 

multi-legged) executions is (and will 

remain) the same and therefore this 

separate column is not needed. The 

Exchange believes eliminating this 

superfluous column will add clarity to 

the Fee Schedule. 

Section I.C. NYSE Amex Options 

Market Maker Sliding Scale—Electronic 

The Exchange is proposing to provide 

a discount to NYSE Amex Options 

Market Makers 22 for transaction fees 

based on a sliding volume scale. This 

proposed Sliding Scale discount is 

designed to replace the $350,000 per 

month fee cap, and related $0.01 per 

contract service fee for all NYSE Amex 

Options Market Maker volume executed 

in excess of 3,500,000 contracts per 

month, except for the execution of an 

Electronic Complex Order, in which 

case the incremental service fee is $0.10. 

The proposed sliding scale is also 

designed to replace the 50,000 contract 

ADV threshold which results in a $0.03 

per contract discount for NYSE Amex 

Options Market Makers, which, as 

discussed in Section I.A. above, the 

Exchange proposes to eliminate.23

The proposed Sliding Scale discount 

in the table in Section 1.C. would apply 

to Electronic transactions in Standard 

Options by NYSE Amex Options Market 

Makers. An NYSE Amex Options 

Market Maker that has monthly volume 

on the Exchange of less than 0.10% of 

total industry Customer equity and 

exchange traded fund (‘‘ETF’’) options 

volume 24 would be charged the 

proposed base rate of $0.23, as 

discussed above. The Exchange 

proposes to offer these same market 

participants a reduction of this per 

contract rate upon reaching certain 

volume thresholds as shown in the table 

below. The rates shown are applicable 

to monthly volume within a given tier 

such that the lower per contract rate 

applies only to volume levels within 

that higher tier. For example, assume 

that an NYSE Amex Options Market 

Maker achieves monthly volume of 

6,000,000 contracts Electronically at a 

time when total industry Customer 

equity and ETF Option volume in the 

same month is 252,000,000 contracts. 

Under the proposed Sliding Scale, this 

Market Maker would pay $0.23 per 

contract on the first 252,000 contracts 

(Tier 1); $0.20 per contract on contracts 

252,001 through 1,512,000 (Tier 2); 

$0.10 per contract on contracts 

1,512,001 through 3,150,000 (Tier 3), 

$0.08 per contract on contracts 

3,150,001 through 3,528,000 (Tier 4), 

$0.05 per contract on contracts 

3,528,001 through 4,410,000 (Tier 5), 

$0.03 per contract on contracts 

4,410,001 through 5,040,000 (Tier 6), 

and $0.02 per contract on contracts 

5,040,001 through 6,000,000 (Tier 7).25

The Exchange believes this change will 

enable it to compete more effectively 

with other options exchanges that offer 

similar pricing.26

PROPOSED TABLE SHOWING SLIDING

SCALE OF MARKET MAKER FEES— 

ELECTRONIC

Tier 

Market maker monthly 

electronic volume as a % 

of industry customer 

equity and ETF option 

volume 

Rate per 

contract 

1 0.00% to 0.10% .............. $0.23 

2 >0.10% to 0.60% ............ 0.20 

3 >0.60% to 1.25% ............ 0.10 

4 >1.25% to 1.40% ............ 0.08 

5 >1.40% to 1.75% ............ 0.05 

6 >1.75% to 2.00% ............ 0.03 

7 >2.00% ........................... 0.02 

Section I.D. Prepayment Program 

The Exchange is proposing to offer 

prepayment programs to NYSE Amex 

Options Market Makers. The proposed 

Prepayment Program would allow a 

NYSE Amex Options Market Makers the 

option to commit to either a 1-year or 

3-year term (the ‘‘1 Year Prepayment 

Program’’ or ‘‘3 Year Prepayment 

Program,’’ respectively) under which it 

could prepay a portion of the charges it 


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27The Exchange will apply the prepayment as a 

credit against charges incurred under Section I.C., 

I.G., or III.A. of the Fee Schedule. Once the 

prepayment credit has been exhausted, the 

Exchange will invoice the NYSE Amex Options 

Market Maker at the appropriate rates under Section 

I.C., I.G., or III.A. In the event that the NYSE Amex 

Options Market Maker does not conduct sufficient 

activity to exhaust the entirety of their prepayment 

credit within the calendar year, there will be no 

refunds issued for any unused portion of their 

prepayment credit. 

28The NYSE Amex Market Maker would be 

required to send an email to the Exchange at 

optionsbilling@nyse.com. The email to enroll in the 

Prepayment Program must originate from an officer 

of the NYSE Amex Options Market Maker firm and, 

except as provided for below, represents a binding 

commitment for the 1- or 3-year term to which the 

NYSE Amex Options Market Making firm commits, 

requiring payment according to the schedule 

described above. 

29To effectuate early termination, an NYSE Amex 

Options Market Making firm must send an email to 

optionsbilling@nyse.com requesting to opt out. The 

opt out request must be submitted by 4:00 p.m. ET 

at least five business days preceding the date(s) on 

which payment is due for any year(s) for which the 

NYSE Amex Options Market Maker wishes to opt 

out. Specifically, to opt out for 2016, the request 

must be submitted by 4:00 p.m. ET on January 22, 

2016 and to opt out for 2017, the request must be 

submitted by 4:00pm ET on January 24, 2017. 

Anytime a NYSE Amex Options Market Making 

firm opts out, they would also forfeit the ability for 

an OFP Affiliate to earn the enhanced credit(s) 

described below in proposed Section I.E. for any 

subsequent year(s) in which they have opted out. 

Opting out does not entitle a NYSE Amex Options 

Market Making firm to any refund of monies 

already paid under the Prepayment Program, but 

only relieves them of the obligation to make 

remaining payments, if any, if they opted into the 

3 Year Prepayment Program. 

30Market share is determined based on cleared 

volumes statistics for both equity and ETF options 

volumes as reported by the OCC. See OCC Monthly 

Statistics Reports, available here, http://

www.theocc.com/webapps/monthly-volume-reports 

(including for equity options and ETF options 

volume, subtotaled by exchange, along with OCC 

total industry volume). Relying on OCC data, the 

Exchange will compute market share by using 

NYSE Amex Options total equity and ETF option 

volumes for the most recent, prior three-months as 

the numerator and OCC equity and ETF option 

volumes (across all options markets) for the same 

three months as the denominator. Any time this 

calculation yields a result less than 7.5% during 

2015 or 7.0% during 2016, rounding to the nearest 

tenth (i.e., one place to the right of the decimal) and 

using standard rounding by Microsoft Excel®, a 

NYSE Options Market Maker in the 3 Year 

Prepayment Program would be eligible to opt out. 

31For example, as previously described in 

proposed Section I.C., a NYSE Amex Options 

Market Maker will be charged for Electronic 

transactions according to the Sliding Scale. In the 

example set forth above in the description of 

Section I.C., the NYSE Amex Options Market Maker 

that transacted 6,000,000 contracts in a month with 

industry Customer equity and ETF option volume 

of 252,000,000 contracts would qualify for the rates 

inclusive of Tiers 1 through 7. Tier 7 covers 

volumes in excess of 2.00% of industry Customer 

equity and ETF option volume and is an infinite 

Tier with no upper bound on volume. Therefore, in 

calculating the 70% reduction in fees charged 

under Section I.C., the Exchange will only consider 

fees for transactions charged under Tiers 1 through 

6. Anytime the aggregate fees charged for all of the 

volumes associated with Tiers 1 through 6 are 

reduced by 70% or more when compared with the 

aggregate fees charged for all of the volumes for 

Tiers 1 through 6 as of January 2, 2015, a NYSE 

Amex Options Market Maker would be eligible to 

opt out. 

The amount of volume represented by Tiers 1 to 

6 will likely change from month to month, as those 

tiers are expressed as a percentage of total monthly 

industry Customer equity option and ETF option 

volume. In the initial example, Tiers 1 to 6 

represent volume of 5,040,000 contracts (2% of 

252,000,000), which would cost each NYSE Amex 

Options Market Maker transacting 5,040,000 

contracts $567,000. If the Exchange were to reduce 

the cost to trade 5,040,000 contracts (in a month 

when total industry Customer equity option and 

ETF option volume was 252,000,000 contracts) by 

at least 70% or $396,900, then a valid opt out 

opportunity would exist. 

