[Federal Register Volume 80, Number 52 (Wednesday, March 18, 2015)]
[Notices]
[Pages 14187-14189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-06125]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74492 ; File No. SR-NYSEArca-2015-13]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Options Fee Schedule Relating to Market Maker Posting Credit Tiers

March 12, 2015.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on March 2, 2015, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule 
(``Fee Schedule'') relating to Market Maker Posting Credit Tiers. The 
Exchange proposes to implement the fee change effective March 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.

[[Page 14188]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to create an additional Market Maker 
Monthly Posting Credit Super Tier (``Super Tier II'') for Executions in 
Penny Pilot Issues and SPY. The Exchange proposes to implement the fee 
change effective March 2, 2015.
    Currently, the Exchange has a Base Posting Credit rate, and two 
additional tiers with higher credit rates for Market Makers that meet 
certain volume criteria, as outlined in the table below.

 Market Maker Monthly Posting Credit Super Tier and Qualifications for Executions in Penny Pilot Issues and SPY
                                                       \8\
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Tier                            Qualification basis (average          Credit applied to        Credit applied to
                                electronic executions per day)        posted electronic        posted electronic
                                                                market maker executions  market maker executions
                                                                  in penny pilot issues                   in SPY
                                                                           (except SPY)
----------------------------------------------------------------------------------------------------------------
Base........................  ...............  ...............                  ($0.28)                  ($0.28)
Select Tier.................  30,000           ...............                   (0.32)                   (0.32)
                               Contracts from
                               Market Maker
                               Posted Orders
                               in All Issues.
Super Tier..................  80,000           200,000                           (0.37)                   (0.39)
                               Contracts from   Contracts
                               Market Maker     Combined from
                               Posted Orders    all orders in
                               in All Issues,   Penny Pilot
                               or               Issues, all
                                                account types,
                                                with at least
                                                100,000
                                                Contracts from
                                                Posted Orders
                                                in Penny Pilot
                                                Issues*.
----------------------------------------------------------------------------------------------------------------
* Includes transaction volume from the Market Maker's affiliates.

    The Exchange is proposing to add another tier, Super Tier II, to 
provide an incentive for increased Market Maker activity on the 
Exchange.
    As with the Super Tier, the proposed Super Tier II qualification 
would be 200,000 contracts, but only contracts traded for the account 
of a Market Maker would count and at least 110,000 of those contracts 
would have to be from Posted Orders or quotes from both Penny Pilot and 
non-Penny Pilot issues. Unlike Super Tier, contract volume from a 
Market Maker's affiliate would not be counted for determining whether a 
member qualified for fees in Super Tier II. Market Makers who meet the 
threshold for Super Tier II would receive a credit of $0.42 applied to 
Posted Electronic Market Maker executions in Penny Pilot issues, 
including SPY.
    In addition, the Exchange proposes to make a non-substantive change 
to the title of the table to more accurately reflect its contents, such 
that it reads: ``MARKET MAKER MONTHLY POSTING CREDIT TIERS AND 
QUALIFICATIONS FOR EXECUTIONS IN PENNY PILOT ISSUES AND SPY.''
    The Exchange is not proposing any other modifications to the Market 
Maker Posting Credits at this time.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\5\ 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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed change is reasonable 
because adding a new Super Tier II would encourage Market Makers to 
post greater volumes in all issues, including non-Penny Pilot issues, 
in order to qualify for the Super Tier II credit of $0.42. The proposed 
change is also reasonable because it is designed to attract higher 
volumes of Market Maker Posted Orders to the Exchange, which would 
benefit all market participants by offering greater price discovery, 
increased transparency and trading opportunities on the Exchange. 
Encouraging Market Makers to send higher volumes of orders to the 
Exchange would also contribute to the Exchange's depth of book as well 
as to the top of book liquidity.
    The Exchange also believes that the proposed credits are reasonable 
because they are within a range of similar credits available on other 
option exchanges.\6\ The Exchange believes that the proposed change is 
equitable and not unfairly discriminatory because it would apply to all 
Market Makers on an equal and non-discriminatory basis. The Exchange 
further believes that the proposed change is equitable and not unfairly 
discriminatory because it is reasonably related to the value to the 
Exchange's market quality associated with higher volumes in Market 
Maker Posted Orders, including both Penny Pilot issues and non-Penny 
Pilot issues.
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    \6\ See, e.g., BATS Options Exchange fee schedule, available at, 
http://www.batsoptions.com/support/fee_schedule/ (providing a 
($0.42) credit for certain market maker volume); NASDAQ Options 
Market fee schedule, available at, http://www.nasdaqtrader.com/Micro.aspx?id=optionsPricing (same).
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    The Exchange believes the non-substantive change to the title of 
the table would benefit all market participants as it would add clarity 
to the fee schedule.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\7\ 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. Instead, the Exchange believes that the proposed 
change would continue to encourage competition, including by attracting 
additional liquidity to the Exchange, which would continue to make the 
Exchange a more competitive venue for, among other things, order 
execution and price discovery. The Exchange does not believe that the 
proposed change will impair the ability of Market Makers or competing 
order execution venues to maintain their

[[Page 14189]]

competitive standing in the financial markets.
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    \7\ 15 U.S.C. 78f(b)(8).
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    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) of the Act \8\ and subparagraph (f)(2) of Rule 19b-
4 thereunder,\9\ because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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    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) of the Act \10\ to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0775726b622a64686a6a626973744774626429606871"><span class="__cf_email__" data-cfemail="b1c3c4ddd49cd2dedcdcd4dfc5c2f1c2d4d29fd6dec7">[email protected]</span></a>. Please include 
File Number SR-NYSEArca-2015-13 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549.

All submissions should refer to File Number SR-NYSEArca-2015-13. 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 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-NYSEArca-2015-13 and should 
be submitted on or before April 8, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-06125 Filed 3-17-15; 8:45 am]
 BILLING CODE 8011-01-P


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