Federal Register / Vol. 80, No. 24 / Thursday, February 5, 2015 / Notices 6563 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See NYSE Amex Options Fee Schedule, dated 

January 14, 2015, available here, https://

www.theice.com/publicdocs/nyse/markets/amexoptions/NYSE_Amex_Options_Fee_Schedule.pdf. 4 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 (252,000,000/21 = 12,000,000). 

5Electronic 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. 6See supra n. 4. 7 Id. 

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– 

BOX–2015–06 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–BOX–2015–06. 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 will also be available for 

inspection and copying at the principal 

office 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–BOX– 

2015–06 and should be submitted on or 

before February 26, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02250 Filed 2–4–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74180; File No. SR– 

NYSEMKT–2015–07] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending the NYSE 

Amex Options Fee Schedule To Make 

a Change to the Amex Customer 

Engagement Program in Section I.E. of 

the Fee Schedule 

January 30, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on January 

28, 2015, NYSE MKT LLC (the 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the 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 make a change to 

the Amex Customer Engagement 

(‘‘ACE’’) Program in section I.E. of the 

Fee Schedule. The Exchange proposes 

to implement the change on February 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 make a 

change to the ACE Program in section 

I.E. of the Fee Schedule. The Exchange 

proposes to implement the change on 

February 2, 2015. 

Section I.E. of the Fee Schedule 

describes the ACE Program,3 which 

features four tiers expressed as a 

percentage of total industry Customer 

equity and ETF option average daily 

volume (‘‘ADV’’).4 Specifically, the ACE 

Program consists of a four-tiered 

schedule of per contract credits payable 

to an Order Flow Provider (‘‘OFP’’) 

solely for Electronic Customer volume 

that the OFP, as agent, submits to the 

Exchange.5 The ACE Program offers 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; 6 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,7 of which 

at least 20% must be Customer volume 

executed Electronically. 

The Exchange has received questions 

regarding qualification for credits under 


rljohnson on DSK3VPTVN1PROD with NOTICES
6564 Federal Register / Vol. 80, No. 24 / Thursday, February 5, 2015 / Notices 

8As proposed, an OFP qualifies for credits under 

method 2 ‘‘[b]y 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 average daily 

industry Customer equity and ETF option volume, 

with the further requirement that a specified 

percentage of the minimum volume required to 

qualify for the Tier must be Customer volume.’’ 

9The Fee Schedule describes how the Exchange 

calculates an OFP’s Electronic volume for purposes 

of the ACE Program. See Section I.E of the Fee 

Schedule. In particular, ‘‘the Exchange will exclude 

volume resulting from Mini Options and QCC 

trades;’’ and will likewise exclude ‘‘any volume 

attributable to orders routed to another exchange in 

connection with the Options Order Protection and 

Locked/Crossed Market Plan referenced in Rule 

991NY.’’ The Exchange will include in its 

calculation of an OFP’s Electronic volume for 

purposes of the ACE Program, ‘‘[v]olume resulting 

from CUBE Auction executions’’ and ‘‘will include 

the activity of Affiliates [i.e., entities with 70% 

common ownership] of the OFP, such as when an 

OFP has an Affiliated NYSE Amex Options Market 

Making firm.’’ Id. The Exchange notes that any day 

the Exchange is open, regardless of length, will 

count as a full day when calculating ADV. 

10An OFP’s Customer volume would need to be 

0.3% (i.e., 1.50% × 20%) of the total average daily 

industry Customer equity and ETF option volume. 

11An OFP’s Customer volume would need to be 

0.7% (i.e., 3.50% × 20%) of the total average daily 

industry Customer equity and ETF option volume. 

12See supra n. 4. 

method 2 of the ACE Program and 

proposes changes to the level of 

Customer volume required to qualify for 

credits under method 2. Specifically, 

the Exchange proposes to revise method 

2 by replacing the clause ‘‘of which at 

least 20% must be Customer volume 

executed Electronically’’ with the clause 

‘‘with the further requirement that a 

specified percentage of the minimum 

volume required to qualify for the Tier 

must be Customer volume.’’ 8 In 

addition, proposed language changes are 

shown in the table below, with 

underlining used to denote new 

language. 

AMEX CUSTOMER ENGAGEMENT PROGRAM—STANDARD OPTIONS

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 of the 

minimum volume for each tier 

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% of which 20% 

or greater of 1.50% must 

be Customer.

($0.14 ) ($0.16 ) ($0.18 ) 

4 .................... >2.00% ................................... ...... >3.50% of which 20% or 

greater of 3.5% must be 

Customer.

($0.14 ) ($0.16 ) ($0.20 ) 

The Exchange’s current Fee Schedule 

requires, under method 2 for qualifying 

for the credits under the ACE Program, 

that at least 20% of an OFP’s Electronic 

volume 9 be comprised of Customer 

volume. However, because method 2 

does not fix the 20% Customer volume 

requirement at a specified, minimum 

level, the more volume that an OFP 

executes, the more Customer volume 

required to qualify for credits under 

method 2. This condition to receiving 

ACE Program credits under method 2 

could create the unintended incentive 

for an OFP that has a proportional 

reduction in its Customer volume (i.e., 

if its overall volume of Non-Customer 

increases, but its Customer volume does 

not) to reduce its trading of NonCustomer Electronic volume on the 

Exchange in order to satisfy the 20% 

Customer volume condition and receive 

the credits available under method 2. 