Continuing the example, if, in a subsequent 

month, total industry Customer and equity option 

and ETF option volume is 200,000,000 contracts, 

Tiers 1 to 6 would represent contract volume of 

4,000,000 contracts (2% of 200,000,000). Under the 

Sliding Scale in effect as of January 2, 2015, any 

NYSE Amex Options Market Maker would have 

been charged $450,000 to transact 4,000,000 during 

a month in which total industry Customer equity 

option and ETF option volume is 200,000,000. If the 

Exchange were to reduce the cost to trade 4,000,000 

contracts (in a month when total industry Customer 

equity option and ETF option volume was 

200,000,000 contracts) by at least 70% or $315,000, 

then a valid opt out opportunity would exist. 

32As of January 2, 2015, a NYSE Amex Options 

Market Maker transacting in CUBE Auctions would 

pay the rates assessed to Non-Customers, which 

includes a CUBE Order Fee of $0.20, a Contra Order 

Fee of $0.05, and a RFR Response Fee of $0.55 for 

Penny Pilot and $0.90 for Non-Penny Pilot. A 70% 

reduction in each and every one of these rates 

would be required in order for that Market Maker 

to be eligible to opt out. 

33Upon request, the Exchange will provide any 

participant a count of the total participants in the 

1 Year and 3 Year Prepayment Programs combined, 

as of either January 4, 2016 or January 3, 2017. 

Should there be fewer than 4 participants in the 1 

Year and 3 Year Prepayment Programs combined, 

an NYSE Amex Options Market Maker in the 3 Year 

Prepayment Program may opt out. Under no 

circumstances will the identity of any participant 

in either the 1 Year or the 3 Year Prepayment 

Program be disclosed to any other participant. 

34See, e.g., CBOE fee schedule, available here, 

http://www.cboe.com/publish/feeschedule/

CBOEFeeSchedule.pdf (the ‘‘Liquidity Provider 

Sliding Scale’’); see also Securities Exchange Act 

Continued 

incurs under proposed Sections I.C., 

I.G., or III.A. of the Fee Schedule.27 The 

1 Year Prepayment Program would 

require an upfront payment of $4 

million, payable by January 30, 2015. 

The 3 Year Prepayment Program would 

require a commitment of $9 million, 

payable in three equal, annual 

installments of $3 million, with the first 

payment due by January 30, 2015, the 

second payment due by January 29, 

2016 and the final payment due by 

January 31, 2017. Any NYSE Amex 

Options Market Maker that elects to 

participate in either of the Prepayment 

Programs would qualify its Affiliated 

OFP to be eligible to receive the 

enhanced credit(s) under the Amex 

Customer Engagement (‘‘ACE’’) Program 

(described below) in proposed Section 

I.E. of the Fee Schedule. 

To participate in the 1 Year or 3 Year 

Prepayment Programs, interested NYSE 

Amex Options Market Makers would 

have to notify the Exchange in writing 

no later than January 15, 2015 

indicating to which prepayment term 

they are committing.28 The 3 Year 

Prepayment Program would not be 

available after January 15, 2015. 

However, NYSE Amex Options Market 

Maker firms could opt into the 1 Year 

Prepayment Program for 2016 or 2017 

by sending an email to the Exchange by 

4:00 p.m. ET on the last business day in 

December of either 2015 or 2016, 

provided the Exchange continues to 

offer the 1 Year Prepayment Program at 

that time. 

The Exchange is proposing to allow 

NYSE Amex Options Market Makers in 

the 3 Year Prepayment Program to ‘‘opt 

out’’ under certain circumstances, 

thereby relieving the Market Maker of 

any remaining payment obligations.29

NYSE Amex Options Market Makers 

would be permitted to ‘‘opt out’’ only if: 

1. NYSE Amex Options equity and ETF 

options market share over any 

consecutive 3-month period during 

2015 falls below 7.5% of total 

equity options and ETF options 

volume; 30 or 

2. NYSE Amex Options equity and ETF 

options market share over any 

consecutive 3-month period during 

2016 falls below 7.0% of total 

equity options and ETF options 

volume; or 

3. the Exchange reduces the transaction 

fees in Tiers 1 through 6 in Section 

I.C. by 70% or more compared to 

the rates as of January 2, 2015; 31 or 

4. the Exchange reduces each and every 

fee in Section I.G. charged to NYSE 

Amex Options Market Makers by 

70% or more compared to the rates 

as of January 2, 2015; 32 or 

5. as of January 4, 2016 or January 3, 

2017 there are fewer than 4 

participants in the 1 Year and 3 

Year Prepayment Programs 

combined.33

Once opted out of the 3 Year 

Prepayment Program, a Market Making 

firm cannot opt back into the 3 year 

Prepayment Program, but may opt into 

the 1 Year Prepayment Program 

provided they email the Exchange by 

the last business day of December of 

2015 or 2016, and provided that the 

Exchange continues to offer the 1 Year 

Prepayment Program at that time. 

The Exchange believes the proposed 

Prepayment Programs will enable it to 

compete more effectively with other 

options exchanges that offer similar 

programs.34


tkelley on DSK3SPTVN1PROD with NOTICES
3706 Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 

Release No. 70498 (September 25, 2013), 78 FR 

60348 (October 1, 2013) (SR–MIAX–2013–43) 

(immediate effectiveness of program allowing 

participating members to prepay certain transaction 

fees). 

35On the current Fee Schedule this is the second 

to last section right before ‘‘NYSE Options: 

General.’’ 

36 In calculating ADV, the Exchange will utilize 

monthly reports published by the OCC for equity 

options and ETF options that show cleared volume 

by account type. See OCC Monthly Statistics 

Reports, available here, http://www.theocc.com/

webapps/monthly-volume-reports (including for 

equity options and ETF options volume, subtotaled 

by exchange, along with OCC total industry 

volume). The Exchange will calculate the total OCC 

volume for equity and ETF options that cleared in 

the Customer account type and divide this total by 

the number of trading days for that month (i.e., any 

day the Exchange is open for business). For 

example, in a month having 21 trading days where 

there were 252,000,000 equity option and ETF 

option contracts that cleared in the Customer 

account type, the calculated ADV would be 

12,000,000. 

37See, e.g., MIAX fee schedule, available here, 

http://www.miaxoptions.com/sites/default/files/

MIAX_Options_Fee_Schedule_12012014.pdf 

(offering Priority Customer Rebate Program that 

features tiers based on a Percentage Thresholds of 

National Customer Volume in Multiply-Listed 

Options Classes Listed on MIAX); CBOE fee 

schedule, available here, http://www.cboe.com/

publish/feeschedule/CBOEFeeSchedule.pdf 

(offering a Volume Incentive Program that features 

tiers based on Percentage Thresholds of National 

Customer Volume in All Underlying Symbols (with 

certain exclusions)); and PHLX fee schedule, 

available here, http://www.nasdaqtrader.com/

Micro.aspx?id=PHLXPricing (offering a Customer 

Rebate Program based on Percentage Thresholds of 

National Customer Volume in Multiply-Listed 

Equity and ETF Options Classes, excluding SPY 

Options). 

38By contrast, the highest credit possible under 

the Customer Electronic Complex ADV Tiers is 

$0.10 per contract and the highest credit under Tier 

1A or Tier 1B of the OFP ADV Tiers is $0.06 per 

contract. 

39Electronic Customer volume is volume 

executed electronically through the Exchange 

System, on behalf of an individual or organization 

that is not a Broker-Dealer and who does not meet 

the definition of a Professional Customer. 

40See supra n. 36. 

41 Id. 

Section I.E. Amex Customer 

Engagement (‘‘ACE’’) Program— 

Standard Options 

The current Fee Schedule includes 

OFP Electronic ADV Tiers (Tiers 1A and 

Tier 1B) as well as Customer Electronic 

Complex Order ADV Tiers (collectively, 

the ‘‘Tiers’’) and rebates per contract for 

certain Electronic equity and ETF 

options volume under ‘‘NYSE Amex 

Options: Trade-Related Rebates or 

Subsidies for Standard Options.’’ 35

Current Endnote 17 provides 

information about how an OFP qualifies 

to meet the criteria set forth in the Tiers. 

