Federal Register / Vol. 87, No. 17 / Wednesday, January 26, 2022 / Notices 4095 

21 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. 

4See NYSE Arca Rule 6.1A–O(a)(13). 

5The Exchange has announced that, pending 

regulatory approval, it will begin migrating 

Exchange-listed options to Pillar on February 7, 

2022, available here: https://w0ww.nyse.com/ 

trader-update/history#110000387355. See also 

Securities Exchange Act Release No. 92304 (June 

30, 2021), 86 FR 36440 (July 9, 2021) (SR– 

NYSEArca–2021–47) (Notice of Filing of Proposed 

Rule Change for New Rules 6.1P–O, 6.37AP–O, 

6.40P–O, 6.41P–O, 6.62P–O, 6.64P–O, 6.76P–O, and 

6.76AP–O and Amendments to Rules 1.1, 6.1–O, 

6.1A–O, 6.37–O, 6.65A–O and 6.96–O) and 

Amendment No. 2 to SR–NYSEArca–2021–47, 

available here: https://www.sec.gov/comments/srnysearca-2021-47/srnysearca202147-20109876- 

264219.pdf. 

6The Exchange notes that the NYSE Arca Equities 

exchange adopted a similar fee cap in connection 

with its migration to the Pillar technology platform 

in 2017 so that its member organizations would not 

incur additional charges during the transition 

period. See Securities Exchange Act Release No. 

81573 (September 11, 2017), 82 FR 43430 

(September 15, 2017) (SR–NYSEArca–2017–97) 

(providing for a temporary cap on monthly fees for 

use of ports during Pillar transition). 

7 15 U.S.C. 78f(b). 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2022–02, and 

should be submitted on or before 

February 16, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01470 Filed 1–25–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94017; No. SR–NYSEArca– 

2022–03] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Options Fee Schedule To Cap Certain 

Port Fees 

January 20, 2022. 

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 January 

14, 2022, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, 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. 

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 (the 

‘‘Fee Schedule’’) to cap certain port fees 

in connection with the Exchange’s 

migration to a new trading platform. 

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

the Fee Schedule to cap certain port fees 

during the Exchange’s migration of 

options trading to a new electronic 

trading platform. 

Currently, the Exchange conducts 

options trading on an electronic 

platform known as ‘‘OX.’’ OX refers to 

the Exchange’s electronic order 

delivery, execution, and reporting 

system for designated option issues 

through which orders and quotes of 

Users are consolidated for execution 

and/or display.4

On or about February 7, 2022, the 

Exchange anticipates beginning the 

migration of its options trading to a new 

technology platform known as Pillar.5

The Exchange proposes to adopt a cap 

on the monthly fees assessed for the use 

of certain ports connecting to the 

Exchange, which will go into effect on 

the day the Exchange commences its 

migration to the Pillar platform and 

remain in effect until the end of the 

month in which the migration is 

completed (the ‘‘Migration Period’’). 

Specifically, the Exchange proposes to 

cap the monthly fees charged to an OTP 

Holder or OTP Firm (collectively, ‘‘OTP 

Holders’’) for the use of Order/Quote 

Entry Ports, Quote Takedown Ports, and 

Drop Copy Ports (collectively, the ‘‘Port 

Fees’’) during the Migration Period (the 

‘‘Migration Cap’’). The Migration Cap 

will be based on the number of ports an 

OTP Holder is billed for in the month 

preceding the beginning of the 

Exchange’s migration to the Pillar 

platform, except that if an OTP Holder 

reduces the number of ports used during 

the Migration Period (i.e., incurs Port 

Fees below the Migration Cap), the OTP 

Holder would only be billed for the 

actual number of ports used. 

Without this proposed rule change, 

the Fee Schedule provides that OTP 

Holders would be charged for the use of 

both legacy OX platform ports and new 

Pillar platform ports, which could 

significantly increase costs to OTP 

Holders during the Migration Period. 