To avoid the potential that the 20% 

Customer volume requirement could 

induce OFPs to reduce their activity on 

the Exchange to avoid disqualifying 

themselves for potential credits under 

method 2 of the ACE Program, the 

Exchange proposes to modify method 2 

to specify that the Customer volume 

component for each Tier is 20% of the 

minimum volume for that Tier. 

Specifically, as proposed, to qualify for 

credits under Tier 3, an OFP’s Customer 

volume would have to be at least 20% 

of volume required to satisfy the 1.50% 

of total average daily industry Customer 

equity and ETF option volume that an 

OFP must execute Electronically on the 

Exchange.10 Similarly, as proposed, to 

qualify for Tier 4, an OFP’s Customer 

volume would have to be 20% of 

volume required to satisfy the 3.50% of 

total average daily industry Customer 

equity and ETF option volume that an 

OFP must execute Electronically on the 

Exchange.11

For example, as noted above,12 in a 

month having 21 trading days where the 

OCC reported 252,000,000 equity and 

ETF option contracts clearing in the 

Customer range, the calculated ADV is 

12,000,000 (252,000,000/21 = 

12,000,000). The ACE Program tiers are 

based on the ADV an OFP executes 

Electronically on the Exchange. Under 

method 2, the ADV associated with Tier 

3 credits ranges from 1.5% to 3.5% of 

industry Customer equity option and 

ETF option ADV (1.5% of 12,000,000 = 

180,000 and 3.5% of 12,000,000 = 

420,000). Under the current Fee 

Schedule, to qualify for the Tier 3 

credits, an OFP with total Electronic 

ADV of 180,000 contracts would be 

required to have at least 20% of that 

volume, or 36,000 contracts (20% of 

180,000 = 36,000) conducted as 

Customer. However, an OFP that has 

total electronic ADV of 420,000 

contracts would be required to have at 

least 84,000 contracts (20% of 420,000 

= 84,000) as Customer volume to qualify 

for Tier 3 credits. 

As proposed, to qualify for Tier 3 

credits, both OFPs in the above example 

would be required to have 36,000 

contracts as Customer volume. In other 

words, Tier 3 credits would be available 

to any OFP with total Electronic ADV of 

between 1.50% and 3.50% of Industry 

Customer Equity and ETF Options ADV, 

provided that the OFP conducted at 

least 0.3% of industry Customer equity 

and ETF option ADV as Customer 

volume (1.50% of 12,000,000 = 180,000 

and 20% of 180,000 = 36,000, which is 

the same as 0.3% of 12,000,000 = 

36,000). Continuing the example, under 

the proposed change, an OFP with total 

electronic ADV greater than 3.5% of 

industry Customer equity option and 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 24 / Thursday, February 5, 2015 / Notices 6565 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(4) and 78f(b)(5). 

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

16 17 CFR 240.19b–4(f)(2). 

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

ETF option ADV would qualify for the 

Tier 4 credits provided the OFP also had 

Customer ADV of at least 0.7% of 

Industry Customer equity and ETF 

option ADV (3.50% of 12,000,000 = 

420,000 and 20% of 420,000 = 84,000, 

which is the same as 0.7% of 12,000,000 

= 84,000). 

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’’),13 in general, 

and furthers the objectives of Sections 

6(b)(4) and 6(b)(5) of the Act,14 in 

particular, because it would provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

members, issuers and other persons 

using its facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Exchange believes that specifying 

a minimum volume amount to meet the 

20% Customer volume component for 

each Tier under method 2 of the ACE 

Program is reasonable, equitable and not 

unfairly discriminatory because it is 

designed to reduce the potential that 

OFPs divert Non-Customer order flow 

away from the Exchange, which may 

increase volume and liquidity on the 

Exchange to the benefit of 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 the 

proposal is not unfairly discriminatory 

as it applies equally to all OFPs, 

enabling each OFP to qualify under 

method 2 of the ACE Program upon 

achieving a set minimum threshold for 

Customer volume based on ADV. The 

Exchange also believes that the proposal 

is reasonable, equitable and not unfairly 

discriminatory because specifying a 

minimum volume amount to meet the 

20% Customer volume component for 

each Tier under method 2 of the ACE 

Program would add clarity to the Fee 

Schedule and aid in market 

participants’ comprehension as to how 

to qualify for the credits under the ACE 

Program. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that the ACE Program 

will continue to encourage Customer 

order flow to be directed to the 

Exchange. By incentivizing OFPs to 

route Customer orders, the Exchange 

desires to attract liquidity to the 

Exchange, which in turn benefits all 

market participants. 

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 one 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) 15 of the Act and 

subparagraph (f)(2) of Rule 19b–4 16

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) 17 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–2015–07 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–2015–07. 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–2015–07, and should be 

submitted on or before February 26, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02252 Filed 2–4–15; 8:45 am] 

BILLING CODE 8011–01–P 


rljohnson on DSK3VPTVN1PROD with NOTICES