The Exchange is proposing to eliminate 

the existing Tiers and related Endnote 

17 and to instead adopt the Amex 

Customer Engagement (‘‘ACE’’) 

Program. 

Under the current Fee Schedule, OFPs 

earn rebates based on achieving certain 

volume thresholds. The current 

Customer Electronic Complex Order 

ADV Tiers are fixed tiers based on set 

numerical ranges. For example, Tier 1 is 

a volume threshold of 35,000 to 49,999 

contracts—paying a rebate of $0.04 per 

contract; Tier 2 is a volume threshold of 

50,000 to 69,999—paying a rebate of 

$0.06 per contract; Tier 3 is a volume 

threshold of 70,000 to 109,999—paying 

a rebate of $0.08 per contract; and Tier 

4 is a volume threshold of 110,000 and 

greater—paying a rebate of $0.10 per 

contract. 

The proposed ACE Program likewise 

features four tiers. However, the 

proposed tiers would be expressed as a 

percentage of total industry Customer 

equity and ETF option ADV.36 The 

Exchange believes that expressing the 

tiers as a percentage rather than a fixed 

numerical range would be more easily 

understood by market participants given 

the widespread use of this metric among 

other exchanges.37 The current OFP 

ADV Tier 1A and Tier 1B are more 

similar to the structure of the proposed 

ACE Program as these tiers are 

expressed as a percentage of total 

industry Customer equity and ETF 

option volume, as opposed to being 

based on fixed numerical ranges. 

As proposed, the ACE Program would 

offer the potential to earn a higher per 

contract credit for Customer volumes 

than is possible under any of the 

existing Tiers, due in part to the 

proposed ability of an OFP to aggregate 

its volume with any affiliates under the 

ACE Program. For example, the 

proposed credits under the ACE 

Program would range from $0.13 for 

qualifying volumes that reach Tier 2, to 

as high as $0.20 per contract for 

qualifying volumes that reach Tier 4 for 

those OFPs that have an Affiliated 

NYSE Amex Options Market Maker 

participating in the 3 Year Prepayment 

Program previously described.38

Specifically, the proposed ACE Program 

would consist of a four-tiered schedule 

of per contract credits payable to an 

OFP solely for Electronic Customer 

volume that the OFP, as agent, submits 

to the Exchange.39 The ACE Program 

would offer the following two methods 

for OFPs to receive credits: 

1. By calculating, on a monthly basis, 

the average daily Customer contract 

volume an OFP executes Electronically 

on the Exchange as a percentage of total 

industry Customer equity and ETF 

options ADV; 40 or 

2. By calculating, on a monthly basis, 

the average daily contract volume an 

OFP executes Electronically in all 

participant types (i.e., Customer, Firm, 

Broker-Dealer, NYSE Amex Options 

Market Maker, Non-NYSE Amex 

Options Market Maker, and Professional 

Customer) on the Exchange, as a 

percentage of total industry Customer 

equity and ETF options ADV,41 of 

which at least 20% must be Customer 

volume executed Electronically. 

Upon reaching a higher tier, an OFP 

would receive for all eligible Customer 

volume the per contract credit 

associated with the highest tier 

achieved, retroactive to the first contract 

traded each month, regardless of which 

of the two calculation methods the OFP 

qualifies under. In the event that an OFP 

is eligible for credits under both 

calculation methods, the OFP would 

benefit from whichever criterion results 

in the highest per contract credit for all 

the OFP’s eligible ADV. For example, if 

an OFP’s Customer Electronic ADV is 

1.51% of total industry Customer equity 

and ETF option ADV, it would receive 

the Tier 3 credits for each qualifying 

Customer Standard Option contract the 

OFP executes, as agent. Alternatively, if 

an OFP has total Electronic ADV which 

falls into Tier 3 (1.50% to 3.50% of total 

industry customer equity and ETF 

option ADV), of which 20% or more is 

Customer volume, the OFP will be 

eligible to earn the Tier 3 credits for 

their eligible Customer volumes. The 

tiers and associated per contract credits 

that apply to Electronic transactions are 

shown in the table below. 


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42Though included in an OFP’s Electronic 

volume calculation, contracts executed in CUBE 

Auctions would not be eligible to earn any credits 

under the proposed ACE Program, as there are 

separate credits paid for certain CUBE Auction 

volumes. See Section I. G. below. 

43 In order to have an Affiliate’s trading activity 

included with its own, an OFP must email the 

Exchange at optionsbilling@nyse.com with such 

request and provide the Exchange with a list of the 

OFP’s Affiliated entities. The Exchange defines an 

‘‘Affiliate’’, or person ‘‘affiliated’’ with a specific 

person, as ‘‘a person that directly or indirectly 

through one or more intermediaries, has a 70% 

common ownership with, the person specified.’’ 

See proposed Fee Schedule, Key Terms and 

Definitions. 

44Thus, if a NYSE Amex Options Market Making 

firm that has committed to the 3 Year Prepayment 

Program opts out before 4 p.m. ET on January 22, 

2016, the OFP Affiliated with that NYSE Amex 

Options Market Maker will be ineligible to earn the 

3 Year Enhanced Customer Volume Credits for their 

activity during any part of calendar years 2016 or 

2017. If, however, the same firm were to 

subsequently opt into a 1 Year Prepayment 

Program, its OFP Affiliate would be eligible to earn 

the 1 Year Enhanced Customer Volume Credits for 

the calendar year in which the firm opted in. 

45See supra n. 37. See e.g., CBOE fee schedule, 

available here, http://www.cboe.com/publish/

feeschedule/CBOEFeeSchedule.pdf (the ‘‘Volume 

Incentive Program’’, pays rebates as high as $0.17 

per contract for complex volumes under tier 4); 

PHLX fee schedule, available here, http://

www.nasdaqtrader.com/

Micro.aspx?id=PHLXPricing (‘‘Customer Rebate 

Program’’, Program pays rebates as high as $0.19 per 

contract under tier 5 for Category B rebates); MIAX 

fee schedule, available here, http://

www.miaxoptions.com/sites/default/files/MIAX_

Options_Fee_Schedule_12102014.pdf (‘‘Priority 

Customer Rebate Program’’, pays rebates as high as 

$0.20 per contract in Select Symbols, under tier 5). 

46As previously discussed, the Exchange 

proposes to eliminate Endnote 5. See discussion in 

Section I.A. 

47On the current Fee Schedule, this section 

immediately follows ‘‘NYSE Amex Options: 

Qualified Contingent Cross (‘‘QCC’’) Fees.’’ 

48See proposed Section I.G. of the Fee Schedule. 

PROPOSED TABLE SHOWING AMEX CUSTOMER ENGAGEMENT PROGRAM—ELECTRONIC

Tier 

ACE program—standard options Credits payable on customer volume only 

Customer electronic ADV as 

a % of industry customer equity and ETF options ADV OR 

Total electronic ADV (of 

which 20% or greater must be 

customer) as a % of industry 

customer equity and ETF options ADV 

Customer volume credits 

1 year enhanced 

customer volume 

credits 

3 year enhanced 

customer volume 

credits 

1 .................... 0.00% to 0.75% ..................... ...... N/A ......................................... $0.00 $0.00 $0.00 

2 .................... >0.75% to 1.00% ................... ...... N/A ......................................... (0.13 ) (0.13 ) (0.13 ) 

3 .................... >1.00% to 2.00% ................... ...... 1.50% to 3.50% ..................... (0.14 ) (0.16 ) (0.18 ) 

4 .................... >2.00% ................................... ...... >3.50% ................................... (0.14 ) (0.16 ) (0.20 ) 

In calculating an OFP’s Electronic 

volume for purposes of determining 

which tier of credits (if any) the OFP 

may be eligible, the Exchange would: 

• Exclude any volume resulting from 

Mini Options and QCC trades as these 

transactions are subject to separate fees 

and/or credits (discussed in Sections 

I.B. and I.F.); 

• Exclude any volume attributable to 

orders routed away in connection with 

the Options Order Protection and 

Locked/Crossed Market Plan referenced 

in Rule 991NY; 

• Include any volume from CUBE 

Auction executions; 42

• Include any Electronic volume of 

Affiliates of the OFP, such as when an 

OFP has an Affiliated NYSE Amex 

Options Market Making firm, provided 

proper notice has been given to the 

Exchange; 43

• Any day the Exchange is open, 

regardless of length, will count as a full 

day when calculating ADV. 