Thus, the proposed Migration Cap is 

intended to encourage OTP Holders to 

maintain the same levels of interaction 

with Exchange during the Migration 

Period, as well as promptly migrate to 

the more efficient Pillar technology 

platform, without incurring additional 

Port Fees as a result of the transition.6

The Exchange proposes to implement 

this fee change on the day it commences 

its migration to the Pillar technology 

platform. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,7 in general, and 

furthers the objectives of Sections 


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4096 Federal Register / Vol. 87, No. 17 / Wednesday, January 26, 2022 / Notices 

8 15 U.S.C. 78f(b)(4) and (5). 

9See Securities Exchange Act Release No. 51808 

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

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

10The OCC publishes options and futures volume 

in a variety of formats, including daily and monthly 

volume by exchange, available here: https://

www.theocc.com/Market-Data/Market-DataReports/Volume-and-Open-Interest/MonthlyWeekly-Volume-Statistics. 

11Based on a compilation of OCC data for 

monthly volume of equity-based options and 

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

Exchange’s market share in equity-based options 

increased from 10.35% for the month of November 

2020 to 12.99% for the month of November 2021. 

12See Reg NMS Adopting Release, supra note 9, 

at 37499. 

6(b)(4) and (5) of the Act,8 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Proposed Rule Change Is 

Reasonable 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 9

There are currently 16 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange has more 

than 16% of the market share of 

executed volume of multiply-listed 

equity and ETF options trades.10

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity 

and ETF options order flow. More 

specifically, in November 2021, the 

Exchange had less than 13% market 

share of executed volume of multiplylisted equity and ETF options trades.11

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue or 

reduce use of certain categories of 

products, in response to fee changes. 

Accordingly, competitive forces 

constrain options exchange fees, 

including fees for connectivity. 

The Exchange believes that the 

proposed Migration Cap is reasonably 

designed to continue to incent OTP 

Holders to maintain sufficient active 

connections to the Exchange during its 

migration to a new trading platform. 

Without the proposed change, OTP 

Holders would be subject to fees for the 

use of both legacy ports and the new 

ports using Pillar technology during the 

Migration Period. Accordingly, the 

Exchange believes that the proposed 

Migration Cap is reasonably designed to 

lessen the impact of the migration on 

OTP Holders and will thus encourage 

OTP Holders to both promptly 

transition to the more efficient Pillar 

technology platform and maintain their 

current level of trading activity on the 

Exchange. 

To the extent the proposed rule 

change encourages OTP Holders to 

migrate to the new Pillar technology 

platform while maintaining their level 

of trading activity, the Exchange 

believes the proposed change would 

sustain the Exchange’s overall 

competitiveness and its market quality 

for all market participants. In the 

backdrop of the competitive 

environment in which the Exchange 

operates, the proposed rule change is a 

reasonable attempt by the Exchange to 

mitigate the expense of the migration 

without affecting its competitiveness. 

The Proposed Rule Change Is an 

Equitable Allocation of Credits and Fees 

The Exchange believes the proposed 

change is an equitable allocation of its 

fees and credits because the Migration 

Cap, which would apply equally to all 

OTP Holders, would be calculated based 

on the number of ports each OTP Holder 

uses. OTP Holders can opt to adjust 

their port usage, if desired, in advance 

of the Migration Period, and to the 

extent OTP Holders choose to use fewer 

ports during the Migration Period (i.e., 

incur Port Fees below the Migration 

Cap), their Port Fees would be reduced 

accordingly. Thus, the Exchange 

believes the proposed rule change 

would facilitate a smooth transition to 

the Pillar technology platform for OTP 

Holders and mitigate the impact of the 

migration process for all market 

participants on the Exchange, thereby 

sustaining market-wide quality. 

The Proposed Rule Change Is Not 

Unfairly Discriminatory 

The Exchange believes the Migration 

Cap is not unfairly discriminatory 

because it would be available to all 

similarly-situated market participants 

on an equal and non-discriminatory 

basis. 