The Exchange notes that the credits 

shown under the ‘‘1 Year Enhanced 

Customer Volume Credits’’ and the ‘‘3 

Year Enhanced Customer Volume 

Credits’’ are only available to those 

OFPs that have an Affiliated NYSE 

Amex Options Market Making firm that 

has committed to either the 1 Year 

Prepayment Program or the 3 Year 

Prepayment Program, as described in 

proposed Section I.D.44

The proposed ACE Program is 

designed to simplify the existing rebate 

programs (by combining the current 

Customer Electronic Complex ADV 

Tiers with the current OFP ADV Tiers), 

while also remaining competitive with 

rebate programs offered on other 

exchanges.45 At the same time, the 

Exchange believes the proposed ACE 

Program would attract more volume and 

liquidity to the Exchange, which will 

benefit all Exchange participants 

through increased opportunities to trade 

as well as enhancing price discovery. 

Section I.F. QCC Fees & Credits— 

Standard and Mini Options 

The current fees for Qualified 

Contingent Cross trades are set forth in 

a table under ‘‘NYSE Amex Options: 

Qualified Contingent Cross (‘‘QCC’’) 

Fees.’’ The Exchange proposes to 

modify its QCC fees and credits and 

reformat the table in the Fee Schedule 

under Section I. F. 

The Exchange proposes to eliminate 

the discounted rate per contract for eSpecialists and Specialists that transact 

50,000 contracts or more ADV.46

Consequently, e-Specialists and 

Specialists that receive an execution as 

part of a QCC trade would be charged 

the rate for a Standard Options Manual 

transaction, or $0.13 per contract. 

The Exchange also proposes nonsubstantive changes to the current table 

illustrating QCC pricing. Specifically, as 

noted in Section I.B. above, the 

Exchange proposes to incorporate the 

information regarding the fees and 

credits for QCC trades involving Mini 

Options into the existing table for QCC 

transactions so that all information 

regarding QCC transactions are in one 

place and also to include the 

information from existing Endnote 15 

regarding Floor Brokers as note 1 to 

immediately follow the table, with 

slight stylistic, non-substantive textual 

changes. 

Section I.G. CUBE Auction Fees & 

Credits—Standard Options 

The current Fee Schedule sets forth a 

table of the fees associated with 

executions in a CUBE Auction under 

‘‘NYSE Amex Options: CUBE Auction 

Fees.’’ 47 The Exchange is not proposing 

any substantive change to the fees for 

contracts executed in CUBE Auctions 

for Standard Options, but the Exchange 

is moving the existing CUBE Auction 

Rebates found under ‘‘NYSE Amex 

Options: Trade-Related Rebates or 

Subsidies for Standard Options’’ to this 

section so all CUBE related fees and 

credits are located in one place. 

The Exchange also proposes to add 

introductory language, taken from the 

existing CUBE Auction Rebates, to 

precede this table, which states, in 

relevant part, ‘‘Credits are payable to the 

Initiating Participant for each contract 

in an order paired with a CUBE Order 

that does not trade with the CUBE Order 

because it is replaced in the auction. 

The table below shows the credits 

payable to the Initiating Participant for 

executions associated with a CUBE 

Auction.’’ 48 The Exchange believes that 

this proposed language would add 

clarity to the Fee Schedule and aid in 


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3708 Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 

49This section appears in the current Fee 

Schedule immediately below the Routing Surcharge 

and immediately above the Marketing Charge. 

50This section appears in the current Fee 

Schedule immediately below the Marketing Charge. 

51See Securities Exchange Act Release No. 67764 

(August 31, 2012), 77 FR 55254 (September 7, 2012) 

(SR–NYSEMKT–2012–44). 

52The Exchange defines ‘‘Floor’’ or ‘‘Trading 

Floor’’ as ‘‘the options trading floor located at 11 

Wall Street, New York, NY.’’ See proposed Fee 

Schedule, Key Terms and Definitions. 

market participants’ comprehension as 

to how fees and credits are applied in 

CUBE Auctions. 

Section I.H. Market Access and 

Connectivity (‘‘MAC’’) Subsidy 

The current Fee Schedule includes 

the MAC Subsidy under ‘‘NYSE Amex 

Options: Trade-Related Rebates or 

Subsidies for Standard Options.’’ In 

connection with its reorganization of the 

Fee Schedule, the Exchange is 

proposing to move the description and 

schedule of the MAC Subsidy to Section 

I.H. of the Fee Schedule. The Exchange 

is not proposing any substantive 

changes to the MAC Subsidy. 

Section I.I. Firm Monthly Fee Cap 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the description of the 

Firm Monthly Fee Cap from Endnote 6 

to Section I.I. of the Fee Schedule. The 

current Fee Schedule sets forth the Firm 

Monthly Fee cap in Endnote 6. The 

Exchange is not proposing any 

substantive changes to this Fee Cap, but 

has made some stylistic changes to the 

text that previously appeared in 

Endnote 6, including streamlining the 

text so that it is more clear and concise. 

Section I.J. Strategy Execution Fee Cap 

The current Fee Schedule includes 

information about the proposed Strategy 

Execution Fee Cap under ‘‘Limits on 

Option Strategy Executions.’’ 49

The Exchange is not proposing any 

substantive changes for the Strategy 

Execution Fee Cap. The Exchange is 

proposing several non-substantive 

changes, including incorporating the 

information from the related Endnotes 8 

(a)–(e) into the section, as well as 

making some stylistic changes to the 

text, including streamlining the text so 

that it is more clear and concise. 

Section I.K. Royalty Fees 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the description of 

Royalty Fees, together with related 

information in Endnote 11, to Section 

I.K. of the Fee Schedule. The current 

Fee Schedule sets forth the Royalty Fees 

assessed by the Exchange under a 

heading of the same name.50 The 

Exchange is not proposing any 

substantive changes to its Royalty Fees; 

rather it is proposing to modify the table 

that illustrates the applicable per 

contract rate for each participant type by 

incorporating text currently referenced 

in Endnote 11. 

Section I.L. Routing Surcharge 

The Exchange is not proposing any 

changes with respect to the existing 

Routing Surcharge or related 

information in Endnote 7. The only nonsubstantive change that affects proposed 

Section I.L. relates to the re-ordering 

and reorganization of the Fee Schedule 

as a whole. 

Section II. Monthly Excessive 

Bandwidth Utilization Fees 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the description of 

order to trade ratio fees and message to 

contract traded ratio fees, together with 

referenced information in Endnote 12, 

to Section II. Proposed Section II would 

have two Subparts. Subpart A would set 

forth the monthly charge for order to 

trade ratios that exceed certain levels. 

Subpart B would set forth the fees 

assessed by the Exchange to ATP 

Holders per message that exceed certain 

ratios of messages to contracts traded. 

The current Fee Schedule includes 

these fees under ‘‘NYSE Options: 

Excessive Bandwidth Utilization Fees.’’ 

Endnote 12 is referenced in applying 

these fees. The Exchange is not 

proposing any substantive changes to 

these fees. The only non-substantive 

changes the Exchange is proposing are 

some stylistic changes to the text, 

including streamlining the text so that it 

is more clear and concise. 

Section III.A. Monthly ATP Fees 

The current Fee Schedule sets forth 

the monthly fees for trading permits 

(‘‘ATPs’’) under ‘‘NYSE Options: 

General Options and Trading Permits 

(ATP) Fees, ATP Trading Participants 

Rights.’’ In connection with its 

reorganization of the Fee Schedule, the 

Exchange is proposing to move the 

description of these fees to Section III.A. 

The Exchange does not propose any 

substantive changes to these fees, but is 

proposing to provide the fee information 

in table format, which the Exchange 

believes will make the information 

easier to digest and aid in the goal of 

enhancing the overall comprehensibility 

of the proposed Fee Schedule. The 

Exchange is also proposing to include 

details of how the ‘‘Bottom 45%’’ 51 of 

issues traded is calculated for purposes 

of the application of certain monthly 

fees to NYSE Amex Options Floor 

Market Makers in the text prior to the 

fee table. This information is currently 

in the Fee Schedule, but appears after 

the ATP fees. 

Section III.B. Floor Access Fee 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the Floor Access Fee 

description to Section III.B. The current 

Fee Schedule sets forth this fee under 

‘‘NYSE Options: General Options and 

Trading Permits (ATP) Fees, ATP 

Trading Participants Rights, Floor 

Access Fee.’’ The Exchange does not 

propose any substantive changes to this 

information. The only non-substantive 

changes that affects this section relates 

to the capitalization of ‘‘Floor,’’ as it is 

now a defined term in the proposed Key 

Terms and Definitions.52

Section III.C. e-Specialist, DOMM and 

Specialist Monthly Rights Fees 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the e-Specialist, 

DOMM and Specialist Monthly Rights 

Fees to Section III.C. The current Fee 

Schedule sets forth these fees under 

‘‘NYSE Options: General Options and 

Trading Permits (ATP) Fees, Specialist/ 

e-Specialist/DOMM Rights Fee,’’ and 

related Endnote 1. The Exchange is not 

proposing any substantive changes to 

these fees. The Exchange proposes the 

non-substantive formatting change of 

incorporating the information that is in 

Endnote 1 as introductory text to this 

section, with slight stylistic changes to 

the text for streamlining and 

consistency purposes. The Exchange 

also proposes to include note 1 to the 

fee table in this section regarding the 

‘‘grandfathering’’ of certain options 

issues after mid-2012, the text of which 

is consistent with the language is the 

asterisk in the current Fee Schedule. 

Section III.D. NYSE Amex Options 

Market Maker Monthly Premium 

Product Fee 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the NYSE Amex 

Options Market Maker Monthly 

Premium Product Fee to Section III.D. 

The current Fee Schedule includes the 

fees in a one-row table entitled 

‘‘Premium Product Issue List—Monthly 

NYSE Amex Options Market Maker 

Participation Fee.’’ The Exchange does 

not propose any substantive changes to 

these fees. The only change the 

Exchange proposes is to put the fees in 

table format, which the Exchange 


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53 15 U.S.C. 78f(b). 

54 15 U.S.C. 78f(b)(4) and 78f(b)(5). 

55See supra n. 14. 56See CBOE fee schedule, available here, 

http://www.cboe.com/publish/feeschedule/

CBOEFeeSchedule.pdf (the ‘‘Liquidity Provider 

Sliding Scale’’). 

believe will make the information easier 

to digest and aid in the goal of 

enhancing the overall comprehensibility 

of the proposed Fee Schedule. 

Section IV. Monthly Floor 

Communication, Connectivity, 

Equipment and Booth or Podia Fees 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the description of 

Floor Communication, Connectivity, 

Equipment and Booth or Podia monthly 

fees to Section IV. Currently, these fees 

are set forth under ‘‘NYSE Amex 

Options: Floor and Equipment Fees’’ 

and ‘‘NYSE Amex Options: Connectivity 

Charges.’’ The Exchange is not 

proposing any changes to these fees. 

The Exchange is proposing to show 

these fees in table format, which the 

Exchange believes would make the 

information easier to digest and aid in 

the goal of enhancing the overall 

comprehensibility of the proposed Fee 

Schedule. The Exchange notes that the 

two ‘‘Connectivity’’ charges from the 

existing Fee Schedule are represented as 

the second and third charges in the 

proposed table (i.e., Login and 

Transport charges). 

Section V. Technology & System Access 

Fees 

A. Port Fees and B. Co-Location Fees 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the fees of Ports and 

Co-Location services to Section V of the 

Fee Schedule. The current Fee Schedule 

includes these fees in a table entitled 

‘‘Port Fees’’ and a series of tables 

following the heading ‘‘Co-Location 

Fees.’’ The Exchange is not proposing 

any changes to its Port and Co-Location 

Fees. The Exchange is proposing to 

include the text from the asterisks in as 

language preceding the respective tables 

for port and co-location fees. 

Section VI. Report Fees 

In connection with its reorganization 

of the Fee Schedule, the Exchange is 

proposing to move the fees for reports 

to Section VI of the Fee Schedule. The 

current Fee Schedule includes these 

fees under ‘‘Report Fees.’’ The Exchange 

is not proposing any changes to these 

fees. 

Section VII. Regulatory Fees 

A. Options Regulatory Fee and B. Other 

Regulatory Fees 

The current Fee Schedule includes 

this information under ‘‘Regulatory 

Fees.’’ The Exchange is not proposing 

any substantive changes to this section 

of the Fee Schedule and there are no 

related Endnotes. The only nonsubstantive change that affects this 

section relates to the reordering and 

reorganization of the Fee Schedule as a 

whole. 

Section VIII. Service Fees 

A. Post-Trade Adjustments 

The current Fee Schedule includes 

this information under ‘‘Service Fees.’’ 

The Exchange is not proposing any 

substantive changes to this section of 

the Fee Schedule and there are no 

related Endnotes. The only nonsubstantive change that affects this 

section relates to the reordering and 

reorganization of the Fee Schedule as a 

whole. 

Elimination of the Specialist Options 

Issue Transfer Fee 

Finally, the Exchange presently 

charges a fee of $100 per issue for each 

option a Specialist transfers to another 

NYSE Amex Options Market Making 

firm that is acting as a Specialist. The 

fee is charged to the transferor. At this 

time the Exchange is proposing to 

eliminate this fee because the Exchange 

believes this fee may operate as a 

disincentive against the transfer of 

options. Typically, option issues are 

transferred as a result of a firm reorganizing or exiting the Specialist 

business. In such instances, the 

Exchange would prefer that the options 

be transferred as opposed to delisted so 

that other Exchange participants may 

continue to trade the option in question. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Securities Exchange 

Act of 1934 (the ‘‘Act’’),53 in general, 

and furthers the objectives of Sections 

6(b)(4) and 6(b)(5) of the Act,54 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. 

Non-Substantive Changes 

The Exchange believes that the nonsubstantive changes to the Fee 

Schedule, which include re-formatting, 

reorganization (including adding a 

Table of Contents section), importing 

text from the current Fee Schedule and 

streamlining certain text, is reasonable, 

equitable and not unfairly 

discriminatory because the changes are 

designed to make the Fee Schedule 

more logical and comprehensive and, 

therefore, easier for market participants 

to navigate and digest, which is in the 

public interest. 

Substantive Changes 

The Exchange believes that adopting 

the Preface and Key Terms and 

Definitions sections in the proposed Fee 

Schedule is reasonable, equitable and 

not unfairly discriminatory because the 

changes are designed to enable market 

participants to better understand how 

the Exchange defines various 

transactions and market participants as 

well as how the Exchange imposes fees 

and credits on each market participants, 

which should make the overall Fee 

Schedule more transparent and 

comprehensive to the benefit of the 

investing public. 

The Exchange believes that adopting 

a base rate of $0.23 per contract for 

NYSE Amex Market Maker Electronic 

transactions is reasonable, equitable and 

not unfairly discriminatory for the 

following reasons. First, the proposed 

change applies equally to all NYSE 

Amex Options Market Makers. Second, 

the proposed rate falls within the range 

of fees charged to market makers on 

other exchanges.55 For example, the 

base rate for market makers in equity 

options on the CBOE is also $0.23.56

The Exchange notes that the newly 

proposed base rate is an increase in the 

rate(s) charged to each of Specialists, eSpecialists, DOMMs and NYSE Amex 

Options Market Makers (regardless of 

whether each is trading more or less 

than 50,000 contracts ADV) and, while 

this proposed base rate increase would 

not impact other Exchange participants 

directly, the Exchange believes the rate 

increase would have an indirect benefit 

on other market participants. For 

example, some proceeds from this 

increase would fund the credits made 

available under the ACE Program. 

Because the ACE Program is designed to 

attract more volume and liquidity to the 

Exchange, the Exchange believes this 

rate increase will benefit all Exchange 

participants through increased 

opportunities to trade as well as 

enhancing price discovery. For these 

reasons, the Exchange believes that the 

proposal to adopt a base rate of $0.23 

per contract for Electronic NYSE Amex 

Options Market Maker transactions is 

reasonable, equitable and not unfairly 

discriminatory. 