The proposed Migration Cap would 

be based on an OTP Holder’s Port Fees 

billed for the month preceding the 

beginning of the Exchange’s migration 

to the Pillar technology platform and 

would be adjusted to the extent an OTP 

Holder chooses to utilize fewer such 

ports during the Migration Period. The 

Exchange believes that the Migration 

Cap will permit OTP Holders to 

maintain the same level of interaction 

with Exchange systems during the 

Migration Period without incurring 

additional Port Fees as a result of the 

transition from OX to the Pillar 

technology platform. The Exchange also 

believes that the Migration Cap would 

allow OTP Holders to maintain their 

existing level of connectivity to the 

Exchange at no additional cost during 

the Migration Period, thereby 

supporting continued trading 

opportunities for all market 

participants, which would promote just 

and equitable principles of trade, 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

the Act, the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Instead, as discussed above, the 

Exchange believes that the proposed 

changes would encourage the 

submission of additional liquidity to a 

public exchange, thereby promoting 

market depth, price discovery and 

transparency and enhancing order 

execution opportunities for all market 

participants. As a result, the Exchange 

believes that the proposed change 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

integrated competition among orders, 

which promotes ‘‘more efficient pricing 

of individual stocks for all types of 

orders, large and small.’’ 12

Intramarket Competition. The 

Exchange does not believe the proposed 

rule change would impose any burden 

on intramarket competition that is not 

necessary or appropriate because it 

would apply equally to all OTP Holders. 

All OTP Holders, regardless of the 

number of ports they utilize, will be 

eligible for the Migration Cap beginning 

on the day the Exchange commences its 


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Federal Register / Vol. 87, No. 17 / Wednesday, January 26, 2022 / Notices 4097 

13See supra note 10. 

14Based on a compilation of OCC data for 

monthly volume of equity-based options and 

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

Exchange’s market share in equity-based options 

increased from 10.35% for the month of November 

2020 to 12.99% for the month of November 2021. 

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). 

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

2 17 CFR 240.19b–4. 

migration to the Pillar technology 

platform through the end of the 

Migration Period. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

16 competing option exchanges if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

has more than 16% of the market share 

of executed volume of multiply-listed 

equity and ETF options trades.13

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in November 2021, the 

Exchange had less than 13% market 

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

The Exchange does not believe the 

proposed rule change would impose any 

burden on intermarket competition that 

is not necessary or appropriate because 

the Exchange operates in a highly 

competitive market in which market 

participants can readily choose to send 

their orders to other exchanges if they 

deem fee levels at those other venues to 

be more favorable. The Exchange 

believes that fees for connectivity are 

constrained by the robust competition 

for order flow among exchanges. 

Accordingly, the Exchange believes that 

the proposed Migration Cap would 

continue to make the Exchange a 

competitive venue for order execution 

by enabling OTP Holders to maintain 

their current levels of interaction with 

the Exchange during the Migration 

Period without incurring additional Port 

Fees and facilitating OTP Holders’ 

migration to the newer, more efficient 

Pillar technology platform. 

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– 

NYSEArca–2022–03 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090.. 

All submissions should refer to File 

Number SR–NYSEArca–2022–03. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2022–03, and 

should be submitted on or before 

February 16, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01459 Filed 1–25–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94011; File No. SR–FINRA– 

2021–030] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Designation 

of Longer Period for Commission 

Action on Proposed Rule Change To 

Amend FINRA Rule 6730 To Require 

Members To Append Modifiers To 

Delayed Treasury Spot Trades and 

Portfolio Trades When Reporting to 

TRACE 

January 20, 2022. 

On November 22, 2021, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change to amend FINRA 

Rule 6730 to require members to append 

modifiers to delayed Treasury spot 

trades and portfolio trades when 

reporting to FINRA’s Trade Reporting 

and Compliance Engine (‘‘TRACE’’). 

The proposed rule change was 


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