The Exchange also believes that 

eliminating the $0.10 per contract 


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57Currently, capped Market Makers pay either an 

incremental service fee of $.01 per contract for 

volumes over 3,500,000 contracts per month or 

$0.10 per contract for Complex volumes upon 

reaching the $350K cap. 

58See, e.g., Rule 925.1NY(c). 

59See proposed Sections III.A.,C. and D., 

respectively. 

60See supra n. 56. 

61See BOX fee schedule, available here, http://

boxexchange.com/assets/BOX_Fee_Schedule.pdf 

(‘‘Tiered Volume Rebate for Market Makers’’); MIAX 

fee schedule, available here, http://

www.miaxoptions.com/sites/default/files/MIAX_

Options_Fee_Schedule_12102014.pdf (‘‘Market 

Maker Sliding Scale’’). 

62See CBOE fee schedule, available here, 

http://www.cboe.com/publish/feeschedule/

CBOEFeeSchedule.pdf, footnote 10 (a market maker 

may be permitted to pay a pro-rated amount of the 

$2.4 million if, for example, they join the program 

mid-year). 

charge for SPY Electronic Complex 

executions for NYSE Amex Options 

Market Makers such that the cost of 

these Electronic option transactions 

would at times be greater than the flat 

rate (e.g., as much as $0.23 per contract 

under proposed Section I.A.) or lower 

(e.g., as low as $0.02 per contract under 

proposed Section I.C.) is reasonable, 

equitable and not unfairly 

discriminatory because this change 

would simplify the Exchange’s pricing 

structure, which benefits investors, and 

apply equally to all NYSE Amex 

Options Market Makers. 

The Exchange believes the proposals 

to eliminate the $350,000 per month 

Market Maker fee cap (‘‘$350K cap’’) 

and the associated $0.01 or $0.10 

service fees 57 as well as the $0.03 per 

contract discount offered to NYSE Amex 

Options Market Makers that transact at 

least 50,000 contracts ADV during a 

month (the ‘‘$0.03 discount’’) are 

reasonable, equitable and not unfairly 

discriminatory because, as discussed 

below, the Exchange proposes to replace 

these two Exchange-offered discounts 

with the NYSE Amex Options Market 

Maker Sliding Scale—Electronic 

(‘‘Sliding Scale’’). The proposed Sliding 

Scale provides the opportunity for 

NYSE Amex Options Market Makers to 

earn volume-based discounts for 

transactions on the Exchange, as they do 

today, using a different methodology. 

The $350K cap is a fixed, ‘‘all or 

nothing’’ threshold that enabled Market 

Makers that hit the cap to immediately 

become eligible to trade for as little as 

$0.01 per contract, whereas Market 

Makers that did not hit the cap 

continued to either trade at their 

respective base rates (i.e., Specialist or 

e-Specialist rates versus DOMM and 

Non-DOMM rates) or to trade at their 

base rates discounted by $.03, if that 

Market Maker achieved at least 50,000 

contract ADV. The Exchange believes 

the proposed Sliding Scale is a fair and 

reasonable replacement for the current 

volume discounts offered by the 

Exchange. The Sliding Scale would 

provide a volume discount to NYSE 

Amex Options Market Makers on a more 

graduated basis than the current fee cap 

and discounts. The Exchange believes 

that the Sliding Scale methodology for 

providing volume based discounts is 

fair and reasonable in the same way that 

the current volume discounts are. 

Further, the proposal is equitable 

because the elimination of the $350K 

cap, $0.01 or $0.10 service fees, and the 

$0.03 discount, would apply equally to 

all NYSE Amex Options Market Makers 

and the Sliding Scale would, likewise, 

apply to NYSE Amex Options Market 

Makers. In addition, as discussed below, 

the Exchange believes it is fair and 

reasonable to offer the Sliding Scale 

solely to Market Makers because of the 

heightened obligations imposed on 

Market Makers, including continuous 

quoting obligations. 

The Exchange believes that adopting 

the Sliding Scale is reasonable, 

equitable and not unfairly 

discriminatory for the following 

reasons. First, all NYSE Amex Market 

Makers are eligible to avail themselves 

of the Sliding Scale, which sets forth 

objective criteria for earning lower rates 

based on reaching stated volume 

thresholds on the Exchange. Second, the 

Exchange believes it is reasonable and 

appropriate that Market Makers be 

charged fees on the Exchange that may 

be comparably lower than other market 

participants in certain circumstances 

when they provide greater volumes of 

liquidity to the market because Market 

Makers have obligations that other 

market participants do not. In 

particular, they must maintain active 

two-sided markets in the classes in 

which they are appointed, and must 

meet certain minimum quoting 

requirements.58 Further the Exchange 

notes that Market Makers are also 

subject to higher fixed costs, not 

assessed upon other market 

participants, such as the relatively more 

expensive ATP fees applicable to 

Market Makers, Rights Fees, and 

Premium Product Fees.59

In addition, the Sliding Scale is based 

on the amount of business transacted 

on—and is designed to attract greater 

volume to—the Exchange. The 

Exchange believes an increase in 

volume and liquidity would benefit all 

market participants by providing more 

trading opportunities and tighter 

spreads, even to those market 

participants that are not eligible for the 

Sliding Scale (i.e., non-NYSE Amex 

Market Makers). Additionally, the 

Exchange believes the Sliding Scale is 

consistent with the Act because, as 

described above, the Program is 

designed to bring greater volume and 

liquidity to the Exchange, which will 

benefit all market participants by 

providing tighter quoting and better 

prices, all of which perfects the 

mechanism for a free and open market 

and national market system. In addition, 

the Exchange also notes that several 

competing option exchanges currently 

offer a tiered or sliding scale to market 

makers. For example, the CBOE 

currently offers a sliding scale to their 

market makers that ranges from $0.23 

down to $0.03 per contract based on 

volume, which is comparable to the 

proposed Sliding Scale, which ranges 

from $0.23 down to $0.02 per contract 

and is also based on volume.60

Similarly, both the Boston Options 

Exchange LLC (‘‘BOX’’) and Miami 

Securities International Exchange, LLC 

(‘‘MIAX’’) offer tiered or sliding scale 

rates for market makers.61 For the 

foregoing reasons, the Exchange believes 

the proposed adoption of the Sliding 

Scale is reasonable, equitable and not 

unfairly discriminatory. 

The Exchange proposal to adopt 

‘‘Prepayment Programs’’ that allow 

NYSE Amex Options Market Makers to 

prepay a portion of certain Exchange 

transaction fees or charges (for a one- or 

three-year period) is also reasonable, 

equitable and not unfairly 

discriminatory for the following 

reasons. First, the proposal is 

reasonable, equitable and not unfairly 

discriminatory because all NYSE Amex 

Options Market Makers may elect to 

participate (or elect not to participate) in 

either of the Prepayment Programs. In 

addition, the Exchange notes that other 

options exchanges likewise offer 

Prepayment Programs, available only to 

market makers. For example, under 

CBOE’s Liquidity Provider Sliding 

Scale, a CBOE market maker may be 

eligible for the lower rates associated 

with tiers 3 through 5 by prepaying $2.4 

million in fees.62 Moreover, similar to 

the proposed Sliding Scale, the 

Prepayment Programs are designed to 

incent Market Makers to commit to 

directing their order flow to the 

Exchange, which would benefit all 

market participants by expanding 

liquidity, providing more trading 

opportunities and tighter spreads, even 

to those market participants that are not 

eligible for the Programs. Thus, the 

Exchange believes the Prepayment 

Programs are reasonable, equitable and 

not unfairly discriminatory to other 


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63See supra n. 34. 

64See supra n. 58 

65See supra n. 59. 

66The Exchange defines ‘‘Affiliates’’ as ‘‘a person 

that directly or indirectly through one or more 

intermediaries, has a 70% common ownership 

with, the person specified. See proposed Fee 

Schedule, Key Terms and Definitions. 

67See supra n. 62. 

68See NOM fee schedule, available here, http:// 

www.nasdaqtrader.com/

Micro.aspx?id=OptionsPricing 

69See id. (stating that ‘‘[f]or purposes of applying 

any options transaction fee or rebate where the fee 

assessed, or rebate provided, by NOM depends 

upon the volume of an Options Participant’s 

activity, references to an entity (including 

references to a ‘Options Participant’) shall be 

deemed to include the entity and its affiliates that 

have been approved for aggregation’’). 

70See Securities Exchange Act Release No. 69132 

(March 13, 2013), 78 FR 16898, 16902–16903 

(March 19, 2013) (SR–NASDAQ–2013–041) 

(justifying higher rebate to NOM Market Makers 

because they ‘‘add value through continue 

quotations and the commitment of capital’’ and this 

fee structure would incentivize Participants to post 

NOM Market Maker liquidity on NOM). 

71See PHLX fee schedule, available here, http:// 

www.nasdaqtrader.com/

Micro.aspx?id=PHLXPricing (defining the term 

‘‘Common Ownership’’ as meaning ‘‘members or 

member organizations under 75% common 

ownership or control’’). 

72See id. (Section II, Monthly Market Maker Cap). 

See also Securities Exchange Act Release No. 70969 

(December 3, 2013), 78 FR 73906 [sic] (December 

9, 2013) (SR–Phlx–2013–114). 

73See Securities Exchange Act Release No. 70969 

(December 3, 2013), 78 FR 73906 [sic], 73908 

(December 9, 2013) (SR–Phlx–2013–114). 

market participants because non-Market 

Makers and other market participants 

will benefit from the anticipated greater 

capital commitment and resulting 

liquidity on the Exchange. Additionally, 

the Exchange believes the Prepayment 

Programs are consistent with the Act 

because they may bring greater volume 

and liquidity to the Exchange, which 

will benefit all market participants by 

providing tighter quoting and better 

prices, all of which perfects the 

mechanism for a free and open market 

and national market system. In addition, 

the Exchange notes that, similar to the 

Prepayment Programs, at least two other 

exchanges have offered market makers 

the ability to prepay a portion of their 

transaction fees.63

In addition, the Exchange believes it 

is reasonable, equitable and not unfairly 

discriminatory to allow only Market 

Makers to prepay certain of their 

Exchange fees in exchange for receiving 

certain benefits because Market Makers 

have obligations that other market 

participants do not. In particular, they 

must maintain active two-sided markets 

in the classes in which they are 

appointed, and must meet certain 

minimum quoting requirements.64

Further the Exchange notes that Market 

Makers are also subject to higher fixed 

costs, not assessed upon other market 

participants, such as the relatively more 

expensive ATP fees applicable to 

Market Makers, Rights Fees, and 

Premium Product Fees.65

The Exchange proposal to require 

NYSE Amex Options Market Makers 

who opt into the 3 Year Prepayment 

Program to pay $3 million per year for 

3 years compared to those opting into 

the 1 Year Prepayment Program who 

will pay $4 million per year is 

reasonable, equitable and not unfairly 

discriminatory. As explained above, the 

Prepayment Program is a credit against 

certain Exchange fees and charges. Any 

activity that exceeds the amount of the 

Prepayment credit will be invoiced at 

the applicable rates in Sections I.C, I.G., 

or III.A. of the fee schedule. As such, all 

NYSE Amex Options Market Makers 

(those who do not participate in the 

Prepayment Program, those who 

participate in the 1 Year Prepayment 

Program and those who participate in 

the 3 Year Prepayment Program) will 

incur the same level of fees and/or 

charges if they conduct the same level 

of activity. Further, assessing a 

prepayment that is 25% smaller on an 

annual basis on firms willing to commit 

to the 3 Year Prepayment Program is 

reasonable, equitable, and not unfairly 

discriminatory because those firms are 

committing 125% more capital and are 

entering a multi-year arrangement that 

the Exchange believes will increase 

liquidity (which ultimately will provide 

ATP Holders more opportunities for 

trading and price discovery). 

The Exchange proposal to replace the 

existing OFP Electronic ADV Tiers and 

Customer Electronic Complex Order 

ADV Tiers (collectively ‘‘Tiers’’) with 

the ACE Program is also reasonable, 

equitable and not unfairly 

discriminatory for the following 

reasons. First, the ACE Program is 

replacing the Tiers in that both pay a 

per contract credit to qualifying OFPs. 

The Exchange believes the credits 

offered under the ACE Program are 

reasonable and appropriate in that they 

are based on the amount of business 

transacted on the Exchange. Per the ACE 

Program, as discussed above, an OFP 

may earn enhanced credits if they have 

an Affiliated NYSE Amex Options 

Market Maker (i.e., the entities share 

‘‘70% common ownership’’ 66) that has 

committed to either of the proposed 

Prepayment Programs. The Exchange 

notes that allowing an entity to earn an 

enhanced discount or credit in exchange 

for committing to a prepayment of 

certain fees is not new or novel.67 Nor 

is it new or novel to offer affiliates 

enhanced discounts or credits based on 

the affiliates’ activity, even if conducted 

in different capacities (e.g., market 

maker volume versus customer volume). 

Notably both the NASDAQ Options 

Market LLC (‘‘NOM’’) and NASDAQ 

OMX PHLX LLC (‘‘PHLX’’) offer 

enhanced credits to Market Makers and 

PHLX offers enhanced credits to 

affiliates of Marker Makers on certain 

volumes based on an affiliate’s activity. 

NOM aggregates the activity of affiliates 

and makes the availability of higher 

credits or rebates to NOM Market 

Maker’s contingent upon volume 

conducted by an affiliate.68 Specifically, 

NOM offers its Participants a Rebate to 

Add Liquidity In Penny Pilot Options 

based on monthly volume as set forth in 

a tier structure. Tiers 5 and 6 are 

available to NOM Market Makers that 

have an affiliate that qualifies for Tier 7 

or Tier 8 of their Customer and 

Professional Rebate to Add Liquidity in 

Penny Pilot Options.69 In its filing with 

the Commission, NOM noted its belief 

that ‘‘its proposal to permit Participants 

under Common Ownership to aggregate 

their volume is reasonable, equitable 

and not unfairly discriminatory because 

the Exchange would permit all 

Participants the ability to aggregate for 

purposes of the rebates if certain 

Participants chose to operate under 

separate entities.’’ 70

Similarly, PHLX provides for an 

enhanced rebate on Customer volumes 

only for those participants that have an 

affiliated Specialist or Market Making 

firm under ‘‘Common Ownership’’.71

Specifically, PHLX offers a tiered 

Customer Rebate Program that qualifies 

either a Specialist or Market Maker or 

its affiliate under Common Ownership 

to an additional rebate provided the 

Specialist or Market Maker has reached 

the Monthly Market Maker Cap in 

accordance with PHLX’s fee schedule.72

In its filing with the Commission, PHLX 

noted its belief that this additional 

rebate was equitable and not unfairly 

discriminatory because, among other 

reasons, Specialists and Marker Makers 

‘‘have burdensome quoting obligations,’’ 

to the market that others market 

participants do not; are subject to higher 

transaction costs and incur higher costs 

related to market making activities; and 

‘‘also serve an important role on the 

Exchange with regard to order 

interaction and they provide liquidity in 

the marketplace.’’ 73 Thus, PHLX noted 

that the ‘‘proposed differentiation as 

between Specialists and Market Makers 

as compared to other market 

participants recognizes the differing 

contributions made to the trading 


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74See supra n. 58. 

75See supra n. 59. 

76See supra nn. 58, 59. 77See supra nn. 58, 59. 

environment on the Exchange by these 

market participants.’’ 

Thus, consistent with the rationales 

articulated by NOM and PHLX when 

justifying similar fee changes 

implemented on their exchanges, the 

Exchange believes that its proposal to 

allow affiliated OFP firms enhanced 

credits by having a NYSE Options 

Market Maker participate in one of the 

Prepayment Programs is reasonable, 

equitable and not unfairly 

discriminatory. First, as discussed 

above, unlike other market participants, 

Market Makers have burdensome 

quoting obligation to the market that do 

not apply to Customers, Professionals 

Customers, Firms and Broker-Dealers.74

Market Makers serve an important role 

on the Exchange with regard to order 

interaction, capital commitment, and 

the provision of liquidity in the 

marketplace. Additionally, as discussed 

above, Market Makers incur costs unlike 

other market participants including, but 

not limited to, more expensive ATP fees 

applicable to Market Makers, Rights 

Fees, and Premium Product Fees and 

other costs associated with market 

making activities, which results in a 

higher average cost per execution as 

compared to Firms, Broker-Dealers and 

Professional Customers.75 The proposed 

differentiation as between Market 

Makers as compared to other market 

participants recognizes the differing 

contributions made to the trading 

environment on the Exchange by these 

market participants. 

The Exchange also believes that 

allowing firms enhanced credits based 

on the activities of their Affiliates (i.e., 

by having a NYSE Options Market 

Maker participate in one of the 

Prepayment Programs) is also 

reasonable, equitable and not unfairly 

discriminatory for several reasons. First, 

the Exchange believes that OFPs 

affiliated (i.e., have a 70% common 

ownership) with NYSE Amex Options 

Market Makers may qualify to earn 

enhanced credits in recognition of their 

shared economic interest, which 

includes the heightened obligations and 

costs imposed on Market Makers.76

OFPs unaffiliated with a NYSE Amex 

Options Market Maker do not share the 

same type of economic interests with a 

Market Maker that bears higher 

obligations and costs. Second, because 

each OFP that is not affiliated with a 

NYSE Amex Options Market Maker has 

the opportunity to establish such an 

affiliation by several means, including 

but not limited to, a business 

combination (e.g., merger or acquisition) 

or the establishment of their own market 

making operation, which as a BrokerDealer, each OFP has the potential to 

establish. 

In addition, the Exchange believes 

that the ACE Program will encourage 

OFPs with an Affiliated NYSE Amex 

Options Market Maker to direct order 

flow to the Exchange (especially 

Customer orders) in order to receive the 

enhanced volume credits. The Exchange 

believes that incentivizing OFPs to route 

orders to the Exchange may result in an 

increase in volume and liquidity to the 

Exchange that would benefit all market 

participants by providing more trading 

opportunities and tighter spreads, even 

to those market participants that do not 

participate in the Program, including 

participants other than NYSE Amex 

Options Market Makers, such as Firms, 

Professional Customers, etc. 

Additionally, the Exchange believes the 

Program is consistent with the Act 

because they may bring greater volume 

and liquidity to the Exchange, which 

will benefit all market participants by 

providing tighter quoting and better 

prices, all of which perfects the 

mechanism for a free and open market 

and national market system. The 

Exchange believes that those OFPs that 

do not have an Affiliated NYSE Amex 

Options Market Maker that has 

committed to a Prepayment Program 

would benefit from the increased order 

flow that those OFPs with an Affiliated 

NYSE Amex Options Market Maker may 

be incented to bring to the Exchange. 

The Exchange notes that it is not 

increasing fees for OFPs nor does it 

charge a fee for Customer transactions. 

The Exchange believes that by offering 

OFPs the ability to qualify to earn 

credits on Electronically executed 

Customer volumes, based solely on 

Customer volumes or on all Electronic 

volumes, the Exchange may experience 

an increase in the number of orders 

routed to the Exchange for potential 

execution as OFPs seek to qualify for the 

credits under the ACE Program. This 

increase in orders routed to the 

Exchange will lead to enhanced price 

discovery, increased market 

transparency and greater opportunities 

to trade, which benefits all participants 

on the Exchange, including those who 

may not be eligible to earn the credits 

under the ACE Program. 

For the above reasons, the Exchange 

believes the program ACE Program is 

also reasonable, equitable and not 

unfairly discriminatory. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The Exchange acknowledges that the 

proposed changes relating to transaction 

charges and/or credits, including the 

Sliding Scale and the Prepayment 

Programs, may increase both 

intermarket and intramarket 

competition by incenting participants to 

direct their orders to the Exchange, 

which will enhance the quality of 

quoting and may increase the volume of 

contracts traded on the Exchange. To 

the extent that there is an additional 

competitive burden on non-NYSE Amex 

Market Makers, the Exchange believes 

that this is appropriate because the 

proposal should incent market 

participants to direct additional order 

flow to the Exchange, and thus provide 

additional liquidity that enhances the 

quality of its markets and increases the 

volume of contracts traded here. To the 

extent that this purpose is achieved, all 

of the Exchange’s market participants 

should benefit from the improved 

market liquidity. Enhanced market 

quality and increased transaction 

volume that results from the anticipated 

increase in order flow directed to the 

Exchange will benefit all market 

participants and improve competition 

on the Exchange. 

The Exchange does not believe that 

offering OFPs affiliated (i.e., have a 70% 

common ownership) with NYSE 

Options Market Makers the ability to 

qualify to earn enhanced credits would 

impose any unnecessary or 

inappropriate burden on competition for 

several reasons. First, OFPs that are not 

affiliated with a market making firm 

would benefit from any increase in 

volume and liquidity on the Exchange 

as a consequence of the proposed 

enhanced credits, which would provide 

tighter quoting and better prices to 

unaffiliated OFPs. The Exchange 

believes that any burden on competition 

on unaffiliated OFPs would be 

outweighed by this benefit. Second, the 

Exchange believes it does not create an 

inappropriate burden on competition on 

unaffiliated OFPs for the Exchange to 

provide affiliated OFPs that share 

common control and shared economic 

interest with market making firms the 

ability to qualify for enhanced credits 

because these affiliated OFPs share the 

heighted obligations and fees of their 

affiliated Market Makers.77 Moreover, 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 3713 

78See, e.g., Securities Exchange Act Release No. 

69132 (March 13, 2013), 78 FR 16898, 16902–16903 

(March 19, 2013) (SR–NASDAQ–2013–041) 

(justifying allowing affiliates to aggregate their 

volume to receive rebates because all Participants 

on the exchange have the ability to aggregate if 

certain Participants chose to operate under separate 

entities). 

79 15 U.S.C. 78s(b)(3)(A). 

80 17 CFR 240.19b–4(f)(2). 

81 15 U.S.C. 78s(b)(2)(B). 82 17 CFR 200.30–3(a)(12). 

the Exchange would permit all OFPs the 

ability to aggregate for purposes of the 

rebates if certain OFPs chose to operate 

under separate entities.78

Given the robust competition for 

volume among options markets, many of 

which offer the same products, 

implementing programs to attract order 

flow similar to the ones being proposed 

in this filing, are consistent with the 

above-mentioned goals of the Act. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed 

rule change reflects this competitive 

environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 79 of the Act and 

subparagraph (f)(2) of Rule 19b–480

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) 81 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– 

NYSEMKT–2015–04 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–NYSEMKT–2015–04. 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 Web site (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 Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEMKT–2015–04, and should be 

submitted on or before February 13, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.82

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01072 Filed 1–22–15; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Military Reservist Economic Injury 

Disaster Loans Interest Rate for 

Second Quarter FY 2015 

In accordance with the Code of 

Federal Regulations 13—Business Credit 

and Assistance § 123.512, the following 

interest rate is effective for Military 

Reservist Economic Injury Disaster 

Loans approved on or after January 20, 

2015. 

Military Reservist Loan Program— 

4.000%. 

Dated: January 15, 2015. 

James E. Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2015–01192 Filed 1–22–15; 8:45 am] 

BILLING CODE 8025–01–P 

SOCIAL SECURITY ADMINISTRATION 

[Docket No. SSA–2015–0001] 

Agency Information Collection 

Activities: Proposed Request and 

Comment Request 

The Social Security Administration 

(SSA) publishes a list of information 

collection packages requiring clearance 

by the Office of Management and 

Budget (OMB) in compliance with 

Public Law 104–13, the Paperwork 

Reduction Act of 1995, effective October 

1, 1995. This notice includes revisions 

and extensions of OMB-approved 

information collections. 

SSA is soliciting comments on the 

accuracy of the agency’s burden 

estimate; the need for the information; 

its practical utility; ways to enhance its 

quality, utility, and clarity; and ways to 

minimize burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. Mail, email, or 

fax your comments and 

recommendations on the information 

collection(s) to the OMB Desk Officer 

and SSA Reports Clearance Officer at 

the following addresses or fax numbers. 

(OMB) Office of Management and 

Budget, Attn: Desk Officer for SSA, 

Fax: 202–395–6974, Email address: 

OIRA_Submission@omb.eop.gov. 


tkelley on DSK3SPTVN1PROD with NOTICES